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Indian stock market and companies daily report (September 28, 2012, Friday)

Contributed by Angel Broking

Indian markets are expected to open in the green today tracing positive opening trades in most of the Asian bourses and the SGX Nifty.

US markets moved notably higher over the course of the trading session on Thursday. The strength on Wall Street was partly due to optimism about the possibility of further stimulus from China and partly due to some upbeat US jobs data. The US Labor Department released a report showing that jobless claims fell more than expected in the week ended 22nd September 2012, at 359,000 from 385,000 last week, as against an expectation of 376,000. Most of the European bourses ended the trading session on Thursday with modest gains, as investor concerns over Greece and Spain continued to linger.

Meanwhile, the Indian markets ended lower on Thursday, as investors indulged in some profit taking after recent gains amid the expiration of nearterm derivative contracts.

Markets Today

The trend deciding level for the day is 18,623 / 5,661 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 18,693 - 18,806 / 5,682 - 5,715 levels. However, if NIFTY trades below 18,623 / 5,661 levels for the first half-an-hour of trade then it may correct up to 18,509 - 18,439 / 5,628 - 5,607 levels.

Government to stick to its budgeted borrowing program for the fiscal year 2013

The government is taking steps towards further fiscal consolidation to narrow the fiscal deficit. The government has already borrowed to the extent of 65% (Rs.3.7 lakh crore) of its total planned borrowing for the fiscal year FY2013. On September 27, 2012, it has indicated that it plans to borrow only Rs.2 lakh crore in the second half of the year thus abiding by its budgeted estimate of Rs.5.7 lakh crore.

The budget deficit in the April- July period has already exceeded 50% of the budgeted deficit for FY2013. The governmentRs.s targeted budget deficit for FY2013 is 5.1% of GDP. However, the Department of Economic AffairsRs. secretary Arvind Mayaram also indicated that the government is likely to breach its budgeted fiscal deficit and reach 5.3% of GDP. We believe that the credible measures by the government to improve its fiscal health are likely to bode positively for market sentiments. The decision of sticking to its budgeted estimate for gross government borrowings, is likely to help ease interest rates in the economy.

ICRA cuts United Spirits loan rating to junk

Rating company ICRA, a unit of MoodyRs.s, has cut the rating on United Spirits (USL) Rs.1,800cr term loans and Rs.1,300cr long-term fund-based facilities to D, the lowest grade it assigns to any borrowing, from investment grade BB. This move may accelerate talks between UB group and Diageo plc regarding the latter acquiring stake in USL. Although USL had admitted to negotiating with Diageo, it had said it may not lead to a transaction. As the downgrade could turn lenders wary of funding USL the proposed deal between USL and Diageo could materialize. We continue to remain neutral on USL.

Economic and Political News

- GoM recommends price control for 348 essential drugs

- Fiscal deficit could touch 5.3% of GDP in FY13: Mayaram

- Strong political will needed for power sector reforms: Fitch

- Land Bill now only for new projects

Corporate News

- Dr ReddyRs.s launches generic asthma, allergy drug in US

- GMR to commission two power projects next month

- Aurobindo Pharma gets tentative nod from USFDA for diabetes drug

- Arvind acquires Indian business of Debenhams, Next and Nautica