Market Outlook 29 03 11

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					                                                                                                                            Market Outlook
                                                                                                                                            India Research
                                                                                                                                             March 29, 2011

Dealer’s Diary                                                                                                   Domestic Indices      Chg (%)       (Pts)   (Close)
                                                                                                                 BSE Sensex              0.7%      127.5 18,943
The market surged in morning trade as data showing stepping up of buying by
                                                                                                                 Nifty                   0.6%       33.0      5,687
foreign funds late last week boosted sentiment. The market once again pared
                                                                                                                 MID CAP                 0.4%       28.3      6,750
gains in mid-morning trade as profit booking emerged after a four-day rally but
regained strength in early afternoon trade. Stocks surged again in afternoon                                     SMALL CAP               0.1%       10.0      8,012
trade. The market pared gains after hitting a fresh two-month high in mid-                                       BSE HC                 -1.2%      (69.7)     5,894
afternoon trade. Volatility continued in late trade. Positive global cues, stable                                BSE PSU                 0.4%       31.3      8,793
crude prices and data showing a pick-up in foreign fund buying in the recent                                     BANKEX                  1.2%      155.8 13,082
session helped the Indian market end higher for a fifth straight session, with the                               AUTO                    1.5%      134.4      8,982
Sensex and Nifty closing up by 0.7% and 0.6%, respectively. The mid-cap and                                      METAL                  -0.3%      (46.7) 15,796
small-cap indices closed with gains of 0.4% and 0.1%, respectively. Among the                                    OIL & GAS               0.0%       (4.1)     9,976
front liners, Tata Motors, Bharti Airtel, L&T, Reliance Infra and Maruti Suzuki                                  BSE IT                 -0.2%      (11.4)     6,333
gained 1.6–3.2%, while Jaiprakash Associates, Reliance Communications,                                           Global Indices        Chg (%)       (Pts)   (Close)
Sterlite Industries, Infosys and DLF lost 0.5–2.0%. Among mid caps, Sterlite                                     Dow Jones               -0.2%    (22.7)     12,198
Tech, Parsvnath Developers, Unichem Lab, Mahindra & Mahindra Finance and
                                                                                                                 NASDAQ                  -0.5%    (12.4)      2,731
Torrent Pharma gained 5–18%, while Shree Global Trd., Den Network,
Aurobindo Pharma, VA Tech Wabag and Glodyne Technoserve lost 5–9%.                                               FTSE                     0.1%       3.7      5,904
                                                                                                                 Nikkei                  -0.6%    (57.6)      9,479
Markets Today                                                                                                    Hang Seng               -0.4%    (90.5)     23,068
The trend deciding level for the day is 18,922/5,680 levels. If NIFTY trades                                     Straits Times           -0.4%    (13.5)      3,057
above this level during the first half-an-hour of trade then we may witness a                                    Shanghai Com             0.2%       6.2      2,984
further rally up to 19,045–19,147/5,717–5,746 levels. However, if NIFTY
trades below 18,922/5,680 levels for the first half-an-hour of trade then it may
                                                                                                                 Indian ADRs           Chg (%)      (Pts)    (Close)
correct up to 18,820–18,698/5,651–5,614 levels.
                                                                                                                 Infosys                  0.3%       0.2      $69.4
  Indices                       S2                         S1                    R1                 R2           Wipro                   -0.3%      (0.0)     $14.1
                                                                                                                 ICICI Bank               2.0%       0.9      $48.7
  SENSEX                     18,698                   18,820                19,045                 19,147
                                                                                                                 HDFC Bank                0.4%       0.7     $163.0
  NIFTY                       5,614                    5,651                 5,717                 5,746

News Analysis                                                                                                    Advances / Declines              BSE           NSE
        TCS signs a contract with CUA                                                                            Advances                        1,243          659
        Idea launches 3G services                                                                                Declines                        1,724          751
        Pfizer unit announces voluntary nationwide recall of 2 drugs in the US                                   Unchanged                         86               48
Refer detailed news analysis on the following page

  Net Inflows (March 28, 2011)                                                                                   Volumes (` cr)
  ` cr              Purch                     Sales                   Net              MTD               YTD     BSE                                          3,291
  FII                    3,330               1,812                 1,518              3,941          (6,244)     NSE                                         12,421
  MFs                       668                588                     79              752            3,054

  FII Derivatives (March 28, 2011)
                                                                                                       Open
  ` cr                                       Purch                  Sales               Net
                                                                                                     Interest
  Index Futures                             6,631                  5,783               848           17,109
  Stock Futures                             6,900                  6,981               (81)          32,123

