Showing posts with label Indian Stock Market Analysis. Show all posts
Showing posts with label Indian Stock Market Analysis. Show all posts

Monday, November 1, 2010

Market Khabar 01 Nov 2010

Stock markets across the world were under pressure during the week ended. The Sensex shed 133 points closing at 20,032 and the Nifty ended 48 points lower at 6,018. Broader markets also showed signs of nervousness and closed on a weak note. Barring auto, almost all sectoral indices ended in the red. With the end of the results season, near-term direction of markets will be dictated by macro economic news and global cues. Refunds from Coal India IPO and SBI Bond issue may ease liquidity in the coming week. The Sensex and the Nifty have already corrected by 1,085 points and 347 points from their recent highs to last week lows. Mild pull back rally in offing, say punters.

The week ahead would be eventful, beginning withRBI’s policy meeting on November 2, Fed Reserve statement on November 3 and CIL listing on November 4. With inflation still high, RBI is expected to hike interest rates by 25 basis points. Choppy moves in markets triggered by these events are not ruled out.

For the week ahead, chartists predict a trading range of 19,600 and 20,450 for the Sensex and 5,840 and 6,190 for the Nifty. Crossover of resistances at 20,360 and 6,160 may see the momentum propelling indices to lifetime highs. Failure of last week lows 19,769 and 5,937 as support levels may see indices slide to 19,350 and 5,830 levels. Avoid getting in wrong and out wrong; getting in right and out wrong; this is making double mistakes. Be just as willing to sell short as you are to buy.

Futures & Options
The week ended being an expiry week witnessed high volatility in the derivative segment. High cost of carry (nearly 85 points) in Nifty futures resulted in lower rollover of 69 per cent in Nov series as against 71 per cent in October series. Despite the addition of new stocks to the F&O segment, the first day of new series saw a sharp drop in volumes reflecting traders’ indecisiveness over the near term direction of markets.
Option activity indicates build up of puts at 5,900 and 6,000 strikes and calls at 6,300 and 6,400 strikes suggesting the trading range for November series.
* Renewed buying in bank stocks led by ICICI Bank helped markets recover. Stay invested in Axis Bank, OBC, BOB, SREI Infra, Shriram Transport, IDBI Bank, IDFC and Karnataka Bank for further gains.
* Auto stocks were on fast track. Stay invested and use corrections to accumulate.
* Metal stocks lost sheen on global weakness. Short covering rally from lower levels seen in Tata Steel and Hindalco. Ahead of FPO, SAIL may continue to witness selling pressure.
* The government’s clear road map for petro companies may give fillip to oil marketing PSUs like IOC, BPCL and HPCL. OIL may get strengthened from its inclusion to F&O.
* Shipping firms posted better than expected results. Accumulate GE Shipping, SCI and MLL. Holding companies Bajaj Holdings and JSW Holdings.
* Festival season failed push up retail prices of sugar. Avoid sugar counters for present.

Stock Scan

In line with predictions, Vishnu Chemicals has posted good Q2 results on the back of its new plant, improved margins and good demand for its inorganic chemicals. While turnover was up by 50 per cent, net profit grew by 400 per cent for the six months ended. Annualised EPS is likely to be over `20. Buy for a target price of `225.

Pitti Laminations reported a 125 per cent growth in the turnover and a four-fold jump in net profit. Strong order book and demand predicts good times for the company. Buy at current levels for a target price of `100 in medium term.

Manugraph India, the lar-gest manufacturer of web offset presses in the country, has become the top manufacturer of single width, single circumference press in the world after it acquired US-based Daup-hin Graphic Machines. Its net profit jumped 192 per cent and sales went by 66 per cent in Q2 reflecting robust demand. Buy at current levels for target price of `100 in the medium term.

ICSA is one of the leading providers of embedded technology solutions and infrastructure deployment services for the power sector. It has recently started its smart energy meter facility and developed new products for energy management. Though its results were flat in the last two quarters because of consolidation, sources hint at stro-ng rebound in Q2. Buy at current levels for a short term target of `190.

Ganesh Polytex Ltd (GPL) recycles post-consumer PET bottle waste into recycled polyester staple fibre. Post expansion, GPL has become the largest PET waste recycler dislodging RIL and is the leading non-biodegradable waste management company, eligible for carbon credits. For the current year, GPL projects a topline close to `300 crore and EPS of `15. Buy this niche segment stock for target price of `125.

C. Kutumba Rao is a Hyderabad-based stock market analyst. The views expressed and the recommendations made are those of the author. Readers are strongly recommended to consult their financial advisors before making any financial investments. This newspaper is not liable for investment decisions made on the basis of recommendations in these columns.

Source : DC

Bought to you by


Ingenious Investor

Equity Research Division


Ravina Consulting

No.11 AG Plaza

3rd Cross Kamanahalli

BANGALORE 560084


For Free Stock Advise + Ideas

sowmya@ravinaconsulting.com

Talk / SMS 08105737966


Read - www.ingeniousinvestor.blogspot.com

Follow us - www.twitter.com/smartinvestor

Monday, July 26, 2010

Market Khabar 26 July 2010

Buoyed by positive global cues, changes in takeover code and good earnings from banking, auto component and capital goods sectors, Indian markets extended gains for the third straight week.

The BSE Sensex added 175 points and closed at 18,131. The Nifty rose 55 points ending at 5,449 — above 5,400-mark after 30 months. However, under-performance of midcap and smallcap indices reflects the underlying fears and scepticism of market players over the ongoing rally.

Strong FII inflows and positive economic news may see markets gaining momentum in coming days. To combat inflation, RBI is expected to hike repo and reverse repo rates by 25 basis points.

Weekend global cues such as results of stress tests of major European banks, rally in euro and better than expected results from Microsoft and others may ease investor worries about the strength of the global economy.

Important events for next week are RBI credit policy, first quarter results of RIL and F&O settlement.

For the week ahead chartists predict a trading band of 17,800 and 18,600 for the Sensex and 5,320 and 5,600 for the Nifty. The indices can face resistance at 18,340 and 18,560 and 5,490 and 5,560. Supports for the week are at 18,020 and 17,860 and 5,380 and 5,320.

Probability of short-covering rally propelling the indices closer to 19,000 and 5,700 levels is not ruled out in next few weeks discount fundamental outlook.

Futures & options

Robust volumes were seen in the derivatives segment. Open interest of the market has crossed Rs 1,70,000 crore. Nifty PCR has increased to 1.47 indicating addition of short positions. Good roll over of positions seen in many stock futures.

In August series, 5,600 call and 5,300 put have seen good addition indicating a higher trading range for the Nifty in the near term.

Spurred by Chinese rumours, metal stocks witnessed good buying interest. Buy on declines SAIL, Tata Steel, JSPL and JSW Steel. Non-ferrous counters Sterlite and Hindalco may seek higher levels on short covering.

Good buying was seen in capital goods stocks Crompton Greaves, BHEL and BEL. Stay invested and add on declines.

True to predictions, smaller PSU banks continued to attract buyers on every decline. Buy Allahabad Bank, UCO Bank, Syndicate Bank, Indian Bank and Dena Bank on declines.

Rumours of “surprise” bonus from SBI are doing rounds. Short covering in Bank Nifty may push it closer to 10,500 level. Telecom counters are witnessing heightened activity.

Further gains indicated in Idea, Bharti and Onmobile. After a minor correction, realty stocks will seek higher levels say punters. DLF, Unitech and HDIL are the favorites in the space.

Maruti results were a big disappointment. Drop in profits was due to higher royalty to Suzuki. Punters expect the stock to slide to Rs 1,250 level.

Among the side counters Alstom Projects, Dabur, HCC, Jain Irrigation and Sintex Inds look good for higher levels.

New entrants to F&O, Shriram Transport, Adani and NHPC witnessed heightened activity. Book profits at higher levels.

Stock scan

Astral Polytechnik primarily manufactures chlorinated poly vinyl chloride (CPVC)/PVC (lead free) pipes and fittings.

The company has launched innovative products like fire fighter pipes, soil waste rain water pipes and many more.

With many user industries preferring CPVC pipes over GI pipes, the company is expected to report strong growth in sales and net profit for next few quarters. Buy on declines for a price target of Rs 450. Camphor & Allied Products is the largest manufacturer of terpene chemicals and other specialty aroma chemicals, which find application in vast array of industries like flavours and fragrances, pharmaceuticals, soaps and cosmetics, paints and varnishes and many more. Book value of Rs 125 and an EPS of Rs 20 make the stock a good bet for a target price of Rs 225 in the medium term.

Shilp Gravures is pioneer and undisputed leader in electro-mechanical engraving, with a substantial share of the flexible packaging industry. The company’s client list includes In-dia’s most reputed na-mes in FMCG, liquor and cigarette segments. Buy at current levels for target price of Rs100. True to predictions, Andhra Petro has reported excellent turnaround performance.

C. Kutumba Rao is a Hyderabad-based stock market analyst. The views expressed and the recommendations made are those of the author. Readers are strongly recommended to consult their financial advisors before making any financial investments. This newspaper is not liable for investment decisions made on the basis of recommendations in these columns.

