11 April 2011

11 April 2011
Indian Market

(% Change)

Indices

Last close

1d

1m

1yr

Research inside

Sensex

19,451

(0.7)

5.5

9.8

Fundamentals

Nifty

5,842

(0.7)

5.8

10.1

Defty

4,591

(0.6)

8.1

11.1

BSE Mid Cap

7,174

(1.2)

9.3

2.2

BSE Small Cap

8,773

(1.4)

10.4

(2.0)

Volumes (US$ bn)

Category

(% Change)
Last close

1d

1m

1yr

3.6

-13.5

36.9

-25.4

21.8

29.7

5.9

27.4

Cash (NSE+BSE)
F&O (net)
Net Investments
Category

Technicals
Intermediate trend holds index down a third time
News

Ex-CEO Asim Ghosh sells his remaining Voda stake to

Max India founder Analjit Singh; Singhs stake in telco

rises to 6.24% (ET)

(Rs bn)
Last close

MTD

QTD

CYTD

FIIs

3.8

67.5

67.5

42.5

DIIs

(1.3)

(22.0)

(22.0)

88.7

MFs

(0.5)

(7.3)

(7.3)

13.2

Global Market
Indices

Banking: Week in review

Tata Power SED bags Rs10.94bn record deal to

modernize air force bases (BS)

SpiceJet plans to hike fares as fuel costs soar (ET)

Berggruen Hotels to invest US$227mn to set up 43

hotels under the brand Keys in India by 2014 (ET)

(% Change)
Last close

1d

1m

1yr

China posts trade deficit of US$1.02 bn trade deficit

(DNA)

America
Dow Jones

12,380

(0.2)

2.8

12.6

S&P 500

1,328

(0.4)

1.8

11.2

Nasdaq

2,780

(0.6)

2.4

13.3

Bovespa

68,718

(0.7)

3.0

(3.8)

FTSE 100

6,056

0.8

3.9

4.9

CAC 40

4,062

0.8

3.4

0.3

DAX

7,217

0.5

3.4

15.5

24,396

0.5

2.9

11.6

Unitech to invest Rs20bn in affordable housing

projects in Tier 1 and 2 cities (BS)

Ratings show signs of peak credit quality for India Inc;

modified credit ratio improved to 1.1 in FY11 from 0.86

Europe

in FY09 (BS)

Asia
Hang Seng
Nikkei 225

9,768

1.8

(7.2)

(12.5)

Shanghai Composite

3,030

0.7

1.0

(2.8)

Bhilai Steel identifies 19mt iron ore deposits in

Chhatisgarh mines (BS)

India plans to develop vessels to explore ocean floor

for resources; to invest of Rs5bn for the same (Mint)

Muthoot Finance seeks to raise Rs8bn through share

sale (Mint)

Advances / Declines
Category

BSE 100

S&P CNX Nifty

Advances

19

11

Declines

81

39

Unchanged
Total

100

50

S&P CNX Nifty

7,000

S&P CNX Nifty 1yr fwd PE

19

6,000

15

5,000
4,000

11
3,000
2,000
Oct 08

Feb 09 Jun 09

Oct 09

Feb 10 Jun 10

Oct 10

Feb 11

7
Oct 08

Feb 09

Jun 09

Oct 09

Feb 10

Jun 10

Oct 10

Feb 11

11 April 2011
Sector Watch
Indices

(% Change)

Nifty Leaders

(% Change)

Last close

1d

1m

1yr

Company

Last close (Rs)

1d

1m

1yr

BSE Auto

9,397

(1.9)

6.9

21.8

Bharti Airtel

362

1.4

8.1

15.7

BSE Bank

13,299

(0.6)

7.0

23.8

Ranbaxy Laboratories

466

0.9

2.2

(0.2)

BSE Capital Goods

13,742

0.1

8.2

(3.6)

Cairn India

346

0.7

(1.6)

14.0

BSE Consumer Durables

6,427

(1.5)

12.0

45.0

Itc

184

0.7

6.9

40.2

2,538

0.6

10.6

19.6

Last close (Rs)

1d

1m

1yr

259

(3.9)

16.5

(22.3)

94

(3.9)

12.1

(36.4)

209

(3.3)

(1.4)

18.4

BSE FMCG

3,637

0.4

3.8

27.8

Grasim Industries

BSE IT

6,558

(0.7)

4.3

23.3

Nifty Laggers

BSE Healthcare

6,123

(0.3)

