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Indian stock market morning report by Keynote Capitals (July 2, 2009, Thursday, 7.00 a.m. GMT)

Views on markets today

- Indian markets were positive yesterday led by FII buying.

- Market breadth was 0.95x. FIIs bought equities worth Rs185Cr while domestic institutions sold Rs75Cr.

- Trading volumes remain subdued before Union Budget as traders lacked conviction to put big trades.

- Asian markets are trading mixed. Nikkei opened flat as caution set in ahead of US jobs data. Hitachi Ltd jumped on report that it will boost production of lithium ion batteries for hybrid cars. Hang Seng opened up helped by manufacturing data from US and talk of strong growth in new lending in the mainland in June.

- Indian markets may remain positive today on back of global cues.

Economic and Corporate Developments

- The rupee (INR) latest quote: 47.88 per USD

- NYMEX Crude Oil (CL) is currently trading at $69.19 per barrel.

- The government has raised petrol price by Rs4 per litre and diesel by Rs2 per litre.

- The government has allowed developers of SEZs to raise overseas debt for building infrastructure facilitieswithin the zones.

Buzzing stocks

- SAIL has entered into an agreement with two defence construction agencies, Military Engineering Services and Married Accommodation Project, for supply of at least 3 lakh tonnes of steel items estimated at Rs100Cr.

- Punj Lloyd, through its subsidiary, Sembawang Engineers and Constructors has bagged an Rs1,263Cr order to construct two key stations in Singapore. After this, the total value of unexecuted orders for the Punj Lloyd group on a consolidated basis is stands at Rs22,066Cr.

- Nagarjuna Construction has bagged four orders worth Rs797Cr for construction-related works.

US markets
The US markets ended slightly up 0.7% on positive economic data from manufacturing and pending home sales. However, stocks closed well off their highs of the day as traders took profits in anticipation of the July 4th holiday weekend. The CBOE volatility index dropped below 25 for the first time since September 2008, just before the collapse of Lehman Brothers. It however ended at 26.22. Financial stocks were some of the session's worstperformers. US markets will be closed on Friday in observance of Independence Day.

Economic data

- June ISM manufacturing index rose to 44.8 from 42.8 in May, slightly higher than expected. However, it means that manufacturing activity continues to contract since the Index is below 50.

- ADP employment change report showed more than-expected job losses for June at 473,000 jobs.

- Pending home sales for May increased just 0.1% month-over-month. They were expected to be flat after spiking 7.1% the month before.

- Construction spending during May fell 0.9% month-over-month and missed expectations.

Key events today
- Jobless Claims
- Factory Orders
- Employment Situation