Source : DC

Bought to you by


Ingenious Investor

Equity Research Division


Ravina Consulting

No.429 Mahavir Tuscan

Near Hoodi, Whitefield

Mahadevapura Post

BANGALORE 560048


For Free Stock Advise + Ideas

sowmya@ravinaconsulting.com

Talk / SMS 08105737966


Read - www.ingeniousinvestor.blogspot.com

Follow us - www.twitter.com/smartinvestor

Sunday, November 15, 2009

Indian Stock Markets Review and 9-13 Nov Outlook BSE and NSE

e bulls managed to sustain last week’s momentum, with the BSE Sensex adding 4.3% to close at 16,848 and the NSE Nifty rising 4.2% to 4,998. Better-than expected IIP numbers helped the market in maintaining the bullish tempo. However, the Nifty continued to witness resistance at 5,000 levels through the week.

The BSE Sensex hit an intra-week high of 16,910 and low of 16,147 while, NSE Nifty hit an intra-week high of 5,017 and low of 4,790.

The Foreign Institutional Investors (FIIs) bought shares worth Rs30.15bn during the week. The Domestic Institutions were net buyers to the tune of Rs4.90bn during the week.

The top gainers: The top gainers in the Sensex were Tata Motors (up 8.8%), Reliance Industries (up 8.3%), TCS (up 7.7%), ICICI Bank (up 7.1%) and Infosys (up 6.4%).

The Top Losers: The top losers in the Sensex were Bharti Airtel (down 5.6%), DLF (down 3.1%), Hindustan Unilever (down 1%), Ranbaxy Labs (down 0.5%) and Reliance Power (down 0.2%).

The BSE IT Index (up 6.5): The top gainer in the IT sector was HCL Tech. The stock rose over 10% during the week. The company is reportedly looking for small acquisition over the next year to close gap in service offerings in certain areas like healthcare and lifesciences.

TCS rose over 7.7% during the week. The company said it plans to expand its strategic business alliance with US-based Dow Chemicals.

Infosys was up by over 6% during the week after the company announced that its BPO arm had acquired the US-based back-office firm McCamish Systems for around US$38mn.

Mahindra Satyam surged over 6% during the week. Nearly 27.25mn shares or 2.3% of the company’s equity were offloaded by L&T in a single block trade on the BSE on Friday. The transaction was seen at an average process of Rs112.45, raising almost Rs3.03bn for L&T.

Wipro surged over 6% during the week. According to a report released by IIFL during the week, “While margins are likely peaking at other IT services vendors, we believe Wipro’s IT services margins will continue to expand. Further, margin expansion in the combined entity could be greater, as its badly affected infrastructure unit (WIN) turns EBITDA-positive. YoY, Wipro has improved EBITDA margins in its IT services division by 350bps against 150-250bps of competitors. This is despite its higher hedges putting it at a marginal disadvantage during a period of rapid depreciation of the rupee (11% vs US$). Apart from tighter hiring (1.3% decrease in headcount vs Infosys’s and TCS’s 5% to 7% increase YoY in 2QFY10), the shift in pricing models (~9ppt increase in contribution from fixed-price projects YoY) has released new delivery levers. Guidance for 3QFY10 is strong (4.5% QoQ at top end) and we expect Wipro’s outperformance vs Infosys to continue (Wipro had better QoQ US$ revenue growth than Infosys in six out of the last nine quarters). We reiterate Wipro as our top pick in IT services and recommend a switch from Infosys to Wipro”.

The BSE Consumer Index: The top gainers in the consumer durables space were Su-Raj Diamonds (up 4.2%), Whirlpool (up 4%), Videocon Industries (up 1.8%), Blue Star (up 1.7%) and Mirc Electronics (up 0.9%).

Samtel Color lost over 5% during the week.

The BSE Healthcare Index (up 2.2%): The top gainers in the Pharma sector were Morepen Labs (up 34%), Panacea Biotec (up 12.5%), Strides Arcolab (up 9.9%), Orchid Chem (up 7.2%) and GlaxoSmithKline (up 4.9%).

The top losers were Aurobindo Pharma (down 6.1%), Cadila Healthcare (down 5.2%), Glenmark Pharma (down 2.4%), Dishman Pharma (down 2.3%) and Zandu Pharma (down 1.3%).

Lupin ended almost flat during the week. A report released by IIFL stated that, “Key takeaways from investor meetings that we recently hosted for Lupin’s management add to our confidence that the company will continue its strong performance. The company believes that active promotion of the newly acquired Antara can push its sales significantly above the historical run rate of US$70m per year. Its entry into ophthalmology and oral contraceptives in the US will significantly contribute to overall growth rate. USFDA issues surrounding the Mandideep facility will be resolved sooner rather than later, and the weak margins of 2QFY10 were an aberration. We are raising our FY10 and FY11 core earnings estimate by 3-4%. We also raise our price target to Rs1,610 from Rs1402 and maintain our BUY rating”.

The BSE Banking Index (up 5.3%): The top gainers in the banking space were ICICI Bank (up 7.1%), IOB (up 6.5%), Axis Bank (up 6.2%), Kotak Mahindra Bank (up 6.2%) and Canara Bank (up 5.5%).

The top losers were Karnataka Bank (down 1.1%) and Andhra Bank (down 0.1%).

According to a report released by IIFL during the week, “Bank loan growth has been on a declining trend since peaking in October 2008 and grew at just 9.7% YoY for the fortnight ended 23 October 2009. The lower loan growth can be attributed to lack of demand from individuals and corporates alike. Alternate sources like QIPs and commercial paper have partly offset the fund flow to corporate sector. Banks have been parking their excess liquidity with mutual funds, which in turn have been subscribing to corporate CPs. While we expect some pick-up in loan growth in 2HFY10, full year growth is likely to be below 15%, well below RBI’s targeted 18%. But most private and front-line government banks are expected to grow their loan book at well above the system growth rate. Axis, Yes, PNB, BOB and SBI remain our preferred picks”.

The BSE Auto Index (up 4%): The top gainers in the auto sector were Hindustan Motors (up 27.9%), Tata Motors (up 8.8%), Eicher Motors (up 6.4%) and M&M (up 5.9%).

Hero Honda was up 3.2% during the week. According to reports, Honda said it is committed to its joint venture with the Hero Group, putting to rest speculations of a rift between the partners.

Maruti was marginally up by 0.5% during the week. According to a report released by IIFL during the week stated, “Reports of foreign automakers planning to set up plants in India have been a big overhang for Maruti stock for some time now. For a case study, we looked at the impact new entrants had on incumbents when a similar situation played out in Brazil ten years ago. In the last ten years, since the likes of Renault, Peugeot, Toyota and Honda set up shop in Brazil, they have been able to take only 10% market share from the top four auto makers (Fiat, Volkswagen, GM and Ford), who even now constitute 80% of the market. This corroborates our view that concerns over market share loss for Maruti are overdone. While we agree that increasing competition from the likes of Honda and Toyota will mean some market share loss for Maruti over the next few years, we think the decline will be far slower than what the market seems to be pricing in currently”.

The BSE Oil & Gas Index (up 5.3%): The top gainers in the oil & gas space were Hindustan Oil (up 12.4%), Gujarat NRE Coke (up 7.1%) and MRPL (up 4.3%).

Reliance Industries surged 8% and ONGC added 2.2% during the week after media reports stated that the Oil Minister has proposed a 31% hike in regulated gas prices.

GSPL rose by over 4% during the week after the company announced that it plans to lay, build and operate a natural gas pipeline from Gujarat to Orissa.

The top losers were IOC (down 5.9%), Jindal Drilling (down 1.2%) and Great Offshore (down 0.3%).

The BSE Capital Goods Index (up 3.4%): The top gainers in the capital goods space were LMW (up 7.4%), Greaves Cotton (up 7.2%), Siemens (up 6.7%), Praj Industries (up 5.9%) and HEG (up 5.2%).

The top losers were Dredging Corp (down 4%), Alfa Laval (down 1.8%), BEML (down 0.9%) and BEL (down 0.3%).

The Cement Sector: The top gainers in the cement sector were Gujarat Sidhee (up 18.4%), Grasim (up 5.6%), Kakatiya Cement (up 3.7%), Shree Cement (up 3.2%) and ACC (up 2.9%).

The top losers were JK Cements (down 7.3%), Birla Corp (down 1.5%) and Ultratech Cement (down 0.8%).

According to a report released by IIFL during the week stated, “Cement exports from India declined 40% YoY in the September 2009 quarter, as the key Middle East region turned from supply shortage to excess supply. Withdrawal of Saudi Arabia’s ban on cement export from second week of October further depressed the already-declining cement prices in the Middle East. For exports from India, FOB prices are currently at ~US$40 per tonne—down from US$60 per tonne two quarters ago. With diversion of supplies meant for exports, cement prices in Gujarat have declined sharply in the past month. We expect the decline in export volumes to continue, as supply in the Middle East region is likely to increase sharply”.

The Telecom Sector: The top gainer in the telecom space was WWIL. The stock shot up over 30% during the week after Union Cabinet approved the proposal of the Information & Broadcasting Ministry to issue policy guidelines for Headend-in-the-Sky (HITS) operators. The policy guidelines provides for a framework within which the HITS service providers has to provide services in the country.

Among the other major gainers were Gemini Comm (up 12.8%), Shyam Telecom (up 12%), MTNL (up 7.3%) and Himachal Futuristic (up 1.9%).

The top losers were Bharti Airtel (down 5.6%), RCom (down 2.6%) and Idea Cellular (down 0.2%).

