- Indian stock indices rose to their highest levels in 25 months, with the Sensex and Nifty gaining 1.4% and 1.5% respectively, lifted by sustained buying in index pivotals. - Regional stocks were mixed, with metal and auto stocks rising on firm commodity prices and strong auto sales, while IT stocks declined due to a stronger rupee. - In corporate news, steel makers raised prices for the third time in 2010 due to higher raw material costs, while ACC reported a 3.5% drop in cement dispatches for March.

1. Market Outlook
India Research
April 06, 2010
Dealer’s Diary Domestic Indices Chg (%) (Pts) (Close)
Sustained buying in index pivotals took the key benchmark indices to their BSE Sensex 1.4% 243.1 17,936
highest levels in 25 months. Firm Asian stocks and higher US index futures Nifty 1.5% 77.9 5,368
underpinned sentiment. The market came off the higher level in early trade, MID CAP 1.5% 99.9 6,966
after a firm opening triggered by positive global cues. The market surged to a SMALL CAP 2.0% 171.7 8,875
fresh 25-month high in early afternoon trade. Stocks held firm in afternoon BSE HC 1.4% 76.9 5,421
trade. The market extended gains in mid-afternoon trade to hit fresh 25-month BSE PSU 1.0% 88.0 9,156
highs. A buying frenzy in index pivotals in late trade helped indices register
BANKEX 1.9% 199.1 10,912
fresh multi-month highs later. The market breadth was strong. Auto stocks were
AUTO 2.0% 153.6 7,819
in demand following good March monthly sales of auto firms. Metal stocks rose
METAL 1.7% 311.6 18,542
following firm prices on the London Metal Exchange. IT stocks declined in
OIL & GAS 2.0% 208.0 10,467
volatile trade on a firm rupee. The Sensex and Nifty gained 1.4% and 1.5%,
respectively, while the BSE Mid-cap and Small-cap indices were up by 1.5% and BSE IT -0.0% (1.3) 5,354
2%, respectively. Among the front-liners, Reliance Infra, Bharti Airtel, Hero
Honda Motors, Tata Steel and DLF were up by 3-5%, while HUL, Grasim, TCS, Global Indices Chg (%) (Pts) (Close)
L&T and ITC were down by 0-1%. In the mid-cap segment, Emami, Allahabad Dow Jones 0.4% 46.5 10,974
Bank, Nirma, Marico and Andhra Bank were up by 6-9%, while P&G, Asian NASDAQ 1.1% 26.9 2,429
Star, 3M India, EID Parry and Fortis Health were down by 2-5%.
FTSE 1.2% 65.3 5,745
Nikkei -0.4% (46.5) 11,293
Markets Today
Hang Seng 1.4% 297.7 21,537
The trend deciding level for the day is 17859/ 5346 levels. NIFTY trades above Straits Times 0.9% 25.4 2,968
this level during the first half-an-hour of trade then we may witness a further Shanghai Com 0.5% 17.2 3,175
rally up to 18025 – 18114/ 5400 – 5432 levels. However, if NIFTY trades
below 17859/ 5346 levels for the first half-an-hour of trade then it may correct Indian ADRs Chg (%) (Pts) (Close)
up to 17770 – 17604/ 5314 – 5260 levels.
Infosys 1.5% 0.9 $61.1
Indices S2 S1 R1 R2 Wipro 2.4% 0.6 $24.6
SENSEX 17,604 17,770 18,025 18,114 Satyam 2.3% 0.1 $5.3
NIFTY ICICI Bank 4.1% 1.8 $45.4
5,260 5,314 5,400 5,432
HDFC Bank 0.9% 1.3 $145.5
News Analysis
Steel-makers raise prices for the third time since January 2010 Advances / Declines BSE NSE
Petronet LNG in talks to secure gas supply for Kochi Advances 2,245 1,093
ACC – March 2010 cement despatches Declines 663 236
Refer detailed news analysis on the following page. Unchanged 61 24
Net Inflows (Mar 30, 2010)
Volumes (Rs cr)
Rs cr Purch Sales Net MTD YTD
BSE 4,640
FII 2,179 1,879 301 18,294 19,270
MFs NSE 13,110
466 566 (100) (3,809) (5,818)
FII Derivatives (Apr 05, 2010)
Open
Rs cr Purch Sales Net
Interest
Index Futures 1,981 670 1,311 13,936
Stock Futures 1,165 883 282 28,768
Gainers / Losers
Gainers Losers
Company Price (Rs) Chg (%) Company Price (Rs) Chg (%)
Allahabad Bank 153 6.6 Bharat Electronics 2,102 -4.2
Andhra Bank 115 6.3 HPCL 310 -2.0
Deccan Chroni. 163 5.9 Max India 213 -1.9
Bajaj Auto 2,115 5.8 IOC 294 -1.5
Jain Irrigation 1,008 5.4 Idea Cellular 64 -1.2
1
Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539

