Indian Shares / Stock Markets Voices 9 July 2009
With investors treading a cautious path ahead of key results from India Inc and on mixed global cues, the market ended a highly choppy session on a flat note today.
There were a few of bright spells during the day but all of them proved quite short-lived as investors chose to lighten commitments at higher levels.
The Sensex ended the day at 13,765.65 (provisional) with a small loss of 3.50 points.
It touched a high of 13,879.18 and a low of 13,643.97 today.
The Nifty closed at 4083.50, up 4.60 points or 0.11%. The Nifty hit a high of 4114.90 and a low of 4039.85.
Metal, pharma and FMCG stocks had a fairly bright outing. Oil and realty stocks found some support. Auto, power, bank and IT stocks remained quite subdued. Capital goods stocks struggled today. Not much buying was seen in midcap and smallcap segments.
Sun Pharma, Reliance Infra, Sterlite, ITC, TCS, Tata Power, HDFC Bank, Bharti Airtel, JP Associates, Hero Honda, Wipro and RIL moved up.
Tata Motors, ICICI Bank, M&M, DLF, Infosys, L&T, Hindalco, HUL, BHEL and ONGC declined sharply.
HCL Tech, Jindal Steel, SAIL, GAIL India, Ambuja Cements, Cipla, Cairn, Unitech, Ranbaxy and BPCL gained significant ground today. Axis Bank, Siemens and Suzlon Energy ended lower.
The market breadth was weak right through the day.
Some short-covering is likely in the market over the next few sessions.
If results and guidance from Infosys Technologies are in line with market expectations, then one can see a fairly good upmove. However, if global cues are negative, the market may find it difficult to sustain at higher levels.
Cement and infrastructure stocks can give good returns over a medium term. Sharp declines can be used to accumulate quality stocks from these two sectors. Ambuja Cements, Ultratech, ACC, India Cements and Madras Cements can be picked up at 15 - 20% down from their current levels.
The market has edged up now following a positive start on the European bourses. Higher U.S. index futures have also aided sentiment to an extent. With key results to hit the market over the next few sessions, the mood is likely to remain highly cautious in the very short run.
Some encouraging report cards could bring the bulls back in full strength and trigger a few sharp rallies.
IVRCL Infra (Rs 328) has a target of Rs 370 -375 and strength there can take the stock to Rs 395 or even higher. For now, short term traders can hold the stock with a stop loss near Rs 270.
Since the market is likely to move sideways for the next couple of months, if not longer, one can book profits or lighten commitments at sharp rallies. Sharp dips can be treated as buying opportunities for short term.
Bharat Forge (Rs 136) can move up sharply if it recovers to Rs 155 and trades firm for a few sessions. A rise to Rs 190 -195 is possible. On the downside, the stock has support near Rs 120 and a pronounced weakness there could result in a fall to Rs 90.
Bharti Airtel (Rs 801) is likely to face resistance at Rs 850 - 860 levels. A strong breakout there can lift the stock close to Rs 1000.
One with a medium term view can stay invested with a stop loss near Rs 710.
Institutional investors appear to be waiting for the market to correct further. One can expect a reasonably strong participation from domestic funds and FIIs if the market sheds some more weight.
The rise from the dismal lows recorded in early March this year was too sharp and rapid. Several stocks rallied without valid reasons. A correction from current levels is certainly healthy.
Investors willing to wait patiently for good returns can try steel stock Tata Steel, SAIL, JSW Steel and Jindal Steel at declines.
Though these stocks are likely to remain highly slippery in the near run, one can certainly look forward to strong returns from investments in these stocks over a long term.
With the possibility of interest rates declining further looking rather dim, the next few quarters are going to be very tough for several players in the realty sector.
For any significant rise in demand to happen, the economy has to show definite signs of recovery. Till then, one would do well to avoid building up big positions in reatly stocks.
India Cements (Rs 142) can be retained for medium term. The stock is likely to rise sharply, and a move to Rs 165 - 170 looks possible. One can hold the stock with a stop loss near Rs 110.
The Nifty (4045) will have to decisively move past 4095 to make a significant move into the positive territory today. On the downside, the index could slide to 4010 or further down if it remains weak around its current levels for some more time.
Paramount Communications has announced its entry into the vibrant domestic wires market with a range of cables that offer an environmentally friendly Lead Free, Zero Halogen, Low Smoke option.
The domestic cables from the Company will initially be launched in the Delhi and NCR region and would be available in all key North Indian markets within three months. The stock is trading at Rs 9.75 at present. One holding the stock can exit the counter at sharp rallies.
PSU oil stocks HPCL, BPCL and IOC have rallied sharply this morning on falling crude oil prices. The recent hike in fuel prices is also aiding the cause of these stocks. It looks these stocks have further upside in the near run. Short term traders can exit at sharp rallies and re-enter at declines.
MIC Electronics has signed an MOU with Indian Oil Corporation for marketing of Solar LED Lantern. The MIC Electronics stock is trading 2.5% up at Rs 33.65. One holding the stock can retain it for decent gains over a medium to long term. Small quantities can be added at declines.
Moser Baer has posted a net loss of Rs 1508.80 million for the year ended March 31, 2009 as compared to net loss of Rs 789.10million for the year ended March 31, 2008.
The company's total income increased from Rs 20017.30 million for the year ended March 31, 2008 to Rs 23249.10 million for the year ended March 31, 2009. The stock is currenly trading in the red at Rs 71 with a loss of 3.2%.
The market has opened on a slightly listless note amid mixed global cues this morning. The Sensex rose to 13,830 after opening marginally higher but has slipped to 13,729 now, netting a loss of around 40 points or 0.29%. The Nifty is down by 7.75 points or 0.19% at 4071.55. It had surged to 4089.90 in opening trade.
Stocks to watch
IOL Netcom Ltd after its board approved raising up to Rs 250 crore.
Amtek group firms Amtek Auto Ltd, Amtek India and Ahmednagar Forgings after their respective boards approved raising funds by issuing warrants to founders.