Thursday, May 7, 2009

BSE / NSE Shares analysis for 07-05-09


Cement stocks can be picked up at declines if one is looking at medium to long term.  ACC, Ambuja Cements, Grasim, Ultratech, India Cements and Rain Commodities are likely to drift down a bit in coming sessions and one can treat sharp declines as opportunities to increase exposure to these stocks.

JSW Steel has posted a net profit after tax of Rs 492.00 million for the quarter ended March 31, 2009 as compared to Rs 3701.80 million for the quarter ended March 31, 2008. Total Income has decreased from Rs 35699.90 million for the quarter ended March 31, 2009 to Rs 34261.00 million for the quarter ended March 31, 2009.  Southern Iron and Steel Company Ltd amalgamated with the Company during the last quarter of 2007-08 with effect from April 01, 2007. Accordingly figures for the quarter March 31, 2008 have been aggregated with the figures of SISCOL extracted from its unaudited (limited reviewed) financial results/information and regrouped/restated to present the combined numbers for the amalgamated Company.

Jaiprakash Hydro Power Limited has posted a net loss of Rs 255.20 million for the quarter ended March 31, 2009 as compared to Net Profit of Rs 288.60 million for the quarter ended March 31, 2008.  Total Sales / Income from Operation has decreased from Rs 649.10 million for the quarter ended March 31, 2008 to Rs 608.10 million for the quarter ended March 31, 2009.  The stock is traded around Rs 41 at present. One can pick up the stock at Rs 32 - 35 levels for long term.

Unitech (Rs 53.35) can be retained for short to medium term.  The stock may see some weakness at times, but one can expect some solid returns from the stock over the next 6 - 9 months.  Sharp falls can be used to increase exposure. For now, long term players can have a stop loss near Rs 35.

Asian markets have posted strong gains today as fears over U.S. banks' financial status subsided to an extent.  The mood on the Indian bourses is cautiously positive today.  Though the market has been struggling at times, the key indices are holding on in the positive territory thanks to some strong buying in select blue chip stocks.  Midcap and smallcap stocks are in demand. The breadth is quite strong at present.

Marico Ltd's Non-Convertible Debenture Programme has been assigned a credit rating of "AA/Stable" (pronounced "Double A with stable outlook"), indicative of a high degree of safety with regard to timely payment of interest and principal.  Premier credit rating agency CRISIL has assigned this rating to Marico's programme.  With global economy still not out of the woods, some correction is not ruled out in the market.

Prices have moved up at an incredible pace and a lot many investors are likely to exit at the slightest excuse possible. Hence, it is advisable to refrain from building up big positions at current levels. One should have strict stop loss triggers in place.

Sun Pharma (Rs 1295) looks set for more upside.  The stock can move on to 1375 - 1395 where it is likely to find its next major resistance.  Long term investors can hold the stock with a stop loss near Rs 1070.

Union Bank of India has posted a net profit of Rs 4650.60 million for the quarter ended March 31, 2009 as compared to Rs 5211.30 million for the quarter ended March 31, 2008.  The bank's total income increased from Rs 29131.00 million for the quarter ended March 31, 2008 to Rs 38487.30 million for the quarter ended March 31, 2009.  The stock has tumbled 5.3% to Rs 160.70 due to the sharp decline in net profit. One holding the stock with a long term view can stay invested and buy more at sharp dips.

Hindustan Zinc has announced that ongoing exploration activities have yielded significant success with an increase of 46.3 million tonnes to its reserves and resources.  The company completed a record annual drilling of 70,300 meters in financial year 2009.  The Hindustan Zinc stock has gained nearly 6% at Rs 560. One looking at fresh buying can go in for the stock at 15 - 25% down from its current levels.

The Nifty (3652) will have to decisively break a resistance at 3682 to make a sharp upmove.  If it manages to do that, then a rise to 3715 or even higher is possible.  On the downside, the index can slip to 3590 if it slids to 3625 and displays weakness there.

ONGC (Rs 900) looks good for a move up north in the near term.  One can go in for the stock at current levels and pick up more at declines.  The stock can move on to Rs 912 or even higher today if the current momentum at the counter sustains for a while.

Metal, bank, capital goods and realty stocks have rallied sharply this morning.  Though most of the stocks from metal, banking and capital goods sectors are likely to extend gains in the near to medium term, realty stocks are likely to find the going tough for the next couple of quarters, if not longer.

Hence, it is advisable to be quite selective with regard to fresh investments at these levels in realty space. A little wait would do no great harm.

10:00 AM: Trading got off to a bright start on the major Indian bourses this morning on strong global cues.

The Sensex opened nearly 110 points up at 12,064.51 and is currently up with a big gain of 173.24 points or 1.44% at 12,125.99.  The Nifty is up 43.15 points or 1.19% at 3668.20.  Sterlite Industries, DLF, HDFC, Tata Steel, RIL, ICICI Bank and L&T have posted sharp gains.

Market Outlook

The market is expected to open on a firm note this morning on positive global cues. The mood is likely to remain fairly buoyant for a better part of the session. Though fears over the financial status of leading U.S. banks have receded a bit, some profit taking is not ruled out ahead of release of results of the stress tests the major U.S. banks were subjected to recently.

Sector Watch

Bank stocks are likely to attract attention. Some profit taking is likely later on in the day. Realty stocks may move up initially but many of them are likely to find it difficult to sustain at higher levels.

Information technology stocks are expected to rebound and regain some lost ground. Select metal, FMCG and auto stocks may surge higher.

Scrip Watch

Wipro may see action following an announcement from the company that Unitech Wireless has awarded a multi-hundred million long term outsourcing contract to Wipro for creating the next generation telecom company.

Tata Communications will be in focus following an announcement that the company is partnering RComm to provide joint data services between carriers in Russia and the rest of the world. The agreement will help Tata Communications to leverage its position of strength in the worldwide telecommunications sphere.

Birla Corporation, JP Hydropower, TN Petro, Union Bank of India, JSW Steel and Vardhman Textiles will announce their quarterly results today.

Macro and Market Factors

The Wall Street ended on a buoyant note yesterday with investors picking up financial stocks in a frenzied way as fears over the health of major U.S. banks receded significantly. Asian markets have taken cues and are trading firm at present.

The mood back home is likely to be bullish as well. FIIs were strong buyers in the previous session and if they remained active once again, then the market is likely to see a sharp rally today. Crude oil prices have moved up once again and this can cap the upmove to an extent.

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