Oil Prices and Stability of Central Government a worry for markets 08 Mar 2010

Indian stock markets closed weak on the back of selloff in heavy weights during the The Day Ahead
day. Stocks from the capital goods and realty space have lost the most, while stocks
from the IT and PSU space have lost the least. Oil’s certainly not well…
Steel stocks traded weak due to selling pressure in heavyweights like SAIL, Tata Steel Worries about the potential impact of oil's climb above $100 a barrel sent U.S.
and JSW Steel. As per reports, SAIL is aiming at garnering one fourth of its revenues stocks lower Friday, but came short of wiping out gains recorded earlier in the week.
from sources other than steel by the year 2020. This diversification will help in Investors were uninspired by government data showing nonfarm payrolls rose by
minimizing the risk of volatile steel prices. The company is planning to set up a 192,000 last month while the unemployment rate fell to 8.9%, the first time it has
separate company for mining projects by the name of SAIL Natural Resources. It is slipped below 9% since April 2009.
considering the possibility of mining titanium and manganese through joint ventures The turmoil in the Arab world continues to cast a shadow on the markets. Just
in Kerala and Rajasthan respectively. For power generation, it is in talks with NTPC about a month ago, we were more obsessed with high food inflation, potential
Ltd and Damodar Valley Corp. interest rate hikes, the Euro crisis, and scandals and political logjams. While these
Nifty gainers and losers were as follows: headwinds have not gone away, the repercussions of the Jasmine Revolution in tiny
Top 5 Gainers LTP Change Top 5 Losers LTP Change Tunisia has grabbed the attention of global leaders, investors and markets.
Cairn India 357.3 1.75% Tata Motors 1125.2 -4.30% International investors are keeping their fingers crossed, amid fears that the unrest
R Power 122.7 1.28% Axis Bank 1271.8 -4.26% could spread to big oil-producing nations like Saudi Arabia and Iran. Clearly, given
Dr. Reddy's 1578.3 0.40% Sun Pharma 414.2 -4.21% the ethnic, social and political dynamics in the region, there are no illusions of
resolving the problems in the Arab world overnight.
Cipla 304.3 0.03% IDFC 142.1 -3.95%
- - - BPCL 557.5 -3.89% The benchmark indices ended up 4.4% last week. Automobile and FMCG stocks
Index PE 4-Mar Yr. High Yr. Low were top gainers, while IT, consumer durables and Pharma remained major
Sensex 20.04 24.47 19.02 underperformers. This week, long positions can be assumed in sectors like auto,
Nifty 21.21 25.91 19.81 FMCG and capital goods from current levels or from lower Nifty support at 5,400
Market levels. Short positions can be assumed in metals, realty and Pharma if the index fails
Turnover 4-Mar (Rs. Crore) 3-Mar (Rs. Crore) Variance (%) to cross 5,600-5,650 levels. The index is expected to trade in a range of 5,400-5,650
BSE Cash 3,166 3,834 -17.4% this week.
NSE Cash 11,713 14,990 -21.9% Asian stock markets opened mostly lower on Tuesday as higher oil prices continued
NSE F&O 1,04,831 1,50,591 -30.4% to hurt sentiment, while the resignation of Japan's foreign minister added to the
Total 1,19,710 1,69,415 -29.3% gloom in Tokyo Intensified fighting in Libya over the weekend raised the chance
Index of Industrial Production Growth that the country will descend into civil war and signs of political unrest in other
10-Dec 09-Dec Apr- Dec 10 Middle East and North African nations such as Saudi Arabia, Bahrain, Yemen,
IIP 1.60% 18.00% 8.60% Oman and Algeria sent oil prices higher, threatening economic growth across the
Mining 3.80% 11.10% 7.70% globe.
Manufacturing 1.00% 19.60% 9.10% Global Cues
Electricity 6.00% 5.40% 4.70% Asian markets have opened the day on a mixed note. Markets in Japan (down
Support/Resistance Nifty Sensex 1.4%), Taiwan (down 0.5%) and Hong Kong (down 0.2%) are trading weak.
Support 1 5440 18377
European and American markets too closed in red with CAC 40 declining 0.20%,
Support 2 5402 18200 FTSE 100 declining 0.17%; and US Stocks ended lower on Monday due to spike in
Resistance 5600 18665 Oil prices overshadowing a strong Febuary job report. Dow Jones Industrial
[Type text] Average tumbled 88.32 points, or 0.72 percent
1|P a g e Branch Office:
th
Shah Investor’s Home Ltd.164-C, 16 Floor, Mittal Tower, Nariman Point, Mumbai-400021
PH: 91 22 22040782/83/84 Fax: 91 22 22040722 E-Mail: research@sihl.in Web: www.sihl.in
 Oil Prices and Stability of Central Government a worry for markets 08 Mar 2010

Banking stocks closed in red with Andhra Bank and IDBI Bank leading the pack of losers. As part of its recapitalization package, RBI is all set to infuse Rs 43.7 billion in two
PSU banks namely Bank of Baroda and Union Bank of India. Accordingly, Bank of Baroda has taken necessary steps to raise capital via offering equity shares. The capital
infusion would raise the governments’ holding in the bank which currently stands at 53.8%. Capital infusion in Bank of Baroda would be to the tune of Rs 32.8 bn while that
for Union Bank of India it would be Rs 10.9 bn. The proposed infusion is expected to be completed by March 31 this year. It may be noted that the FM had announced capital
infusion of Rs 201.5 bn into PSU banks during the current fiscal so as to enable them to maintain a minimum tier-1 capital of 8%.
Steel stocks traded weak due to selling pressure in heavyweights like SAIL, Tata Steel and JSW Steel. As per reports, SAIL is aiming at garnering one fourth of its revenues
from sources other than steel by the year 2020. This diversification will help SAIL in minimizing the risk of volatile steel prices. The company is planning to set up a separate
company for mining projects by the name of SAIL Natural Resources. and considering the possibility of mining titanium and manganese through joint ventures in Kerala and
Rajasthan respectively. For power generation, it is in talks with NTPC Ltd and Damodar Valley Corp. The company seeks nomination for the construction of the eastern part
of the Indian railways along with manufacture of railway coaches as a part of its railway plans.
Capital Goods were the biggest loserers with L&T and BHEL each losing 2.5% each. Engineering stocks closed the day on a weak note with Punj Lloyd, L&T and ABB
trading in the red. However, Thermax closed 1% up. L&T is in the process of achieving financial closure for its recently bagged Hyderabad Metrorail project. The original cost
of the project was earlier estimated to be around Rs 121 bn. However, since the length of the route is expected to be increased, the cost has increased to Rs 148 bn. L&T will
infuse equity of about Rs 34 bn. The remainder Rs 114 bn will be raised via debt from a consortium of 10 banks led by SBI.

[Type text]
2|P a g e Branch Office:
th
Shah Investor’s Home Ltd.164-C, 16 Floor, Mittal Tower, Nariman Point, Mumbai-400021
PH: 91 22 22040782/83/84 Fax: 91 22 22040722 E-Mail: research@sihl.in Web: www.sihl.in