The Indian stock market indices saw modest gains on Thursday as worries about European sovereign debt eased. The Sensex and Nifty closed with gains of 0.9% and 0.8% respectively, while mid and small cap indices underperformed. Selected pharma, auto and metal stocks rose, while IT and banking stocks declined slightly. Sun Pharma received FDA approval for a generic drug and Bajaj Hindusthan announced plans to merge a subsidiary. Analysts believe the market may see further gains if indices remain above certain support levels early in the trading session.

1. Market Outlook
India Research
June 18, 2010
Dealer’s Diary Domestic Indices Chg (%) (Pts) (Close)
The market opened flat and traded volatile through the entire session on BSE Sensex 0.9% 153.8 17,617
Thursday. The key benchmark indices propelled to new one- and a- half month Nifty 0.8% 41.5 5,275
highs in late trades, as worries about Euro-zone sovereign debt retreated after a MID CAP 0.4% 28.3 7,011
largely successful Spanish bond auction. All sectoral indices ended in the green. SMALL CAP 0.6% 51.1 8,891
The Sensex and Nifty closed with gains of 0.9% and 0.8%, respectively. BSE HC 0.4% 24.1 5,600
However, the BSE Mid and Small-cap indices underperformed the benchmark BSE PSU 0.2% 13.6 9,220
indices ending with gains of 0.4% and 0.6%, respectively. Among the front- BANKEX 0.3% 28.4 10,924
liners, L&T, Tata Motors, Jaiprakash Associates, RCom and Jindal Steel were up AUTO 0.9% 75.4 8,186
by 2–3%, while Hero Honda, HUL, Tata Steel, SBI and BHEL ended 0–1% lower. METAL 0.7% 106.6 14,998
Among the Mid-caps, Lakshmi Mach, Indraprastha Gas, Gujarat NRE Coke, OIL & GAS 1.3% 136.3 10,408
Indiabulls Finance, and Gee Kay Finance were up by 5–11%, while Religare BSE IT 0.3% 14.1 5,381
Enterprises, Kwality Dairy, Sadbhav Engineering, Anant Raj Industries and
Monsanto India declined by 4–7%.
Global Indices Chg (%) (Pts) (Close)
Dow Jones 0.2% 24.7 10,434
Markets Today
NASDAQ 0.1% 1.2 2,307
The trend deciding level for the day is 17553/5256 levels. If NIFTY trades FTSE 0.6% 31.2 5,254
above this level during the first half-an-hour of trade then we may witness a Nikkei -0.7% (67.8) 9,999
further rally up to 17711– 7806/ 5305 – 5335 levels. However, if NIFTY trades Hang Seng 0.4% 76.3 20,138
below 17553/ 5256 levels for the first half-an-hour of trade then it may correct Straits Times -0.1% (3.0) 2,844
up to 17459–17300/ 5226 - 5177 levels. Shanghai Com -0.4% (9.7) 2,560
Indices S2 S1 R1 R2
Indian ADRs Chg (%) (Pts) (Close)
SENSEX 17,300 17,459 17,711 17,806
Infosys -0.6% (0.4) $63.2
NIFTY 5,177 5,226 5,305 5,335
Wipro -1.4% (0.3) $22.2
News Analysis Satyam 0.4% 0.0 $5.1
ICICI Bank 0.1% 0.0 $38.0
Sun Pharma receives approval for generic Keppra HDFC Bank -0.9% (1.4) $151.3
Bajaj Hindusthan to merge 75% subsidiary
Refer detailed news analysis on the following page. Advances / Declines BSE NSE
Net Inflows (June 16, 2010) Advances 1,515 707
Rs cr Purch Sales Net MTD YTD Declines 1,330 603
FII 2521 1662 858 3603 24139 Unchanged 115 53
MFs 302 450 (148) 740 (6,390)
Volumes (Rs cr)
FII Derivatives (June 17, 2010) BSE 4,578
Open
Rs cr Purch Sales Net NSE 14,372
Interest
Index Futures 1,806 1,447 359 14,315
Stock Futures 3,108 2,988 120 30,418
Gainers / Losers
Gainers Losers
Price Price
Company Chg (%) Company Chg (%)
(Rs) (Rs)
Guj NRE Coke 63 5.6 Anant Raj Inds 104 (3.7)
Indiabulls Fin 140 5.1 Hindustan Copp 494 (3.3)
IOB 102 4.9 Container Corp 1,269 (2.5)
MTNL 64 4.8 Andhra Bank 133 (2.0)
Essar Shipping 89 4.5 Petronet LNG 79 (1.9)
Please refer to important disclosures at the end of this report Sebi Registration No: INB 0109965391

2. Market Outlook | India Research
Sun Pharma receives approval for generic Keppra
Sun Pharma has announced that it has received US FDA approval for generic version of
Keppra (Levetiracetam) injection and plans to launch it shortly. The injection clocked
annual sales of US$ 85mn in CY2009 in the US. Currently, the product has limited
competition as only three players (including Sun Pharma) are present in the market.
However, market size is insignificant and given genericisation of the product other players
could also enter the market. The stock is currently trading at 23.6x FY2011E and 19.9x
FY2012E Earnings. We maintain Neutral on the stock.
Bajaj Hindusthan to merge 75% subsidiary
Bajaj Hindusthan (BJH) has announced merger of its 75% subsidiary, Bajaj Hindusthan
Sugar and Industries (BHSIL), with itself. The swap ratio is decided at 1 share of BJH for
every 5 share of BHSIL. We expect the merger, which has long been overdue, to result in
operational synergies with both companies being in the same line of business. We
maintain our Neutral recommendation on the stock.
Economic and Political News
GDP likely to grow 9.2% this fiscal: CMIE
Food inflation eases to 16.12% in early June
RBI, Rangarajan talk of freeing interest rates
Corporate News
Reliance industries may acquire 26% stake in Pipavav Shipyard
Religare to buy boutique AMCs in US and merge the corpus to reach US $40bn
Mindtree bags UID deal to develop applications
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint
Events for the day
Berger Paints Dividend, Results
Dabur India Dividend, Results
ITC Bonus, Increase in Authorised Capital
June 18, 2010 2

3. Market Outlook | India Research
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