market outlook 7th december 2011
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8/3/2019 Market Outlook 7th December 2011
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Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539 1
Market OutlookIndia Research
December 7, 2011
Dealer’s Diary
Indian markets are expected to open marginally in the green following positive
cues in the Asian markets. Asian stocks are trading higher on expectations thatEuropean leaders will step up their efforts to fight the financial crisis to preserve
their sovereign credit, failure of which is likely to make funding more costly.
Both US and European markets witnessed choppy trading and ended the sessions
mixed on Tuesday as traders seemed reluctant to make any significant moves as
they digested remarks from Standard & Poor's regarding European credit ratings.
S&P said that it has placed its long-term sovereign ratings on 15 Eurozone
nations including Germany and France on credit watch with negative
implications. The ratings agency also placed its rating on the European Financial
Stability Facility (EFSF) bailout fund on credit watch with negative implications.
Investors worldwide will look towards the upcoming EU Summit at the end of the
week. The result of the summit will likely determine whether S&P reduces itsrating of Germany and France.
Markets Today
The trend deciding level for the day is 16,787/5,032 levels. If NIFTY trades
above this level during the first half-an-hour of trade then we may witness a
further rally up to 16,882 – 16,958/5,062 – 5,085 levels. However, if NIFTY
trades below 16,787/5,032 levels for the first half-an-hour of trade then it may
correct up to 16,710 – 16,615/5,009 – 4,980 levels.
Indices S2 S1 R1 R2
SENSEX 16,615 16,710 16,882 16,958
NIFTY 4,980 5,009 5,062 5,085
News Analysis Political Update - FDI in retail: marred with issues and agitations
HT Media to form JV with US firm Apollo Global
Refer detailed news analysis on the following page
Net Inflows (December 02, 2011)
` cr Purch Sales Net MTD YTD
FII 2,574 1,862 712 1,617 (2,407)
MFs 548 386 163 (80) 5,865
FII Derivatives (December 05, 2011)
` cr Purch Sales Net Open Interest
Index Futures 1,292 1,508 (216) 13,748
Stock Futures 942 1,225 (283) 25,771
Gainers / Losers
Gainers Losers
Company Price (`) chg (%) Company Price (`) chg (%)
Hindustan Oil 131 5.8 Pantaloon Retail 186 (12.9)
GVK Power 11 5.7 Bombay Rayon 222 (9.9)
Ashok Leyland 26 5.4 Indiabulls Real Est. 63 (4.2)
Shriram Trans. Fin. 570 5.3 CESC 250 (4.0)
Aurobindo Pharma 97 4.4 JSW Steel 611 (3.9)
Domestic Indices Chg (%) (Pts) (Close)
BSE Sensex (0.3) (41.5) 16,805
Nifty (0.2) (11.0) 5,039MID CAP (0.1) (2.9) 5,761
SMALL CAP 0.1 5.3 6,195
BSE HC (0.4) (24.7) 6,100
BSE PSU 0.2 16.9 7,094
BANKEX 0.0 1.6 10,552
AUTO 0.0 3.9 8,824
METAL (0.9) (97.9) 10,816
OIL & GAS (0.1) (11.0) 8,400
BSE IT 0.0 0.2 5,727
Global Indices Chg (%) (Pts) (Close)
Dow Jones 0.4 52.3 12,150
NASDAQ (0.2) (6.2) 2,650
FTSE 0.0 0.8 5,569
Nikkei (1.4) (120.8) 8,575
Hang Seng (1.2) (237.5) 18,942
Straits Times (0.1) (3.2) 2,763
Shanghai Com (0.3) (7.3) 2,326
Indian ADRs Chg (%) (Pts) (Close)
Infosys (1.0) (0.5) $52.8
Wipro 0.3 0.0 $10.2
ICICI Bank (0.3) (0.1) $30.2
HDFC Bank (0.2) (0.1) $28.8
Advances / Declines BSE NSE
Advances 1,353
Declines 1,337 739
Unchanged 152 88
Volumes (` cr)
BSE 1,823
NSE 8,149
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Market Outlook | India Research
December 7, 2011 2
Political update - FDI in retail: Marred with issues and agitations
The political uproar over the FDI issue is showing no signs of abating with
opposition as well as UPA allies determined to seek withdrawal of the key
reform. Hence, the parliament stalemate over FDI in retail continues at the
helm with prolonged adjournments – both houses are expected to resume
today. The topic has aroused endless debates, speeches and demonstrations
across the country.
Opposition demands adjournment motion
The growing heat over the episode has triggered advanced parliamentary
proceedings BJP demanded adjournment motion (extraordinary procedures,
including voting on matters of public importance) on FDI in retail and
challenged the government to face the adjournment motion. But the Congress
seems to undermine the debate, arguing that an adjournment motion can bemoved only with the consent of the government.
Ministers kick start persuasive discussions with allies and opposition
In a strong message to allies and the Opposition, Finance Minister Pranab
Mukherjee on Friday asked the allies and opposition parties not to obstruct
implementation of FDI in retail. The Finance Minister cleared the dilemma that
state governments hold the ultimate decisive power over whether or not to
allow retail chains in their territory. He firmed his stance by reiterating the fact
that FDI would strongly promote investment in technology in rural areas.
In addition, the government has initiated fresh efforts to persuade stategovernments. Commerce & Industry Minister Anand Sharma is also expected
to meet trade and farmer bodies over the next few days in a bid to garner their
support for the controversial move. The minister had written to CMs and
prominent political leaders explaining the rationale, safeguards and
consultation process followed by the government before the Cabinet approved
the proposal. The entire exercise is attempted to convince states to withdraw
their opposition to the move.
Foreign brands worried; hopes for amicable solution
The growing agitation over FDI in retail has left foreign brands nervous,
inferred though the two-day retail summit in Delhi last week. Several
international companies, mainly in the food and restaurant segment, decided
to stay away even after confirming their participation. A well-known South
African food chain, an Italian single-brand retailer and Dubai-based Binhendi
were among those who backed out of the summit.
Industry representatives blamed this on policy uncertainty, which is currently in
a ‘half-approved’ status. Due to this, foreign investors’ appetite in the Indian
market is likely to be low; they may not take a call on investments at this point
unless the environment is more certain. Experts also believed that negative
signals were sent to the world, which would surely make foreign companies
rethink their strategies on India.
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December 7, 2011 3
HT Media to form JV with US firm Apollo Global
HT Media Ltd. (HTML) has entered into an agreement with US-based Apollo
Global Inc. in a 50:50 JV to introduce programs and services in the education
space. Apollo Global is a joint venture between US-based private education
provider, Apollo Group, and private equity firm, the Carlyle Group. As per HTML’s
management, the JV will focus on the much needed quality educational services in
India, where there is a mismatch in education and employment. We have not
factored in our estimates in the JV, as the company has not disclosed any financial
details pertaining to the JV.
HTML is already present in the education space in the form of Studymate tuition
centers in Delhi, HT Education (a newspaper for youth) and HT Campus (an online
resource portal for students looking for higher education). We maintain our Buy
view on the stock with a target price of `170.
Economic and Political News
Government won't rush into arbitration on RIL notice: Oil Ministry
RBI priority is to keep inflation low: Subir Gokarn
Interest rate hike ineffective beyond a point: Finance Minister
Corporate News
Cairn-Vedanta deal gets Home Ministry’s approval
ADB lends ` 250cr to RPower's solar project in Rajasthan
IOB plans to restructure SME and corporate loans
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint
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December 7, 2011 4
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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