Market Outlook 7th December 2011

8/3/2019 Market Outlook 7th December 2011

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Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539 1

Market OutlookIndia Research

December 7, 2011

Dealer’s Diary

Indian markets are expected to open marginally in the green following positive

cues in the Asian markets. Asian stocks are trading higher on expectations thatEuropean leaders will step up their efforts to fight the financial crisis to preserve

their sovereign credit, failure of which is likely to make funding more costly.

Both US and European markets witnessed choppy trading and ended the sessions

mixed on Tuesday as traders seemed reluctant to make any significant moves as

they digested remarks from Standard & Poor's regarding European credit ratings.

S&P said that it has placed its long-term sovereign ratings on 15 Eurozone

nations including Germany and France on credit watch with negative

implications. The ratings agency also placed its rating on the European Financial

Stability Facility (EFSF) bailout fund on credit watch with negative implications.

Investors worldwide will look towards the upcoming EU Summit at the end of the

week. The result of the summit will likely determine whether S&P reduces itsrating of Germany and France.

Markets Today

The trend deciding level for the day is 16,787/5,032 levels. If NIFTY trades

above this level during the first half-an-hour of trade then we may witness a

further rally up to 16,882 – 16,958/5,062 – 5,085 levels. However, if NIFTY

trades below 16,787/5,032 levels for the first half-an-hour of trade then it may

correct up to 16,710 – 16,615/5,009 – 4,980 levels.

Indices S2 S1 R1 R2

SENSEX 16,615 16,710 16,882 16,958

NIFTY 4,980 5,009 5,062 5,085

News Analysis Political Update - FDI in retail: marred with issues and agitations

HT Media to form JV with US firm Apollo Global

Refer detailed news analysis on the following page

Net Inflows (December 02, 2011)

` cr Purch Sales Net MTD YTD

FII 2,574 1,862 712 1,617 (2,407)

MFs 548 386 163 (80) 5,865

FII Derivatives (December 05, 2011)

` cr Purch Sales Net Open Interest

Index Futures 1,292 1,508 (216) 13,748

Stock Futures 942 1,225 (283) 25,771

Gainers / Losers

Gainers Losers

Company Price (`) chg (%) Company Price (`) chg (%)

Hindustan Oil 131 5.8 Pantaloon Retail 186 (12.9)

GVK Power 11 5.7 Bombay Rayon 222 (9.9)

Ashok Leyland 26 5.4 Indiabulls Real Est. 63 (4.2)

Shriram Trans. Fin. 570 5.3 CESC 250 (4.0)

Aurobindo Pharma 97 4.4 JSW Steel 611 (3.9)

Domestic Indices Chg (%) (Pts) (Close)

BSE Sensex (0.3) (41.5) 16,805

Nifty (0.2) (11.0) 5,039MID CAP (0.1) (2.9) 5,761

SMALL CAP 0.1 5.3 6,195

BSE HC (0.4) (24.7) 6,100

BSE PSU 0.2 16.9 7,094

BANKEX 0.0 1.6 10,552

AUTO 0.0 3.9 8,824

METAL (0.9) (97.9) 10,816

OIL & GAS (0.1) (11.0) 8,400

BSE IT 0.0 0.2 5,727

Global Indices Chg (%) (Pts) (Close)

Dow Jones 0.4 52.3 12,150

NASDAQ (0.2) (6.2) 2,650

FTSE 0.0 0.8 5,569

Nikkei (1.4) (120.8) 8,575

Hang Seng (1.2) (237.5) 18,942

Straits Times (0.1) (3.2) 2,763

Shanghai Com (0.3) (7.3) 2,326

Indian ADRs Chg (%) (Pts) (Close)

Infosys (1.0) (0.5) $52.8

Wipro 0.3 0.0 $10.2

ICICI Bank (0.3) (0.1) $30.2

HDFC Bank (0.2) (0.1) $28.8

Advances / Declines BSE NSE

Advances 1,353

Declines 1,337 739

Unchanged 152 88

Volumes (` cr)

BSE 1,823

NSE 8,149



Market Outlook | India Research

December 7, 2011 2

Political update - FDI in retail: Marred with issues and agitations

The political uproar over the FDI issue is showing no signs of abating with

opposition as well as UPA allies determined to seek withdrawal of the key

reform. Hence, the parliament stalemate over FDI in retail continues at the

helm with prolonged adjournments – both houses are expected to resume

today. The topic has aroused endless debates, speeches and demonstrations

across the country.

Opposition demands adjournment motion

The growing heat over the episode has triggered advanced parliamentary

proceedings BJP demanded adjournment motion (extraordinary procedures,

including voting on matters of public importance) on FDI in retail and

challenged the government to face the adjournment motion. But the Congress

seems to undermine the debate, arguing that an adjournment motion can bemoved only with the consent of the government.

Ministers kick start persuasive discussions with allies and opposition

In a strong message to allies and the Opposition, Finance Minister Pranab

Mukherjee on Friday asked the allies and opposition parties not to obstruct

implementation of FDI in retail. The Finance Minister cleared the dilemma that

state governments hold the ultimate decisive power over whether or not to

allow retail chains in their territory. He firmed his stance by reiterating the fact

that FDI would strongly promote investment in technology in rural areas.

In addition, the government has initiated fresh efforts to persuade stategovernments. Commerce & Industry Minister Anand Sharma is also expected

to meet trade and farmer bodies over the next few days in a bid to garner their

support for the controversial move. The minister had written to CMs and

prominent political leaders explaining the rationale, safeguards and

consultation process followed by the government before the Cabinet approved

the proposal. The entire exercise is attempted to convince states to withdraw

their opposition to the move.

Foreign brands worried; hopes for amicable solution

The growing agitation over FDI in retail has left foreign brands nervous,

inferred though the two-day retail summit in Delhi last week. Several

international companies, mainly in the food and restaurant segment, decided

to stay away even after confirming their participation. A well-known South

African food chain, an Italian single-brand retailer and Dubai-based Binhendi

were among those who backed out of the summit.

Industry representatives blamed this on policy uncertainty, which is currently in

a ‘half-approved’ status. Due to this, foreign investors’ appetite in the Indian

market is likely to be low; they may not take a call on investments at this point

unless the environment is more certain. Experts also believed that negative

signals were sent to the world, which would surely make foreign companies

rethink their strategies on India.




December 7, 2011 3

HT Media to form JV with US firm Apollo Global

HT Media Ltd. (HTML) has entered into an agreement with US-based Apollo

Global Inc. in a 50:50 JV to introduce programs and services in the education

space. Apollo Global is a joint venture between US-based private education

provider, Apollo Group, and private equity firm, the Carlyle Group. As per HTML’s

management, the JV will focus on the much needed quality educational services in

India, where there is a mismatch in education and employment. We have not

factored in our estimates in the JV, as the company has not disclosed any financial

details pertaining to the JV.

HTML is already present in the education space in the form of Studymate tuition

centers in Delhi, HT Education (a newspaper for youth) and HT Campus (an online

resource portal for students looking for higher education). We maintain our Buy

view on the stock with a target price of `170.

Economic and Political News

Government won't rush into arbitration on RIL notice: Oil Ministry

RBI priority is to keep inflation low: Subir Gokarn

Interest rate hike ineffective beyond a point: Finance Minister

Corporate News

Cairn-Vedanta deal gets Home Ministry’s approval

ADB lends ` 250cr to RPower's solar project in Rajasthan

IOB plans to restructure SME and corporate loans

Source: Economic Times, Business Standard, Business Line, Financial Express, Mint




December 7, 2011 4

Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

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Market Outlook 7th December 2011

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