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Indian stock market daily morning report (August 30, 2010, Monday)

Contributed by Keynote Capitals

By Keynote Capitals

Views on markets today

- Indian markets closed on negative note on Friday tracking weak cues from global markets as investors were skeptical ahead of US Federal Reserve Chairman, Ben Bernanke's speech, which is likely to signal his views about the prospects for the world's largest economy. Negative opening of the European markets and decline in the US futures saw markets slipping below psychological levels. All the sectoral indices except oil & gas, edged lower and rate sensitive real estate and banking stocks were most affected while IT and consumer durables were the other laggards on the markets.

- Market breadth was weak at ~0.43x as investors sold large cap stocks. FIIs sold equities worth Rs1.08 while domestic institutions bought equities of Rs2.39bn.

- The Asian markets are trading positive this morning. The Nikkei rose 3.1% after the yen slipped as the Bank of Japan began an emergency policy meeting and after revised second quarter U.S. GDP was less gloomy than expected. The Hang Seng is also trading higher.

- Indian markets are expected to open positive as Asian markets rose in tandem with US markets as investors shrugged off dour comments from the US Federal Reserve chairman.

Economic and Corporate Developments

- Key infrastructure industries (core sector) registered a sluggish growth of 3.9% in July 2010.

- Finance Ministry rejects demand for hike in iron ore export duty.

Buzzing Stocks

- Tata Steel has signed a MoU with Thailand’s Sahaviriya Steel Industries, setting the scope of a possible deal for sale of its Teesside Cast Products facility for around US$500mn.

- Rcom is planning to rope in strategic partners for its infrastructure and technology innovation unit for 3G business and is in discussions with global players like Motorola and HP.

- Power Grid is among the three firms shortlisted by Nigeria to manage electricity grid to be constructed at a cost of US$3.5bn.

- Lupin’s generic tuberculosis drug ethambutol tablet has been included by the WHO in the list of pre-qualified medicines.

- ABG Shipyard sold a 4.7% stake in Great Offshore for Rs645mn through open market transactions.

- HPCL plans to sell 23% of its stake in HPCL-Mittal Energy through an initial public offer.

- DB Realty is in talks with private equity firms for selling 20% stake in its Bandra Government Colony project.

- HPCL to add another 800 retail outlets in the next few months, taking its total fuel dispensing stations to 10,100.

- Oil India is likely to form a joint venture with a US-based shale gas company to acquire shale gas assets globally.

US markets

The US markets rebounded to post their best gains in nearly four weeks on Friday, overcoming initial skittishness brought on by a revenue warning from Intel and dour comments from Federal Reserve Chairman Ben Bernanke. Mr. Bernanke told central bankers that the recovery has weakened more than expected but the US central bank was ready to take further steps if needed to spur the recovery.

As per data released on Friday, US GDP growth in the June quarter was slightly lower than in the previous quarter, but was still better than expected. The US economy expanded by 1.6% during the June quarter, which helped US markets to notch up significant gains.