  Gainers / Losers
                            Gainers                                                    Losers
                                                 chg                                                      chg
  Company                    Price (`)                          Company                Price (`)
                                                 (%)                                                       (%)
  LIC Housing Fin                 221            7.9            Aurobindo Phar             186           (5.8)
  M&M Finance                     824                5.5        Pantaloon Retl             258           (3.5)
  Essar Ship Ports                   92              5.0        Guj NRE Coke                  50         (3.5)
  Tata Comm                       248                4.7        Sun Pharma                 443           (3.3)                                                  1
  Indusind Bank                   264                4.5        Suzlon Energy                 44         (3.3)

Please refer to important disclosures at the end of this report                                                     Sebi Registration No: INB 010996539
                                                                          Market Outlook | India Research

                 TCS signs a contract with CUA

                 TCS has signed a contract with Credit Union Australia (CUA), Australia’s largest customer-
                 owned financial institution, to implement TCS’s core banking solution as its new core
                 banking system.

                 CUA will revolutionise its core banking system and back office processes over the next two
                 years to provide greater flexibility and integration across the business and deliver an
                 enhanced customer experience.

                 This deal would augur well for TCS to scale its revenue from the BFSI vertical, which
                 currently contributes 44.6% to the company’s revenue and grew by 8.4% in the last
                 quarter. At the CMP of `1,121, the stock is trading at 21.8x FY2012E EPS of `51.5.
                 We recommend Accumulate on the stock with a target price of `1,287.



                 Idea launches 3G services

                 Idea Cellular (Idea) announced the launch of 3G services on its network in MP,
                 Chhattisgarh, Gujarat and Himachal Pradesh yesterday. To anchor the occasion, Idea
                 unveiled a new 3G logo. The new branding will be implemented throughout India, across
                 all customer touch points. Idea has set up ‘Experience Kiosks’ to provide a flavour of
                 services that customers can opt for. These will be available to all users at select
                 ‘My Idea’ stores.

                 Idea’s 3G services will be available in 200 towns by April 2011, progressively growing at
                 the rate of 10 towns per day to cover 750 towns by mid-2011 and 4,000 towns by the end
                 of FY2012. Idea has traditionally focused on growth from India’s semi-urban
                 heartlands and will continue to drive its 3G services from these industrial, agricultural and
                 educational regions.

                 Idea has introduced time-based billing plan for 3G services, enabling users to avail
                 high-end data services without worrying about the volume of usage. To promote usage,
                 Idea has introduced ‘sachet’ pricing offering attractive trial packages with per day billing.

                 Currently, 10% of Idea’s over 86mn subscribers are said to be using 3G-enabled
                 handsets. It is expected that these users will be the early adopters of 3G services.
                 We recommend Neutral view on the stock.



                 Pfizer unit announces voluntary nationwide recall of 2 drugs in the US

                 Pfizer, Inc'.s Greenstone LLC unit has announced a voluntary nationwide recall of two
                 drugs in the US, namely Citalopram and Finasteride, due to possible mislabeling. As per
                 the company, some bottles of Citalopram (anti-depression drug) may have been labeled
                 inaccurately as Finasteride (treats benign prostatic hyperplasia) and vice versa by a
                 third-party manufacturer. Also, as indicated on the FDA website, the company believes this
                 is the only lot number being recalled and no other lots or markets are believed to be
                 impacted (the total recall has been of 500 bottles).

                 Aurobindo and Pfizer have an in-licensing and supply agreement in place for the supply of
                 finished dosage products, which are commercialised in the US through Pfizer’s Greenstone
                 subsidiary. However, since this recall does not relate to quality issues, we do not see it
                 majorly impacting the deal between Pfizer and Aurobindo and, thus, maintain our
                 estimates and recommend Buy on the stock with a target price of `210.




March 29, 2011                                                                                              2
                                                                                         Market Outlook | India Research




                    Economic and Political News

                   Banking license draft guideline by March-end: Finance Minister
                   Final decision on 2G spectrum pricing within three months
                   India, Africa target US $70bn trade by 2015


                    Corporate News

                   DB Realty director Rajagopal quits
                   ONGC sells Sudan Nile Blend at strongest price in two years
                   Reliance Broadcast enters regional TV space with Big Magic
                   Reliance Infra announces `1,000cr share buyback offer

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




March 29, 2011                                                                                                       3
                                                                                                                                 Market Outlook | India Research



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March 29, 2011                                                                                                                                                                    4

				
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