A report released by IIFL during the week stated, “Industry’s QFY10 financial report released by TRAI shows a 0.4% QoQ drop in aggregate gross revenues (GR). The decline was led by B-circles (32% of total gross revenues), in which GR declined by 3.3% QoQ, while metro and C circles grew 2.5% and 2.8% respectively (A circles were flat). In the nine circles where Tata DoCoMo (TD) launched the per-second billing tariff plans, their revenues were up (12% QoQ), RCOM grew 3% QoQ (with this and the decline in the mobile revenues in 2Q reporting to exchanges, the hitherto inexplicable gap is decreasing), while revenues of Bharti, Vodafone and Idea dropped by 2% each. Expect more revenue declines when TD goes national”.

The Realty Sector (down 2.3%): The Realty index was the only loser among the sectoral indices. The top losers in the real estate space were Unitech (down 3.8%), DLF (down 3.1%) and HDIL (down 0.6%).

The top gainers were Sobha Developers (up 10.5%), Akruti City (up 8.8%), Parsvnath (up 4.2%), Mahindra Lifespace (up 3.4%) and Omaxe (up 1.1%).

The Metals sector (up 7.1%): The top gainers in the metal space were JSW Steel (up 17.7%), Bhushan Steel (up 6.4%), Jindal Steel (up 6.1%) and Tata Metaliks (up 4.9%).

SAIL rose over 10% during the week. The Finance Ministry is in talks with the Steel Ministry to sell stake in SAIL.

Source: Indiainfoline

Bought to you by :

Equity Research Division

Ravina Consulting
B-429 Mahavir Tuscan
Whitefield, Hoodi Circle
Mahadevapura Post
BANGALORE 560084

www.twitter.com/smartinvestor

Wednesday, November 11, 2009

Indian Stock Markets BSE & NSE Review 10 Nov 2009

The key benchmark indices snapped last four days' gains, closing with small losses on profit taking. The BSE 30-share Sensex fell 58.16 points or 0.35%, off close to 240 points from the day's high and up close to 70 points from the day's low. Intraday volatility was high.

FMCG, capital goods, telecom and realty stocks fell. The market breadth was negative in contrast to a strong breadth earlier in the day. Index heavyweight Reliance Industries edged higher in volatile trade. But two other index heavyweights Infosys and Larsen & Toubro, fell.

Intraday volatility on the bourses was high. The market opened on a firm note on higher Asian stocks and overnight solid rally in US stocks. It trimmed gains in mid-morning trade on profit taking after a sharp surge over the past four days. The market regained strength after falling to an intraday low in mid-morning trade. However, the intraday rebound proved short lived. The market slipped into the red in early afternoon trade. The market cut losses after hitting a fresh intraday low in early afternoon trade.

The government today launched a discussion paper on the universal Goods and Services Tax (GST). The government had set a deadline of April 2010 for introducing GST but the finance minister said recently it could be delayed by a few months. The proposed GST which is to replace existing levies such as excise, service tax and value-added tax, could help lower the overall tax burden of industry.

Finance Minister Pranab Mukherjee today said the government will have to take corrective measures on stimulus in due course. He said there is a need of massive investment in agriculture and infrastructure to revive domestic demand. He further said there is a need to maintain high savings and investment rates. He also said the economy is in the process of recovery. The finance minster said there is a need of generating strong domestic demand until the robust recovery all over the world, particularly the developed world takes place

Mukherjee had on Sunday, 8 November 2009, said that the timing of the withdrawal of stimulus steps for India's economy will be decided when it becomes clear the economy is recovering, but there will be no fresh stimulus. Prime Minister Manmohan Singh on that day had said the government would take steps in the 2010/2011 fiscal year to wind down economic stimulus measures for Asia's third largest economy.

Mukherjee said he was not worried about the availability of food grains and the government will continue to import food items to meet any supply shortfall. He said the government is hopeful of more than 7% growth in the fiscal year ending March 2011 and 9% growth by 2012

The Prime Minister had said on Sunday day that the government would push through legislative changes, including in the insurance sector which foreign players are eyeing

The government, last week, mandated more sales of shares by state-run firms and changed the rules on how it can use the proceeds, as it seeks to boost revenues and rein in a widening budget deficit. The government said all profitable, listed state-run firms must have at least 10% of their shares in public hands, and unlisted firms that had a positive net worth, no accumulated losses and a net profit over the past three years should list.

The government plans to introduce in parliament by December 2009 bills proposing the raising of foreign stake limits in insurers to 49% from the present 26% and opening up the pension sector to private and foreign firms. It will also propose a law to cut its holding in top lender State Bank of India to 51%

The government will maintain its stimulus measures for the export sector, Trade Minister Anand Sharma said on Monday. He said it was not yet time to withdraw stimulus.

RBI deputy Governer Shyamal Gopinath today said India is actively confronted by an upturn in inflation. She added that withdrawal from the supportive monetary policy may diverge considerably between developed and emerging nations. Gopinath said the RBI will ensure there is adequate liquidity in the banking system

Last month, while announcing the monetary policy the Reserve Bank of India signalled an interest rate hike was imminent, citing inflationary pressures. It also started tightening some bank credit. The RBI sharply raised its inflation forecast for end-March 2010 to 6.5% with an upward bias, from 5 % earlier.

Gopinath said capital flows have resumed on economy's growth prospects. She said the costs and benefits need to be considered in managing the impact of foreign fund flows.

European Central Bank (ECB) President Jean-Claude Trichet on Monday said risks to both global growth and inflation were currently balanced. Trichet said global economic growth was a bit better than earlier expected, with emerging economies taking the lead. Among growing signs of economic recovery, some central banks - such as Norway and Australia - have already raised interest rates, while the ECB has signalled it will start rolling back some of its extra liquidity supplies.

Meanwhile, as part of its efforts to encourage small and medium-sized enterprises (SMEs) to go public, the Securities and Exchange Board of India (Sebi) on Monday exempted them from the usual eligibility norms applicable for initial public offerings (IPOs) and follow-on public offerings.

Sebi has also amended the Issue of Capital and Disclosure Requirements Regulations (ICDR) to allow pure auctions for qualified institutional investors (QIBs) in follow-on public offerings to begin with. The method may be later extended to initial public offerings. Under the new method, bidders will be free to bid at any price above the floor price. At present, allotments are made at the floor price. Retail investors, however, will be allotted shares at the floor price.

The board also decided that the issuer is free to place a cap either in terms of the number of shares or percentage to issued capital of the company so that a single bidder does not garner all the shares on offer, ensuring a wider distribution of shareholding.

European shares rose in a volatile trade extending four-session winning streak. The key benchmark indices in Germany, France and UK rose by between 0.04% to 0.25%.

Asian stocks rose on Tuesday, buoyed by Wall Street's gains as interest in risk-taking rose, with tech firms climbing and trading houses up after gains in oil, gold and other commodities. The key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan rose by between 0.1% to 0.75%.

China is quite competent to grow by 8% in 2009, Ma Delun, a vice-governor with the People's Bank of China, said at a banking event in Mumbai on Tuesday. Earlier this month, the World Bank raised its forecasts for Chinese growth, saying gross domestic product will increase 8.4% this year and 8.7% in 2010 on the back of massive fiscal and monetary stimulus.

Moody's Investors Service raised the outlook on China's A1 rating to positive from stable on Monday, praising its economic performance in the past year during the global financial crisis. The agency said the country's strong credit fundamentals would resume its improving trend as the economy emerged from the effects of the global recession.

In a separate release, Moody's also said it was lifting the credit outlook on Hong Kong's Aa2 government bonds to positive from stable. Moody's said while Hong Kong has a separate credit rating from mainland China, it deserved a review because of increasing financial and economic ties with the fast-growing mainland economy. The boost in outlook comes even as Hong Kong has projected government deficits for the next two years.

Trading in US index futures indicated Dow could slide 9 points at the opening bell on Tuesday, 10 November 2009.

US stocks rallied on Monday, with the Dow Jones industrial average at a 13-month high, as the Group of 20's pledge to keep aid flowing to the world's economy boosted investors' appetite for risk. The Dow added 203.52 points, or 2%, to 10,226.94, a new 2009 high. The S&P 500 index rose 23.78 points, or 2.2%, to 1,093.08. The Nasdaq Composite Index rose 41.62 points, or 2%, to 2,154.06.

A survey of top forecasters released on Tuesday showed that top forecasters are growing more confident that the US economy has embarked on a sustainable recovery. The Blue Chip Economic Indicators newsletter for November 2009 found forecasters had raised their 2010 projections for US gross domestic product for a fourth straight month. However, they still expect the pace of growth to fall short of the typical post-recession bounce. The US economy should expand 2.7% next year, the newsletter said. That marked an upward revision from the 2.5% pace the survey panel had expected a month ago.

The Group of 20 finance ministers and central bankers pledged on Saturday, 7 November 2009, to prepare strategies to end emergency support for their economies, but to keep the aid flowing until recovery was assured. The world's biggest economies - the European Union, the United States and Japan - are either expected to or already have emerged from recession in the third quarter.

This has prompted a discussion on when to start cutting back on the trillions in public support pledged to cushion the worst economic downturn since World War Two to maintain credibility of fiscal policies with markets and consumers. Officials from the world's 20 biggest developed and emerging economies said at the end of talks in the small Scottish town of St. Andrews that while the economy has improved, recovery was still uneven and depended on policy support.

