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Indian stock market daily morning report (September 01, 2010, Wednesday)

Contributed by Keynote Capitals

By Keynote Capitals

Views on markets today

- Indian markets ended with modest losses to its lowest close in a month yesterday as shaky global markets and concerns about the US economy cast a shadow on the outlook for risk appetite. However, the market recovered some of its losses after showing smart recovery in the last trading session. Robust first quarter GDP growth at 8.8% in the June quarter however failed to excite investors as it was in line with expectations. Reliance Industries lost ~3.1% as investors gave a thumb down to its surprise stake buy in hotel chain EIH, which was seen as a diversion from its core strength. Consumer durable, oil & gas, real estate and metal stocks witnessed selling pressure while some buying activities in FMCG, auto and IT stocks capped losses to major extend.

- Market breadth was weak at ~0.46x as investors sold small and mid cap stocks. FIIs bought equities worth `2.87 while domestic institutions sold equities of `5.95bn.

- The Asian markets are trading positive this morning. The Nikkei is trading up getting a bit of a boost from a rise in China's purchasing managers index, while technology shares crawled higher in reaction to a sharp fall the day before. The Hang Seng is also trading positive.

- Indian markets are expected to open higher supported by firm Asian markets. Automakers will be in focus as they release August sales data.

Economic and Corporate Developments

- India’s GDP growth for Q1 FY11 was at 8.8%, fastest pace in nine quarters.

- Fiscal deficit from April to July was US$19.3bn.

- The Designated Authority in the Commerce Ministry has initiated anti-dumping investigations into soda ash imports from China, the European Union (EU), Kenya, Pakistan, Iran, Ukraine and the US, following a petition filed by the domestic producers' association.

Buzzing Stocks

- With production from Reliance Industries’ KG-D6 field stuck at 60mmscmd, the government has decided not to make any fresh gas allocation from it.

- Reliance Industries is likely to bid for `75bn, 1,320-Mw thermal power project at Gulbarga in north Karnataka.

- Infosys Technologies does not foresee a major dent in its margins because of the hike in US visa fee but might pass on the new cost to its US customers.

- HDFC has increased its retail prime lending rate by 50bps to 14.25%.

- The USFDA has issued a warning letter to Sun Pharma for manufacturing practice violations at its Cranbury facility in New Jersey.

- NALCO has invited bids from coal companies in Indonesia to mine its coking coal mines in East Kalimantan Province.

- Adani Power plans to spend about `825bn to increase capacity in the next four years.

- HCL Technologies will merge its subsidiary, HCL Technoparks with itself.

- Cummins India will begin construction shortly on a new plant for export in markets like UK, Europe and USA.

US markets

The US markets closed flat as a pair of positive data surprises on the consumer and housing fronts helped ease investor anxiety over the economy's strength. U.S. consumer confidence rose more than expected in August, lifted by a mild improvement in the short-term outlook and though a separate report showed business activity in the U.S. Midwest registered a slowdown in August, growing a bit less than economists expected.

Saks Inc surged 19.6% after a news report suggested that a group of private equity firms might soon bid for the New York-based luxury department store operator. Broadcom Corp tumbled 6.4% and also the PHLX semiconductor index.