Saturday, July 4, 2009

Market Voices 30 June 2009

Market Voices 30 June 2009

The market opened on a firm note but tumbled into the red after a few minutes and kept sliding down as the session progressed as investors indulged in heavy profit taking.

While a firm trend on the Asian bourses set off a positive start, weakness in European markets and lower U.S. index futures rendered the mood negative in afternoon trade. A fall in infrastructure output also weighed in to a significant extent.

The Sensex ended at14,539.61 (provisional) with a loss of 246.13 points or 1.66%. The index plunged to a low of 14,420.41 in afternoon trade.
The Nifty closed a 4305.85, down 85.10 points or 1.94%. The Nifty touched a low of 4267.35 this afternoon.

Realty stocks were hammered today. Metal, power, capital goods, bank, oil and pharma stocks too declined sharply. DLF, Tata Motors, JP Associates, Sterlite, RComm, Reliance Infra, ICICI Bank, L&T, RIL, ACC and M&M ended with sharp losses.

Suzlon lost around 11%. Idea Cellular, Unitech, Reliance Capital, Axis Bank, Siemens, RPower, Cipla and HCL Technologies also ended with sharp losses. TCS, HUL, Hero Honda, BPCL, Tata Power and Maruti Suzuki bucked the trend and closed with notable gains.

After a bright spell, midcap and smallcap stocks lost their way and finally ended on a weak note. The market breadth was very weak at close.

Tata Power Limited has signed two contracts with OPG Group, Chennai.
Under the first contract, Tata Power will provide Operations and Maintenance Services to OPG Power Generation Pvt Ltd, for its 1x80 MW Coal based power plant. The contract is for an initial period of two years and can be extended with mutual consent.

Under the second contract, the company will provide Project Management Services to OPG Power Gujarat Pvt. Ltd. for their upcoming 2x150 MW coal based thermal power plant. This plant will be located at Bhadreswar, in the Kutch district of Gujarat and is likely to be commissioned by September 2011.

GMR Infrastructure Ltd has informed BSE that Management Committee of Board of Directors of the Company, on June 30, 2009 have decided to withdraw the QIP in light of the existing market conditions.

The company had informed yesterday that the Management Committee of Board of Directors of the Company had decided to make an issuance of Equity shares of face value Rs 2 each of the Company to Qualified Institutional Buyers. The committee had also approved the Preliminary Placement Document for the said issue. The GMR Infrastructure stock is down by around 9% at Rs 141 at present.

Hindalco has posted a net profit of Rs 2,230.27 crore for the year ended March 31, 2009 as compared to Rs 2,860.94 crore for the year ended March 31, 2008.

The company's total income has decreased from Rs 19,693.97 crore for the year ended March 31, 2008 to Rs 18,856.30 crore for the year ended March 31, 2009. The stock is down by around 1.75% at Rs 86.25 at present. Long term investors can hold the stock with a stop loss near Rs 55.

Investors with a long term plan cay pick up GMR Infrastructure at sharp dips. IVRCL Infrastructure, Gammon Infrastructure, Reliance Industrial Infrastructure and PBA Infrastructure are some of the other good picks from the infrastructure space. All these stocks can be picked up at 15 - 25% down from their current levels.

Tata Motors, which has come a long way from its 52-week low of Rs 122 recorded in mid November last year, is seen struggling since yesterday due to weak results. The stock, which went down sharply in the previous session, is down by as much as 6.25% at Rs 294.25 now.

Further weakness at the counter is not ruled out. One looking for fresh exposure to the stock would do well to wait for now and take a call after a couple of weeks.

L&T (Rs 1618) can rise to Rs 1635 if it edges up to Rs 1622 and holds firm for a while. On the downside, a fall to Rs 1600 is possible if the stock remains subdued around its current levels for some more time.

Investors looking at long term can stay invested in L&T and pick up more of it at sharp dips.

Fortis Healthcare Limited has posted a net loss of Rs 7.90 million for the quarter ended March 31, 2009 as compared to net profit of Rs 96.00 million for the quarter ended March 31, 2008.

Total Income has decreased from Rs 516.10 million for the quarter ended March 31, 2008 to Rs 507.80 million for the quarter ended March 31, 2009. The stock is down by over 4% at Rs 96.

