Friday, March 27, 2009

BSE / NSE Share Analysis for 27-03-09

BSE / NSE Share Analysis for 27-03-09

Global cues were not encouraging and there were no prominent triggers from the home front as well.  Still, the market managed a few bright spells in the positive territory today as investors lapped up some front line stocks in a frenzied manner.  The Sensex, which dropped down to 9913.40 after touching a high of 10,127.09 in early trade, ended the day at 10,039.38 (provisional) with a gain of 36.28 points or 0.36%.  The Nifty closed at 3107.80 with a gain of 25.55 points or 0.83%.  In intra-day trades, the Nifty touched a high of 3123.35 and a low of 3055.90.

Metal stocks opened on a firm note and gained in strength as the session progressed. Pharma, bank and auto stocks rallied sharply in afternoon trade.  It was a good session for PSU, consumer durables and capital goods stocks too. A few telecom stocks also posted sharp gains.  FMCG, realty and power stocks found support at lower levels. Oil stocks remained subdued.  After moving in a tight range till a little past mid afternoon, midcap and smallcap stocks staged a strong rally during the final hours.

The market breadth was quite positive today.  Tata Motors and Tata Steel gained 9% - 10% today.  RComm, Hindalco, ACC, JP Associates, Ranbaxy, TCS, SBI, ICICI Bank, L&T and DLF ended with sharp gains.  SAIL, PNB, Cipla, Hero Honda, Reliance Capital, HCL Tech, Nalco, Ambuja Cements, RPower, Axis Bank, Idea Cellular, Suzlon and ABB closed with impressive gains.  HDFC, Infosys, Power Grid, RIL, Unitech, Wipro, Siemens and BHEL declined sharply.

Metal, auto and bank stocks are likely to be in focus over the next couple of weeks.  One can look at buying quality stocks from these sectors for some solid gains over a short run.

IT majors had a lacklustre session today. IT and realty stocks are likely to remain somewhat sluggish. Long term investors can continue to hold the likes of Infosys, TCS, Wipro and Tech Mahindra with strict stop losses.

For the second successive session, Tata Motors is being lapped by the bulls despite global rating agency Standard & Poor's downgrading the stock citing deteriorating cash flow and an adverse operating environment.  Earlier this month, another leading rating agency Moody's had also downgraded the credit ratings on Tata Motors.  The stock, following the launch of Nano, has been making waves. At Rs 186, the stock has gained 7.7% today and a further upmove looks very likely in the near term.

An advisory committee of the Employees' Provident Fund Organisation (EPFO) today rejected a finance ministry proposal to invest up to 15 per cent of its funds totalling around Rs 1,82,000 crore in the stock markets.  It was proposed to park this corpus amount in listed companies and mutual funds for higher returns. The rejection, it is learnt, has come in the wake of continuing volatility in the stock markets.

The market may see a few big rallies in the near run. However, a sustained upmove may prove elusive as global economy is likely to remain under pressure for another two or three quarters, if not longer.  One would do well to use rallies to lighten commitments. Short term traders with a good appetite for risk will have plenty of opportunities to make money. But then, they would do well to stay cautious with regard to selection of stocks.

Mahanagar Telephone Nigam Ltd has received refund of Rs 516.18 crore from Income Tax Department pursuant to the orders of Income Tax Appellate Tribunal for the Assessment years 2001-02 & 2003-04 with respect to the issue of License Fee and 80IA deduction.  The MTNL stock has jumped by around 6% to Rs 73 and a further upmove looks likely in the near run.

Investors with a long term view can continue to hold SBI.  Exposure to the stock can be increased at sharp declines from current levels.  Axis Bank, PNB, Bank of Baroda, BOI, Indian Bank, IOB and Dena Bank too look good for long term.

One can look forward to some sharp gains from metal stocks in the near run.  Though some of these stocks may see a few weak spells, a sharp rebound is likely in the short term.  Tata Steel, SAIL, Sterlite, JSW Steel, Jindal Steel and Nalco are the stocks to watch out for.

IVRCL Infrastructure (Rs 133) may face strong resistance at Rs 160 - 165 levels.  Traders with a short or medium term plan can exit at those levels and consider a re-entry later at declines.  The stock has support at Rs 110 and Rs 90. Long term investors can place a stop loss near one of these levels.

The Nifty (3080) can move up sharply and can even surge past 3125 if it manages to decisively break a resistance at 3090.  On the downside, the index can decline sharply if its slips to 3055 and trades weak for sometime.

Sterlite Industries (Rs 372) is a good stock for medium to long term.  The stock may remain a bit slippery at times, but a rise of 30 - 40% looks very likely over the next 18 - 24 months.  One with a long term plan can continue to hold the stock and look at adding more quantities at sharp declines from here.

Investors looking at long term can go in for Praj Industries (Rs 55) at declines.  The stock has support at Rs 45 and one can have a stop loss near that level.  Thermax and Punj Lloyd also can be bought at declines.

Reliance Power (cmp Rs 112) can move on to Rs 125 - 130 if the current momentum at the counter sustains for a couple of sessions.  The stock has support at Rs 100 and then around Rs 90 levels.  Long term investors can continue to hold the stock with a stop loss near Rs 80.

IT stocks Infosys Technologies, Wipro and TCS have declined sharply this morning.  Though a further downside is not ruled out, these stocks are likely to give fairly decent returns over a short to medium run.  Investors with some appetite for risk can go in for some modest exposure in these stocks at current levels and buy more at sharp declines from here.  Oracle Financial Services, Tech Mahindra and Patni can also give good returns over a medium run.

Axis Bank, the new entrant to the Nifty fold, is likely to move up sharply in the near run.  One can try this stock, traded around Rs 428 at present, for fairly solid gains over the next 2 - 3 months.  Long term investors can hold the stock with a stop loss at Rs 280 - 300 levels. More quantities can be picked in a staggered way at declines from current levels.

Amid mixed global cues, the market got off to a volatite start this morning.

The Sensex opened higher at 10,036.80 but drifted down into the red immediately thereafter on selling in some heavyweight stocks.  At 9994.70, around 80 points off a low of 9914.29, the Sensex is down 8.40 points from its previous closing mark.  The Nifty is down marginally at 3080.55. Earlier, after touching a high of 3091.55, the Nifty had slipped to 3055.90.

Unitech, Zee, HDFC, Maruti, Wipro, Sterlite Industries, Idea, Tata Motors, Infosys, M&M, RIL and DLF have declined sharply.  Suzlon, Hindalco, Reliance Capital, Ranbaxy, Tata Steel, Sun Pharma, L&T, ICICI Bank, RComm and Bharti Airtel have posted smart gains.

The bulls are likely to call the shots once again as global cues point to a bright start for equities this morning. Some profit taking may emerge later on in the day but the undertone is likely to remain fairly buoyant.

Tracking Nasdaq's gains, information technology stocks are likely to surge higher this morning. Bank, capital goods and auto stocks are expected to do well. Some battered down realty stocks may find support and regain a bit of lost ground.

Healthcare stock Lupin may see action following an announcement from the company that it has completed the acquisition of a majority stake in Multicare Pharmaceuticals Philippines Inc. The Philippines firm, a branded generic company, commands a premium image with the medical profession with a good position in the Women's health and Child Care segment.

Bang Overseas has entered into a 50:50 Joint Venture Agreement with M/s. Aquarelle International Ltd, a Mauritius based Company, in the name of Aquarelle India Pvt. Ltd., for carrying on the business of manufacturing shirts and other garments in India for export and sale in the domestic market.