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Indian stock market daily morning report (February 08, 2012, Wednesday)

Contributed by Keynote Capitals

Views on markets today

- Indian markets snapped a five-day winning streak and closed on negative note yesterday after the government forecast growth may dip below 7%, the slowest pace since the 2008 financial crisis. The Government released its advance GDP estimate for the year ending on March 31, 2012 and expected GDP to expand by 6.9% in FY12 as against a healthy 8.4% in the last two years. The sentiment was also edgy after weakness in European markets amid concerns about Greece's ability to secure a second bailout package from the international lenders to avert a default. The downward movement was led by selling pressure in capital goods, real estate, power and metal stocks while buying activities in oil & gas, consumer durables, bank and FMCG stocks support the markets. Telecom stocks fell across the board after telecom regulator TRAI said it plans to review its stance of not interfering in fixing of telecom tariffs as reports indicate a possible reversal of the declining trend in telecom tariffs. Manappuram Finance tumbled after the RBI banned the company and an unlisted group company from taking public deposits. The RBI said that acceptance of deposits either by Manappuram Finance or Manappuram Agro Farms (Magro) is punishable with imprisonment. Hindustan Unilever were down today, a day after the FMCG giant posted better-than-expected Q3 net profit on rising prices and volume growth. However, HUL did warn about headwinds from an uncertain global environment. RIL edged higher after Goldman Sachs upgraded the company to a 'Buy' from 'Neutral', citing a potential gain in margins on increased refining and recovering oil demand.

- Market breadth was weak at ~0.77x as investors sold large cap stocks. On provisional basis, FIIs bought equity of Rs.6.19bn while domestic institutions sold equity of Rs.8.54bn.

- Asia markets move higher, with auto sector leading the indices after Toyota improved its outlook.

- We expect a positive opening for the Indian markets today, following the cues from the Asian markets.

Economic and Corporate Developments

- An Empowered Group of Ministers (EGoM) decided to allow further export of 1 million tonnes of sugar in view of surplus production and reduce export price of basmati rice to $700 a tonne.

Buzzing Stocks

- Suven Life Sciences Limited (Suven) stated that it has secured three patents, two from the US and one from Mexico, for its new chemical entities (NCEs) for the treatment of disorders associated with neurodegenerative diseases. These patents are valid through 2025 and 2028.

- India Cements is expected to make an investment of around Rs.500Cr during the next two years, mainly in its power plant and coal project in Indonesia.

- Trent is restructuring its business. The retail arm of the Tatas is closing stores in its loss-making value fashion format, Fashion Yatra, and is reworking its operations in Sisley brand.

- Lanco Babandh Power Ltd has proposed to scale up capacity of its proposed coal-fired power plant in the state from 1,320 MW to 2,640 MW.

- Reliance Industries said that after a ministerial panel on Tuesday allowed private airlines to import jet fuel directly, it has been approached by airlines to provide them services for handling jet fuel on their behalf at the airports.

US markets

U.S. stocks rose Tuesday, sending the Dow industrials to their highest close since 2008, as Greece reportedly neared accord on budget cuts, job openings rose in America and the Federal Reserve kept to its low-rate stand.

The Dow Jones Industrial Average rose 33.07 points, or 0.3%, to 12,878.20. The S&P 500 index gained 2.72 points, or 0.2%, to 1,347.05. The Nasdaq Composite Index COMP +0.07% advanced 2.09 points, or 0.1%, to 2,904.08