4.3

14.6

Company

BSE Metal

16,460

(1.2)

4.0

(9.7)

Dlf

BSE Oil & Gas

10,088

(1.3)

4.6

(2.1)

Jaiprakash Associates

(% Change)

BSE Power

2,774

(1.0)

7.3

(12.6)

BSE Realty

2,464

(2.5)

19.0

(29.4)

Reliance Power

131

(3.1)

7.4

(16.4)

BSE TECK

3,871

(0.5)

5.3

16.2

Reliance Capital

606

(2.9)

25.0

(22.6)

(% Change)

F&O Snapshot

Last close ($)

1d

1m

1yr

Most bullish

ADR Leaders
Company
Dr Reddy's Laboratories

Hindalco Industries

Futures (Rs)

Cash (Rs)

Premium %

37.7

2.3

7.9

34.4

Welspun Corp

212

210

0.8

172.2

0.4

11.2

16.5

Cummins India

690

685

0.8

Patni Computer Systems

21.3

(0.0)

7.3

(3.5)

Tata Communications

251

250

0.7

Wipro

15.1

(0.3)

11.2

6.5

Dena Bank

ICICI Bank

49.3

(0.5)

9.3

9.6

Bosch

Last close ($)

1d

1m

1yr

2.2

(4.4)

10.8

(37.9)

Tata Communications

11.3

(2.4)

21.4

(13.2)

Tata Motors

27.9

(2.0)

8.4

44.2

Infosys Technologies

72.1

(1.7)

6.7

19.4

ICICI Bank

49.3

(0.5)

9.3

9.6

HDFC Bank

ADR Laggers

(% Change)

Company
Mahanagar Telephone Nigam

Nifty F&O Premium/Discount

Most bearish

107

0.7

6,530

0.7

Futures (Rs)

Cash (Rs)

Premium %

Core Projects & Technologies

309

338

(8.5)

Patni Computer Systems

448

475

(5.8)

Siemens India

850

892

(4.7)

251

259

(2.9)

1,625

1,663

(2.3)

Power Finance Corporation

Hero Honda

Motors

100

40

108
6,575

NSE Volatality

85
70

20

55
40

25

-20
Jun 10

Aug 10

Oct 10

Dec 10

Feb 11

Apr 11

10
Oct 08

Feb 09

Jun 09

Oct 09

Feb 10

Jun 10

Oct 10

Feb 11

11 April 2011
Currency

(% Change)

Category

Commodities

Last close

1d

1m

1yr

Category

INR/US$

44.1

0.3

2.3

0.7

Precious Metals

US$/GBP

1.6

0.0

1.8

6.6

Gold

US$/EUR

1.4

-0.1

4.1

6.4

Silver

JPY/US$

84.7

0.0

-3.4

10.0

INR/US$ Future

44.2

-0.2

-2.4

-0.4

Bond Market

(bps Change)

Category

Yield %

1d

1m

1yr

10 yr G-Sec

7.9

(3.3)

(2.5)

10.7

5 yr G-Sec

7.9

2.2

(5.5)

64.6

Call Rate

7.0

115.0

15.0

420.0

Cross Currency Rates

Category
Rupee (INR)

INR

US$

EUR

GBP

JPY

44.08

63.72

72.15

51.97

Last close

1d

1m

1yr

(US$/oz)

1,473

-0.1

3.9

26.8

(US$/oz)

41.5

1.4

15.5

125.4

(US$/barrel)

112.8

2.3

7.4

32.1

(US$/MMBtu)

4.1

-1.7

6.0

3.6

Aluminum

(US$/MT)

2,712

1.5

4.5

15.0

Copper

(US$/MT)

9,875

2.1

3.6

25.1

Lead

(US$/MT)

2,850

2.2

10.0

24.5

Nickel

(US$/MT)

27,600

3.0

2.9

11.7

Tin

(US$/MT)

33,050

1.5

8.0

77.7

Zinc

(US$/MT)

2,534

3.3

5.8

6.5

1,376

-1.8

-3.4

-52.9

28 Mar

3 Apr

9 Apr

Crude & Gas

Crude Oil
Natural Gas
Non-Ferrous Metals

US dollar (US$)

0.02

0.69

0.61

0.85

Euro (EUR)

0.02

1.45

0.88

1.23

Trade

Pound (GBP)

0.01

1.64

1.13

1.39

Baltic Dry Index

Yen (JPY, 100 Yen)

