Market Outlook

India Research
January 4, 2012

Dealers Diary
Indian markets are expected to open in the green following positive cues from the European markets and the Asian markets. Asian stocks are trading in the green after U.S. manufacturing increased at the fastest pace in six months. Indian shares rallied on Tuesday as inflation worries seem to be abating and the Reserve Bank of India said it might ease monetary policy to address concerns about economic growth. The US markets ended in the green as markets benefited from positive reactions to the latest batch of economic data. The early rally on Wall Street was partly due to the release of a report showing a modest rebound in Chinese manufacturing activity in the month of December. A separate report showing a notable drop in German unemployment also generated some buying interest. Stocks saw continued strength following the release of a report from the Institute for Supply Management showing that its index of activity in the U.S. manufacturing sector rose to a six-month high in December.

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 (%) 2.7 2.8 2.4 2.3 1.5 3.8 4.4 1.9 5.1 1.9 2.3 Chg (%) 1.5 1.7 2.3 0.7 2.4 1.6 1.2

(Pts) 128.6 124.4 129.3 86.2 240.8 398.9 155.1 472.6 148.1 131.6 (Pts) 43.6 127.6 56.5 42.0 25.9

(Close) 4,765 5,256 5,686 5,947 6,617 9,577 8,201 9,825 7,776 5,954 (Close) 2,649 5,700 8,455 2,688 2,199

421.4 15,939

179.8 12,397

Markets Today
The trend deciding level for the day is 15,850/4,738 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 16,060 16,180/4,800 4,835 levels. However, if NIFTY trades below 15,850/4,738 levels for the first half-an-hour of trade then it may correct up to 15,730 15,520/4,703 4,641 levels.
Indices SENSEX NIFTY S2 15,520 4,641 S1 15,730 4,703 Pivot 15,850 4,738 R1 16,060 4,800 R2 16,180 4,835

443.0 18,877

Indian ADRs Infosys Wipro ICICI Bank HDFC Bank

Chg (%) 4.0 2.7 6.5 3.2

(Pts) 2.1 0.3 1.7 0.8

(Close) $53.5 $10.5 $28.2 $27.1

News Analysis
Cement Dispatches December 2011 Reliance Industries gets nod to develop new D6 fields HCC bags order worth `289cr
Refer detailed news analysis on the following page

Advances / Declines Advances Declines Unchanged

BSE 2,019 740 109

NSE 1,237 237 69

Net Inflows (January 02, 2011)

` cr FII MFs Purchases
472 187

Sales
511 242

Net
(39) (55)

MTD
(39) (55)

YTD
(39) (55) Volumes (` cr) BSE NSE 1,850 8,210

FII Derivatives (January 03, 2012)

` cr Index Futures Stock Futures Purchases
1,909 1,246

Sales
1,143 873

Net
766 373

Open Interest
10,133 23,454

Gainers / Losers
Gainers Company
MMTC Hindustan Copper IVRCL JSW Steel GMR Infra.

Losers Company
Gitanjali Gems Oil India BPCL M&M Indian Oil Corp.

Price (`)
620 220 32 589 22

chg (%)
19.4 17.2 10.2 9.6 8.6

Price (`)
301 1,139 474 667 251

chg (%)
(3.6) (3.2) (1.3) (1.1) (1.0)

Please refer to important disclosures at the end of this report

Sebi Registration No: INB 010996539

Market Outlook | India Research

Cement Dispatches December 2011

Ambuja Cements dispatches stood at 1.93mn tonnes for December 2011, up by modest 5.7% yoy on a high base of last year. For CY2011, the companys dispatches grew marginally by 4.2% to 20.96mn tonnes. During CY2010, the company added 2mtpa of capacity, post which its overall capacity stands at 27mtpa. We continue to remain Neutral on Ambuja Cements.

Reliance Industries gets nod to develop new D6 fields

The government has approved Reliance Industries' US$1.5bn plan to develop the new D6 block, which has the potential to produce additional 10mmscmd gas. RIL and, its partner, BP have four months to start work on the project as the KG D6 block faces adverse weather during the rest of the year. Until further clarity on the anticipated production from the block, we maintain our estimates and maintain our Buy rating on the stock with a target price of `1,006.

HCC bags order worth `289cr

Hindustan Construction Company (HCC) has received a Letter of Acceptance (LOA) for a `289cr contract to construct a bulk water transmission system for Gujarat Water Infrastructure Limited, a Government of Gujarat Undertaking. The work involves construction of a 57km-long water transmission pipeline between Dhanki and Maliya villages under the Swarnim Gujarat Saurashtra-Kutch, Water Grid Programme. The project will be completed in 12 months. With this order, HCCs outstanding order book now stands at ~`16,967cr (4.1x FY2011 revenue). We maintain our Neutral view on the stock.

Economic and Political News

DoT to demand `1,593cr from companies for under-reporting revenue Government may okay `300cr for marketing support to MSMEs Union Budget to be presented on March 16, 2012 Companies Bill may be cleared in Budget session: Law Minister

Corporate News
RIL to fund Network 18s Eenandu stake buy IDFC to raise upto `4,500cr via infra bonds Bajaj Auto unveils its first-ever four-wheeler, RE60, in New Delhi Suzlon Energy bags order to supply 57 wind turbines in the U.S.
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint,

January 4, 2012

Market Outlook | India Research

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January 4, 2012