The United States sees China as a vital partner and competitor, but the two countries need to address economic imbalances or risk "enormous strains" on their relationship, President Barack Obama said on Monday. Three days before leaving on a nine-day trip to Asia, Obama said the world's two most powerful nations need to work together on the big issues facing the globe, and any competition between them has to be fair and friendly.

In an interview to a news agency Obama on Monday said he plans to raise the issue of the yuan currency with Chinese officials when he meets with them in Beijing next week. Obama said he was confident that both the United States and China can arrive at a broad set of policies that encourages trade that benefits both the countries

China has been angered by recent controls slapped by the US on some of its imports, and China's foreign ministry spokesman Qin Gang issued a new warning against barriers to commerce. He said the US needs to make positive efforts with China to resolve frictions and questions in trade, including acknowledging China's status as a full market economy and halting some protectionist measures.

The BSE 30-share Sensex fell 58.16 points or 0.35% to 16440.56. The Sensex rose 178.81 points at the day's high of 16677.53 in early trade. The Sensex fell 127.06 points at the day's low of 16371.66 in early afternoon trade.

The S&P CNX Nifty fell 16.70 points or 0.34% to 4881.70. Nifty November 2009 futures were at 4,872.15, at a discount of 9.55 points as compared to spot closing of 4,881.70. Turnover in NSE's futures & options (F&O) segment was Rs 81008.35 crore higher than Rs 73802.20 crore on Monday, 9 November 2009.

BSE clocked a turnover of Rs 5950 crore, higher than Rs 5014.39 crore on Monday, 9 November 2009.

The market breadth, indicating the overall health of the market turned negative. The breadth weakened from strong breadth in early trade. On BSE, 1287 shares advanced as compared with 1456 that declined. A total of 56 shares remained unchanged.

From the 30 share Sensex pack, 22 stocks fell and rest rose.

From a low of 15,404.94 on 3 November 2009, the Sensex had jumped 1,093.78 points or 7.1% in four trading sessions to 16498.72 on Monday, 9 November 2009. The Sensex is up 6793.25 points or 70.41% in calendar year 2009, as on 10 November 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 8280.16 points or 101.46%, as on 10 November 2009.

Coming back to today's trade, the BSE Mid-Cap index fell 0.43% and the BSE Small-cap index fell 0.38%. Both the indices underperformed the Sensex.

The BSE PSU index (up 2.13%), the BSE Metal index (up 2.38%), the BSE Oil & Gas index (up 2.4%), the BSE Bankex (up 4.8%), the BSE FMCG index (up 2.17%), the BSE Auto index (up 1.58%), the BSE Healthcare index (up 1.27%), the BSE Consumer Durables index (up 2.44%), outperformed the Sensex.

The BSE Realty index (down 2.77%), the BSE Teck index (down 1.39%), the BSE IT index (down 0.73%), the BSE Capital Goods index (down 0.56%), the BSE Power index (down 0.45%), underperformed the Sensex.

Energy major Reliance Industries (RIL) gained 1.39% to Rs 2052.60 after company on Tuesday announced its first oil discovery in its exploration block in the Cambay Basin off Gujarat. The stock was volatile. It hit a high of Rs 2100 and a low of Rs 2007. Reliance holds 100% participating interest in the block. This block was awarded to Reliance under the fifth round of the New Exploration Licensing Policy.

RIL today said reports of a meeting between the billionaire Ambani brothers to settle a gas-pricing dispute were baseless. Reliance Industries, controlled by billionaire Mukesh Ambani, is embroiled in a high-profile legal battle over a deal to sell gas to Reliance Natural Resources, led by Ambani's estranged younger brother Anil, at below the price set by the government. RIL said in a statement the matter would be decided by the Supreme Court, which is currently hearing the case.

The RIL stock had jumped 3.46% on Monday on reports the firm is close to announcing a major overseas acquisition. The likely target is a part of the assets owned by troubled petrochemical major LyondellBasell, which is undergoing reorganisation under the protection of a US court, reports suggest.

The government on 27 October 2009 allocated additional 50 million cubic metres a day (mmscmd) of gas from Reliance Industries-operated east coast block D6. Power plants and refineries will get the bulk of Reliance Industries' gas from the Krishna-Godavari basin beyond the previously allotted 40 million metric standard cubic metres per day (mmscmd).

The empowered group of ministers (eGoM) also made some allotments for Reliance's petrochemical plants and refineries.

FMCG stocks fell on profit taking. Marico, ITC, Hindustan Unilever, REI Agro fell by between 0.15% to 2.33%.

Telecom stocks extended recent fall on worries the ongoing price war will result in a sharp fall in revenues and profits. Reliance Communications and Idea Cellular fell by between 1.48% to 2.9%.

Bharti Airtel fell 4.47% extending 3.88% fall on Monday after chairman Sunil Mittal told the media that the company is not actively seeking acquisitions, after its planned tie-up talks with South Africa's MTN collapsed recently

India's largest engineering and construction firm by sales Larsen & Toubro fell 0.36%. The company announced on Monday it won on orders worth Rs 1635 crore.

Among other capital goods stocks, Bharat Heavy Electricals, ABB, Thermax, BEML fell by between 1.19% to 2.95%.

Rate sensitive realty shares fell after the RBI, last week, raised the provisioning requirements for loans to commercial real estate from 0.4% to 1% in its monetary policy review meet on 27 October 2009. Sobha Developers, Omaxe, Unitech, DLF and Indiabulls Real Estate fell by between 0.44% to 4.8%.

The latest RBI move will result in increase in borrowing costs for realty firms which depend heavily on borrowing. In view of large increase in credit to the commercial real estate sector over the last one year and the extent of restructured advances in this sector, it would be prudent to build cushion against likely non-performing assets (NPAs), the central bank said in its quarterly policy review.

Some PSU stocks rose after Prime Minister Manmohan Singh on 5 November 2009, approved divestment in public sector companies to raise funds for social welfare. Hindustan Copper, State Trading Corporation, MMTC, Hindustan Copper, Power Finance Corporation rose by between 0.02% to 8.69%.

IT stocks fell on recent strong gains in rupee against the dollar. India's second largest software company by sales Infosys fell 0.71% even as its ADR rose 2.78% on Monday. The back-office arm of Infosys Technologies is looking at acquiring firms in Europe and in the United States of $50 million to $100 million, a top official said on Monday. Infosys BPO would also hire 1,200 people in the current financial year, the unit's chief executive, Amitabh Chaudhry, told reporters on the sidelines of the World Economic Forum.

Infosys said on 5 November 2009 its chairman's wife sold company shares worth $92 million for setting up a venture capital fund. Sudha Murthy, wife of Infosys co-founder and chief mentor N.R. Narayana Murthy, sold 20 lakh shares, or about 22% of her total holding, on the Bombay Stock Exchange on 5 November 2009, the company said in a filing. Last month, Narayana Murthy, who co-founded Infosys with six other software engineers in 1981 with $250, had sold a total of 800,000 shares worth $37 million to set up a venture capital fund which he plans to set up in India. The company said the Murthys have confirmed they did not plan to raise further capital for the fund.

India's third largest software company by sales Wipro fell 1.57% even as its ADR rose 4.05% on Monday. Wipro, sees robust deal pipeline on the back of improving IT demand worldwide, Suresh Vaswani, joint chief executive said on Tuesday The company said on 5 November 2009 it had agreed to buy some personal care businesses of Yardley for about $45.5 million, adding to its consumer goods business. Wipro said it had signed an agreement with UK-based Lornamead group, which owns the Yardley brand, for the businesses in Asia, the Middle East, Australasia and some African markets.

India's largest software company by sales Tata Consultancy Services (TCS) fell 0.28%. The company recently secured a 150 million pounds software implementation contract for 15 years from Cardiff city council, UK.

The Indian rupee lost ground after strengthening to a new three-week high against the dollar on Tuesday. The partially convertible rupee was at 46.49/51 per dollar, weaker than its close of 46.46/47 on Monday. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.

Banking shares rose on hopes of financial sector reforms. India's largest private sector bank by net profit ICICI Bank rose 0.66% as its ADR rose 8.86% on Monday, 9 November 2009. The bank's net profit rose 2.6% to Rs 1040.13 crore on a 12.7% decline in total income to Rs 8480.73 crore in Q2 September 2009 over Q2 September 2008. The result was announced during trading hours on 30 October 2009.

India's largest bank by net profit State Bank of India (SBI) rose 2.14% after gaining 5.19% on Monday. State Bank of India said on Monday it had entered into an agreement with T. Rowe Price to sell a 6.5% holding each in UTI Asset Management Company and UTI Trustee Company. State Bank currently holds 25% in each of the companies and after the sale its holding would be reduced to 18.5%, it said in a statement.

SBI announced after market hours on Friday 6 November 2009 it has revised downwards interest rates on deposits by 25-50 basis points for a few maturities effective from 9 November 2009. The bank's consolidated net profit rose 28.29% to Rs 3,133.16 crore on 22% rise in consolidated income to Rs 33,101.65 crore in Q2 September 2009 over Q2 September 2008. The results were announced on 31 October 2009.

But, India's second largest private sector bank by net profit HDFC Bank fell 0.43% even as its ADR rose 8.35% on Monday.

The RBI did not relax mark-to-market rules for bank's debt holdings at a quarterly policy review on 27 October 2009. The market was been agog with talks of the central bank hiking the ceiling on the portion of government securities that banks can park in held-to-maturity (HTM).

The central bank also decided to streamline provisioning requirement on non-performing assets. The RBI, asked banks to ensure by September 2010 that the total provisioning coverage against non-performing or bad loans aren't less than 70% of the outstanding amount.