Investors holding Infosys, TCS and Wipro with a long term plan can continue to stay invested. Though some weakness is likely in the near term, the medium to long term prospects for these stocks continue to remain bright. Sharp dips can be used to increase exposure.

Bharat Earth Movers (BEML) is a good stock to own for long term. One can look at picking up this stock at declines in a staggered manner.
Strong results and a fairly healthy order book may take the stock further up north over a medium term.

India's infrastructure sector output grew 2.8 percent in May from a year earlier, slower than an upwardly revised 5 percent in April. Output had risen 3.1 percent in the same month last year. During April-May, the output rose 3.9 per cent, up from compared with 2.7 percent in the same period last year.

While the figures are somewhat encouraging, a lot more is to happen in the infrastructure space to arouse sustained buying interest in key stocks in the sector.

HDFC Bank (cmp Rs 1496) can move up to Rs 1525 if it recovers to 1505 and trades firm for a while. On the downside, the stock can fall to Rs 1480 if it eases to Rs 1490 and exhibits weakness. Intra-day traders with a reasonably good appetite for risk can buy the stock at Rs 1505.

Shaw Wallace is reportedly planning to sell its entire stake in United Spirits. Shaw Wallace, which holds a 10.27 per cent stake in United Spirits, is planning this move in order to retire a part of its debt. The stake sale, worth around Rs 943 crore, is likely take place through open market transactions. The Shaw Wallace stock is trading 3% down at Rs 303 at present.

IndusInd Bank (Rs 89) can rise to Rs 105 - 110 in the near term. One holding the stock can stay invested with a stop loss near Rs 75 - 78.
Long term investors can look at buying the stock at declines.

Hindustan Construction Company (cmp Rs 109) can be retained with a stop loss near Rs 95. The stock can move up to Rs 125 - 130 in the short run and a further upmove is possible if a decisive breakout happens there. On the downside, a fall to Rs 65 or even lower is likely if there is a strong breach of the support at Rs 95.

Cairn India (up 3.65% at Rs 242.60) has moved up sharply on higher crude oil prices. The stock appears headed for further upside in the near to medium run. One can stay invested in the counter and look to buy more in small quantities at declines.

Sasken Communications has announced that its consolidated revenues for FY 2009 grew 22% year-on-year to Rs 697.8 crore. The net profit for the year rose 7% to Rs 42.3 crore. The stock is currently trading at Rs 109.25, up by around a per cent over its previous closing price. One holding the stock with a long term plan can stay invested for now.
Market Outlook

The market is likely to open on a firm note this morning on positive global cues. Profit taking at higher levels may cap gains to a significant extent. With a lot of companies scheduled to announce their fourth quarter and annual results today, the market is likely to remain quite listless for a better part of the session.

Sector Watch

Bank stocks will continue to remain in focus. IT stocks, which had a weak outing yesterday, are expected to rebound and regain some lost ground. Metals may move up sharply. Shares of oil marketing firms may remain a bit slippery. Action is likely to be stock specific in realty and capital goods sectors.

Scrip Watch

Nagarjuna Construction Company will be issuing equity shares and securities to the qualified institutional buyers (QIBs) through Qualified Institutional Placement (QIP) for an amount not exceeding Rs 5.50 billion.

Pyramid Saimira Theatre may see action following the company putting its businesses and assets in the US and Malaysia up for sale in order to generate funds fro its Indian operations and to cut down losses.

Apollo Hospitals & Enterprises Limited has posted a net profit of Rs 291.40 million for the quarter ended March 31, 2009 as compared to Rs 218.10 million for the quarter ended March 31, 2008. Total Income has increased from Rs 3122.30 million for the quarter ended March 31, 2008 to Rs 3966.00 million for the quarter ended March 31, 2009. The stock is likely to surge higher today.

BL Kashyap & Sons Ltd has announced that it bagged new projects worth over Rs 560 crore for Construction in the first quarter of 2009-10, out of which Rs 124 crore is for Infrastructure and PSU sector, a new thrust segment for the Company. The BL Kashyap & Sons counter is likely to attract attention today.

Macro and Market Factors

The overnight surge on Wall Street and strong gains posted by most of the Asian markets today will keep the Indian bulls quite busy this morning. However, the mood is likely to remain somewhat cautious ahead of the Budget which is just a few days away.