Indian markets continued their downward trend for a third straight session, falling to their lowest close in over five weeks. Key factors included weak European markets and a credit rating downgrade of State Bank of India. Bank stocks fell sharply on renewed concerns about weakening asset quality. Overall market breadth was weak as investors sold large cap stocks. Asian markets opened lower today following declines in Japan.

1. K E Y N O T E
INSTITUTIONAL RESEARCH
India Morning Note
Wednesday, October 5, 2011
Domestic Markets Snapshot Views on markets today
Name of Index Oct 3 Oct 4 Change (%)
• Indian markets continued its downward trends for a
third straight session to their lowest close in more
Sensex 16,151.45 15,864.86 -1.77%
than five weeks after weak European markets and
CNX Nifty 4,849.50 4,772.25 -1.59% rating downgrade of top lender State Bank of India
BSE Mid-cap 6,013.42 5,936.18 -1.28% rattled investors and sent bank stocks reeling on
BSE IT 5,195.75 5,153.79 -0.81% renewed fears of weakening asset quality. Ratings
BSE Banks 10,544.72 10,219.03 -3.09% agency Moody's Investors Service downgraded the
standalone rating for SBI to D+ from C-, citing its
FII Activity (`Cr) ‘modest’ capital and deteriorating asset quality.
Date Buy Sell Net European markets extended yesterday loss with
Greece worries continuing to weigh on investors and
3-Oct 1640 2422 -782
reports that the board of Belgian-French bank Dexia
29-Sep 6194 6504 -310
SA held an emergency meeting that stretched into the
Total Oct 1640 2422 -782 early hours of Tuesday amid fears that the bank was
2011 YTD 485298 488025 -2736 going to collapse. Except capital goods, all sectoral
indices closed on negative with bank, auto, oil & gas
MF Activity (`Cr)
and metal stocks were major losers. After SBI's
Date Buy Sell Net downgrade news, bank stocks fall sharply with ICICI
3-Oct 387 620 -233 Bank lost 4.6% while SBI lost 4.1%. Power Finance
28-Sep 319 476 -157 Corp fell 4.85% after Macquarie said it expects the
company to book a large mark-to-market loss in the
Total Oct 387 620 -233
second quarter of the current fiscal year due to
2011 YTD 101954 96962 5264 unhedged foreign currency liabilities and a sharp fall
Volume & Advances / Declines in the rupee. Maruti Suzuki gained 2.7% after the
company’s plans to raise production of its best-selling
NSE BSE
hatchback, Swift, by more than 40%. It will also shift
Trading Volume (`Cr) 11,415 2,614 its entire output to the Manesar factory after a month-
Advances 444 985 long industrial unrest.
Declines 1,017 1,762 • Market breadth was weak at ~0.56x as investors sold
Unchanged 63 125 large cap stocks. FIIs sold equities worth `9.71bn while
Total 1,524 2,872 domestic institutions bought equities of `5.55bn.
• Asian markets are downbeat today although US
Global Markets
markets showed late recovery overnight as Japanese
Index Latest Values Change (%) shares fall after Fast Retailing Co. issued a downbeat
DJIA 10,808.71 1.4% sales report. Hong Kong and Chinese markets were
NASDAQ 2,404.82 3.0% closed for holiday.
Nikkei * 8,385.71 -0.8% • We expect a weak opening for the Indian markets
tracking the cues from the Asian markets. SBI's debt
Hang Seng (Closed) 16,250.27 -
downgrade yesterday by Moody's may shadow over
* as of 8.45AM IST the markets today as other PSU bank stocks may also
Currencies / Commodities Snapshot come under the scanner of the investors.
Latest Previous Economic and Corporate Developments
Quote Close • Concerned over severe shortage of iron ore after the
Indian Rupee per $ 49.24 49.23 ban on mining in Karnataka, Steel Minister Beni Prasad
Indian Rupee per € 65.54 65.54 Verma said the Finance Ministry should immediately
NYMEX Crude Oil($/bbl) 77.63 75.67 increase the export duty on the raw material to 30%.
Gold ($/oz) 1,620.70 1,614.70 • Loans disbursed by the National Bank for Agriculture
and Rural Development (Nabard) to state
Silver ($/oz) 30.05 29.79
governments crossed the `1,00,000Cr mark and stood
at `1,02,844Cr as on September 30.
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2. K E Y N O T E
INSTITUTIONAL RESEARCH
TOP GAINERS Buzzing Stocks
(BSE A-Group) • PVR Cinemas plans to invest around `580Cr to set up
Previous Current Change six entertainment cities and add 350 screens to its
Company Name
Close (`) Price (`) (%) existing 154 across the country over the next three
Patni Computer 274.80 287.35 4.57 years.
Maruti Suzuki 1077.15 1106.55 2.73
• Oil & Natural Gas Corp will fast-track its plans to
Cadila Health 746.05 762.00 2.14
develop new oil and gas fields, so as to raise its
Areva T&D 214.60 218.80 1.96
sagging output and increase crude oil output by 15%
Colgate Palmol 966.40 983.85 1.81
in two years, according to Sudhir Vasudeva, the new
(BSE Mid-Cap) head of the nation’s biggest energy explorer.
Previous Current Change • Axis Bank extended its $200mn US Commercial
Company Name
Close(`) Price(`) (%) Paper (CP) programme by one year.
Patni Computer 274.80 287.35 4.57
• Liquor maker Tilaknagar Industries acquired Punjab
Himadri Chem 48.30 49.60 2.69
Expo Breveries for an undisclosed sum.
Wockhardt 389.80 400.25 2.68
S Mobility 99.85 102.00 2.15 US markets
Areva T&D 214.60 218.80 1.96 Last hour buying helped US markets to gain more
than 3% after a report that European official were
TOP LOSERS moving toward a plan to recapitalize the region’s
(BSE A-Group) banks. The Dow Jones industrial average gained
153.41 points, or 1.44%, to 10,808.71. The S&P 500
Previous Current Change
Company Name gained 24.72 points, or 2.25%, to 1,123.95. The
Close(`) Price(`) (%)
JUBL FOOD 753.95 668.05 -11.39 Nasdaq Composite gained 68.99 points, or 2.95%, to
PIPAVAVDOC 76.95 71.40 -7.21 close at 2,404.82.
JPINFRATEC 51.25 48.20 -5.95
Allahabad Bank 154.70 146.65 -5.20
Essar Oil 78.00 74.00 -5.13
(BSE Mid-Cap)
Previous Current Change
Company Name
Close(`) Price(`) (%)
JUBL FOOD 753.95 668.05 -11.39
Network18 75.25 68.25 -9.30
PIPAVAVDOC 76.95 71.40 -7.21
Amtek Auto 120.60 112.20 -6.97
Page Inds 2539.15 2386.05 -6.03
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