Wednesday, April 8, 2009

BSE / NSE Shares analysis for 8th April 2009

BSE / NSE Shares analysis for 8th April 2009

Buying in blue chip stocks has gathered tremendous momentum now and mirroring the surge, the Sensex has shot up to 10,771.31, recording a big gain of 237.48 points or 2.22%.

The Nifty has gained 94.05 points or 2.8% at 3350.65.  JPA has vaulted 10%. Tata Motors, HUL and Wipro are up by 5.75% - 6.5%.  NTPC, L&T, ITC, TCS, Sun Pharma, Tata Steel, ONGC, Ranbaxy and RIL have also posted strong gains.

HCL Tech has zoomed nearly 12% now. Nalco is up by close to 10%.  GAIL, Reliance Capital, Ambuja Cements and Unitech have also recorded big gains.

The Sensex has rallied nearly 500 points from its morning now thanks to sustained buying in several blue chip stocks from realty, consumer durables, FMCG, PSU, capital goods, Pharma, metal and oil sectors.  IT, auto and power stocks too have posted sharp gains. Bank stocks have regained a substantial portion of lost ground now.

Heavy buying is seen at several midcap and smallcap counters.  The Sensex is up 133.12 points or 1.26% at 10,667.99 at present.  The Nifty has gained 57.60 points or 1.77% at 3314.20. Earlier, it had touched a low of 3149.25.

JP Associates, Tata Motors, HUL, L&T, Sun Pharma, Wipro, ITC, NTPC, Ranbaxy, Tata Steel and TCS have posted strong gains.  RIL, ONGC, ACC, Maruti, Tata Power and DLF have also risen sharply.

The Sensex has bounced back into the positive territory thanks to some frenzied buying across the board on the back of a modest recovery in European markets and US index futures.

Realty, consumer durables, FMCG, PSU, capital goods, pharma and oil stocks have rallied smartly. Auto, power and information technology stocks too have gained in strength this afternoon.

The Sensex, which had plunged to 10,171.91 in morning trade, is now up with a marginal gain of 10.27 points at 10,545.14. A little while ago, it had moved on to 10,583.34.

The Nifty has gained 24.80 points or 0.76% at 3281.40. It had slipped to a low of 3149.25 in opening trade today.

Realty stocks have come back with a bang. With key stocks in this space racing ahead smartly this afternoon, the Realty index has spurted 2.3% now.  Still, it is too early to say the sector has bottomed out. There will be some rounds of selling in the short run in several stocks in the realty space. One would do well to stay cautious and pick up only those stocks, which have strong fundamentals.

The British economy shrank 1.5 per cent in the first quarter, and according to the National Institute of Economic and Social Research, the recession increasingly resembled the one that started in 1979.  The current drop is on the back of the 1.6 per cent decline in the last three months. Consumer confidence has hit the lowest level in the last four years.  Unemployment rate is rising at a rapid pace, a pace the economy has not witnessed in the past three decades. It is now felt that the economy would take at least a couple of years to get back to the early 2008 level.

The market has staged a splendid recovery this afternoon thanks to some hectic buying in several blue chip stocks.
The Sensex, which had gone crashing down to 10,171.91 in early trade and remained deep down in the red for well over a couple of hours, has now recovered to 10,427.89, cutting down its loss to 106.98 points or around a per cent.  The Nifty, which had drifted down to 3149.25, has rallied to 3236.20, trimming down its loss to 20.40 points or 0.63%.

HCL Tech has spurted 8.3%. Tata Motors is up by over 5%.  Tata Comm, GAIL, Nalco, L&T, HUL, BPCL, Power Grid and Ambuja Cements have gained 2% - 4%.  RIL has recovered well and is down by just 0.65% at present.

Four Soft Limited has signed a contract with Calderhead Refrigerated Transport, UK, to implement its warehouse management system - 4s eLog, in Calderhead's temperature controlled warehousing operations.  The thinly traded stock has vaulted 10% to Rs 15.54 today.  Since its downside appears a bit limited, one can buy the stock at Rs 14 or so and have a stop loss in place near its 52-week low of Rs 10.55.

Cement stocks Ambuja Cements, Ultratech and ACC can give solid returns if one holds them with a long term view.
Among other stocks in the cement space, Dalmia Cement, Rain Commodities and India Cements are expected to do well over a medium to long run.

The benchmark indices Sensex and Nifty continue to languish deep down in the red as selling continues in blue chip stocks.  Smallcaps have outperformed the market and a good number of these stocks have posted strong gains today. The Smallcap barometer has surged 1.32% now.

A fair amount of buying is seen at several mid cap counters as well. BSE Midcap has advanced by 0.72%.

Reliance Industries (cmp Rs 1609) can see a few weak spells in the near run. So, investors with a short term view and are running in profits at present, can look at booking some gains at 5% - 7% up from current levels.  Long term investors can book partial profits and re-enter the counter later at sharp declines.

The near term may remain a bit slippery for IT majors Infosys, TCS and Wipro, but investors holding the stock with a long term plan need not worry on this.  One can look at buying more of these stocks at sharp falls from current levels.  Tech Mahindra, Oracle Financial Services and Patni also look good for medium to long term.

One with a long term plan can stay invested in NTPC (cmp Rs 186).  Short term traders can exit the counter at Rs 200 levels and re-enter later at declines.  Power Grid, CESC, NLC and Tata Power are among the other good picks from the power sector for long term.

As already warned by some analysts and experts, the market has taken a retreat after some impressive rallies.
Though there may not be a significant and sustained downside for the market from here, some very weak spells are still likely.  Hence, one has to remain extremely cautious if looking for building up some big positions with a short term outlook.

One can stay invested in L&T (cmp Rs 750) for solid gains over a medium to long term.  Those looking for some short term gains and have a good appetite for risk, can buy the stock now for a 7% - 15% return.

Tata Consultancy Services has entered into an agreement for technology partnership with Rajastan Royals, the IPL 2008 Champions.  The software major will be associated with Rajasthan Royals for an initial duration of three years, providing expertise in information technology solutions to the organization on and off the field.