Market Outlook

India Research
September 21, 2011

Dealers Diary
The key benchmark indices nudged higher in opening trade as most Asian stocks reversed initial losses and soon extended initial gains. The market further extended gains to hit a fresh intraday high in morning trade and moved in a narrow range in mid-morning trade. The market remained firm in early afternoon trade and hit fresh intraday highs in afternoon trade as European stocks bounced back soon after a weak opening. The market extended gains to hit a fresh intraday high in mid-afternoon trade and spurted to a 1.5-week high in late trade as European stocks rose and as US index futures jumped, buoyed by expectations that Greece will receive the next aid tranche from international creditors as well as hopes that the Federal Reserve may announce fresh measures to stimulate the economy. The Sensex and Nifty ended with gains of 2.1% and 2.2%, respectively. The mid-cap and small-cap indices closed up by 0.9% and 1.2%, respectively. Among the front runners, Hindalco Industries, TCS, SBI, RIL and DLF gained 3-4%, while ONGC and BHEL lost 0-3%. Among mid caps, Rajesh Exports, Shree Global Trading, Religare Enterprises, Deccan Chronicle and Sunteck Realty gained 6-13%, while Nava Bharat Ventures, Alfa Level, Bajaj Hindustan, Godrej Properties and NCC lost 3-5%.

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 (%) 2.1 2.2 0.9 1.2 1.1 0.5 2.3 1.3 2.0 1.9 3.2 Chg (%) 0.1 (0.9) 2.0 (1.6) 0.5 0.9 0.4

(Pts) 108.3 57.6 88.6 65.4 39.9 118.0 168.2 163.4 (Pts) (22.6) 104.2 (142.9) 23.6 10.0

(Close) 5,140 6,429 7,300 5,995 7,721 8,981 8,844 5,216 (Close) 2,590 5,364 8,721 2,781 2,448

353.9 17,099

254.5 11,252 238.2 12,350

7.7 11,409

Markets Today
The trend deciding level for the day is 16,998/5,108 levels. If Nifty trades above this level during the first half-an-hour of trade then we may witness a further rally up to 17,23717,375/5,1825,223 levels. However, if Nifty trades below 16,998/5,108 levels for the first half-an-hour of trade then it may correct up to 16,86016,621/5,0674,994 levels.
Indices SENSEX NIFTY S2 16,621 4,994 S1 16,860 5,067 R1 17,237 5,182 R2 17,375 5,223

96.9 19,015

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

Chg (%) 1.0 (0.1) 1.9 1.0

(Pts) 0.5 (0.0) 0.7 0.3 BSE 1,849 937 130

(Close) $50.0 $9.7 $36.9 $31.3 NSE 989 441 64

News Analysis
Coal Indias August-September production hit due to heavy rains HCL Tech to set up software delivery centre in Dublin
Refer detailed news analysis on the following page

Net Inflows (September 19, 2011) ` cr Purch Sales FII MFs 1,560 560 1,564 410

Net (4) 150

MTD 1,543 (801)

YTD 735 5,473

FII Derivatives (September 20, 2011) ` cr Index Futures Stock Futures Gainers / Losers Gainers Company Cairn India Reliance Power Reliance Cap Educomp Sol Adani Enter Price (`) 305 84 419 243 605 chg (%) 5.0 4.9 4.8 4.8 4.6 NCC IVRCL Ltd ONGC Ashok Leyland Company United Spirits Losers Price (`) 792 69 40 262 26 chg (%) (3.5) (3.2) (3.1) (2.9) (1.9) Purch 2,711 2,165 Sales 2,611 2,486 Net 100 (321) Open Interest 16,302 30,393

2,541 10,298

NSE

Please refer to important disclosures at the end of this report

Sebi Registration No: INB 010996539

Market Outlook | India Research

Coal Indias August-September production hit due to heavy rains

As per NC Jha, Chairman, Coal India, the companys August and September production was lower than its target on account of heavy rains. The production was lower in its fully owned subsidiaries, Eastern Coalfields and Bharat Coking Coal. Nevertheless, the company maintained its production target at 452mn tonnes for FY2012. We maintain our production volumes estimate at 455mn tonnes and sales volumes estimate at 458mn tonnes for FY2012. We continue to maintain our Neutral rating on the stock.

HCL Tech to set up software delivery centre in Dublin

HCL Tech will be establishing a software delivery centre in Dublin, Ireland, which will employee 80 graduates over three years. With this centre, HCL Tech will service a growing number of HCL Tech clients and prospects in the financial services, insurance and healthcare/pharmaceutical industries. Plans for the development centre were provoked by a forecast for rapidly increasing demand for IT services in this region. HCL Tech has global delivery centres in the UK, Poland, Finland, US, Brazil, China, India, Malaysia and Northern Ireland and employs 4,500 people across Europe. We maintain our Buy rating on the stock with a target price of `578.

Economic and Political News

Coal output down 2.5% at 192mn tonnes in April-August HRD Ministry for outlay of `2.3 lakh cr for basic education Japanese government keeps economic view but flags overseas risks

Corporate News
BHEL aims 20,000MW capacity by FY2012 Lupin announces USFDA approval of its first oral contraceptive NTPC targets 1.3 lakh MW project by 2032 Subex to sell its activation biz to NetCracker
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint

September 21, 2011

Market Outlook | India Research

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September 21, 2011