Metal stocks rose after a gauge of six metals traded on the London Metal Exchange, rose 0.92% on Monday, 9 November 2009. Hindustan Zinc and Sterlite Industries rose by between 0.65% to 0.69%.

National Aluminium Company rose 0.34%. The company recently hiked the prices of aluminium products by Rs 1000 a tonne reflecting the recent uptrend in prices on the London Metal Exchange.

Steel stocks rose for the fourth straight day on reports major steel producers have posted strong sales volumes for the month of October 2009. Steel Authority of India (Sail) rose 0.26%. Sail has posted 28% growth in saleable steel volumes to 0.85 million tonnes in October 2009 over October 2008.

JSW Steel rose 4.19% after a group company JSW Energy recieved approval for an initial public offer from the Securities and Exchange Board of India. JSW steel's sales doubled to 0.4 million tonnes in October 2009 over October 2009.

But Tata Steel, the world's eighth largest steelmaker by output, fell 0.9%. The company said on Friday 6 November 2009 steel sales at its Indian operations rose 38% to 462,000 tonnes in October 2009 over October 2008.

Demand for steel remains strong auto, rural construction and infrastructure sectors. Also demand for construction grade steel has improved post monsoon season, and has resulted into higher sales. Another reason for the surge in sales in October 2009 was lower base effect, as last year demand dropped significantly owing to economic downturn. Most steel companies had cut production in October last year due to the global economic crisis and steep fall in demand.

Auto stocks fell on profit taking. Low interest rates and attractive benefits offered by companies pushed up sales of the industry in October 2009.

India's second largest bike marker by sales Bajaj Auto fell 1.14% after Carlos Ghosn, chief executive of French car maker Renault and Japan's Nissan Motor Co, said on Tuesday an agreement had been signed with Bajaj Auto for a low-cost car which would come to India in 2012.

India's largest bike marker by sales Hero Honda Motors fell 3.27%. The company reported a marginal increase in October sales at 354,156 units as against 352,449 units in the same month last year

India's largest small car marker by sales Maruti Suzuki India fell 2.73%. The company's total sales grew 32.4% to 85415 units in October 2009, compared with 64490 units posted in the same month a year ago.

India's largest tractor maker by sales Mahindra & Mahindra was flat at Rs 1002.90. The company's overall sales climbed 32% in October this year to 18,410 units against 13,935 units in the same month last year. Mahindra and Mahindra (M&M) reportedly plans to launch a motorcycle next year. The company is also looking at acquisitions in the electronic scooter space. The auto major had entered the two-wheeler market market by acquiring the assets of Pune-based scooter manufacturer Kinetic Motor in 2008.

India's largest truck marker by sales Tata Motors rose 2.26%. Its total sales grew 18% to 20,011 units last month against 17,014 units in the same period last year.

GVK Power & Infrastructure clocked highest volume of 1.63 crore shares on BSE. Suzlon Energy (1.36 crore shares), Cals Refineries (1.21 crore shares), Unitech (1.2 crore shares) and Reliance Natural Resources (1.15 crore shares) were the other volume toppers in that order.

Reliance Industries clocked highest turnover of Rs 281.21 crore on BSE. State Bank of India (Rs 239.91 crore), Educomp Solutions (Rs 210.10 crore), Housing Development & Infrastructure (Rs 158.09 crore) and DLF (Rs 146.17 crore) were the other turnover toppers in that order.

Source : capitalmarket.com

Bought to you by :

Equity Research Division

Ravina Consulting
B-429 Mahaveer Tuscan
Near Hoodi Circle, Whitefield
Mahadevapura Post
BANGALORE 560048

Call / SMS 9880080321
Follow - www.twitter.com/smartinvestor

Saturday, May 9, 2009

BSE / NSE Market Commentary 8th May 2009

Market Commentary 08 May 2009

Political uncertainty triggered profit taking after a sharp recent sharp surge in share prices. Nevertheless, the market cut losses in late trade as European stocks extended gains and as US index futures jumped. Auto stocks recovered. Index heavyweights Reliance Industries and Larsen & Toubro came off the day's lows.

The market was volatile. The BSE 30-share Sensex was down 240.51 points or 1.98%, up close to 110 points from the day's low and off close to 305 points from the day's high. The barometer index today, 8 May 2009, fell below the psychological 12,000 mark.

Domestic bourses slipped today, 8 May 2009, despite higher global markets. World stocks rose after the results of stress tests on US banks showed no nasty surprises. Banking, IT and metal stocks fell. The market breadth turned negative from strong breadth seen in early trade.

Volatility was high. After initial gains tracking higher US index futures, the market slipped into the red. It later moved between the positive and negative terrain in mid-morning trade. The market slipped to the day's low in early afternoon trade after the inflation data. The market extended losses in afternoon trade. After a steep slide at about 13:54 IST, the market cut losses in late trade.

Political uncertainty weighed on the bourses with polling underway for India's 15th Lok Sabha. The month-long a parliamentary elections that began on 16 April 2009 will conclude on 13 May 2009. Poll estimates point to a fractured mandate. Consumption and investment decisions will be significantly impacted by any signs that the new government is unstable. The counting of votes will take place on 16 May 2009. A party/alliance needs 272 seats in the 543-member parliament to claim power at the Centre.

Recovery in the Indian economy triggered a solid rally on the domestic bourses recently. The rally was also a part of a sharp surge in global equities triggered by hopes the worst of the global economic recession may be over. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex jumped 3,956.54 points or 48.48% to 12116.94 on 7 May 2009.

Meanwhile, the Federal Reserve stress result announced on Thursday determined that 10 US banks need to raise a total of $74.6 billion in capital, a finding that Chairman Ben S. Bernanke said should reassure investors about the soundness of the financial system.

The results showed that losses at the banks under more adverse economic conditions than most economists anticipate could total $599.2 billion over two years. Mortgage losses present the biggest part of the risk, at $185.5 billion. Trading accounts were the second-largest vulnerability, with potential losses of $99.3 billion. The conclusion of the unprecedented probe of the health of the largest 19 lenders opens an exit for some of the firms from a tense partnership between Wall Street and the government. Others will have six months to fill their capital shortfalls and may be forced to accept expanded federal ownership that could prompt changes in their management.

Bank of America Corp. was judged to need $33.9 billion in additional capital under regulators' criteria, the largest gap. Wells Fargo & Co.'s shortfall is $13.7 billion, while Citigroup Inc.'s gap is $5.5 billion. New York-based Citigroup has already announced plans to bolster its tangible common equity ratio by converting some of its preferred shares into common stock.

Fifth Third Bancorp's capital need is $1.1 billion, KeyCorp's is $1.8 billion, PNC Financial Services Group Inc.'s is $600 million, Regions Financial Corp.'s is $2.5 billion and SunTrust Banks Inc.'s is $2.2 billion. GMAC LLC needs $11.5 billion, while Morgan Stanley's assessment was $1.8 billion.

Goldman Sachs Group Inc., JPMorgan Chase & Co., Bank of New York Mellon Corp., MetLife Inc., American Express, State Street Corp., BB&T Corp., US Bancorp and Capital One Financial Corp. were deemed not to need additional funds, according to the results.

European shares extended gain on Friday, 8 May 2009, as financial stocks advanced after the results of stress tests on US banks showed no nasty surprises, while miners tracked higher metals prices. Key benchmark indices in France, Germany and UK were up by between 1.78% to 2.92%.

Asian shares rose after the US bank stress results provided no negative surprises. Key benchmark indices in Hong Kong, Japan, China, Taiwan, Singapore, South Korea were up by between 0.17% to 1.09%. Volatility was high in Asia.

Chinese State Council Vice Premier Wang Qishan wrote in an editorial Friday, 8 May 2009, that the global financial crisis and economic slump are getting worse, in contrast to more optimistic recent comments from US officials. The world economy is going to get worse before it gets better, and the situation remains serious, Wang said in a commentary published in the Financial Times. Wang called for greater cooperation between the UK and China in order to foster recovery, and repeated earlier comments by other Chinese officials calling for more international regulation to prevent future crises.

Trading in US index futures showed the Dow could rise 115 points at the opening bell on Friday, 8 May 2009. US stocks fell on Thursday 7 May 2009 before the results of the stress tests. The Dow slipped 102.43 points, or 1.2%, to 8,409.85. The S&P 500 index was down 12.14 points, or 1.3%, to 907.39, and the Nasdaq composite index fell 42.86 points, or 2.4%, to 1,716.24. The results of the stress test were announced after trading hours in the US on Thursday.

In economic news in US, initial jobless claims fell more than expected to the lowest level since January 2009. The numbers for the week ending 2 May 2009 totaled 601,000, which was less than expected and down from the preceding week. Continuing claims climbed to a new record of 6.35 million, which was in-line with expectations.

Closer home, foreign institutional investors (FIIs) are in an aggressive buying mode after they made heavy sales in the first two months of calendar 2009. Foreign institutional investors (FIIs) bought shares worth a net Rs 395.20 crore on Thursday, 7 May 2009. FII inflow in May 2009 totaled Rs 3,269.60 crore (till 7 May 2009). FII inflow in calendar year 2009 totaled Rs 3,982.40 crore (till 7 May 2009).

