Tuesday, March 17, 2009

BSE / NSE Share analysis for 17-03-09

The Sensex closed in the red at 8861.86 (provisional) with a loss of 81.68 points or 0.91%.  It touched a high of 9024.12 in intra-day trades today. The Nifty ended at 2756.95 with a loss of 20.30 points or 0.73%.

After opening on a flat note, the market edged up only to falter into the red in subsequent trade.  Strong buying in realty, power, auto and metal stocks lifted the market up sharply in late morning trade but the rally proved somewhat short-lived as bank, IT and oil stocks drifted down sharply.

Tata Motors, Maruti Suzuki, Hindalco, ITC, NTPC and ICICI Bank finished with notable gains.  TCS, JP Associates, SBI, Ranbaxy, RIL, Infosys, ACC, HUL, L&T, DLF and HDFC closed with sharp losses.  Zee Entertainment, Suzlon and Hero Honda surged higher.  PNB, Tata Communications, Ambuja Cements and SAIL declined sharply.  The market breadth was positive at close thanks to a good show by several stocks from midcap and smallcap segments.

Rain Commodities Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on March 28, 2009, inter alia, to consider and approve the Buy-Back of Equity Shares of the Company.  The cement stock, which had tumbled to a 52-week low of Rs 52.25 on 5 March this year, has been moving up consistently since then.  
At present, it is traded around Rs 72. Earlier today, the stock had vaulted to Rs 78.40.

Tatanet, Division of Nelco, has bagged ONGC order for Satellite Connectivity.  The Rs 41.6 crore order will augment voice and date communications requirement between ONGC's offshore installations and its base station office in Mumbai and provide backup network.  At Rs 26.60, Nelco looks a bit attractive as a short and medium term option. One can hold the stock with a stop loss at Rs 20.

Jaiprakash Associates (down 4.3% at Rs 73.90) can exhibit weakness in the near run.  But, investors with a medium or long term plan can continue to hold the stock. The stock had touched a low of Rs 47.05 in late October 2008 and a fall to that level looks somewhat unlikely.  The company recently repurchased and extinguished the zero coupon convertible bonds aggregating to the face value of $32,025,000.

Jet Airways (Rs 152) is likely to face strong resistance at Rs 168 - 170.  A decisive breakout there can result in a surge to Rs 205 or even higher.  On the downside, the stock has support at Rs 130 and then near Rs 110.  

PSU oil stocks may remain a bit slippery in the near run.  Still, one with a good appetite for risk can try BPCL, HPCL and Indian Oil Corporation for some smart gains.  ONGC can yield strong returns over a long run. The stock can be bought at current levels.

SBI (Rs 952) can be retained for long term. One can consider buying more of this stock at sharp declines from here.
UCO Bank, Oriental Bank of Commerce, PNB, Bank of India, BOB and Canara Bank can also give returns over a medium to long run.  Among private sector bank stocks, HDFC Bank, Federal Bank and Yes Bank look good for long term.

LIC Housing Finance (cmp Rs 204) can move up a bit in the near run.  The stock can face some resistance around Rs 225 - 230 where one can make an exit and look at a re-entry later.  Long term investors can hold the stock with a stop loss near Rs 150. More quantities can be bought at declines from current levels.

Foreign Direct Investment in India in January 2009 was up 55% at $ 2.73 billion from $ 1.76 billion for the same month in the preceding year.  Though monthly inflows up to September this fiscal were in excess of $ 2 billion, the next three months saw a sharp decline in the overseas investment due to global financial crisis.  Against this backdrop, the January inflow has renewed hope that the country is back on the radar of global investors.

The market, notwithstanding some sharp rallies here and there, is likely to remain sideways in the near run.  It will take at least another couple of quarters, if not more, for the market to show some strong signs of a recovery.
Till then, investors with a low appetite for risk would do well to exit at higher levels and sit on cash.

Stocks from power, capital goods, FMCG and pharma sectors are likely to do well over a medium to long run. Still, one has to be extremely cautious with regard to selection of stocks.  

One with a long term view can stay invested in Tata Steel (cmp Rs 174) and buy more at declines. SAIL and JSW Steel also look attractive at current levels. Declines can be used to increase exposure.  Nalco, Sterlite Industries, Hindalco and Sesa Goa can also be bought for long term.

Praj Industries Limited has received an order for downstream processing equipment from Range Fuels, USA, of approx. Rs 20 crore.  At Rs 50, the stock does look a good option for long  term.  Investors can go in for some exposure now and increase stake at declines from current levels.  Those averse to risk can have a stop loss near Rs 46.

Investors looking for some smart gains over a 2 - 3 month period can go in for media stocks.  Zee Entertainment, Sun TV, ND TV Network, TV Today Network, Deccan Chronicle Holdings and IBN 18 can be tried at current levels or at slight declines.  Those with a low appetite for risk can exit these counter at 5 - 7% rise from current levels. Others can stay invested with a trailing stop loss.

IT stocks exhibit weakness this morning.  Still, investors with a long term plan can go in for the likes of Infosys, TCS, Wipro, Oracle and Tech Mahindra at declines.  Though these stocks are likely to find the going somewhat tough in the near run, their long term prospects continue to remain quite bright. Among other IT stocks, Moser Baer, NIIT and Aptech can be picked up in small quantities at declines. Investors with a good appetite for risk can try Educomp Solutions.

Those looking for some intra-day gains can go in for Unitech.  The stock, traded at Rs 26.80 at present, can move on to Rs 31 - 32 during the course of the session today. Investors with a low appetite for risk can place a stop loss around Rs 25.75. HDIL, Omaxe, India Bulls Real Estate, DLF and Parsvnath Developers can give decent returns over a short run. Still, it is advisable to have strict stop loss triggers in place.

Everonn Systems has received Letter of Intent from M S Ramaiah Medical College and Teaching Hospital, Bangalore.
As per the LOI, the Company would be installing a studio to facilitate the process of e-learning and for networking their CME programmes to their group of 7 Colleges. These courses will also be taken to other Everonn colleges.  
Everonn Systems (up 15% at Rs 142.25) is among the most actively traded stocks on the bourses this morning.  
On NSE, over 3.64 million shares have changed hands at the Everoon counter today. On BSE, the counter has recorded a volume of nearly 2 million shares this morning.

The market has opened on a cautious note this morning amid mixed global cues.  The Sensex opened flat at 8942.01 and slipped to 8901.40. At 8911.73, it is down with a loss of 31.81 points at present.

The Nifty is down marginally (by 1.95 points) at 2775.30.  HCL Tech, Nalco, ICICI Bank, Cairn, M&M, DLF, HUL, HDFC Bank, Cipla and ACC have posted sharp gains.  Heavyweight stocks TCS, HDFC, Infosys, L&T, RIL and SBI trade weak.