The key Indian indices surged by around 1.7% after China announced it would allow more flexibility in its currency. Metals and realty stocks rallied. The RBI directed banks to make NPA compromises in a transparent manner and express concerns about differing settlement amounts. Bharti Airtel plans to invest $100 million in expanding its network in Uganda over the next two years following its acquisition of Zain's Africa assets.

1. Market Outlook
India Research
June 22, 2010
Dealer’s Diary Domestic Indices Chg (%) (Pts) (Close)
The key indices surged after China announced over the weekend that it will BSE Sensex 1.7% 305.7 17,877
allow its currency more freedom to move against the US dollar, which should Nifty 1.7% 90.7 5,353
spur its economic growth. An end to the row over regulation of Unit Linked MID CAP 1.3% 90.1 7,066
Insurance Products (ULIPs) and firm Asian stocks, aided the rally on the SMALL CAP 1.2% 107.6 8,954
domestic bourses. Metals and realty shares rallied. The market extended gains BSE HC 1.0% 54.3 5,657
in morning trade, remained range bound in early afternoon trade and pared BSE PSU 0.6% 52.1 9,256
gains after hitting fresh intraday highs in mid-afternoon trade. Both the Sensex BANKEX 2.0% 222.3 11,102
and Nifty closed up by 1.7% each, while the BSE mid-cap and small-cap indices AUTO 1.5% 122.0 8,257
closed up by 1.3% and 1.2%, respectively. Among the front-liners, Sterlite METAL 5.2% 764.2 15,586
Industries, Tata Steel, Hindalco Industries, ICICI Bank and JP Associates were up OIL & GAS 0.9% 90.7 10,384
by 4–8%, while HDFC Bank and Bharti Airtel were the only losers, which ended BSE IT 0.7% 35.4 5,436
down by 0.3% and 0.1%, respectively. Among the mid-caps, Edelweiss Capital,
Fresenius Kabi, Mahindra Lifespace Developers, India Infoline and Geekay
Global Indices Chg (%) (Pts) (Close)
Finance were up by 5–19%, while Kwality Dairy, IBN18 Broadcast, Patni
Computer Systems, KGN Industries and GTL declined by 2–5%. Dow Jones -0.1% (8.2) 10,442
NASDAQ -0.9% (20.7) 2,289
Markets Today FTSE 0.9% 48.3 5,299
Nikkei 2.4% 243.0 10,238
The trend deciding level for the day is 17817/5329 levels. If NIFTY trades
Hang Seng 3.1% 625.5 20,912
above this level during the first half-an-hour of trade then we may witness a
Straits Times 1.8% 52.2 2,886
further rally up to 17979–18082/5391–5429 levels. However, if NIFTY trades
Shanghai Com 2.9% 73.0 2,586
below 17817/5329 levels for the first half-an-hour of trade then it may correct
up to 17714–17552/5291–5229 levels.
Indian ADRs Chg (%) (Pts) (Close)
Indices S2 S1 R1 R2 Infosys -0.3% (0.2) $63.2
SENSEX 17,552 17,714 17,979 18,082 Wipro 1.6% 0.4 $22.4
NIFTY 5,229 5,291 5,391 5,429 Satyam 1.8% 0.1 $5.1
ICICI Bank 2.3% 0.9 $39.0
News Analysis HDFC Bank 2.7% 4.1 $154.6
RBI seeks transparency in NPA compromise settlements
Advances / Declines BSE NSE
Bharti Airtel to invest US $100mn in Zain Uganda
Advances 1,837 964
Refer detailed news analysis on the following page.
Declines 1,063 356
Net Inflows (June 18, 2010) Unchanged 96 47
Rs cr Purch Sales Net MTD YTD
FII 2,134 1,439 695 4,843 25,379 Volumes (Rs cr)
MFs 511 557 (46) 468 (6,662) BSE 4,112
NSE 12,790
FII Derivatives (June 21, 2010)
Open
Rs cr Purch Sales Net
Interest
Index Futures 3,587 3,162 4,26 15,782
Stock Futures 5,578 5,773 (196) 30,812
Gainers / Losers
Gainers Losers
Price Price
Company Chg (%) Company Chg (%)
(Rs) (Rs)
Sesa Goa 388 9.5 Patni Comp. 537 (3.8)
Sterlite Inds 184 8.3 GTL 416 (2.5)
Tata Steel 504 6.3 MMTC 31,296 (2.4)
Hindalco 153 5.6 Glenmark Phar. 266 (1.0)
JSW Steel 1,095 5.5 Zee Entert 293 (1.0)
Please refer to important disclosures at the end of this report Sebi Registration No: INB 0109965391

2. Market Outlook | India Research
RBI seeks transparency in NPA compromise settlements
The Reserve Bank of India (RBI) has directed banks to carry out the settlement of non-
performing assets (NPAs) in a transparent manner. The RBI expressed concerns that some
banks were agreeing to smaller amounts than what they could recover. Debt Recovery
Tribunals (DRTs) also observed that banks adopted different parameters for different
borrowers and agreed to a lesser amount as against the claimed amount, despite the
availability of ample securities and by ignoring RBI guidelines. Further, RBI told banks that
the officer or authority sanctioning the compromise settlements must append a certificate
stating that the settlements are in conformity with RBI guidelines.
Bharti Airtel to invest US $100mn in Zain Uganda
Bharti Airtel plans to invest up to US $100mn in Uganda over the next two years towards
network expansion, distribution, infrastructure and broadband extension. The company
recently concluded a US $9bn takeover of Zain’s Africa assets in 15 African countries. We
believe these initiatives to pay off in the long run and help the company gain a strong
subscriber market share. We maintain Buy on the stock with a Target Price of Rs360.
Economic and Political News
Yuan rises to the highest level against dollar in modern era
IT Dept may demand Rs8,500cr tax over transfer pricing
Karnataka clears 69 new investment proposals
To promote multiplexes in HP, government exempts entertainment tax for five years
Corporate News
National Textile Corporation eyes Rs750cr from Mumbai mill sell-off
Saudi Binladin Group makes 20% open offer for Maytas Infra
Jyothy Labs board okays raising Rs300cr via QIP
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint
Events for the day
Steel Strips Wheels Dividend, Results
June 22, 2010 2

3. Market Outlook | India Research
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