Monday, March 23, 2009

BSE / NSE Shares analysis 23-03-09

Sensex up 459 pts, headed for a buoyant close

The bulls thronged the bourses on strong global cues, stayed put right till the end and lifted the market to a buoyant close today.  Heavy short-covering ahead of March series F&O expiry too contributed to the sharp rise in prices.  The Sensex ended at 9453.19 (provisional) almost near the day's high of 9454.69, with a thumping gain of 486.51 points or 5.43%.  The Nifty closed at 2946.10 with a gain of 139.05 points or 4.95%. It touched a high of 2949.75 today.  Bank, oil and metal stocks rallied sharply.

Several stocks from power, PSU, capital goods, auto, IT, pharma and consumer durables sectors too posted impressive gains.  FMCG stocks enjoyed a bright spell as well. Select realty stocks surged higher.  It was a pretty good day for several midcap and smallcap stocks too. Ranbaxy, Tata Steel and Hindalco gained 10% - 12%.

HDFC, Reliance Infra, RIL, ICICI Bank, SBI, HDFC, ONGC, RComm, JP Associates, Tata Power, Sun Pharma, M&M, Sterlite, Grasim, Wipro and L&T also closed with strong gains.  Infosys Technologies, TCS, Tata Motors, NTPC, ACC, BHEL and HUL also signed off on a high note.  Reliance Capital shot up by over 15%. Tata Comm, SAIL, Suzlon, PNB, Idea Cellular, SAIL, RPL, Cairn India and RPower too posted impressive gains. The market breadth was strong right through the session today.

Investors looking for some good returns over a short to medium run can try NLC, GMR Infra, Power Grid and Reliance Infrastructure at 5% - 10% down from their current levels.  Suzlon Energy, Reliance Power and NTPC can also be bought for medium term.

The Nifty (2925) can move on to 2955 if buying in blue chip stocks continue for a while.  The index will face some resistance there and is likely to drift down a bit.  It has strong support at 2750 - 2760 levels and a decisive breach there can result in a fall of 70 - 80 points.

On expectations that the US Treasury's efforts to stabilise the ailing financial system would speed up a recovery of the US economy, Asian markets rose sharply today. European markets have posted gains and US index futures have also surged higher.   Back home, the bulls continue to remain quite aggressive. Short-covering due to expiry of March series derivatives contracts has also contributed to the sharp upmove today.  However, it is still not advisable to go on a buying spree. One needs to take a cautious view and remain extremely selective with fresh investments, especially at higher levels.

Realty stock DLF (down 3.55% at Rs 165.40) is likely to find the going tough in the near run.  There may be a few positive spells for the stock but a sustained upmove looks somewhat unlikely.  It is advisable to keep exposure to the stock at modest levels for now.  Not just DLF, several other stocks in the realty space are likely to experience some weak spells in the short run.

A sharp upmove looks very likely in the near term in key metal stocks. Tata Steel, Sterlite Industries, SAIL, Hindalco and Nalco look set for higher levels.  Investors holding these stocks can stay invested.  Those looking for fresh exposure can go in for them now. More quntities can be bought at declines.

BGR Energy Systems Ltd has announced that it has signed up credit lines to fund its working capital requirements for execution of EPC contract for 2 x 600 MW Thermal Power Project at Kalisindh of Rajasthan Rajya Vidyut Utpadan Nigam Ltd.,  The Company has estimated its fund based and non fund based working capital facilities at Rs 3,850 Crores and mandated IDBI Bank Ltd to arrange the financing facilities.  At Rs 124.25, BGR Energy is up with a sharp gain of 2.2% now. The stock had touched a low of Rs 107 earlier this month. Short term traders can hold the stock with a stop loss near that level.

Bank stocks SBI, Canara Bank, Bank of India and Bank of Baroda look set for a sharp upmove.  Investors looking for some sharp gains over a short to medium term can go in for these stocks now.   PNB, UCO Bank, IOB, Indian Bank and Syndicate Bank can also be tried at 3%- 5% down from current levels for short term.

This has been a pretty good session for several blue chip stocks today.  Besides strong Asian markets, short covering in derivatives segment has also contributed to the sharp upmove today.  Though the undertone remains firm at present, some strong round of corrections is not ruled out in the near run.  One would do well to stay cautious and remain quite selective if looking at the market with a short term view.

Ranbaxy Laboratories (Rs 152) looks set for a fairly sharp move up north in the near run.  One with some good appetite for risk can buy the stock now and expect a return of 10 - 15% in the short run.  However, a strict stop loss at 5 - 7% down from current levels is a must.  Long term investors can pick up this stock at declines.

Capital goods stocks Larsen & Toubro and BHEL can be retained for long term.  One can buy more of these stocks at sharp declines. So, these two stocks may remain a bit weak at times, long term investors need not worry.

Akruti City (Rs 1440) is likely to remain extremely volatile for the next few sessions. Investors or traders with little or no appetite for risk would do well to stay away from the counter for now.  The stock has been excluded from equity derivatives segment and fresh month contracts will not be introduced for the expiry month June 2009 on the expiration of March 2009 contracts.

The launch of Nano has triggered some hectic buying at the Tata Motors counter this morning.  The stock rallied to Rs 173.85 in early trade on BSE and is currently traded at Rs 170, up 5.7% over its previous closing price.  Investors looking at long term can continue to hold the stock with a stop loss near Rs 120.  A few weak spells are likely for the stock in the near run and one can buy it at such declines in a staggered manner.

The market has opened on a buoyant note this morning thanks to positive cues from Asian bourses.  The Sensex shot up to 9141.86 after opening with a positive gap of nearly 75 points at 9040.30.  At 9130.69, the Sensex is up with a strong gain of 164.01 points or 1.83% at present.  The Nifty is up 1.85% or 51.80 points at 2858.85.

Metal, power, oil, capital goods, bank and auto stocks have rallied sharply.  Pharma, IT and FMCG stocks too have surged higher. Realty stocks remain subdued.  Tata Motors, Sterlite, Reliance Infra, Tata Steel, BHEL, ONGC, RIL and ICICI Bank have moved up sharply.  SBI, TCS and Wipro have also posted impressive gains.