Stock Markets in India

The Indian markets are expected to open in the green today tracing positive opening in most of the Asian bourses. Asian stocks rose the most in two weeks, after Federal Reserve Chairman Ben S. Bernanke said monetary policy needs to focus on creating jobs and South Korea’s consumer confidence improved.

The US markets (Nasdaq and the S&P 500) closed at their fresh multi-year highs on Monday. The strong upward move by stocks came on the heels of a speech by Bernanke, who noted that the U.S. unemployment rate has declined faster than the Fed predicted but cautioned that the jobs market remains far from normal. He also assured that the Fed's zero-interest rate policy and other support measures would continue to reduce unemployment over time by promoting economic growth.

Weak global cues on fears over Spain's fiscal outlook and lingering worries about slowing global growth dragged Indian shares sharply lower on Monday. Also, with the government preparing to pass retrospective amendments to the income-tax laws, investors fear that new tax rules could affect capital inflows through participatory notes.

Markets Today

The trend deciding level for the day is 17,151 / 5,211 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 17,280 – 17,506 / 5,248 – 5,311 levels. However, if NIFTY trades below 17,151 / 5,211 levels for the first half-an-hour of trade then it may correct up to 16,924 – 16,795 / 5,148 – 5,111 levels.

Proposed hike in stamp duty by Maharashtra govt. to have a negative impact on the real estate sector

The Maharashtra state government has proposed to increase stamp duty on residential and commercial leave and license agreements according to Times of India. The proposed plan is to increase stamp duty to 0.1% on residential properties from a maximum of Rs.25,000 paid currently for 60 months and 0.4% on commercial properties from a maximum of Rs.50,000 paid currently for 60 months. The commercial and residential segments, which were already witnessing a significant decline in demand from end-users due to high prices and interest rates, have been witnessing an increase in leasing activity since the past one year. If this plan is implemented, it will further affect the leasing segment negatively, as it will push up the overall leasing cost. Stamp duty is paid by the end-user and, thus, developers would not be impacted directly but would find it difficult to increase rents and could witness a decline in demand. This move may affect companies that have a high exposure to the leasing segment in Maharashtra. We continue to remain Neutral on the real estate sector.

Reliance Industries – BP to jointly work on KG-D6

Reliance Industries (RIL) and its partner BP are expected to submit an integrated development plan to increase natural gas from all the 18 discoveries in the KGD6 block to the government by October 2012. Both the companies are projected to commence production from R-Series, the third largest gas find in the eastern offshore KG-D6 block, from CY2015 and production from satellite fields from CY2016. KG-D6 gas block had hit an all-time low production of 28mmscmd, as RIL had shut six wells due to water and sand ingress during the week ending March 4, 2012. Further, Dhirubhai 1 and 3 gas fields in the eastern offshore KGDWN- 98/3 output had plummeted to 28mmscmd during the same week.Including the gas production of 6.5mmscmd from MA fields, total production from KG-D6 block averaged 35mmscmd (significantly below the field development plan of 70mmscmd approved during 2006) during the same week. We continue to await further clarity on the issue. Meanwhile, we maintain our Buy recommendation on the stock with a target price of Rs.923.

Economic and Political News
- Govt. allows 1mn tonnes of extra sugar exports
- Power companies lost 8.7bn units due to coal shortages: govt.
- Interest rates on post-office operated small savings scheme hiked up by 0.5%

Corporate News
- Car making operations at Gurgaon plant will continue: Maruti
- Bank of Maharashtra get shareholders nod for Rs.995cr pref. issue
- Gammon Infra bags Rs.935 cr road project from NHA

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