Reports » India

Indian stock market daily morning report (July 12, 2012, Thursday)

Contributed by Keynote Capitals

Views on markets today

- Indian markets fell yesterday, a session after closing at their highest since mid-March, as select blue chips such as cigarette maker ITC were hit by profit-booking. Global risk aversion also weighed investor's sentiments. European shares edged lower after profit warnings from U.S. companies, including Cummins Inc, compounded fears that the sluggish global economy will erode earnings.

- However, investors will shift their focus to corporate earnings, as software services exporters Infosys and Tata Consulting Services will announce April-June quarterly earnings today. Investors are also waiting for industrial output data to be announced today while inflation data is due on Monday.

- FMCG stocks fell after the director-general of state-run India Meteorological Department (IMD) L.S. Rathore said El Nino, which is usually associated with lower rainfall, will likely emerge in August 2012.

- HDFC declined on profit taking after the company reported good Q1 results. Infosys rose in choppy trade ahead of its Q1 results while TCS fell ahead of its Q1 results. Reliance Industries fell 1.9% on continued worries over natural gas output from its domestic KG-D6 blocks. Cummins India fell 3%, after its parent Cummins Inc cut its full-year sales forecast, sending its shares down 10% in U.S. markets.

- Market breadth was weak at ~0.75x as investors sold large cap stocks. On provisional basis, FIIs bought equity of ?0.84bn while domestic institutions sold equity of ?3.57bn in cash segment.

- Asian markets are negative today, after US Fed indicated that it is not in favour of stimulus.

- We expect a weak opening for the Indian markets, following the cues from the Asian markets. The markets may remain cautious ahead of the IIP data slated to be announced today.

Economic and Corporate Developments

- Monsoon rains have covered the entire country though it is still deficient by 23% and the situation in Karnataka and Maharashtra is worrisome, the Government said.

Buzzing Stocks

- CCEA to consider 10% divestment in SAIL today.

- Mahindra Satyam in talks to buy an aerospace engineering company in Europe.

- BHEL close to bagging '1000Cr locomotive manufacturing contract from Pakistan.

- GSPC, ONGC, Oil India and BPCL may sweeten bid for British Gas' 65% stake in Gujarat Gas.

- Diesel price may rise by '5 per litre after presidential elections.

- RIL holds roadshow in Singapore for $1.5bn loan.

- Kesoram Industries puts all expansion plans on hold.

- Kingfisher Airlines cancels 12 flights.

US markets

U.S. stocks fell overnight, after the Federal Reserve failed to deliver a firmer read on additional stimulus. The markets dropped on the news that only a few officials thought that more asset purchases would be necessary at the Federal Reserve's policy meeting in June, according to the minutes released on Wednesday that drove U.S. stocks lower.