- Indian markets fell sharply on May 3, with the Sensex dropping 0.87% amid worries about the country's fiscal challenges and a weakening rupee. Banking stocks declined after the RBI imposed new capital requirements. - Most Asian markets also fell as US services growth was lower than expected, weighing on commodity prices and exporter/raw materials company earnings. The Indian rupee hit a four-month low against the dollar. - Auto stocks declined further after most reported weak April sales, while IT stocks gained on expectations a weaker rupee would boost margins. Sugar stocks rose on removed export limits.

1. K E Y N O T E
INSTITUTIONAL RESEARCH
India Morning Note
Friday, May 04, 2012
Domestic Markets Snapshot Views on markets today
Name of Index May 2 May 3 Change (%) • Indian markets posted their biggest falls in nearly
Sensex 17,301.91 17,151.19 -0.87% three weeks and closed on negative note yesterday
CNX Nifty 5,239.15 5,188.40 -0.97% after a slump in the rupee exacerbated worries about
BSE Mid-cap 6,298.95 6,234.75 -1.02% the country's fiscal and economic challenges, as well
BSE IT 5,746.08 5,786.99 0.71% as about foreign selling on the back of recent tax
BSE Banks 11,860.29 11,653.70 -1.74% proposals. Banking shares led the falls a day after the
Reserve Bank of India issued guidelines imposed core
FII Activity (`Cr)
capital ratios of at least 7%, sparking concerns about
Date Buy Sell Net return on equities in the sector. The RBI introduced
30-Apr 2,114 1,573 541 new rules on Wednesday to get banks to comply with
27-Apr 2,084 2,415 -331 upcoming Basel III rules, which would hit leverage
Total Apr 36,146 38,012 -1865 levels and ROEs of the banks. The rupee dropped to a
2012 YTD 236,380 192,917 43462 four-month low against the dollar yesterday, sparked
by concerns about foreign flows and the country's
MF Activity (`Cr)
widening current account deficit. Except IT, all sectoral
Date Buy Sell Net indices closed on negative levels with auto, metal,
26-Apr 725 876 -152 bank and real estate stocks were major losers. Auto
25-Apr 448 558 -110 stocks fell for the second day in a row after tepid sales
Total Apr 8,237 8,892 -654 growth reported by most auto firms for the month of
2012 YTD 44,182 50,410 -6228 April 2012. However, software services exporters
gained on expectations the slide in the rupee would
Volume & Advances / Declines
improve profit margins at a time of waning
NSE BSE outsourcing demand. Sugar producers stocks surged
Trading Volume (Cr) 55.60 20.21 after the government removed any limits on export
Turnover (`Cr) 10,004 1,921 volumes, raising expectations for improved profits in
Advances 429 1,055 the sector. Hero MotoCorp dropped 7.7% after missing
Declines 1,046 1,719 earnings estimates, and on worries about the impact
from the expiration of a state tax exemption it
Unchanged 68 107
currently enjoys in Haridwar of northern India.
Total 1,543 2,881
Global Markets • Market breadth was lower at ~0.61x as investors sold
large cap stocks. On provisional basis, FIIs bought
Index Latest Values Change (%) equity of `0.73bn while domestic institutions sold
DJIA 13,206.59 -0.47% equity of `3.47bn in cash segment.
NASDAQ 3,024.30 -1.16%
• Asian markets fell for a second day, as U.S. service
Nikkei * 9,380.25 0.31%
industries expanded less than forecast and falling
Hang Seng * 21,077.87 -0.81%
commodity prices weakened the earnings outlook for
* as of 8.25AM IST exporters and raw-material producers.
Currencies / Commodities Snapshot
• We expect a weak opening for the Indian markets,
Latest Previous
tracking the cues from the Asian markets and global
Quote Close
economic developments.
