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Indian stock market daily morning report (September 03, 2012, Monday)

Contributed by Keynote Capitals

Views on markets today

- Indian markets fell on Friday to their lowest close in four weeks after stronger-than-expected GDP data dashed hopes for rate cuts next month, while Reliance Industries fell after Citigroup downgraded the stock. India's gross domestic product grew 5.5% in the April-June quarter, just above the 5.3% posted in the last quarter and slightly higher than forecasts. Although the data signalled the worst may be over, investors worry that growth will remain lethargic, but not low enough to prompt interest rate cuts from the Reserve Bank of India. Continued disruptions in Parliament are also reducing the prospect of policy reforms during a time when the country is under threat of credit ratings downgrades from Standard & Poor's and Fitch Ratings.

- Banks were among the leading decliners. ICICI Bank fell 1.9% and Axis Bank lost 2.1%. UBS downgraded Axis Bank to "neutral" from "buy", citing "increasing" quality risks, "muted" earnings growth and a 28% share price increase so far this year.

- Reliance Industries fell 2.2% after Citigroup downgraded the stock to "neutral" from "buy", saying valuations were "not compelling enough" while the near-term earnings outlook was muted. Hero MotoCorp fell 3.3%, marking its fifth day of falls on continued worries about a potential slowdown for twowheeler demand and a pileup of inventory.

- Market breadth was marginally negative at ~0.97x as investors sold large cap stocks. On provisional basis, both FIIs and domestic institutions sold equities worth '2.11bn and '1.72bn, respectively in cash segment.

- Asian stocks fall after China's manufacturing index, recorded as PMI fell to the lowest since 2009. HSBC China August PMI fell to 47.6 from July's 49.3.

- Indian markets to open following the suits of the Asian markets and RBI's hard stand towards the growth by reiterating its focus on reducing inflation.

Economic and Corporate Developments

- Market regulator SEBI may soon ask companies and merchant bankers to limit any business transactions amongst them to bare minimum and to provide investors with a detailed analysis of how they discover the IPO price range.

- FICCI'S survey of the Business Confidence Index during the April-June quarter stood at 51.8, down from 60.3 in the Q4 of FY'12.

Buzzing Stocks

- Eicher Motors Bus & Truck Sales 7.3% at 3,909 Units (YoY)

- EIH Associated Hotels approves rights issue price of '100 per share, ratio 5 shares for 9 shares held

- TPG may sell its 20% stake in Shriram Transport Finance in open market (Stake valued at '2800Cr)

- Vedanta may shut Lanjigarh refinery, to issue closure notice this week

- Coal India CMDsaid that the Board yet to approve price pooling for imports Board asks CIL to present price pooling business model

- Oil PSUs hike ATF prices by 7.6% (-ve for Airlines co)

- GAIL says in LNG supply pact with Spain's gas natural Fenosa Spain co to supply 3bn cu mt LNG over 3 years starting Jan

- Jain Irrigation board to consider raising around $200m on September 4

- Everest Kanto planning restructuring of $35mn outstanding FCCBs

- Sun Pharma Advanced rights issue of 1:7 at '67 per share begins on Sept, 6, 2012.

- OMDC board meets to mull bonus issue

- RCF Mulls $1bn investment in Candada

- Amara Raja has Sept 26 as record date for stock split from 2 to 1

- FDC buyback will start from Sept 3

- Chartered Logistics board meets to mull bonus issue

- Fire at Apollo Tyres Kalamassery unit, machinery and rubber have been destroyed