BSE / NSE Shares Analysis 31 March 2009

BSE / NSE Shares analysis 31-03-09

The market opened on a bright note, slipped into the red after an hour, staged a splendid rally in afternoon trade and ended with notable gains despite a strong round of selling during the fag end of the session.

The Sensex ended at 9689.49 (provisional) with a sharp gain of 121.35 points or 1.27%.  It touched a high of 9826.22 and a low of 9547.21 today.  The Nifty, which rose to 3054.30, closed at 3017.90 with a gain of 39.75 points or 1.33%. It slipped to a low of 2966.40 in intra-day trades.

Global cues were not strong but participants went on a buying spree in afternoon trade on expectations of a further easing of the monetary policy by the Apex bank.  Capital goods, realty, pharma, auto, metal and IT stocks ended with smart gains.

Bank stocks rebounded after a severe setback but gave up a good portion of their gains during the closing minutes.

FMCG, power, telecom and sugar stocks surged higher.  Oil, PSU and consumer durables stocks had a sluggish session.

JP Associates, Tata Steel, Ranbaxy, Tata Motors, RComm, M&M, Hindalco, SBI and Grasim ended with sharp gains.

ITC, Sun Pharma, Maruti, Reliance Infra, TCS, Infosys, BHEL, L&T, Bharti Airtel, HDFC Bank and ACC also closed on a high note.  

Siemens, Reliance Capital, Axis Bank, GAIL India, PNB, SAIL, Unitech, Suzlon, HCL Tech, Hero Honda, Power Grid and RPower had a bright session today.  Heavy buying was seen at several midcap and smallcap counters.  The market breadth was strong right through the session.

Great Offshore Ltd has entered into three year charter  commencing end April 2009 with ONGC. The aggregate value of the three year firm charter is around $ 65 million.  Investors looking at medium or long term can hold Great Offshore (cmp Rs 251) with a stop loss near its 52-week low of Rs 200.

The Nifty (3023) will face stiff resistance at 3055.  A decisive break out there can result in a surge to 3085 or even higher.  On the downside, a fall to 3025 accompanied by strong volumes can result in a slide to 2965 or further down.

A rally on the Asian bourses, the positive start in European markets and higher US index futures have aided the sentiment and triggered a sharp rally here.  Also, traders are seen covering their short positions in a hurry on expectations of some monetary measures from the Apex bank on the back of falling inflation.  Kalpataru Power Transmission has bagged orders worth around Rs 400 crore from Algeria.  The stock has gained over 4% today and a further upmove looks likely in the near run. One can hold stock with a long term view.

Cairn India (Rs 181.50) can give solid returns over a long run.  In the short run, however, the stock is likely to remain quite sluggish.  It has support at Rs 155 - 160 levels and one can hold the stock with a stop loss there. The stock has another decent support near Rs 135.

Punj Lloyd (Rs 90) can be retained for long term. One can pick up more of this stock at declines. For now, a stop loss can be placed near Rs 65.  Crompton Greaves, BEML, Areva and Praj Industries are among the other good picks from the capital goods sector.

One can buy Balrampur Chini, Bajaj Hindustan, Triveni Engineering and Renuka Sugars for short term. Traders with a good appetite for risk can buy Renuka Sugars for intra day.  The stock, currently traded at Rs 90, can go on to Rs 93 - 94. On the downside, the stock will drop down to Rs 85 if it eases to Rs 87.50 and trades weak for a while.

The bulls have come back with a bang this afternoon. After guiding the market for a couple of weeks, they had gone into hiding yesterday due to weak global markets.  This has been a pretty good afternoon so far for stocks, but it remains to be seen whether the rally will sustain till the end of the session. European markets and US index futures will have a say in the market's direction this afternoon.

Bharat Electronics (BEL), currenty traded around Rs 880, is a good stock for long term.  The stock has an immediate support near Rs 815 and a pronounced weak spell there can result in a fall to Rs 750 or even lower.  On the upmove, the stock can rise to Rs 975 or even higher, if it manages to decisively break a resistance at Rs 900 - 905.

Suzlon Energy's step-down subsidiary Suzlon Energy Australia Pty Ltd, has entered into an agreement with AGL Energy Ltd for the turnkey delivery which includes the engineering, procurement and construction of the entire wind farm that will comprise of 63 units of Suzlon's wind turbine generators translating to 132.30 MW of capacity.  The Suzlon Eenrgy stock can give fairly good returns over a long run. One can hold the stock (cmp Rs 42.15) with a stop loss around Rs 33. Investors with a good appetite for risk can buy this stock around its current levels.

NIIT (Rs 20.90) can be bought for long term.  One can take a modest exposure now and go in for more at declines from current levels.  Long term investors can hold the stock with a stop loss around Rs 14.

Japan’s recession has deepened with the unemployment rate surging to a three-year high.  Wages have fallen sharply and job openings have crashed at the fastest pace in three decades.  The Japanese government is expected to announce a strong stimulus package but it remains to be seen how that it going to influence the Asian markets which have turned weak after a positive start today.

Jet Airways is on a trip down south today following Sahara filing an execution application against it in the Bombay High Court. Sahara has alleged that Jet has partly defaulted in payment of yearly instalments.  At 164, Jet Airways is down with a sharp loss of 5.2% at present. It had slipped to Rs 158.15 earlier this morning. The stock looks a bit weak on the charts as well and a further downside looks very likely in the near run.

One with a long term plan can continue to hold Infosys Technologies with a stop loss near Rs 1040.  Though the stock is likely to exhibit some weakness in the near run, a sustained slide looks quite unlikely. Sharp declines can be treated as opportunities to increase exposure.  TCS, Tech Mahindra, Wipro and Oracle Financial Services can also be picked up at declines.

Notwithstanding some sharp rallies here and there, the market is likely to struggle in the near term as global economic scenario is expected to remain weak for a better part of this year.  One would do well to lighten commitments by selling at sharp rallies.  Caution is needed with regard to fresh investments in realty space. There may be a few winners in this space, but one can certainly get some quality stocks at much cheaper levels.

L&T has bagged orders valued at Rs 1100 crore in Electrical Construction sector.  The L&T stock, thanks to the very strong order book of the company, is expected to yield very good returns over a medium to long run.  One can pick up this stock (cmp Rs 667) in a staggered way at declines.

Tracking firm Asian markets, equities rallied in early trade on the major Indian bourses this morning.  The Sensex opened at 9633.21, around 65 points up, and has surged to 9730.39 now, recording a gain of 162.25 points or 1.7%. 

The Nifty has gained 44.90 points or 1.51% at 3023.05.

IT, capital goods, realty, power and metal stocks have rallied sharply.  A host of stocks from banking, oil, pharma and auto sectors too have moved higher.  Tata Steel, Tata Power, HDFC, DLF, BHEL, Reliance Infra, Tata Motors, Bharti Airtel, ICICI Bank, RIL and L&T have risen sharply.  Unitech, PNB, Reliance Capital, SAIL, Suzlon, BPCL and Axis Bank are among the prominent gainers in the Nifty index.