Indian Rupee per $ 53.37 52.98
Indian Rupee per € 70.20 69.66 Economic and Corporate Developments
NYMEX Crude Oil($/bbl) 102.68 102.54 • HSBC's business activity index or services PMI,
Gold ($/oz) 1,636.20 1,634.20 compiled by its service Markit, rose to 52.8 in April
Silver ($/oz) 30.12 29.98 from 52.3 in March.
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2. K E Y N O T E
INSTITUTIONAL RESEARCH
TOP GAINERS Buzzing Stocks
(BSE A-Group) • Cairn India to invest $5bn in Barmer block to
Previous Current Change increase output.
Company Name
Close(`) Price(`) (%) • Delhi High Court adjourns hearing in IGL vs PNGRB
Pipavav Defence 79.90 86.70 8.51
matter to May 8.
United Phos 119.75 126.85 5.93
• Dr Reddys gets US nod for osteoporosis drug Boniva
Godrej Cons 548.00 566.75 3.42
150 mg generic.
Glenmark Ph 329.75 337.15 2.24
Hind Unilever 425.00 433.60 2.02 • Pheonix Mills board clears raising `1000Cr via QIP
route.
(BSE Mid-Cap)
• Bosch to invest `300Cr in Nashik plant expansion.
Previous Current Change
Company Name • Mcnally Bharat Engineering receives 2 orders worth
Close(`) Price(`) (%)
Pipavav Defence 79.90 86.70 8.51 `177Cr from NTPC and Unitech Hi-Tech (NTPC
United Phos 119.75 126.85 5.93 Thermal Project worth `170Cr).
Core Projects 279.10 294.75 5.61 • GAAR may be put off by a year, tax amount of `10-
Arvind 85.80 89.90 4.78 15Cr may be the threshold above which rule could
Amara Raja 289.25 302.00 4.41 be invoked.
• Taib Bank investment in Anantraj Industries could
TOP LOSERS come under scanner of ED & IT for violation of FDI
(BSE A-Group) norms.
Previous Current Change • Reliance Industries fined `6600Cr for KG D6 output
Company Name
Close(`) Price(`) (%) fall.
IRB Infra 167.95 149.65 -10.90
US markets
Hero MotoCorp 2245.00 2072.35 -7.69
U.S. stocks fell, amid disappointing service industries
Aditya Birla Nuv 931.10 884.40 -5.02
data and as investors awaited for jobs report to gauge
JUBL FOOD 1183.75 1128.20 -4.69
the pace of growth at the world’s largest economy.
Bank of India 347.80 333.60 -4.08
The S&P 500 retreated 0.8 percent to 1,391.57 while
(BSE Mid-Cap) the Dow Jones Industrial Average declined 61.98 points,
Previous Current Change or 0.5 percent, to 13,206.59.
Company Name
Close(`) Price(`) (%)
Stocks dropped after service industries grew at a
IRB Infra 167.95 149.65 -10.90
slower pace than projected in April, a sign the largest
VIP Inds 93.00 86.75 -6.72 part of the economy may struggle to accelerate. The
TVS Motor 41.50 39.20 -5.54 report overshadowed data showing that jobless claims
Educomp Sol 197.20 186.55 -5.40 fell to 365,000 in the week ended April 28, a one-month
Sintex Inds 71.20 67.45 -5.27 low.
Keynote Capitals Institutional Research (research@keynotecapitals.net) (+9122-30266000)

3. K E Y N O T E
INSTIT UT IONAL R ES EAR C H
India and Global Economic Calendar
Countries / Friday Monday Tuesday Wednesday
Regions 4/May 7/May 8/May 9/May
India Forex Reserves Data
Weekly Supplement
of RBI
US Average Hourly Consumer Credit NFIB Small Business wholesale
Earnings (YoY & Change Optimism Index inventories
MoM) & Average
Weekly Hours
Nonfarm Payrolls ICSC-Goldman Store
Sales
Unemployment Rate
Global UK's RICS Housing Germany trade
Price Balance balance data
Germany's Industrial
Production s.a.
(MoM)
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