1 Market Outlook India Research September 30, 2011 Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539 Dealer’s Diary The market edged lower in early trade. A bout of volatility was witnessed in mid-morning trade as the key benchmark indices trimmed losses after hitting fresh intraday lows. The market gradually ascended and bypassed the base line by early afternoon trade on the back of positivity erected in the market. Indices further strengthened on the back of strong opening of European bourses. Media reports about German parliament’s approval on measures to enhance the lending power and flexibility of the Eurozone bailout fund offered strong hopes. The overall market breadth turned positive and the bourses closed on an upbeat note. The Sensex and Nifty gained 1.5% and 1.4%, respectively. However, the mid-cap and small-cap indices lost 0.2% and 0.1%, respectively. Among the front runners, JP Associates, Tata Motors, Infosys, HDFC Bank and M&M gained 3-6%, while L&T, Coal India, Sterlite, SBI and Sun Pharma lost 1-2%. Among mid caps, HT Media, Bombay Dyeing, India Cements, Alok Inds. and KGN Inds. gained 5-6%, while SpiceJet, Jubilant Foods, Hathway Cable, Thermax and Shree Global Tradefin lost 5-6%. Markets Today The trend deciding level for the day is 16,590/ 4,985 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 16,864 – 17,030/ 5,064 – 5,113 levels. However, if NIFTY trades below 16,590/ 4,985 levels for the first half-an-hour of trade then it may correct up to 16,424 – 16,151/ 4,936 – 4,857 levels. Indices S2 S1 R1 R2 SENSEX 16,151 16,424 16,864 17,030 NIFTY 4,857 4,936 5,064 5,113 News Analysis German parliament passes expanded bailout fund Ashok Leyland bags exports order worth US$36.6mn Refer detailed news analysis on the following page Net Inflows (September 28, 2011) ` cr Purch Sales Net MTD YTD FII 2,744 2,493 252 (835) (1,643) MFs 319 476 (157) (731) 5,544 FII Derivatives (September 29, 2011) ` crPurch Sales Net Open Interest Index Futures 5,635 6,118 (484) 12,755 Stock Futures 7,130 6,544 585 26,256 Gainers / Losers Gainers Losers Company Price ( `) chg (%) Company Price ( `) chg (%) Jaiprakash Asso 74 6.3 Sun TV Network 244 (7.0) Container Corp 966 6.0 Jubl. Food 825 (5.2) India Cements 73 5.0 Thermax 461 (5.1) Adani Power 87 4.6 ABB 705 (4.5) Torrent Power 226 4.3 Pantaloon Retl 207 (4.3) Domestic Indices Chg (%) (Pts) (Close) BSE Sensex 1.5 252.1 16,698 Nifty1.4 69.6 5,015 MID CAP (0.2) (9.7) 6,165 SMALL CAP (0.1) (7.3) 6,942 BSE HC (0.1) (7.4) 5,903 BSE PSU 0.4 27.5 7,526 BANKEX 1.5 159.4 11,055 AUTO 2.4 198.4 8,651 METAL 0.3 31.9 11,299 OIL & GAS 1.5 125.5 8,551 BSE IT 2.0 106.1 5,339 Global Indices Chg (%) (Pts) (Close) Dow Jones 1.3 143.1 11,154 NASDAQ (0.4) (10.8) 2,481 FTSE (0.4) (20.8) 5,197 Nikkei 1.0 85.6 8,701 Hang Seng (0.7) (119.5) 18,011 Straits Times 0.3 7.0 2,708 Shanghai Com (1.1) (26.7) 2,365 Indian ADRs Chg (%) (Pts) (Close) Infosys 1.8 0.9 $51.8 Wipro 1.7 0.2 $9.6 ICICI Bank 3.5 1.3 $36.9 HDFC Bank 4.5 1.3 $30.7 Advances / Declines BSE NSE Advances 1,247 62 Declines 1,538 805 Unchanged 103 55 Volumes (` cr) BSE 2,272 NSE 13,122
Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539
Dealer’s Diary
The market edged lower in early trade. A bout of volatility was witnessed inmid-morning trade as the key benchmark indices trimmed losses after hitting
fresh intraday lows. The market gradually ascended and bypassed the baseline by early afternoon trade on the back of positivity erected in the market.Indices further strengthened on the back of strong opening of Europeanbourses. Media reports about German parliament’s approval on measures toenhance the lending power and flexibility of the Eurozone bailout fund offeredstrong hopes. The overall market breadth turned positive and the boursesclosed on an upbeat note. The Sensex and Nifty gained 1.5% and 1.4%,respectively. However, the mid-cap and small-cap indices lost 0.2% and 0.1%,respectively. Among the front runners, JP Associates, Tata Motors, Infosys,HDFC Bank and M&M gained 3-6%, while L&T, Coal India, Sterlite, SBI andSun Pharma lost 1-2%. Among mid caps, HT Media, Bombay Dyeing, IndiaCements, Alok Inds. and KGN Inds. gained 5-6%, while SpiceJet, Jubilant
Foods, Hathway Cable, Thermax and Shree Global Tradefin lost 5-6%.
