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Indian stock market daily morning report (November 27, 2009, Friday)

Contributed by Keynote Capitals

By Nitin A. Khandkar (Keynote Kapitals)

Views on markets today

- The Sensex shed 2% yesterday on the nervousness in the global markets on account of the debt worries in Dubai. European banks declined sharply as media reports of the Dubai debt restructuring came in, leading to worries that the global financial system which is just recovering from last year’s turmoil, may get bogged down yet again. Indian banks followed their European counterparts and led the market losers. Oil and gas, consumer durables and real estate were the other sectors, which witnessed sharp declines. Further impact on global markets may only have been contained by the US markets, which remained closed yesterday for Thanksgiving.

- Market breadth was weak at over 0.4x as investors offloaded positions in large cap stocks. FIIs sold equities worth Rs70Cr, while domestic institutions bought equities of Rs151Cr.

- Asian markets declined sharply this morning, after the US dollar hit a 14-year low and debt problems in Dubai hit the world financial markets. Both the Nikkei and the Hang Seng are trading lower today.

- We expect a weak opening for the Indian markets this morning, in line with the Asian markets. Banks, oil and gas and real estate stocks may react sharply to Dubai news. Investors are unlikely to take long positions or keep long positions open over the weekend, fearing further bad news flowing in from Dubai, which however remains closed for business for the Eid weekend. Investors will also await cues from the US markets later today.

Economic and Corporate Developments

According to Fashion and Lifestyle Franchise Report 2009-10, the retail market in India is expected to reach $535bn by 2013 and modern retail will show impressive CAGR of 40%. The report also says that $30bn worth of fresh investment is expected over the next five years.

Key event

IPO of MBL Infrastructures Ltd. Opens today, closes Dec.1, price band Rs165 to 180 per share.

Buzzing Stocks

- Tata Steel, which reported a consolidated quarterly net loss on the weak performance of its European unit Corus, sees stability in prices and expects its capacity utilization to be about 80% for the rest of the year.

- Siemens, which holds an investor conference in Mumbai today, has reported an order book of Rs103bn as of Sept. 30, up from Rs98bn y-o-y. The company received new orders worth Rs88bn in the period.

- Sun Pharmaceuticals has received tentative US FDA approval (ANDA) for its generic Strattera capsules, used for treatment of attention deficit hyperactivity disorder. The drug is a therapeutic equivalent of Strattera capsules from Eli Lily.
 

- Indian Oil Corp. plans to invest Rs4,650Cr in laying crude oil and petroleum product pipelines over the next three years.

- ONGC plans to acquire a 20-25% stake in a Iranian gas field and plans to develop a gas field it had discovered two years ago.
 

- Koutons India plans to open 100 new stores and expects revenue to grow by 35% in the current fiscal.

US markets

US markets were closed yesterday in observance of Thanksgiving day.

US News Updates

- Retailers from Wal-Mart Stores to Gap, RadioShack and Walgreens opened their doors yesterday as US families celebrated Thanksgiving, aiming to capture early bird shoppers a day before official start of holiday shopping on "Black Friday." The unsettled state of the US economy, with 26-year high unemployment and tighter access to

credit, has industry holiday sales forecasts varying widely from a decline of 3% to an increase of 2%.

- Fannie Mae plans to raise minimum credit score requirements next month and limit the amount of overall debt that borrowers can carry relative to their incomes.

- Wal-Mart Stores demand rock-bottom prices from suppliers in China means some of these companies are forcing their employees to work in sweatshop-like conditions.

Key event today

Money Supply Data