Thursday, May 21, 2009

BSE / NSE SHares analysis for 21 May 2009

BSE / NSE SHares analysis for 21 May 2009

Notwithstanding a few bright moments during the session, the market ended the day on a highly negative note due to heavy selling in blue chips on renewed concerns over recession.

The Sensex ended the session at 13,732.61 (provisional) with a huge loss of 328.05 points or 2.33%. The Nifty closed at 4210.95, lower by 59.35 points or 1.39%.

Capital goods stocks went down sharply. Bank, auto, FMCG, IT and metal stocks also closed with sharp losses. Power and realty stocks failed to hold gains and ended well off their highs. PSU oil stocks had a good outing on lower crude oil prices and on hopes of oil price decontrol.

Midcaps gave up their gains while smallcaps ended on a firm note.

The market breadth was strong right through the session. Heavyweight stocks L&T, ICICI Bank, HDFC, TCS, SBI< Infosys and RIL ended sharply lower today. ONGC ended stronger by nearly 8.5%. RComm, Ranbaxy, NTPC and Reliance Infra also ended on a firm note. BPCL, Reliance Capital, Poewr Grid, Suzlon and Unitech ended with handsome gains.

A Joint Venture Company of NTPC Ltd has been incorporated today under the name 'International Coal Ventures Pvt. Ltd' in association with Steel Authority of India, Coal India, Rashtriya Ispat Nigam and NMDC.

SAIL, CIL, RINL, NMDC and NTPC shall contribute in the equity share capital of the Company in the ratio of 2:2:1:1:1 respectively.

The Company has been Incorporated for the purpose of carrying on business for overseas acquisition and/or operation of coal mines or blocks/Companies for securing coking and thermal coal supplies.

With analysts and economists predicting a longer recession, markets the world over may not see a sustained rally in the near run. There will be some sharp upmoves but then there will be some equally sharp or even sharper corrections in the near term.

Investors, at least those with a very low appetite for risk, would do well to exit at rallies and re-enter the market at dips.

With the U.S. Federal Reserve projecting a deeper recession in the U.S. economy and former Fed chairman expressing concern about the state of global finacial sector and stating that the capital shortfall in the banking systems may well be bigger than reflected in the stress tests on the 19 biggest U.S. lenders, the mood on the European bourses is quite bearish today.

With most of the European markets trending lower and the U.S. index futures dropping down sharply, heavy selling is seen on the Indian bourses this afternoon.

IDFC (s 116) can rise to Rs 125 before facing some resistance. The stock has good support at Rs 85 and long term investors can place a stop loss there. Weakness there can result in a fall to Rs 65.

Bajaj Auto has posted a net profit of Rs 130.21 crore for the quarter ended March 31, 2009 as compared to Rs 120.79 crore for the quarter ended March 31, 2008. For the year ended 31 March 2009, the company has posted a net profit of Rs 654.5 crore as compared to Rs 755.78 crore for the year ended March 31, 2008. The stock, which had plunged to a 52-week low of Rs 294.65 in early December 2008, is trading at Rs 930 now.

Patel Engineering has bagged new orders worth Rs 708.04 crore from Vidarbha Irrigation Developement Corporation (Rs 554.67 crore) and Himachal Pradesh Power Corporation (Rs 153.37 crore). As on March 2009, the company's order book stood in excess of Rs 7,200 crore. The company expects its order book to cross Rs 9,000 crore by the middle of this fiscal. The stock, currently traded at Rs 368, can give fairly good returns over the next 18 - 24 months.

One holding telecom stocks Bharti Airtel, RComm, Idea Cellular and Tata Communications can stay invested for now. Though some weakness is not ruled out in these stocks, a fairly sharp rise looks very much on the cards over a medium run.

PSU oil & gas exploration major ONGC is reported to be planning a capital expenditure in excess of Rs 200 billion for domestic activities in the current fiscal. The stock has gained nearly 8% at Rs 1068.
One looking for some solid gains over a medium or long term can continue to hold this stock. Fresh buying can be considered. But, one should go in for modest exposure at current levels and increase stake at declines.

According to reports in a section of the media, Reliance Power is said to have bagged four hydroelectric power projects of 2,520 megawatt capacity worth over Rs 18,000 crore from the Arunachal Pradesh government through a competitive bidding process. The stock, traded at Rs 169 now, will see some weakness before rebounding to higher levels.

Areva T&D India Limited has received a prestigious order for 400 kv substation at Kharagpur, from West Bengal State Electricity Transmission Company. The order, worth around Rs 1100 million, is to be completed in about 30 months. At Rs 340, the Areva stock is up by a little over 3% now. One holding the stock can stay invested and buy more at falls.

NTPC, NLC, Power Finance Corporation and CESC can be picked up at declines in a staggered way. One looking at long term can also go in for Areva.