2. Market Outlook | India Research
Steel-makers raise prices for the third time since January 2010
Domestic steel players have raised steel product prices effective from April 1, 2010 to
factor in rising raw material costs (coking coal and iron ore). SAIL, Tata Steel, JSW Steel,
Ispat Industries and Uttam Galva have all announced price increases for April 2010. For
the period of April-June 2010, coking coal contracts have been settled at US $200/tonne,
higher by 55% yoy, and iron ore contracts have been higher at 83% at US $110/tonne.
Moreover, the raw material pricing system has changed to quarterly-based contracts,
which is likely to keep the steel price volatile, in our view.
Price hikes undertaken by various steel players in April 2010
Steel Companies Rs/tonne
SAIL 2,000-2,500
Tata Steel 2,500-3,000
JSW Steel 5-7%
Ispat Industries 2,500-2,700
Uttam Galva* 6,000
* Secondary steel producer
Petronet LNG in talks to secure gas supply for Kochi
Petronet LNG is in talks with West Asian countries, including Qatar, to secure gas supply
for its Kochi terminal. Petronet has already tied up for 1.5MMTPA LNG from the proposed
Gorgon project in Australia for its 2.5MMTPA LNG terminal in Kochi, which is expected to
be operational in 2012. The company has obtained additional supplies from RasGas of
2.5MMTPA (from January 2010), in addition to the existing supplies of 5MMTPA, thus
securing supply linkage for 7.5MMTPA out of the 11.5MMTPA capacity of Dahej terminal.
Qatar has agreed to supply another 4MMTPA LNG to India, after Petroleum Minister Murli
Deora met Qatar’s Deputy PM and Energy Minister Abdullah bin Hamad Al Attiyah last
month. According to the proposal, Qatar is said to be supplying 0.3MMTPA of LNG this
year, 0.5 MMTPA in 2011, 2.5 MMTPA in 2012 and 4 MMTPA from 2013. Of this, about
2.5 MMTPA will be received at Dabhol, while the remaining may be received at Kochi once
the terminal is ready. However, there is no clarity on the pricing front of the contracted
LNG. Qatar would also be bringing on stream two more plants with 15MMTPA of LNG
production capacity, which would raise its output to 77 MMTPA a year; thus, LNG prices
would remain in check. If Petronet is able to tie-up gas supplies, it will remove an
overhang on the stock and will be a positive development. We maintain an Accumulate on
the stock, with a Target Price of Rs88.
ACC – March 2010 cement despatches
ACC’s cement despatches fell by 3.5% yoy to 1.94mn tonnes in March 2010. The
company’s production was also down by 2.5% for the period. The company has shown a
decline in despatches, although many of the other major cement manufacturers have
reported a strong growth in despatches in March 2010, on account of the healthy demand
from realty and infrastructure sectors. However, the decline in the ACC’s despatches is
expected to be on account of a production cut, due to load shedding in the southern
region, where the company has a significant presence. We remain Neutral on the stock.
April 06, 2010 2

3. Market Outlook | India Research
Economic and Political News
Tighter FDA rules sour local drug companies’ American dream
SEBI tightens disclosure norms
Foreign investment in Indian shares rises to all-time high of US $77.2bn
Corporate News
McNally Bharat bags project worth Rs827cr
Biocon to acquire CIMAB SA's stake in Biocon Biopharma
Ankur Drugs and Pharma to acquire TVC Life Sciences
MRPL to reduce term crude imports from Iran by ~8.5% to 130,000 bpd for FY2011
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint
April 06, 2010 3

4. Market Outlook | India Research
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