Asia ex-Japan equity funds took in $1.62 billion in the week though 6 May 2009, up from $1.1 billion the previous week, according to the latest data from EPFR Global which tracks global funds with assets totaling some $10 trillion. Two-thirds of the inflows in Asia ex-Japan equity funds was targeted at the Greater China region. Emerging-market stock funds worldwide took in $3.6 billion during the period, while those focused on the US and Europe posted outflows.

A pattern that started in late March 2009, with cash coming off the sidelines and bypassing funds geared to developed markets in favor of emerging markets equity, high-yield bond and some sector funds carried into the first week of May 2009, EPFR Global said.

Activity in Indian factories expanded for the first time in five months in April 2009 as a swelling orders pipeline pointed to a tentative recovery, a survey showed on Monday, 4 May 2009. The ABN AMRO Bank purchasing managers' index (PMI) based on a survey of 500 companies, rose to 53.3 in April 2009 from 49.5 in March 2009, climbing above the threshold of 50 that separates expansion from contraction. The latest reading is the highest in seven months and it has steadily risen after hitting a trough of 44.4 in December 2008.

Manufacturing makes up about 16% of India's gross domestic product. The boost in manufacturing index came from a surge in new orders. The new orders index rose to 54.9 in April 2009 from 49.5 in March 2009. Several research notes in the past few days have pointed to improvement in economic activity in the months ahead.

Inflation based on the wholesale price index rose 0.7% in the year though 25 April 2009, higher than previous week's annual rise of 0.57%, data released by the government during trading hours today, 8 May 2009, showed.

The BSE 30-share Sensex was down 240.51 points or 1.98% to 11,876.43. The Sensex rose 63.13 points at the day's high of 12,180.07 in early trade. At the day's low of 11,765.06 Sensex fell 351.88 points in mid-afternoon trade.

The S&P CNX Nifty was down 63.20 points or 1.72% to 3,620.70. Nifty May 2009 futures were at 3627.65, at a premium of 6.95 points as compared to the spot closing of 3,620.70. Turnover in NSE's futures & options (F&O) segment surged to Rs 56,236.37 crore from Rs 48,471.10 crore on Thursday, 7 May 2009.

The BSE clocked a turnover of Rs 6612 crore, higher than Rs 4704.45 crore on Thursday 7 May 2009.

The BSE Consumer Durables index (up 1.89%), the BSE FMCG index (down 0.48%), the BSE PSU index (down 0.66%), the BSE Oil & Gas index (down 0.76%), the BSE Capital Goods index (down 0.78%), the BSE Auto index (down 0.78%), the BSE Healthcare index (down 1.02%), the BSE Realty index (down 1.13%), the BSE Power index (down 1.72%), the BSE TECk index (down 1.93%), outperformed the Sensex.

The BSE Bankex (down 3.21%), the BSE Metal index (down 2.52%), the BSE IT index (down 2.15%) underperfomed the Sensex.

The market breadth, indicating the overall health of the market, was even. It had turned negative in mid-afternoon trade from a strong breadth earlier in the day. On BSE, 1,277 shares rose as compared with 1,287 that fell. A total of 53 shares remained unchanged.

The BSE Mid-Cap index fell 0.17%. The BSE Small-Cap index gained 0.32%. Both these indices outperformed the Sensex

From the 30 share Sensex pack, 26 stocks fell while rest gained.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) fell 0.89% to Rs 1,897. Nevertheless, the stock came off the day's low of Rs 1,875. Analysts expect strong growth in bottom line in coming quarters from sale of gas which it started pumping last month from its deep-sea field off the east coast.

India's biggest engineering & construction firm by revenue Larsen & Toubro (L&T) rose 0.54% to Rs 992, off the day's low of Rs 961.85. L&T on 16 April 2009 said the company expects its order inflow to grow by 25-35% in FY 2010. Other capital goods stocks BEML, Praj Industries, Crompton Greaves and Thermax rose by between 0.25% to 2.21%.

PSU OMCs fell on rise in oil prices. Indian Oil Corporation BPCL and HPCL fell by between 0.14% to 2.55%. Crude oil futures rose Friday in Asia on relative dollar weakness, staying near six-month highs. On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded at $57.84 a barrel up $1.13 or 2% in the Globex electronic session. State-run oil marketing firms suffer revenue loss on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.

Auto stocks cut losses on higher sales in the month just gone by. India's largest commercial vehicle maker by sales Tata Motors was down 1.36% to Rs 268.40, off the day's low of Rs 262. India's largest car maker by sales Maruti Suzuki India was down 1.1% to Rs 830.05, off the day's low of Rs 817.25. India's largest tractor maker by sales Mahindra & Mahindra was down 4.28% to Rs 494.25, off the day's low of Rs 486.75.

Metal stocks fell as copper futures for July 2009 delivery declined 1% yesterday, 7 May 2009, retreating from a three-week high on the London Metal Exchange. Aluminum slid 0.4% at $1,561 a tonne.

India's largest steel maker by sales Tata Steel fell 4.08% even after the company said its sales volume surged by 31% to 4.52 lakh tonnes in April 2009 over April 2008 led by robust demand from auto and construction sectors. Steel Authority of India, Sterlite Industries, National Aluminum Company, Hindustan Zinc and Hindalco Industries, fell by between 0.1% to 4.98%.

Rate sensitive banking stocks fell on profit taking after a sharp surge in the past few days. India's second largest private sector bank by operating income HDFC Bank fell 2.83% to Rs 1,143.50. Three block deals were executed in the HDFC stock on BSE. Two deals of 38.82 lakh shares each were executed at Rs 1140 per share while another deal of 38.82 lakh shares was executed at Rs 1175 per share.

DBS Group, Southeast Asia's biggest bank, sold its entire 2.7% stake in HDFC Bank through the block deals on BSE today, 8 May 2009.

India's largest private sector bank by net profit ICICI Bank fell 5.19% as its ADR fell 5.79% on Thursday.

India's largest bank in terms of assets and branch network State Bank of India (SBI) fell 3.06%. SBI announces Q4 March 2009 results on Saturday, 9 May 2009. A total 13 brokerages expect a between 15% fall to a 39% rise in SBI's net profit at between Rs 1601.20 crore to Rs 2626.60 crore in Q4 March 2009 over Q4 March 2008.

India's biggest dedicated housing finance firm by operating income HDFC fell 4.19%.

Outsourcing focussed IT stocks fell for the third straight day on US government plans to scrap tax incentives that encourage American firms to ship jobs overseas. India's second largest software services exporter by sales Infosys fell 2.4% as its American depository receipt (ADR) slipped 1.4% on Thursday 7 May 2009.

India's third largest software services exporter by sales Wipro fell 6.59% as its ADR fell 3.49% on Thursday. India's largest software services exporter by sales TCS fell 0.29% to Rs 630.25 off the day's low of Rs 610.

Analysts, however, feel that US government's plan to scrap tax incentives that encourages American firms to ship jobs overseas is unlikely to dent business for Indian outsourcers. US president Barack Obama on Monday, 4 May 2009, announced plans to reduce tax breaks for US-based multinationals shipping jobs to places like India. Instead, the tax incentives would now go to those creating jobs inside the US, in places like the Buffalo city, New York.

Currently, US businesses that invest overseas can take an immediate tax deduction for expenses supporting their overseas investments. They can also defer the payment of US taxes on the profits they make from such investments. But, now the Obama Administration wants to ensure that companies do not receive deductions for expenses supporting their offshore investments until they pay tax on their offshore profits. This is intended to disincentivise US companies from retaining profits abroad.

Infosys said the proposal, if implemented, was unlikely to reverse the outsourcing of a gamut of services by US firms to Indian companies. "The current proposal, as we understand, is to close corporate tax loopholes on US multinational corporations and crack down on their overseas tax havens," the company said in a statement. "We do not believe that it has anything to do with IT outsourcing done by US corporations.", Infosys said.

Rate sensitive realty stocks fell on profit taking after recent surge in prices. Unitech, Phoenix Mills, Anant Raj Industries, fell by between 0.93% to 2.04%.

DLF fell 1.84% on reports the promoters are close to finalising a deal worth around Rs 3000 crore with some foreign and domestic institutional investors to offload a little over 7% stake.

Some healthcare stocks fell on profit taking after they rose as most of the healthcare firms reported better than expected Q4 March 2009 result. Piramal Healthcare, Sun Pharmaceuticals Industries, Pfier, Biocon, Cipla, Dr Reddy's Laboratories fell by between 0.22% to 3.69%.

India's largest FMCG maker by sales Hindustan Unilever rose 0.98% to Rs 232.90 after a block deal of 3.33 lakh shares was executed on NSE at Rs 233.25 per share.

United Spirits fell 6.7% after reports Diageos talks to buy a stake in the alcohol maker have hit a roadblock.

Cement stocks fell on recent reports cement prices could fall by up to 10% in the coming months, pushed lower by new supply and slower construction activity during the monsoon season. Ultratech Cements, India Cements, ACC and Ambuja Cements, fell by between 0.43% to 4.73%.

Cals Refineries clocked the highest volume of 6.62 crore shares on BSE. Ispat Industries (3.07 crore shares), Reliance Natural Resources (1.43 crore shares), Suzlon Energy (1.36 crore shares), HDFC Bank (1.36 crore shares) were the other volume toppers in that order.

HDFC Bank clocked the highest turnover of Rs 1,524.22 crore on BSE. Reliance Industries (Rs 203.51 crore), ICICI Bank (Rs 186.57 crore), Tata Steel (Rs 177.99 crore) and Housing Development & Infrastructure (Rs 166.25 crore) were the other turnover toppers in that order.