0.02

1.18

0.82

0.72

3,700

Bond
10 yr G-Sec

8.7

(% Change)

5 yr G-Sec

MCX

3,600

8.3

3,500
7.9

3,400
7.5
7.1
Oct 10

3,300
Nov 10

Dec 10

Jan 11

Feb 11

3,200
26 Feb

Mar 11

4 Mar

10 Mar

INR / US$

22 Mar

Baltic Indicies

Currency Trend
48.0

16 Mar

US$ / EUR (RHS)

1.6

Baltic dry

Baltic dirty tank er (RHS )

Baltic clean tanker (RHS)

1,650

1200

1,450

1000

1,250

800

1,050

600

47.0
1.4

46.0
45.0

1.2

44.0
43.0
Jun 10

1
Aug 10

Oct 10

Dec 10

Feb 11

Dollar $ v/s Commodities

125

Dollar $

Crude Oil

Gold (RHS)

1,600

10 Mar

18 Mar

26 Mar

IEX Electricity

3 Apr

10 Apr
Rs/MWh

4,250

1,200

105

3,500

95

800

85

400

75

400
2 Mar

5,000

115

65
Jun 10

850

0
Aug 10

Oct 10

Dec 10

Feb 11

Apr 11

2,750
2,000
1:00 AM

6:00 AM

11:00 AM

4:00 PM

9:00 PM

hrs.

11 April 2011

Banking: Week in review

Bank stocks generally managed to hold on to modest gains as news flow continued to
be relatively light. Bank Nifty index has rallied 8.9% from its low on 17 March 2011, as
global concerns relating to Japan and Libya have continued to ease. Markets direction
and bank stocks performance near term may hinge on earnings season.
RBI data published last week (for fortnight ending 25 March 2011) indicated that banks
credit growth continues to be relatively strong, up 21.4% yoy. We expect it could
contribute to some upside to bank earnings in Q4. However, NIM compression could
offset at least in part, some of the strong loan growth. In any case, operating
headwinds related to rising interest rates, NPAs, growth outlook etc. need to play out
over the next couple of quarters before we get some conviction in terms of strong
earnings momentum returning. Also, rising global oil price remains a key risk to macro
economic growth.
Looking to FY12, our expectation is that if loan growth remains reasonable, banks can
withstand some NIM compression (20-25bps) in FY12, although growth would be
down from recent rates. We expect a decline from Q3FY11 levels could result in NIM
being generally flat yoy for many banks, given sharp rise in NIM in early part of FY11.
Modestly positive week for bank stocks: Bank earnings could provide some
direction to bank stock valuations, although given uncertainties and operating
headwinds outlined above, we believe sustained run-up in bank stocks is unlikely in the
near term. In rating changes last week, we lowered our ratings on HDFC Bank (Add
from Buy), ICICI Bank (Reduce from Add) and Bajaj Finance (Add from Buy). Our lower
ratings primarily reflect run-up in bank stocks over last several weeks. Near-term we
continue to view banks with strong franchises, reasonable earnings visibility, better
asset quality and strong track record favourably, although with recent run-up we have a
Buy rating only on Axis Bank.
Bank Nifty Index ended the week up 0.7% (up 1.8% last week) at 11,673 (down 1.0%
YTD). Broader market Nifty Index was up 0.3% (up 3% last week) at 5,842 (down 4.8%
YTD). Top 3 banks stocks in our tracking universe last week were Vijaya Bank (up
8.1%), Dhanlaxmi Bank (up 7.7%) and Karnataka Bank (up 5.9%), while at the bottom
were Oriental Bank of Commerce (down 2.4%), Corporation Bank (down 2.0%) and
Kotak Mahindra Bank (down 1.9%).
Also, while food inflation was down further to 9.2% (v/s 9.5% last week), we expect RBI
to remain hawkish given high oil prices and inflationary spill over to non-food
manufactured articles. With oil prices continue to trend higher, key question is how
much impact it would have on inflation, interest rates and broader economic growth.
Globally - while oil price surged, economic recovery seems positive: While Libyan
situation and Japanese nuclear disaster kept markets on edge for several weeks, the
risk of further escalation, at least in near-term, seems to receded. Nevertheless, the
Libyan situation and potential escalation in the Middle East, remain key wild cards.
Economic news flow from the US was generally light, although incrementally positive as

