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Indian stock market morning report by Keynote Capitals (June 22, 2009, Monday, 7.00 a.m. GMT)

Views on markets today

- Led by buying from domestic institutions, Indian markets closed up on Friday. However, FIIs remained net sellers, which fueled volatility. Capital goods, metals and real estate stocks recovered after the weakness over the last few days.

- Market breadth was tight at 1x. FIIs sold equities worth Rs29Cr while domestic institutions bought equities of Rs413Cr. Trading volumes on both exchanges weakened on Friday, it being the last day of the week. Traders avoided taking fresh positions. Deliverable volumes for the top 10 traded stocks weakened on both exchanges, led by weak deliverable volumes in real estate and infrastructure stocks.

- Asian markets opened strong this morning, but remained cautious ahead of the US Fed meeting tomorrow and and Wednesday. Markets are awaiting the Fed's views on economic outlook and interest rates.

- We expect a cautious but positive opening for the Indian markets tracking the Asian markets. Markets may remain range-bound but volatilite due to lack of immediate triggers and FII selling. Domestic institutions have however been buying, which is a positive for the markets.

Economic and Corporate Developments

- The Indian Rupee (INR) latest quote 48.07 per USD.

- NYMEX Crude Oil (CL) is currently trading at $69.26 per barrel.

- The World Bank has warned that prospects for the global economy remain unusually uncertain despite recent signs of improvement in parts of the world and cut its 2009 growth forecasts for most economies.

Buzzing Stocks

- SBI has approved the proposal to acquire State Bank of Indore subject to approval by the RBI and the Government of India.

- Rolta India has $150mn outstanding FCCBs due 2012 convertible into ordinary shares each at par value of Rs10. The company intends to repurchase for cash, the aggregate principal amount of the outstanding bonds.

- Ess Dee Aluminium plans to pump in nearly Rs2bn, to add nearly 60,000 tonnes of aluminium packaging foils manufacturing capacity at its Hoera unit.

- Emami Group has decided to bring its FMCG business under group flagship Emami and realty business under a separate company Emami Infrastructure, with a view to consolidate its FMCG and realty businesses.

Results to be announced today
Ansal Properties & Infrastructure, Gujarat Industries Power, Adhunik Metaliks

US markets last Friday

The US markets spent the morning in positive territory until the weight of falling oil and general expiration day volatility shoved the index into the red 0.2% at its close. There was no economic indicator news, so markets focused on company news. Financial stocks and tech stocks showed leadership in this session's late advance. Financial stocks actually fell to a loss in the early going, but pushed higher to finish with a 1.7% gain, better than any other major sector. Blackstone Group was a standout after it was reported that China Investment Corporation is poised to invest $500mn in a hedge fund unit of the investment services company. Bank regulators closed 3 small banks on Friday, bringing total bank failures to 40 this year as the recession and delinquent loans erode the health of financial institutions. The failure is expected to cost the FDIC deposit insurance fund an estimated $217mn. The CRB Commodity Index was also unable to make headway; the CRB fell 1.6%, giving it a weekly loss of 3.6%.