Tuesday, April 21, 2009

Market Voices 21 April 2009

Market Voices 21 April 2009


It was a volatile day of trade today as the market closed quiet. Sensex closed at 10909, down 69 points (provisional) and Nifty at 3365, down 11 points (provisional) from the previous close. CNX Midcap index was down 0.71% and BSE Smallcap index was up 0.57%. The market breadth was negative with advances at 542 against declines of 684 on the NSE. 

Buy Yes Bank if it stays above Rs 78 it has a target of Rs 92, says E Mathew, technical analyst, on CNBC Awaaz. The stock is currently trading at Rs 243, down 7.5% on the BSE. 

Buy Tata Steel with a target of Rs 250 and stop loss of Rs 220, says Hemen Kapadia, technical analyst, on CNBC Awaaz. The stock is currently trading at Rs 243, down 7.5% on the BSE. 

The RBI's credit policy for FY10 is based on the deepening economic slump and financial market turmoil, says D Subbarao, governor of RBI, on NDTV Profit. There is scope for banks to further reduce rates, he feels. RBI will continue to ensure ample liquidity, he adds. Policy measures to ensure that financial market continues to function in an orderly manner, he says.

The market is now in a wait and watch mode as it could break down from 3350 on Nifty, says Sudarshan Sukhani, technical analyst, on CNBC TV18. But it could slowly move above 3500 on Nifty, he feels. What is clear is that even if Nifty goes above 3500, the upside seems limited, he adds.

The market is trading volatile, flipping in and out of the positive and negative. Sensex is trading at 10909, down 70 points and Nifty is at 3367, down 9 points from the previous close. CNX Midcap index is down 1.23% and BSE Smallcap index is up 0.03%. The market breadth is negative with advances at 481 against declines of 743 on the NSE. 

KS Oils acquires 20,000 hectares for Rs 370 crore for backward integration, says Sanjay Agarwal, MD & CEO of the company, on CNBC TV18. The stock is currently trading at Rs 48, up 3.1% on the BSE. 

Buy SBI with a target of Rs 1322 and stop loss of Rs 1230, says Hemen Kapadia, technical analyst, on CNBC Awaaz. The stock is currently trading at Rs 1258, down 2.9% on the 

Buy Piramal Healhtcare with a target of Rs 340 in the long term, says Sarbajeet Kaur of Angel Broking, on CNBC Awaaz. The stock is currently trading at Rs 213, down 5.2% on the BSE. 

Buy RIL with a target of Rs 1795 and stop loss of Rs 1675, says Hemen Kapadia, technical analyst, on CNBC Awaaz. The stock is currently trading at Rs 1713, down 0.01% on the BSE. 

Good long-term picks in the market today in the power space are PFC, REC International and Voltamp Transformers, says Ashish Kapoor of Investshoppe, on Zee 

The interim trend is still up and the short-term trend in flat, says Deepak Mohoni, technical analyst, on CNBC TV18. If Nifty is able to cross 3500, it has some more upside, he 

A correction in the market could be good for those who have missed the opportunity to get in around 8500 levels in Sensex, says Hitesh Agarwal of Angel Broking, on CNBC TV18. For 2009, the higher range for Sensex could be 12500, he adds.

The market is trading flat. Sensex is trading at 11016, up 36 points and Nifty is at 3399, up 22 points from the previous close. CNX Midcap index is down 0.70% and BSE Smallcap index is up 0.23%. The market breadth is negative with advances at 534 against declines of 670 on the NSE. 

Buy Glenmark Pharma with a target of Rs 244-277, says Ashwani Gujral, technical analyst, on CNBC TV18. The stock is currently trading at Rs 207, up 3.5% on the 

Buy Unitech with a target of Rs 100 in the medium term, says Rakesh Bansal of SMC Global Securities, on CNBC Awaaz. The stock is currently trading at Rs 52, down 3.2% on the 

The market may or may not head lower, this is still a good market to invest into as valuations are reasonable, says Ashish Kapoor of Investshoppe, on Zee Business. Good long-term picks in the banking space are SBI and ICICI Bank; in metal space are Tata Steel and Sterlite Industries and in IT space are Infosys and TCS, he adds.

Buy Cadila Healhtcare with a target of Rs 350 in the long term, says Sarbajeet Kaur of Angel Broking, on CNBC Awaaz. The stock is currently trading at Rs 310, up 0.48% on the BSE. 

Hold IFCI with a target of Rs 27 and if it crosses that it can go to Rs 35 and keep a stop loss of Rs 22, says Rakesh Bansal of SMC Global Securities, on CNBC Awaaz. The stock is currently trading at Rs 24, down 0.41% on the BSE. 

Nifty could test 3150 in a correction, says Mitesh Thakkar, technical analyst, on CNBC TV18. Go long if Nifty trades above 3400, he adds. 

The Asian markets are trading mixed. European markets are trading in the positive. Our market had a tempered start, digested the credit policy and is now seeing a choppy run. Sensex is trading at 11061, up 81 points and Nifty is at 3411, up 34 points from the previous close. CNX Midcap index is down 0.11% and BSE Smallcap index is up 0.57%. The market breadth is negative with advances at 493 against declines of 699 on the 

Buy Sintex Industries at Rs 120 with short-term target of Rs 150, says Nitin Murarka of SMC Global on Zee Business. Keep stop loss of Rs 110, he adds. The stock is currently trading at Rs 131, down 1.5% on the 

The Credit Policy has given a positive surprise to both the equity and debt market, says Nilesh Shah of ICICI Prudential on CNBC TV18. However, he believes that the driver for the market will not be the Credit Policy but the election outcome. 

Hold Reliance Power with short-term target of Rs 150, says Nitin Murarka of SMC Global on Zee Business. Keep stop loss of Rs 100, he adds. The stock is currently trading at Rs 120.30, up 1.2% on the BSE.

Hold ABG Shipyard with target of Rs 145, says Nitin Murarka of SMC Global on Zee Business. Keep stop loss of Rs 98, he adds. Buy more when it comes to Rs 105, he says. The stock is currently trading at Rs 120.60, down 3.8% on the BSE.

Hold GMR Infra with target of Rs 135, says Prakash Gaba, technical analyst, on CNBC Awaaz. It has good support at Rs 105, he adds. The stock is currently trading at Rs 119, down 0.4% on the 

Hold Maruti for long term with target of Rs 1000 in 6-8 months, says Nitin Murarka of SMC Global on Zee Business. Short-term traders may hold with stop loss of Rs 790, he adds. The stock is currently trading at Rs 820.40, down 2% on the BSE. 

Buy Greaves Cotton with target of Rs 95, says Anil Singhvi, market expert, on CNBC Awaaz. Keep stop loss of Rs 77, he adds. The stock is currently trading at Rs 85.60, up 0.7% on the 

Buy Punj Lloyd at Rs 110 with target of Rs 135, says Nitin Murarka of SMC Global on Zee Business. Keep stop loss of Rs 90, he adds. The stock is currently trading at Rs 109.15, down 3.6% on the BSE.

The market at noon has made some recovery from the morning's low. However, the rate cut announcement by RBI a few minutes earlier appears not to have much of an impact on the stock market. Asian markets are trading mixed. Sensex is trading at 10907, down 73 points from its previous close, and Nifty is at 3360, down 17 points. CNX Midcap index is down 1% and BSE Smallcap index is down 0.5%. The market breadth is negative with advances at 372 against declines of 805 on the NSE. 

Hold ICICI Bank with target of Rs 450 at which level book profits, says Prakash Gaba, technical analyst, on CNBC Awaaz. The stock is currently trading at Rs 407.40, down 4.5% on the 

Buy HCC only on dips and not at current levels, says Siddharth Bhamre of Angel Broking on CNBC TV18. The stock is currently trading at Rs 59.50, down 2.5% on the BSE.

Hold Polaris with target of Rs 75, says Prakash Gaba, technical analyst, on CNBC Awaaz. The stock is currently trading at Rs 67.50, down 4.5% on the 

RBI says that bank lending rates still to adjust to policy rate cuts, reports NDTV Profit. According to RBI, there is room for further rate cuts. The RBI has increased limit for FCCB buyback from $50 million to $100 million, reports the channel.

There is still some upmove remaining in this market, says Sharmila Joshi of Systematix Shares on CNBC Awaaz. She advises profit booking in this market and buying banking stocks on decline. 

RBI sees FY'10 GDP growth at 6%, reports NDTV Profit. Inflation expectation for FY'10 is seen at 4% and medium term at 3%, it adds. FY'10 credit growth is seen at 20% and deposit growth seen at 

RBI cuts Repo and Reverse Repo rates by 25 BPS each, reports CNBC TV18. It cuts Reverse Repo rate to 3.25% from 3.5% and Repo Rate to 4.75% from 5%, it adds. RBI keeps CRR unchanged at 5%, it says.

The recent uptrend was just a bear market rally and fundamentals have not improved, says Ajay Bagga of Deutsche Bank on NDTV Profit. He feels that the coming 2-3 quarters could be painful for corporate earnings. He has no expectations of a repo or CRR cut from RBI but believes that there may be curbs in reverse repo. 

