Market voices 26 June 2009
The market opened on a firm note on strong global cues, shrugged off a mild setback it suffered around mid morning and gained in strength as the session progressed today.
As stocks almost across the board rallied higher, the Sensex off in style today. The Nifty too finished with a hefty gain. While the Sensex ended at 14,764.89 (provisional) with a huge gain of 419.27 points or 2.92%, the Nifty closed at 4374.40, up 132.55 points or 3.12%. The Sensex rose to 14,781.94 while the Nifty hit a high of 4383.75 today.
Bank, capital goods, IT, realty and telecom stocks posted strong gains. Consumer durables, oil, metal, power and FMCG stocks also ended on a high note. PSU and Auto sectors saw stock specific action.
Pharma stocks were among the ones to lag behind today. Several midcap and smallcap stocks had a good outing today. The market breadth was strong right through the session.
ICICI Bank gained around 9%. L&T and Sterlite moved up by over 5.5%. TCS, RComm, Infosys Technologies, RIL, Maruti, BHEL, HDFC, HUL, Wipro, SBI, ACC, DLF, HDFC Bank, ONGC, Hindalco, Reliance Infra and ITC also closed on a high note today.
Jindal Steel, Ambuja Cements, Axis Bank, Suzlon Energy, Siemens and Reliance Capital moved up sharply. HCL Tech, Power Grid Corporation, ABB, Tata Comm, PNB, GAIL, RPower and SAIL also ended with impressive gains.
Sterlite Technologies has charted out a Rs 250 crore capex outlay to scale its optical fibre capacity from 12 million-km to 20 million-km. The enhanced capacity, which would be functional by 2011, would position Sterlite amongst the top three manufacturers globally.
The Sterlite Technologies stock is locked at the 10% upper circuit at Rs 183.50. Over 3 lakh shares were traded at the counter today, far higher than the average daily volume of around 88,000 shares the counter has been clocking in recent times.
Unitech, is likely to raise nearly Rs 1,000 crore within the next three months by selling stake in its affordable housing projects to private equity players. According to some reports, Unitech is in advance stages of negotiations with some domestic and global private equity firms to raise funds for its affordable housing projects being developed under the brand 'Uni Homes'.
Unitech had last month announced its plans to construct 20,000 affordable houses at a cost of Rs 1,700 crore to become India's numero-uno realty company within a year.
Max India Limited has posted a net loss of Rs 6.76 crore for the quarter ended March 31, 2009 as compared to net profit of Rs 20.22 crore for the quarter ended March 31, 2008. Total Income has decreased from Rs 111.43 crore for the quarter ended March 31, 2008 to Rs 91.42 crore for the quarter ended March 31, 2009. For the year ended 31 March 2009, the company has posted a net profit of Rs 21.84 crore as compared to Rs 61.90 crore for the year ended March 31, 2008. The stock is trading weak at Rs 205, down 2.2% from its previous closing price.
Tech Mahindra has entered into a strategic alliance with Win Plc, a leading provider of interactive mobil information and entertainment services. Under the terms of the initial agreement, Tech Mahindra will work with WIN to develop the company's next generation mobile platform. The two firms will also look to develop jont go-to-market strategies in key territories, notably Tech Mahindra's strong Asian market.
Investors with a medium to long term plan can try Aurobindo Pharma (cmp Rs 501) at current levels. A modest exposure can be had at current levels. More can be added at declines. The stock can move on to Rs 540 - 550. It has support at Rs 450 levels. For now, a stop loss can be placed there.
One can stay invested in fertilizers stocks and pick up more of them at sharp declines for decent returns over a short to medium term. Godavari Fertilizers, RCF, Nagarjuna Fertilizers, Coromandel Fertilizers, MRPL, GNFC and Tata Chemicals can all give fairly solid returns.
GAIL India rose to Rs 284.70 today on reports that it will invest Rs 7,600 crore towards two pipeline projects linking Karnataka to the National Gas Grid. The stock has eased to Rs 280 now, but still holds on in the positive territory with a fairly sharp gain. One holding the stock can stay invested and look at buying more at sharp dips.
Stay invested in IT majors Infosys, TCS, Wipro, Tech Mahindra and Oracle Financial Services.
Though some downside is likely in the near term, all these stocks are likely to rebound and rally higher over the next 12 - 18 months. One can consider sharp dips as opportunities to buy more of these stocks.
One can stay invested in bank stocks for now. Though a few stocks from this space may see some weakness in the near run, most of the stocks in the sector are likely to give fairly strong returns over the next 6 - 12 months. Fresh buying in heavyweights SBI, HDFC Bank, ICICI Bank and PNB can be considered at declines.
Gemini Communication Ltd has acquired a 51% stake in M/s. SANAT Technologies providing advanced storage products and solutions based in South India. The company has also announced that it has formed a joint venture with GEOSS Technologies AG for providing fully funded intelligent metering and payment operating solutions for gas, water & electricity utility providers in India. The Gemini Communications stock is up by around 1.5% at Rs 23.10 at present.
Cairn India (Rs 229) can move up sharply in the near to medium term. Scrip in focus: Syndicate Bank One holding the stock can stay invested with a stop loss around Rs 180. Those looking at fresh exposure, can enter the counter at Rs 210 - 215 levels.
Sobha Developers (up 2% at Rs 205.50) can edge higher in the short to medium run. One with a reasonably good appetite for risk can try this stock at current levels or 5% - 10% lower. The company is reported to be in talks with some private equity firms, including JP Morgan, Actis and IL&FS, for selling stakes in some of its projects to raise funds.
Tata Power will put up a 525 MW production gas based power plant to secure energy for Corus IJmuiden in the Netherlands. The company has signed an MoU with Tata Steel and Corus Steel B.V. for the said construction. Tata Power and Tata Steel will set up a JV to build, own and operate the power plant which will use most of the excess production gases of the steel plant and will convert the same into steam and power for the use of the steel plant.