Market Outlook

India Research
November 29, 2011
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 (%) 3.0 3.0 1.5 1.7 1.5 3.1 3.4 1.3 4.9 3.5 1.9 Chg (%) 2.6 3.5 2.9 1.6 2.0 1.9 0.1 (Pts) 141.3 84.3 104.0 91.1 205.0 107.7 272.5 101.1 (Pts) 85.8 148.1 127.5 50.5 2.8 (Close) 4,851 5,697 6,153 6,023 6,897 8,471 8,172 5,505 (Close) 2,527 5,313 8,287 2,694 2,383

Dealers Diary
Indian markets are expected to open with a positive bias on the back of sharp gains logged by Asian, European and US markets on Monday, prompted in part by optimism for a solution to Europes debt woes. The key event that would be closely watched is Europe bond auctions which present crucial test as Italy, Belgium, France and Spain are looking to sell up to US$26bn in bonds in current week. Also, the markets would be keeping an eye on the US consumer confidence data scheduled to release today. US markets benefited from optimism about the financial situation in Europe as well as upbeat signs regarding the holiday shopping season in the US. The early rally by stocks came amid reports suggesting that European policy makers are considering new options to resolve the regional debt crisis. Indian markets would be closely watching out for the quarterly GDP data (due on 30th November) and external trade data (scheduled to release on 1st December). Bloomberg survey of economists expects the GDP growth to slow to 6.8% from 7.7% witnessed in 1QFY2012.

471.7 16,167

335.4 10,104 480.7 10,356

291.2 11,523

Markets Today
The trend deciding level for the day is 16,081/4,826 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 16,273 16,379 / 4,885 4,918 levels. However, if NIFTY trades below 16,081/4,826 levels for the first half-an-hour of trade then it may correct up to 15,975 15,782 / 4,792 4,733 levels.
Indices SENSEX NIFTY S2 15,782 4,733 S1 15,975 4,792 R1 16,273 4,885 R2 16,379 4,918

348.3 18,038

Indian ADRs Infosys Wipro ICICI Bank HDFC Bank

Chg (%) 2.1 2.8 4.1 3.0

(Pts) 1.0 0.3 1.1 0.8

(Close) $51.0 $9.4 $28.7 $26.6

News Analysis
Bharti Airtel expands services contract with Ericsson Punj Lloyd bags an order worth `469cr
Refer detailed news analysis on the following page

Advances / Declines Advances Declines Unchanged

BSE 1,831 911 127

NSE 1,120 339 40

Net Inflows (November 25, 2011)

` cr FII MFs Purch 1,393 733 Sales 2,149 581 Net (756) 152 MTD (4,277) 595 YTD (3,761) 5,730

Volumes (` cr) BSE NSE 1,909 8,643

FII Derivatives (November 28, 2011)

` cr Index Futures Stock Futures Purch
2,184 1,671

Sales
1,653 1,141

Net
531 530

Open Interest
12,270 25,437

Gainers / Losers
Gainers Company
Educomp Sol Financial Tech JSW Steel Hindalco Inds NCC

Losers Company
Pantaloon Retail CESC Sun TV Network Glenmark Pharma Aurobindo Phar

Price (`)
218 659 614 125 41

chg (%)
16.1 14.4 10.2 9.9 8.9

Price (`)
223 263 267 310 91

chg (%)
(4.6) (4.2) (2.2) (2.2) (2.1)

Please refer to important disclosures at the end of this report

Sebi Registration No: INB 010996539

Market Outlook | India Research

Bharti Airtel expands services contract with Ericsson

Bharti Airtel (Bharti) has expanded its managed services agreement for India operations with Ericsson for the next five years. Under the five-year, multi-vendor, multi-technology managed services agreement, Ericsson will operate, maintain and provide services across 15 circles of Bhartis networks in India. Ericsson will also take responsibility for the intelligent network that manages Bhartis pre-paid customer base. This partnership will help Bharti to focus on creating a compelling service proposition for customers, as it looks at ramping up its market access for next-generation services on 3G and 4G. The two companies had inked a five-year managed services contract in July this year for the Africa operations of Bharti. The 15 telecom circles under the scope of the partnership include Delhi, Jammu and Kashmir, Haryana, Punjab, Himachal Pradesh, Uttar Pradesh West and UP East, Rajasthan, the Northeastern states, Assam, Karnataka, Andhra Pradesh, Tamil Nadu, Chennai and Kerala. We maintain our Neutral rating on the stock.

Punj Lloyd bags an order worth `469cr

Punj Lloyd has bagged an offshore project worth `469cr from ONGC in the Bombay High region off Mumbai. The project is scheduled for commissioning by May 2013. The scope of work for the project includes designing, engineering, procurement, fabrication, installation of 122km of submarine pipeline and modification on existing facilities. With this order, the companys total outstanding order book stands at ~`27,178cr (3.5x FY2011 revenue). We maintain our Neutral view on the stock on account of various overhangs uncertainty over receivable claims, stretched working capital, auditor qualifications and increasing leverage on the balance sheet.

Economic and Political News

Kanimozhi, four others get bail in 2G case Bill introduced in Lok Sabha to make digitization mandatory Petrol prices may dip by `2/liter from Thursday Global recovery losing steam: OECD Power ministry to step up efforts for supply of coal and gas

Corporate News
Steel imports dip by 36% during April-September Power firms suffer loss of 5.3bn units in April-October RIL sends arbitration notice to Oil Ministry on KG-D6 SBI-led banks agree on financial revamp package for Air India SAIL-led consortium bags mining rights in Afghanistan
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint

November 29, 2011

Market Outlook | India Research

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November 29, 2011