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Indian stock market daily morning report (September 14, 2012, Friday)

Contributed by Keynote Capitals

Views on markets today

- Indian markets gained yesterday for the seventh straight trading session and a seven-month closing high, as hopes for government reforms boosted banks, while technology shares gained on hopes for stimulus measures from the Federal Reserve. A special Indian cabinet panel is due to meet later in the evening, and may discuss raising prices of heavily subsidized fuels, while the issue of opening up the aviation sector for foreign direct investment will be discussed at a separate weekly cabinet meeting. Policy reforms are seen as critical for a country facing ratings downgrades into sub-investment grade, due to rising fiscal imbalances and slowing growth. Investors are also on hold for the Federal ReserveRs.s meeting later in the day amid high hopes for a new asset-purchasing programme, an event that could boost demand for risk assets such as those in emerging markets.

- Banks were among the dayRs.s leading gainers on hopes that fiscal reforms would give Reserve Bank of India room to cut interest rates given the central bank has pushed the government to shore up its finances. Some state-owned companies also rose on media reports the cabinet will meet on Friday to consider selling some of the governmentRs.s stake in five companies. National Aluminium Co Ltd shares gained 1.3%, while Hindustan Copper gained 1.2%, and Neyveli Lignite Corp rose 1.8%. SpiceJet gained 4.6% after surging 7.1% on Wednesday on hopes the government would change rules that currently bar foreign airlines from buying stakes in domestic carriers.

- Market breadth was lower at ~0.79x as investors sold large cap stocks. On provisional basis, FI Is bought equity of Rs.3.61bn while domestic institutions sold equity of Rs.1.56bn in cash segment.

- Asia shares jump, following sharp gains for U.S. markets, after the Federal Reserve unveils a fresh round of major quantitative easing.

- We expect a gap up opening for the Indian markets, following the Asian markets and diesel price rise by the government.

Economic and Corporate Developments

- Government hiked diesel prices by Rs 5/litre. It capped subsidised LPG to 6 cylinders per family per year.

- Coal ministry de-allocated 4 coal blocks.

Buzzing Stocks

- Inter Ministerial Group to review Tata Steel, Reliance Power and Bhushan Steel coal blocks.

- Department of Telecommunications (DoT) issues order against 7 Mumbai companies over high radiation levels including Reliance Communications , Tata Teleservices (Maharasthra), Bharti Airtel , Vodafone, Idea Cellular , Aircel, Loop Telecom

- Grasim Industries to partner Japan based Omikenshi Company to develop international markets for rayon products

- Cabinet to consider FDI in aviation, broadcast sectors today: BS

- Mylan in talks to buy part of SMS Pharma Rs.s business

- Ranbaxy to invest USD 40 million to set up manufacturing unit in Malaysia

- Lupin gets US FDA nod for Generic Lexapro tablets

- Orissa Minerals Development Company (OMDC) board rejects bonus share issue

- Karnataka Bank board to mull raising of funds via rights issue today

- Religare Finvest to raise Rs 500 crore via NCDs, issue opens today

- Hinduja Global buys healthcare IT operations of Deloitte Consulting in all-cash deal

- Mawana Sugars to sell 49% stake in Siel Industrial for Rs 135 crore

- KGN Enterprises board to mull issue of convertible warrants to promoters on a private placement/ preferential basis