Daily Morning Report of Indian Stock Market

Observation on markets today

Indian markets plunge for the second day yesterday to reach their stumpy closing level in more than a week as investors took profits on expiry of monthly derivatives along with concerns about high oil prices. Volatility was high as traders turn over positions in futures & options (F&O) segment from the near-month February 2012 series to March 2012 series. Investors are also awaiting further confirmation on the health of the global financial system as high oil prices intimidate to fuel inflationary pressures and increase costs for companies, affecting their profitability. UBS also said in a note that India looks susceptible to profit taking in the short term after recent outperformance, rising oil prices and seasonally tighter financial conditions. The downward movement was mainly led by selling pressure in real estate, metal, auto and capital goods stocks while FMCG, power and oil & gas stocks spectator some buying activities which gave some support to the markets. Realty stocks edged lower on profit taking after recent strong gains. DLF, Phoenix Mills, HDIL and Unitech fall between 1.08-6.17%. Sterlite Industries fell 4.09%, with the stock extending Wednesday's 6.62% slide. As per media reports, the Vedanta Resources group may merge iron ore firm Sesa Goa with copper and aluminium maker Sterlite Industries to shorten and merge its corporate structure. PNB fell 1.96% as the board of directors of the bank at its meeting has permitted issuance of up to 1.28Cr equity shares to Government of India and up to 1.58Cr equity shares to LIC on preferential basis, at a premium of Rs.993.69.

- Market breadth was weak at ~0.61x as investors sold huge cap stocks. On provisional basis, FIIs bought equity of Rs.1.05bn while domestic organization sold equity of Rs.6.41bn in cash segment.

- Asian markets were plane today after growing crude oil prices and strain related to Iran weighed on the equities.

- We expect a flat to vigilant opening for the Indian markets today following the signal from the Asian markets.

Financial and Commercial Improvement

Amid the country facing an sensitive coal shortage, a ministerial panel, headed by Finance Minister Pranab Mukherjee, will meet on March 1 to address the environmental problem that hurt the coal productivity.

A panel of ministers will meet on Feb 27 to confer a share sale in state-run oil voyager and producer Oil and Natural Gas Corp, Oil Minister S. Jaipal Reddy said.

Energetic Stocks

Shasun Pharmaceuticals would meet on February 27, 2012, to judge issue of equity shares on a special basis to private equity investor.

Coal India Ltd. will look for offtake obligation from power utilities before importing, as has been asked by the Prime Minister’s Office.

The state-owned coal sector monopoly was recently asked by the Prime Minister’s office (PMO) to meet the contribute obligation of the power sector even if it means resorting to imports.

Ashok Leyland is scheduling to set up a new creation facility near Chennai.

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