Daily Call - Oct 1 2009

The Bharti–MTN deal has fallen through again. The first attempt had failed on May 25, 2008. Exactly a year after the first attempt failed, Bharti had dialed the number again on May 25 this year. MTN’s own compulsions and some last minute change of guidelines by SEBI may have had a role to play in not tying the knot. The markets will like this as they have rarely backed stocks which have bitten larger than what they can chew. Wiser after the failed courtship, the two companies will redouble their efforts to scout for a partner once again after a breather.

International cues are not very encouraging. In the US, Chicago purchasing managers index came in lower than expected. A reading of 46 indicates contraction. The quarterly Tankan survey by Bank of Japan is on expected lines but further cuts planned in December in machinery buying is a worry. The Nikkei is in red. Hong Kong and China are closed. Expect the markets to open lower and the 5000 mark in the Nifty is going to act as a solid support, though a slide of that magnitude is not expected. Crude prices going up will buoy some of the upstream oil and services companies and will hit the oil marketing companies. Gail could spring a surprise with Government mulling marketing margins for the company in the case of APM gas.