11 April 2011

initial jobless claims were down 10,000. While fears of a US government shutdown
were looming, a compromise deal was reached was reached at the last minute late
Friday (8 March 2011) night that would cut about US$38bn in spending for the second
half of current fiscal.
On the European front, Portugal finally requested EU aid after resisting bailout for
several weeks. On the rate front, the ECB last week raised a key policy rate by 25bps
to 1.25% and acknowledged credit supply was improving and limited downside risks to
growth. Strong export growth data from Germany provided additional confirmation that
global recovery is gaining strength.
Global oil rallies: Crude oil (Brent) was higher at US$124.7 per (8 April 2011) v/s
US$118/barrel at end of previous week. On the back of macro and domestic
uncertainties, economic growth outlook continues to be clouded in our opinion.
FIIs buying seem to have turned around sharply: Net FII flow for past two weeks
has been sharply higher. Last week, net flows were positive US$1.5bn (positive
US$1.01bn, positive US$118mn and negative US$4.1mn over last three weeks). Net
inflows in 2010 were US$29bn, up 64.9% from 2009. While FII flows reversed course in
CY11 on the back of rising domestic concerns and relatively attractive investment
opportunities in other markets, FIIs seem to be returning the last two weeks, although
earnings could determine its sustainability. Cumulative flows have been positive
US$996mn YTD until week ending 8 April 2011. DII flows have been US$3.5bn YTD.
A detailed note will be released shortly.
Murali Gopal (murali.gopal@bricssecurities.com)
Nilanjan Karfa (nilanjan.karfa@bricssecurities.com)

11 April 2011

Nifty: Daily Market View

Intermediate trend holds index down a third time

Nifty Futures ended 2-week rally with last week's marginal negative close of 6 points.
At a close of 5854, the index gave back 155 points from the week's high of 6000
(which we believe was a freak trade seen on 5 April 2011). Over the past week, we
have emphasized that an ease-off of the recent +500 points rally is a high-probability
event. Over past four trading sessions we've seen the same with the index drifting
down, essentially consolidating the earlier rally. One aspect we are certain of is that the
index has decided to correct in terms of price rather than a range-bound consolidation.
This implies that we can expect further downsides in case of fresh selling impetus;
short-term supports on the downside are at (5780-5790) and then at 5735. On the
other hand, any bounce back from the current levels will face supply at 5930.
Abhijit Paul (abhijit.paul@bricssecurities.com)

11 April 2011

Economic Events
Key Indian Economic Statistics

Period

Forecast

Actual

Prior

5 Apr 11
Food articles WPI yoy

26 Mar 11

9.18%

9.50%

Fuel Power Light WPI yoy

26 Mar 11

13.13%

13.13%

Primary Articles WPI yoy

26 Mar 11

12.97%

12.98%

8 Apr 11
India local car sales

Mar

Indian Economic Calendar for the week.

189,008

Period

Forecast

Prior

Feb

5.00%

3.70%

11 Apr 11
Industrial production yoy
15 Apr 11
Food articles WPI yoy

2 Apr 11

9.18%

Primary Articles WPI yoy

2 Apr 11

12.97%

US Economic Calendar for the week.

Period

Forecast

Prior

14 Apr 11
Initial jobless claims

Apr 11

382K

4 Apr 11
Producer price index yoy

Mar

6.30%

5.60%

Consumer price index yoy

Mar

2.60%

2.10%

Industrial production

Mar

0.50%

-0.10%

Capacity utilization

Mar

77.40%

76.30%

U. of Michigan confidence

Apr

69

67.5

8 Apr 11

Corporate Action
Company

Record Date

Purpose

11 April 2011
Board Meeting

Company

Board Meeting Date

Agenda

Infosys Technologies

15 Apr 11

Final Dividend & Audited Results

Persistent Systems

17 Apr 11

Audited Results & & 18/04/2011 Final Dividend & inter alia, to consider the following business: The audited consolidated financial

Container Corpn. Of India

19 Apr 11

Quarterly Results

3I Infotech

22 Apr 11

Dividend & Audited Results

Dabur India

27 Apr 11

Audited Results & Final Dividend

11 April 2011

BRICS RECOMMENDATION SCALE

BUY:

More than 15% upside

ADD:

Upside up to 15% (between 0% and 15%)

REDUCE:

Downside up to 15% (between 0% and 15%)

SELL:

More than 15% downside

Head Office: Sadhana House, 1st Floor, 570, P. B. Marg, Behind Mahindra Tower,
Worli, Mumbai - 400 018. Tel: (91-22) 6636 0000
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