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Indian stock market daily morning report (August 17, 2010, Tuesday)

Contributed by Keynote Capitals

By Keynote Capitals

Views on markets today

- Indian markets closed lower yesterday on profit booking across the sectors despite slower-than-expected rise in monthly inflation figure on weak global markets. The sentiment in the global markets was weighed down by the weaker than expected Japanese GDP which triggered the worries about the slowdown in the economic recovery. Gap-down opening of European markets triggered fresh selling pressure in mid-afternoon trades. All sectoral indices, except FMCG closed in negative note.

- Market breadth was weak at ~0.75x as investors sold large cap stocks. FIIs bought equities worth Rs4bn while domestic institutions sold equities of Rs4.33bn.

- Asian markets are trading lower this morning. The Nikkei is trading negative neat to its 13 month low as exporters such as Canon Inc fell as the yen advanced. The Hang Seng is also trading lower.

- Indian markets are expected to open flat. The sentiments will be cautious due to mixed global markets on fresh concerns surfacing over the health of the global economy.

Economic and Corporate Developments

- Whole sale price inflation falls to single digit at 9.97% in July.

- Shipping Ministry will award 25 port projects under the Public Private Partnership (PPP) scheme during the current financial year.

Buzzing Stocks

- Vedanta Resources has agreed to acquire a majority stake in energy explorer Cairn India for up to US$9.6bn in cash.

- Tata Steel-owned Corus plans to invest ?185mn in the No 4 blast furnance at Port Talbot steelworks in Wales, which will increase capacity by 400,000 tons a year.

- SBI has raised its benchmark prime lending rate by 50bps to 12.25% effective Tuesday

- Lanco Infratech has targeted a capex plan of Rs240bn for increasing its power generation capacity to 9,300MW.

- Siemens has bagged a ?10mn order from SAIL to supply an RH vacuum degassing plant to the Rourkela Steel plant.

- Tata Steel’s domestic manufacturing capacity will jump three-fold to 21mtpa following the expansion of its Jamshedpur project and Orissa and Chattisgarh’s greenfield units becoming operational.

- Yes Bank has raised Rs6.65bn of capital through two bond issues.

- Godrej Consumer Products is in talks to give up the license to sell the air-freshener brand 'Ambipur' in India to global major P&G in the next 2-3 months.

Results to be announced today

Educomp Solution, Mawana Sugars

US markets

The US markets closed flat as investors found little reason to buy stocks, suggesting that even several days of losses have not convinced institutions share prices are attractive. Investors anticipating a rebound after four days of losses were also disappointed by early economic releases that suggested more weakness in housing and regional manufacturing.

However, strength in technology shares boosted the Nasdaq modestly. The biggest losers were education stocks, which tumbled on concerns federal regulators will impose tighter controls on student loans.