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Indian stock market daily morning report (November 17, 2009, Tuesday)

Contributed by Keynote Capitals

By Nitin A. Khandkar (Keynote Capitals)

Views on markets today

- Indian markets were upbeat throughout yesterday’s trading session on optimism expressed by India's finance minister on the economy and strong global cues. Benchmark BSE Sensex remained above the 17,000 level almost throughout the trading session. The rally was led by real estate, auto, metal and oil and gas stocks, while IT stocks underperformed. However, trading volumes dipped for the second consecutive day. In the backdrop of poor trading volumes, as such the rally loses its sheen.

- Market breadth was positive 1.7x led by large cap stocks. FIIs bought equities worth Rs5.4bn and domestic institutions sold equities of Rs2.9bn.

- Asian markets have turned weak this morning on profit taking. Japanese markets are trading lower, dragged down by exporter stocks due to a strong yen.

- Indian markets are set to open weak this morning, tracking the Asian markets. We expect investors to take profits following the rally over the last few days, which may add to the weakness. However, markets may be supported by FII buying, which has been the trend over the last few days.

Economic and Corporate Developments

- Despite uncertainties over cane pricing, sugar mills in Uttar Pradesh have plans to commence crushing as early as possible, in order to avoid any recovery loss which may impact their operating performance.

Buzzing Stocks

- Reliance Industries will be in focus as the company holds its AGM today.

- According to media reports, Larsen & Toubro's power unit has emerged the lowest bidder for a project in north India.

- ICICI Bank is likely to raise $700mn in bonds through medium-term note programme.

- Jaiprakash Associates will raise low cost funds to the extent of Rs5bn by way of private placement of unsecured rated commercial paper, and disinvest / offer for sale upon 60mn equity shares of the 1.215bn equity shares of Rs10 each held by the company in subsidiary Jaypee Infratech.

- Ruchi Soya Industries board approved the scheme of amalgamation of Mac Oil Palm Ltd.

- Bharat Forge plans to foray into the power sector with an investment of up to Rs500bn to set up power generation capacity of up to 10,000MW over the next ten years.

- Tata Steel plans to raise its annual iron ore production in India by 55% to 17mn tonnes over the next two years with an expected investment of about Rs11bn.

- Shoppers Stop will invest Rs2.5bn from internal accruals to open 15 more stores across the country over the next three years.

- Orbit Corporation has approved the allotment of 2mn warrants, convertible into equity shares of Rs10 each @ Rs189.75 per shares, on preferential basis, each to promoters Mr. Ravi Kiran Aggarwal and Mr. Pujit Aggarwal.

- Suzlon has bagged a 21MW order from Grant County Wind Farm in Minnesota. It will supply 10 wind turbines of 2.1MW each.

US markets

Stocks hit a 13-month high today as surprisingly positive retail sales figures helped to power the gains. Strength in the broader market also helped stocks offset a late slip by financials so that the S&P 500 could settle above the 1100 mark for the first time in more than 1 year. Crude soared leading the energy sector higher wrapping up the very bullish session. Conversely, the US dollar hit a 15 month low as Fed Chief, Ben Bernanke, warned of significant headwinds to the recovery, in a speech to the Economic Club of New York.

Economic Events
October Advance Retail Sales report said that total retail sales were up 1.4% last month. Economists had expected a 0.9% increase. Excluding autos, retail sales were up by 0.2% last month, but that rate is below 0.4% increase that economists expected.

Empire Manufacturing Survey for November came in at 23.5, below expectations for a reading of 30.0 following the 34.6 that was posted in the previous month.

Business inventory data for September showed a 0.4% decrease, which is softer than the 0.7% decrease that had been widely expected. That announcement had no real impact on trade, though.