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Indian stock market daily morning report (August 18, 2010, Wednesday)

Contributed by Keynote Capitals

By Keynote Capitals

Views on markets today

- Indian markets ended lacklustre session on a flat note yesterday due to lack of buying activity despite strong cues from European markets and higher US index futures. Investors are looking for US government data on producer prices and housing starts for July to get the market direction. Buying activities were witnessed in banks stocks on optimism over loan demand while Reliance Industries declined on ongoing worries over the delay in ramp up of gas production. The sell-off in IT, capital goods and power stocks weighed on the markets while buying in banks, real estate and consumer durable stocks limited losses.

- Market breadth was marginal weak at ~0.95x as investors sold small and mid cap stocks. FIIs bought equities worth Rs4.04bn while domestic institutions sold equities of Rs4bn.

- Asian markets are trading higher this morning. The Nikkei is trading positive buoyed by short-covering after two days of falls this week, though rises were limited by the yen's persistent strength against the dollar. The Hang Seng is also trading higher.

- Indian markets are expected to open on positive note in line with the global markets.

Key events today

- Listing of IPO of Bajaj Corp (NSE: BAJAJCORP, BSE code:533229), issue price: Rs660 per share

Economic and Corporate Developments

- India’s exports rose 13.2% last month to $16.24bn, compared to $13.62bn in July last year, but lower than $19bn in July 2008. Imports, meanwhile, jumped 34.3% to $29.17bn in July, compared to $19.62bn in 2009- 10.

Buzzing Stocks

- The government has told Cairn Energy that its deal with Vedanta Resources will go through only after a formal proposal to the government is made and all clearances are obtained.

- Mahindra Satyam has won its tax dispute with Upaid after the Supreme Court of the State of New York gave a favourable decision.

- ADAG is close to acquiring a 26% stake from Indiabulls Financial Services in Indian Commodity Exchange.

- HPCL is looking at buying fuel retail assets of Royal Dutch Shell in Africa.

- Bharti Airtel plans to invest US$10mn in its newly acquired telecom network in Seychelles.

- Cox & Kings issued Global Depository Receipts (GDR) at Rs569.20 per share yesterday, amounting to US$65mn.

- Ennore Port is planning to raise around Rs4bn through private placement of shares to part finance expansions.

- Crompton Greaves through its subsidiary, CG Holdings Belgium, has entered into a MoU with the EIC Group of Saudi Arabia to set up a second JV to consolidate its business in the EPC segment in West Asia.

Results to be announced today

Procter & Gamble, United Spirits, Elder Pharma, Gati, Gillette India

US markets

The US markets closed positive after earnings from Wal-Mart and Home Depot and a $39bn takeover bid in the agriculture sector bolstered confidence in the corporate outlook. The two retailing giants reported profit that topped expectations, buoying the markets. The materials sector handily outperformed the broad market after BHP Billiton made an unsolicited $39bn takeover bid for Potash Corp of Saskatchewan Inc.

However, economic data was mixed. Industrial production rose and wholesale prices rose, allaying some fears of deflation, but housing starts suggested that sector remains weak. Most economic data in recent weeks have portrayed a slowdown in the recovery, driving investors away from equities. The US Industrial Production for the month ended July 2010 stood at 1% as compared to (0.10%) in the previous month.