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Indian stock market daily morning report (August 19, 2010, Thursday)

Contributed by Keynote Capitals

By Keynote Capitals

Views on markets today

- Indian markets closed on positive note yesterday after a significant rally in the final hours as the buying interest emerged across IT, FMCG, Metal, Auto and Bank space. Firm Asian markets also supported the sentiments. Except consumer durable, all sectoral indices closed positive. Bajaj Corp made a modest debut, with the stock gained 14.8% over the initial public offer price of Rs660.

- Market breadth was strong at ~1.31x as investors bought large cap stocks. FIIs bought equities worth Rs6.74bn while domestic institutions sold equities of Rs1.13bn.

- Asian markets are trading higher this morning. The Nikkei is trading positive after US stocks eked out gains on a reassuring sales forecast from retailer Target Corp, but the yen's strength against the dollar weighed on the market. The Hang Seng is also trading higher today.

- The Indian markets are expected to open flat with positive bias. However, the weekly inflation numbers are to be announced today, which will be closely eyed by the markets. The investors may be worried that the RBI may raise interest rates in its mid-monetary policy review scheduled next month, if inflation increases.

Key events today

- Announcement of food and fuel price inflation data.

Economic and Corporate Developments

- The government is planning to set up a committee to consider opening of the multi-brand retail trading business to foreign companies.

- The government has estimated 30% deficit in infra funding in 12th five-year Plan.

Buzzing Stocks

- Tata Motors may issue more shares under the differential voting rights (DVR) banner for raising funds.

- GVK Power & Infrastructure is in the last lap of finalising a private equity investment of US$280mn in its power venture.

- Blackstone has invested US$300mn in Moser Baer Projects Private Ltd, the unlisted energy business of Moser Baer India.

- Essar Oil and IOC have bid for five and ten of Shell India’s retail outlets, respectively. BPCL is negotiating a bid for nine outlets.

- Dr Reddy's Laboratories said it was looking out for partnerships to expand its presence in Japan.

- Trent plans to invest around Rs2.75bn over the next three years in its hypermarket format Star Bazaar.

- NDTV is in talks were for a strategic alliance in its lifestyle business.

- JK Paper has launched a Rs15bn expansion programme at Rayagada, Orissa.

Results to be announced today

Ballarpur Inds.

US markets

The US markets closed positive led by gains in consumer stocks after a sales forecast from discounter, Target Corp temporarily quelled concerns about consumer demand.

Target Corp rose 2.5% after the company said it expects same-store sales to increase 1-3% in the third quarter and be up slightly more in the fourth quarter. The outlook came a day after the stock market rallied on higher-thanexpected earnings from Wal-Mart Stores and Home Depot.

Analog Devices Inc gained 4.4% a day after the microchip maker posted a quarterly profit that topped estimates and issued a better-than-expected fourth-quarter outlook.