Reports » India

Indian stock market daily morning report (February 02, 2012, Thursday)

Contributed by Keynote Capitals

Views on markets today

- Indian markets recovered in late trade yesterday to post its highest close in 12 weeks after manufacturing data in Europe built confidence among the global investors. India's manufacturing sector grew at its fastest pace in eight months in January as factory output surged the most on record on increased domestic and foreign demand also led the markets to recover from early loss. The HSBC manufacturing purchasing managers’ index (PMI), compiled by Markit, jumped to 57.5 from 54.2 in December. The upward movement was mainly led by gain in metal, capital goods, auto and power stocks while consumer durable, PSU, IT and FMCG stocks witnessed some selling pressure. Auto stocks gained on better-than-expected January sales, with Maruti Suzuki gained 2.4% to its highest close in five and a half months after it reported its first monthly sales rise since May last year. Tata Motors gained 1.9% after it reported January sales rose 16%. M&M, which posted a 22% rise in January sales, ended 2.2% higher. ICICI Bank fell 1.4% after surging nearly 6% in the previous session, while top mortgage lender HDFC fell 1.3% after private-equity firm Carlyle Group said to have sold a quarter of its stake in the company. Top steelmaker Tata Steel jumped 4.5%, while Jindal Steel & Power surged 6.3%, leading a rally in metal stocks after news that the factory sector in China, a key consumer of natural resources from oil to metals, unexpectedly expanded slightly in January.

- Market breadth was strong at ~1.91x as investors bought large cap stocks. On provisional basis, FIIs bought equities worth `16.76bn while domestic institutions sold equities of `0.32bn.

- Asian markets jumped Thursday, after surveys signalled that global manufacturing improved in January.

- We expect a positive opening for the Indian markets today, riding on the recovery of the global markets. Investors may keep a close eye on the weekly food and fuel inflation data.

Economic and Corporate Developments

- The HSBC PMI for India grew to 57.5 in January from last month's 54.2.

- The Committee of Secretaries constituted by Prime Minister Manmohan Singh to look into matters impacting power sector growth is believed to have decided that Coal India will be penalised if it fails to supply fuel at an 80% "trigger" level.

Buzzing Stocks

- In management rejig of telecom operations, Reliance Communications said that its wireless business head, Syed Safawi is leaving the company and COO, Shamik Das would oversee all the geographical divisions.

- TVS Motor Company reported 5% growth in total sales in January 2012 to 173,514 units as against 165,152 units in the same period last year. Cumulative sales for the period during April 2011 to January 2012 grew 10% to 1,843,554 units as against 1,678,048 units in the previous comparable period.

- Binani Industries Limited acquired 3B, a Belgian fibreglass major, for €275mn. This is the third such global acquisition of the group in six years. Last year, the group acquired US-based composite maker CPI Inc.

- The government’s decision to roll back a 12.5% rise in coal prices might have eroded Coal India’s cushion against a `6,500Cr wage impact. But it came as a blessing for another public sector undertaking, NTPC. The state-owned power generator is saved from an additional annual outgo of `7,700Cr, 85% of its annual profit.

US markets

U.S. stocks rallied Wednesday, breaking a four-session loss streak for the Dow Jones Industrial Average and S&P 500, lifted by Chinese and European data and an expansion in U.S. manufacturing.

The Dow Jones Industrial Average ended up 83.55 points, or 0.7%, at 12,716.46. The S&P 500 Index added 11.68 points, or 0.9%, to 1,324.09. The S&P 500 Index added 11.68 points, or 0.9%, to 1,324.09