Market Outlook

India Research
March 6, 2012

Dealers Diary
The Indian markets are expected to open in red taking cues from negative opening in most of the Asian markets. Indian markets fell sharply yesterday as caution prevailed ahead of the election results from five states due today. Globally, most of the US and European markets ended lower on Monday pressured by weakness in the euro, data showing a modest dip in the services sector growth rate last month in Eurozone and weak global cues on concerns over slowing growth in China dented investor sentiment. China has cut its outlook for GDP growth in 2012 to 7.5% from earlier estimate of 8.0%, raising concerns about demand in the world's second largest economy. Meanwhile, US non-manufacturing index rose to 57.3 in February from 56.8 in January, with a reading above 50 indicating growth in the service sector. The markets today will closely watch out for UP state election results due to be released today. Also, 4QCY2011 GDP growth data of Eurozone (Bloomberg estimate 0.7% yoy) will be on radar.

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 (%)

(Pts)

(Close)

(1.6) (274.1) 17,363 (1.5) (1.4) (1.0) (0.9) (79.1) (88.1) (65.4) (54.2) 5,280 6,271 6,788 6,351 7,564 9,832 8,487 6,051
(Close)

(1.8) (134.4) (0.3) (28.2)

(2.6) (315.2) 11,707 (3.1) (365.9) 11,603 (1.4) (120.5) (1.1)

Chg (%)

(67.2)
(Pts)

(0.1) (0.9) (0.6) (0.8) (0.1) (0.6)

Chg (%)

(14.8) 12,963 (25.7) (36.3) (78.4) (1.7) (15.7)

(Pts)

2,950 5,875 9,699 2,992 2,445

(Close)

Markets Today
The trend deciding level for the day is 17,422 / 5,297 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 17,531 17,699 / 5,328 5,376 levels. However, if NIFTY trades below 17,422 / 5,297 levels for the first half-an-hour of trade then it may correct up to 17,254 17,144 / 5,249 5,218 levels.
Indices SENSEX NIFTY S2 17,144 5,218 S1 17,254 5,249 PIVOT 17,422 5,297 R1 17,531 5,328 R2 17,699 5,376

(1.4) (297.0) 21,265

Indian ADRs Infosys Wipro ICICI Bank HDFC Bank

(1.1) (1.4) (2.7) (0.4)

(0.6) (0.2) (1.0) (0.1)

BSE

$57.1 $10.9 $35.6 $34.1

NSE

News Analysis
Refer detailed news analysis on the following page

RCom wins contract for Aadhaar project valued upto `300cr JSW Steels February crude steel production grows by 13%

Advances / Declines Advances Declines Unchanged

952 1,898 107

412 1,044 52

Net Inflows (March 02, 2012)

` cr FII MFs Purch 2,385 408 Sales 1,783 666 Net 602 (257) MTD 878 (257) YTD 37,176 (4,284)

Volumes (` cr) BSE NSE

2,456 10,760

FII Derivatives (March 05, 2012)

` cr
Index Futures Stock Futures

Purch 1,750 1,517

Sales 1,618 1,551

Net 132 (34)

Open Interest 12,744 28,152

Gainers / Losers
Gainers Company
Reliance Infra Reliance Power Zee Entertaintment Syndicate Bank Castrol India

Losers Company
United Spirits Sintex Industries EIH Hindustan Copper Pantaloon Retail

Price (`)
656 135 141 113 507

chg (%)
5.5 5.0 4.0 3.4 3.3

Price (`)
521 79 92 284 173

chg (%)
(6.8) (6.8) (6.7) (6.3) (6.2)

Please refer to important disclosures at the end of this report

Sebi Registration No: INB 010996539

Market Outlook | India Research

RCom wins contract for Aadhaar project valued upto `300cr

As per media reports, Reliance Communications (RCom) has won the network and telecom subscriber contract for Aadhaar, the governments ambitious national identity card program. RCom, an ADAG company, is part of a consortium led by HCL Infosystems that has won number repository and infrastructure contracts for Aadhaar. While the size of the contract won by the consortium is about `2,200cr, RComs share will be `200cr-300cr. We maintain our Neutral view on the stock.

JSW Steels February crude steel production grows by 13%

JSW Steels February 2012 crude steel production grew by 13% yoy to 0.6mn tonnes. However, growth was affected due to non-availability of high-grade iron ore. The quantity of iron ore sold via e-auction was 1.2mn tonnes compared to industry requirement of 3.0mn tonnes during the month. Central Empowered Committee (CEC), in its report, had recommended clean mines (category A) to restart their operations. However, Supreme Court hearing has been delayed several times and, as such, the steel industry continues to face shortage of good-quality iron ore despite paying higher prices. We believe sustaining steel production at current levels from the next quarter would remain a challenge for JSW Steel until the mining ban is lifted in Karnataka. We maintain our Neutral view on the stock.

Economic and Political News

Coffee exports up by 13% in February 2012 EGoM decides to free 700 MHz spectrum band for 4G Government may soon issue notices to companies on idle coal blocks Panel for delinking license and spectrum in FM Radio

Corporate News
Adani in pact to provide 4 MT coal to NTPC LIC bought 157mn ONGC shares in run-up to auction, raised stake to 9.5% Lupin gets US nod for generic schizophrenia capsules Patel Engg wins `377cr urban infra projects Suzlon arm wins `367cr deal to supply wind tower equipment Tata Power to set up JV with South Africa's Exxaro
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint

March 6, 2012

Market Outlook | India Research

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March 6, 2012