Market Outlook

India Research
October 4, 2011

Dealers Diary
The market skidded to one-week low in early trade on weak Asian shares. Weakness continued in morning trade. The market trimmed losses in mid-morning trade. Intraday recovery witnessed in mid-morning trade short-lived as key benchmark indices hit fresh one-week lows in early afternoon trade. Key benchmark indices once again came off lows in afternoon trade. The market traded off one-week low in mid-afternoon trade. The Sensex and Nifty closed lower by 1.8%, and 1.9%, respectively. The mid-cap and small-cap indices lost 1.9% and 1.5%, respectively. Among the front runners, Coal India, ONGC, Hero MotoCorp, Mahindra & Mahindra and Bharti Airtel gained 0-1%, while DLF, Jindal Steel, Hindalco Inds, Tata Steel and Sterlite Inds lost 4-8%. Among mid caps, Kansai Nerolac, Educomp Sol, Glaxosmithkl Cons, Rallis India and Zuari Inds gained 2-4%, while Sintex Inds, Shipping Corp, Anant Raj Inds, Dewan Housing and JSL lost 6-12%.

Domestic Indices BSE Sensex Nifty MID CAP SMALL CAP BSE HC BSE PSU BANKEX AUTO METAL OIL & GAS BSE IT Global Indices Dow Jones NASDAQ FTSE Nikkei Hang Seng Straits Times Shanghai Com

Chg (%) (1.8) (1.9) (1.9) (1.5) (0.6) (0.9) (2.8) (0.4) (4.0) (0.8) (1.5) Chg (%) (2.4) (3.3) (1.0) (1.8) (4.4) (2.0) (0.3)

(Pts) (93.8) (116.2) (101.9) (36.0) (65.6) (33.0) (66.3) (79.5) (Pts) (79.6) (53.0) (154.8) (53.8) (6.1)

(Close) 4,850 6,013 6,779 5,832 7,338 8,465 8,428 5,196 (Close) 2,336 5,076 8,545 2,621 2,359

(302.3) 16,151

(306.0) 10,545 (440.0) 10,556

Markets Today
The trend deciding level for the day is 16,155/4,851 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 16,25316,354/4,8784,906 levels. However, if NIFTY trades below 16,155/4,851 levels for the first half-an-hour of trade then it may correct up to 16,05315,955/4,8234,796 levels.
Indices SENSEX NIFTY S2 15,955 4,796 S1 16,053 4,823 R1 16,253 4,878 R2 16,354 4,906

(258.1) 10,655

(770.3) 16,822

Indian ADRs Infosys Wipro ICICI Bank HDFC Bank Advances / Declines Advances Declines Unchanged Volumes (` cr) BSE

Chg (%) (2.0) (4.1) (3.6) (4.6)

(Pts) (1.0) (0.4) (1.3) (1.3) BSE 876 1,910 108

(Close) $50.0 $8.9 $33.5 $27.8 NSE 343 1,123 48

News Analysis
Auto sales numbers - September 2011 Cement Dispatches September 2011 Cairn India strikes gas in Sri Lankan block
Refer detailed news analysis on the following page

Net Inflows (September 30, 2011) ` cr Purch Sales FII MFs 6,194 319 6,504 476

Net (310) (157)

MTD (1,145) (731)

YTD (1,953) 5,544

FII Derivatives (October 03, 2011) ` cr Index Futures Stock Futures Gainers / Losers Gainers Company BPCL HPCL Educomp Sol. JP Power Glaxo. Cons Price (`) 681 379 246 35 2,394 chg (%) 5.3 3.6 3.1 2.8 2.8 Company Sintex Industries Shipping Corp. DLF JSW Steel Mundra Port Losers Price (`) 112 75 202 550 154 chg (%) (12.4) (9.6) (7.8) (7.1) (6.5) Purch 2,174 1,201 Sales 2,645 1,380 Net (471) (179) Open Interest 12,562 25,911

2,150 8,683

NSE

Please refer to important disclosures at the end of this report

Sebi Registration No: INB 010996539

Market Outlook | India Research

Auto sales numbers September 2011

Bajaj Auto (BAL) BAL reported a better-than-expected 18.4% yoy (9.1% mom) increase in total volumes to 417,686 units in September 2011, led by strong performance across product segments. Motorcycle volumes grew by 18% yoy (9.8% mom) and three-wheeler sales jumped by 21.5% yoy (4% mom) during the month. Exports also maintained their impressive growth rate, registering a robust 39.2% yoy (2.7% mom) increase in sales. BAL recorded its highest-ever motorcycle and three-wheeler sales during the month. Hero MotoCorp (Hero) Hero reported better-than-expected 26.7% yoy (9.1% mom) growth in volumes to 549,625 units, led by robust performance across all product segments. Hero continued its strong pace of growth and reported its highest-ever monthly sales during the month.

Cement Dispatches September 2011

ACCs dispatches for September 2011 stood at 1.73mn tonnes, up by decent 9.5% yoy, aided by expansions at Wadi and Chanda. However, the companys dispatches were down by ~8% on mom basis. Ambuja Cements (Ambuja) posted moderate 2.3% yoy growth in dispatches in September to 1.55mn tonnes. Ambujas dispatches were higher by 2.8% on mom basis as well. Cement dispatches are expected to pick up in October 2011 post the monsoons. Cement prices are also expected to witness a hike with increased dispatches. At the CMP, ACC and Ambuja are trading at EV/tonne of US$120 and US$151, respectively, on CY2012E capacity. We continue to remain Neutral on ACC and Ambuja.

Cairn India strikes gas in Sri Lankan block

Cairn Lanka, a fully owned subsidiary of Cairn India, discovered natural gas in CLPL-Dorado-91H/1z well in the block of SL 2007-01-001, Mannar Basin of Sri Lanka. However, as per the company, further drilling will be required to establish commercial feasibility of the discovery. The company plans to invest US$100mn to explore commercial hydrocarbon deposits in the 3,000 sq. km. block in depths up to 1,800 metres. Meanwhile, we maintain our Neutral view on the stock until further update.

Economic and Political News

FDI jumps two-fold to US$2.8bn in August 2011 August 2011 exports up 44%, trade deficit widens to US$14bn Governments draft policy on electronics aims US$400bn turnover by 2020

Corporate News
RIL seeks approval to sell CBM gas at US$13/mmBtu Reliance Power to get `2,000cr in carbon credits by trading carbon credits Workmen at Ceats Nasik factory resort to a flash illegal strike Dainik Bhaskar picks up 2.7% stake in Edserv Softsystems
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint

October 4, 2011

Market Outlook | India Research

Research Team Tel: 022-3935 7800 E-mail: research@angelbroking.com Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

Address: 6th Floor, Ackruti Star, Central Road, MIDC, Andheri (E), Mumbai - 400 093. Tel: (022) 3935 7800
Angel Broking Ltd: BSE Sebi Regn No : INB 010996539 / CDSL Regn No: IN - DP - CDSL - 234 - 2004 / PMS Regn Code: PM/INP000001546 Angel Capital & Debt Market Ltd: INB 231279838 / NSE FNO: INF 231279838 / NSE Member code -12798 Angel Commodities Broking (P) Ltd: MCX Member ID: 12685 / FMC Regn No: MCX / TCM / CORP / 0037 NCDEX : Member ID 00220 / FMC Regn No: NCDEX / TCM / CORP / 0302

October 4, 2011