Markets Today
The trend deciding level for the day is 16,590/ 4,985 levels. If NIFTY tradesabove this level during the first half-an-hour of trade then we may witness afurther rally up to 16,864 – 17,030/ 5,064 – 5,113 levels. However, if NIFTYtrades below 16,590/ 4,985 levels for the first half-an-hour of trade then itmay correct up to 16,424 – 16,151/ 4,936 – 4,857 levels.
Indices S2 S1 R1 R2
SENSEX 16,151 16,424 16,864 17,030
NIFTY 4,857 4,936 5,064 5,113
News Analysis
German parliament passes expanded bailout fund Ashok Leyland bags exports order worth US$36.6mn
Refer detailed news analysis on the following page
Net Inflows (September 28, 2011)
` cr Purch Sales Net MTD YTD
FII 2,744 2,493 252 (835) (1,643)
MFs 319 476 (157) (731) 5,544
FII Derivatives (September 29, 2011)
` cr Purch Sales NetOpen
Interest
Index Futures 5,635 6,118 (484) 12,755
Stock Futures 7,130 6,544 585 26,256
Gainers / Losers
Gainers Losers
Company Price (`) chg (%) Company Price (`) chg (%)
German lawmakers on Thursday approved an expansion of the euro-area rescue fund’sfirepower, freeing the way for European officials to focus on what next steps may beneeded to stem the debt crisis. Consequently, the size of the European Financial Stability
Fund (EFSF) stands enhanced to €440bn (US$593bn) from €250bn earlier. The lowerhouse of the German parliament passed the measure with 523 votes in favour and 85against, granting the fund powers to buy bonds in secondary markets, enabling bankrecapitalisations and offering precautionary credit lines. It raises Germany’s guarantees to €211bn (US$287bn) from €123bn. The measure will be put to the upper house of theparliament on Friday, where it is expected to be passed.
Ashok Leyland bags exports order worth US$36.6mn
Ashok Leyland (ALL) has bagged an order worth US$36.6mn from the Government ofTanzania to supply 723 trucks, buses and special application vehicles to be executed in thecurrent fiscal year. With the new order, ALL has increased its global footprint and isaggressively expanding its network in the African market. The company has network officesin Nigeria and Ghana in the West; Malawi and Mozambique in the South; and Kenya andTanzania in the East, apart from offices in South Africa and Egypt. ALL’s exportsperformance, which is witnessing strong growth traction, will be further boosted by the neworder. ALL is targeting volume growth of over 20% yoy or ~12,000 units in the exportsmarket for FY2012E and has already achieved volumes of 4,649 units YTD in FY2012. Wemaintain our Buy rating on the stock with a target price of `31.
Economic and Political News
Government to borrow ` 53kcr more, shocks debt markets
New mining law to give ` 10,000cr to 60 tribal districts
2-3% interest relief for exporters likely
Corporate News
Power Grid commissions transmission lines for Mundra UMPP
Reliance Broadcast Network raises ` 1,000cr from QIBs
Coal Ministry asks Neyveli Lignite Corp. to seek board nod for further disinvestment
CNG prices to rise by ` 2/kg this week Source: Economic Times, Business Standard, Business Line, Financial Express, Mint
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