Reports » India

Indian stock market daily morning report (November 19, 2009, Thursday)

Contributed by Keynote Capitals

By Nitin A. Khandkar (Keynote Capitals)

Views on markets today

- The Sensex snapped the 3-day rally and closed just below the crucial 17,000 mark yesterday. Overall, mood was lacklustre due to absence of domestic triggers. The Sensex saw small rallies which however could not sustain on profit taking by traders in banks, oil and gas and capital goods stocks. However, media reports of stake sale in JSW Steel to Nippon Steel fueled a rally in metal stocks. IT stocks were strong as well.

- Market breadth was moderately strong at 1.4x. Small cap stocks witnessed buying momentum, while breadth for large and mid cap stocks was tight. FIIs remained in the buy mode and bought equities worth Rs4.1bn, while domestic institutions sold equities of Rs2.6bn.

- Asian markets are trading lower today, amid continuing bearish sentiments. Japanese markets are down as the Japan's largest bank, Mitsubishi UFJ said it would raise $11bn to meet capital requirements. The Hang Seng too is down, ahead of the key economic numbers to be declared by the US.

- We expect a weak opening for the Indian markets this morning as signals from global markets are not encouraging. However, consistency in FII buying is a positive and may cap any major downside.

Economic and Corporate Developments

- India has imposed a safeguard duty of 20% on Chinese imports of soda ash (key input in detergents) as these are affecting the domestic industry. Tata Chemicals and GHCL can be beneficiaries of this move.

- The National Highways Authority of India (NHAI), having failed to meet the deadline for awarding 126 projects during FY10, has brought down the number of projects to be awarded in FY11 to 92. In FY11, NHAI plans to award 92 projects, covering 11,721 km and worth over Rs 1 lakh crore.

Buzzing Stocks

- HCL has announced a partnership with software company Ubiquiti Inc. to provide automated warranty solutions to automotive manufacturers.

- Suzlon Energy, through its German unit RE Power Systems has signed a contract to supply wind turbines with a total capacity of 18.45MW to US firm Heritage Sustainable Energy LLC, to be installed by Q3 of 2010.

- JSW Steel is planning to enter into a strategic alliance with a global steel company through sell of minority stake for around Rs20bn, which will offer technology to help the company to make speciality steel products.

- Pratibha Industries has bagged an order worth Rs294Cr from UP Jal Nigam for installation of water treatment plant, overhead tank and laying and commissioning of distribution system to be executed in 24 months.

- NMDC has signed a Memorandum of Understanding (MoU) with SAIL to develop a limestone project at Arki in Himachal Pradesh.

- Petronet LNG is planning to acquire up to 10% stake in ONGC Petro-additions (OPaL), the special purpose vehicle formed for setting up a chemical complex at Dahej SEZ.

- Kavveri Telecom Products’s subsidiary Kavveri Telecom Infrastructure has signed a long term agreement for INBUILDING WIRELESS solutions for 10 years on BOL (Build, own, operate and Lease) basis with a forth operator, who is one of the major pan-India cellular operators,. This agreement will contribute to substantial revenues of the Kavveri Telecom Infrastructure.

- Lloyd Electric & Engineering through its subsidiary Janka Engineering, has signed a purchase engineering for acquisition of assets with Trademarks and Janka brand of Kanka Radotin, a leading Czech based manufacturer of diversified Air Handling product portfolio for a total consideration of ?3.66mn.

US markets

Stocks posted a valiant fight back toward breakeven after a slew of negative data knocked the market negative earlier in the session. Despite the general negativity of the day, stocks closed well off their intraday lows with the DJIA giving back just -11.11, closing in red 0.1%. Tight credit led to an unexpected drop in housing starts, while worse than expected earnings from several tech names weighed on that sector.

Economic events
The latest dose of economic data indicated that consumer prices for October increased 0.3%, which is a bitstronger than the 0.2% increase that had been widely expected. Core prices increased 0.2%, which is also bit stronger than the 0.1% monthly increase that had been widely forecast.

Housing starts for October came in at an annualized rate of 529,000, which is below the rate of 600,000 that had been widely expected. Meanwhile, building permits came in at an annualized rate of 552,000, which is a slower pace than the annualized rate of 580,000 that economists, on average, had forecast