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Indian stock market daily morning report (September 08,2010, Wednesday)

Contributed by Keynote Capitals

By Keynote Capitals

Views on markets today

-Indian markets continued their winning streak to hit highest level in 31 months for the second day bolstered by strong fund buying in cement, capital goods and metal stocks despite weak global cues. Cement stocks were among the big gainers on speculation that the companies were likely raise prices, with construction activity set to pick up after the monsoon season ends. Infosys Tech. and TCS closed positive after Dutch bank ABN AMRO set to renew contracts worth $1bn with IBM, TCS and Infosys. The up-move was mainly led by gains in capital goods, IT, metal and oil & gas stocks while real estate, pharma and banks stocks witnessed profit booking.

-Market breadth was strong at ~1.3x as investors bought small and mid cap stocks. FIIs sold equities worth `20.88Cr while domestic institutions bought equities of `4.41bn.

-The Asian markets are trading lower this morning. The Nikkei shed 2%, as the yen's advance to a new 15-year high extinguished an upbeat mood gained from last week's better-than-expected economic indicators. A revival of concerns over European banks and uncertainty over the political situation at home added to the dour mood. The Hang Seng is also trading negative.

-The Indian markets are expected to open lower as concerns about the euro zone banking system drove world markets lower. Maruti Suzuki will be in focus after its plans to invest $1.3bn over the next three years on plants to boost capacity, as demand for cars remain strong.

Economic and Corporate Developments

-Petrol and diesel prices across the country increased by 9-13paise a litre with effect from Tuesday midnight, after the government decided to increase the commission to petrol pump dealers.

-Telecom operators in the country added 17mn subscribers in July this year, taking the total number of mobile users in the country to 652.4mn.

Buzzing Stocks

-Maruti Suzuki plans to invest around `19.25bn for setting up a third plant at its second facility in Manesar.

-Tata Steel, seeking a greater role of the government in promoting Indian industry, has called for an ultra mega steel plant policy, on the lines of the similarly named policy to promote the power sector.

-KEC International has signed a definitive agreement to acquire Texas-based SAE Towers Holdings for US$95mn.

-Tata Steel is looking for a buyer for its South African unit after agreeing to sell its Teesside operations in the UK.

-BHEL plans to leverage its balance sheet and reserves to set up an equipment financing arm through a JV.

-SBI plans to raise `5bn via sale of retail bonds.

-Ashok Leyland plans to raise up to6bn in long-term debt this fiscal to fund its capital expenditure plans till 2011-12.

-Essar Oil, may start supplying gas to the Durgapur facility of Phillips Carbon Black from its Ranigunj (East) CBM block, beginning October.

-Aditya Birla Nuvo has infused `3bn into its NBFC Aditya Birla Finance (ABF) to fund its twopronged expansion plans.

-Shipping Corporation of India plans to purchase a stake in a shipyard to diversify its business.

US markets

The US markets closed negative as investors seized on renewed concerns about European banks as a reason to sell shares after strong gains last week. Banks, energy companies and chipmakers were the biggest decliners. Some analysts feel that the drop after Wall Street's best week in the past two months shows the market is likely to remain range-bound.

Worry about Europe's banks resurfaced after the Wall Street Journal reported major lenders understated holdings in potentially risky government debt during tests designed to probe banks' strength. Also weighing on banks, Germany's banking association said the country's 10 biggest banks may need ?105bn in new capital as regulators revamp rules designed to prevent future crises.