An hour into opening, the market is struggling to make a recovery, in anticipation of the announcement of the Credit Policy in a few minutes now. Sensex is trading at 10822, down 157 points from its previous close, and Nifty is at 3335, down 42 points. CNX Midcap index is down 1.5% and BSE Smallcap index is down 

Buy Adnani Enterprises with intra-day target of Rs 400, says Anil Singhvi, market expert, on CNBC Awaaz. Keep stop loss of Rs 330, he adds. The stock is currently trading at Rs 354.95, up 1.1% on the 

Invest in SBI, Axis Bank and HDFC Bank with long-term view, says Sandeep Shenoy of Pinc Research on CNBC Awaaz. These stocks will give 20% returns in one year, he adds. 

Buy Unitech at Rs 50, says Ashwani Gujral, technical analyst, on CNBC Awaaz. The stock is currently trading at Rs 51.50, down 4.2% on the BSE. 

Hold 3i Infotech with target of Rs 50, says Prakash Gaba, technical analyst, on CNBC Awaaz. It has good support at Rs 40, he adds. The stock is currently trading at Rs 47.05, up 1.2% on the BSE.  » Send to friends

10:35 AM - Hold Bartronics India with short-term target of Rs 110, says Simi Bhaumik, technical analyst, on Zee Business. Keep stop loss of Rs 95, she adds. The stock is currently trading at Rs 104.30, up 4% on the BSE.

Sell ICICI Bank with intra-day target of Rs 400, says Anil Singhvi, market expert, on CNBC Awaaz. Keep stop loss of Rs 440, he adds. The stock is currently trading at Rs 411.10, down 3.6% on the BSE. 

Buy Reliance Infrastructure at Rs 640-650, says Siddharth Bhamre of Angel Broking on CNBC TV18. If it closes above Rs 720 levels, then it might go up to Rs 780-800, he adds. The stock is currently trading at Rs 687.05, down 1.4% on the BSE. 

Buy Dishman Pharmaceuticals with intra-day target of Rs 122, says Anil Singhvi, market expert, on CNBC Awaaz. Keep stop loss of Rs 106, he adds. The stock is currently trading at Rs 116.70, up 3% on the BSE.

Buy Oracle with intra-day target of Rs 885, says Anil Singhvi, market expert, on CNBC Awaaz. Keep stop loss of Rs 825, he adds. The stock is currently trading at Rs 866.20, up 2.5% on the BSE. 

Buy Era Infra with target of Rs 98, says E Mathew, technical analyst, on CNBC TV18. Trade with tight stop loss, he adds. The stock is currently trading at Rs 86.10, up 16% on the BSE. 

The market gets off expectedly to a marginally negative start, in the steps of weak global cues. Earlier, the US markets ended sharply lower and even the Asian markets are trading weak. Sensex is trading at 10816, down 163 points from its previous close, and Nifty is at 3330, down 47 points. CNX Midcap index is down 1.3% and BSE Smallcap index is down 0.8%. The market breadth is negative with advances at 115 against declines of 499 on the 

Sell GHCL with intra-day target of 20% downside, says Anil Singhvi, market expert, on CNBC Awaaz. Keep stop loss of Rs 33, he adds. The stock is at Rs 32.05, down 0.9% on the BSE. 

I would advise traders to book profit, says VK Sharma of Anagram Stock Broking on CNBC TV18. He believes that 3300 would be a key level to watch because of huge Open Interest in 3300 Put. A close below 3300 on the Nifty will give a bearish signal to the market, he adds. He reckons that banks may see shorting ahead of the Credit Policy. 

I expect the market to open with a negative bias on weak global cues, says Amitabh Chakraborty of Religare Securities on CNBC TV18. He thinks that the Nifty may slip to 3100 over the medium term before the uptrend resumes. He believes that the RBI is likely to announce rate cuts in the Credit Policy today. He is positive on private sector banks.

The market may open weak because of negative global cues and the Nifty might see levels of 3300 or even lower, says Rajat Bose, technical analyst, on CNBC TV18. He thinks that the market will also depend on the announcement of the Credit Policy and how bank stocks react to it. He feels that bank and auto stocks will see some selling pressure while technology stocks might show resilience.

BSE /NSE Shares analysis for 21 April 2009

BSE /NSE Shares analysis for 21 April 2009

Weak global cues sent stock prices tumbling down in early trade, but the market bounced back by early afternoon after RBI cut Repo and Reverse Repo rates by 25 basis points each. However, due to heavy selling in bank, metal, IT, auto and capital goods stocks, it closed on a negative note today.  The Sensex ended at 10,909.83 (provisional) with a loss of 69.67 points or 0.63%.  The barometer, which had slipped to 10,764 in early trade, rose to a high of 11,068.82.  The Nifty, which hit a high of 3414.70, closed at 3365.50, down 11.60 points or 0.34%. It touched a low of 3309.35 in early trade.

Realty stocks rallied on hopes of reduction in lending rates.  FMCG, pharma, media and telecom stocks had a good session. Midcap and smallcap stocks had a bright spell but failed to hold on at higher levels.  ICICI Bank and Tata Steel lost over 6% today.  Tata Motors, Maruti Suzuki, Sterlite, SBI, Reliance Infra, L&T, TCS, Infosys, M&M and Ranbaxy also ended with sharp losses.  Siemens, ABB, PNB, Unitech, Axis Bank, Reliance Capital, Hero Honda, Ambuja Cements and Power Grid declined sharply.
Idea Cellular, Cipla, Nalco, SAIL, RPower and HCL Tech closed on a positive note.  The market breadth was marginally negative at close.

Rolta India has posted a net profit after exceptional items & tax of Rs 1600.70 million for the quarter ended March 31, 2009 as compared to Rs 787.50 million for the quarter ended March 31, 2008. Total Income has decreased from Rs 2360.30 million for the quarter ended March 31, 2008 to Rs 2536.10 million for the quarter ended March 31, 2009.  The stock is down 1.5% at Rs 100.

Reliance Power Limited has informed that Sasan Power Ltd, a 100% subsidiary of the Company has executed financing agreements for the 3,960 MW pithead coal based Sasan Ultra Mega Power Project located at Singrauli district, Madhya Pradesh. Though the stock can give good returns over a long run, its immediate prospects remain somewhat uncertain. The stock is likely to remain quite slippery in the near run. One can sell it at rallies and get back to the counter at declines.

RBI's move is likely to result in a fall in interest rates.  While this move by the Apex bank is likely to push up growth, the market's fortunes will depend largely on global factors.  There may be some spirited rallies, but then, if global markets continue to struggle, these rallies may fizzle out. Caution still remains the watchword.

The Nifty (3399) will have to decisively break a resistance at 3415 to a make a further move up north.  On the downside, the benchmark has support at 3355 levels and a pronounced weakness there can result in a fall to 3320 or even lower.  The Nifty is expected to move in the 3100 - 3600 range in the near term.

Infosys Technologies (Rs 1379) can be retained if one is holding the stock with a long term view.  Over a short run, the stock may remain a bit slippery but one need not worry about its long term prospects.  Investors with good cash flow and with a reasonably good appetite for risk can go in for Tech Mahindra, Satyam, Educomp Solutions and Polaris at their current levels or at slight declines.

Larsen & Toubro can give very good returns over a long run.  One can use declines to increase exposure to the stock.  BHEL, BEML and Bharat Electronics can also be picked up in a staggered fashion.

Investors willing to wait long term can go in for Punj Lloyd, Praj Industries, Thermax and Areava at declines.  Though some weakness is not ruled out in the near run, the long term prospects of these stocks continue to remain quite bright.

Asian markets have ended in the red with sharp losses on earnings concerns.  However, back home, the market has rallied sharply and rebounded into the positive territory on some hectic buying in early afternoon trade.  FMCG stocks are back in action. Realty, oil and select power and IT stocks have firmed up.  The Sensex is up 40 points at 11,020 and the Nifty has moved up by 10.10 points to 3387.20.

Hexaware Technologies has announced a tie up with Greenplum, a leading provider of database software forthe next generation of data warehousing and large scale analytic processing.  As per the arrangement, Greenplum will provide a database platform and Hexaware will enable the migration, implementation, upgrades and maintenance services on these platforms.  The Hexaware stock is up 3.75% at Rs 34.50 at present. One holding the stock can stay invested.  Those looking for fresh exposure, can enter the counter at 5 - 8% down from current levels.

Realty stocks have bounced back following a cut in Repo and Reverse Repo rates.  Marketmen now expect commercial banks to pass on the benefit of rate cut to borrowers by announcing a reduction in lending rates.  One willing to take some chances and wait patiently can go in for realty stocks HDIL, DLF, Omaxe, Mahindra Lifespace and Orbit Corporation at current levels. Small quantities can be added at declines.

Bank stocks are likely to drift lower before rallying again.  One with a long term plan can consider buying PSU bank stocks at declines.  SBI, Canara Bank, Bank of India, BOB and Indian Bank can give fairly solid returns over a medium run.

The Reserve Bank of India has cut Repo and Reverse Repo rates by 25 basis points each.  The CRR is left unchanged at 5%. 
The Apex bank has forecast a 6% growth in GDP for fiscal 2009 - 2010 and sees inflation at 4% for the year.

Traders with a good appetite for risk can go long in Educomp Solutions at current levels.  The stock, traded around Rs 2367 at present, can move on to Rs 2550 or even higher.  On the downside, the stock can slip to Rs 2060 if it slides to Rs 2200 and exhibits weakness for a few sessions.

FMCG heavyweights ITC and Hindustan Unilever can be picked up in a staggered way.