Market Outlook

India Research
November 24, 2011
Domestic Indices BSE Sensex Nifty MID CAP SMALL CAP BSE HC BSE PSU BANKEX AUTO METAL OIL & GAS BSE IT Global Indices Dow Jones NASDAQ FTSE Nikkei Hang Seng Straits Times Shanghai Com Chg (%) (2.3) (2.2) (2.1) (1.7) (1.0) (1.9) (2.4) (1.5) (2.0) (2.4) (2.5) Chg (%) (2.1) (2.4) (1.3) (0.4) (2.1) (1.5) (0.7) (Pts) (365.5) (105.9) (115.2) (104.6) (57.7) (127.0) (236.9) (129.6) (204.2) (196.1) (138.7) (Pts) (236.2) (61.2) (67.0) (33.5) (387.2) (40.6) (17.6) (Close) 15,700 4,706 5,514 5,976 5,855 6,588 9,649 8,270 10,024 7,955 5,447 (Close) 11,258 2,460 5,140 8,315 17,864 2,677 2,395

Dealers Diary
Indian markets are headed for a lower opening, tracing weakness across Asian markets. The domestic indices tumbled sharply yesterday and settled at two-year lows as accelerated selling by the FIIs dragged the bourses. Weak manufacturing data from China, lowest in 32 months also caused weakness across major Asian bourses. Global cues continued to remain fragile. The European markets extended losses as Germany's 10-year bond sale failed to receive sufficient demand from investors, indicating that debt crisis woes are likely to grapple even the strongest economies in the Eurozone. Major US indices too ended on a negative note reacting to weak cues from the Eurozone. The domestic indices have been slaughtered, with many stocks reaching new lows. Chances of broad based recovery remain mixed as reposing of FII confidence and positive cues across the globe weigh heavily on the market. Political developments will also play its part Cabinet is scheduled to discuss FDI in multi-brand retail today which could turn tables for retail sector.

Markets Today
The trend deciding level for the day is 15,716/ 4,706 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 15,953 16,207 / 4,777 4,848 levels. However, if NIFTY trades below 15,716/ 4,706 levels for the first half-an-hour of trade then it may correct up to 15,463 15,225 / 4,638 4,570 levels.
Indices SENSEX NIFTY S2 15,225 4,570 S1 15,463 4,638 R1 15,953 4,777 R2 16,207 4,848

Indian ADRs Infosys Wipro ICICI Bank HDFC Bank

Chg (%) (2.7) (2.9) (3.3) (3.8)

(Pts) (1.4) (0.3) (0.9) (1.0)

(Close) $49.6 $9.1 $27.4 $25.2

News Analysis
Cabinet may consider FDI in multi-brand retail today German bonds lose their luster
Refer detailed news analysis on the following page

Advances / Declines Advances Declines Unchanged

BSE 761 2,054 101

NSE 310 1,190 44

Net Inflows (November 22, 2011)

` cr FII MFs Purch 1,759 828 Sales 2,621 355 Net (862) 473 MTD (1,344) (219) YTD (828) 5,354

Volumes (` cr) BSE NSE 2,011 10,301

FII Derivatives (November 23, 2011)

` cr Index Futures Stock Futures Purch 6,349 7,873 Sales 7,637 7,067 Net (1,288) 807 Open Interest 20,424 28,399

Gainers / Losers
Gainers Company Unitech Titan Inds Jubl Food Lupin Divis Lab Price (`) 23 191 760 456 725 chg (%) 4.5 2.8 2.6 2.0 1.8 Company Hindustan Oil Opto Circuits Shree Renuka Sug Mundra Port Adani Enter Losers Price (`) 106 200 31 124 295 chg (%) (8.9) (7.2) (7.2) (6.6) (6.3)

Please refer to important disclosures at the end of this report

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Market Outlook | India Research

Cabinet may consider FDI in multi-brand retail today

The Cabinet of India is scheduled for discussing 51% Foreign Direct Investment (FDI) in multi-brand retail. According to reports, the nod for the same may come with conditions, including local sourcing of products. Currently, the government allows 51% FDI in single brand retail and 100% in cash and carry (wholesale) business. The finance ministry has reportedly given its consent to the draft cabinet note on multi-brand retail to foreign investment. The high level of committee of secretaries (CoS) also, in earlier discussions, met on a consensus over the proposal sector with several conditions, including minimum foreign investment of US$100mn. However, the proposal has long before attracted political uproar opposition parties are strictly opposed to this as rippling effects would include huge unemployment as well as displacement of small and mid-scale retailers. Investors will closely track the progressive developments in todays discussion, which is likely to witness a positive vibe in the retail sector.

German bonds lose their luster

Germany saw one of the poorest debt sale, since the launch of single currency as the Bundesbank was forced to retain almost half of targeted sale of EUR6bn new 10-year note due to a shortage of bids by investors. The new bonds, which promised to pay out a 2% interest rate (lowest ever), were sold at an average yield of 1.98%. The weak sentiment in the capital markets was underlined by the latest economic data release for the region, which showed that Eurozone industrial orders have plunged by 6.4% in September on sequential basis. This development has ignited fears that Euro crisis has even begin to threaten Germany, which is the safest country within the Eurozone. A broad and lasting solution to the crisis seems distant, as leaders of France and Germany are still undecided on whether or not the ECB should take bolder steps to ease the pressure on debt markets in Italy, Spain and others, which have now become the epicenter of the crisis.

Economic and Political News

Public sector spending on healthcare to double in the 12th Plan RBI asks corps to park ECB funds in India amid falling value of INR Indias external debt rises by 3.4% to US$317bn in first qtr. of current fiscal Finance Ministry asks ONGC, others to consider 30% interim dividend

Corporate News
Cyrus P. Mistry to succeed Rata Tata as Tata Sons head Honda Motorcycle launches new variant of Unicorn Dazzler Abbott, Dabur, GSK eye Jagdales energy drinks business HDFC Bank ropes in Experian to tackle loan application fraud IOC signs MoU with BP for exploring the potential for 1mtpa acetic acid plant

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

November 24, 2011

Market Outlook | India Research

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November 24, 2011