BSE / NSE Shares analysis 3rd June 2009

BSE / NSE Shares analysis 3rd June 2009

Despite a heady start and subsequent firm display, the market slipped on profit taking and ended on a flat note today. Asian markets mostly ended higher. European markets opened weak and U.S. index futures edged lower, rendering the mood a bit cautious on the Indian bourses in afternoon trade.

The Sensex, which breached the 15,000 mark for the first time in 9 months, failed to retain gains and ended in negative territory today. The barometer provisionally settled at 14,845.56, down 29.35 points or 0.2%. It rose to a high of 15,046.43 in morning trade but fell to 14,733.59 around mid afternoon. The Nifty closed at 4520.90, down 4.35 points. It touched a high of 4574.90 and a low of 4478.60 today.

Consumer durables, FMCG, pharma and metal stocks had a good outing today. Bank, oil and IT stocks declined. Select realty, auto, capital goods and power stocks surged higher.

Hindalco, ITC, Grasim, ACC, RComm, JP Associates, Sun Pharma, Tata Motors, HUL, Tata Steel, Maruti, Sterlite and Ranbaxy ended with sharp gains. Mahindra & Mahindra, SBI, Infosys, ICICI Bank, RIL and HDFC Bank closed lower. Suzlon Energy flared up by over 14%.

Power Grid, Cipla, Ambuja Cements, Unitech, Tata Comm, PNB, Nalco, Siemens and RPower moved up sharply. Cairn India, HCL Tech, SAIL, ABB, BPCL, RPL, Hero Honda and GAIL closed with sharp losses.

Cranes Software (Rs 62) can be tried at Rs 50 - 53 levels for long term. Though a sharp fall from current levels looks unlikely, a modest decline is not ruled out in the near run. Long term investors can hold the stock with a stop loss near Rs 40.

Tech Mahindra (up 18.75% at Rs 663.50) is on a roll today. The stock, which had slipped to Rs 203.70 in late January this year, had hit a high of Rs 865 in early June 2008. The stock can well re-test that high over the next 3 - 6 months. One can stay invested in the stock and look at buying more in small quantities at declines.

Jaihind Projects Ltd has informed BSE that the Company in consortium has been awarded order of Rs 230.81 crore from Gujarat State Petronet Ltd for E.P.C. Project for Darod - Jafrabad Gas Pipeline Project - Section A. Earlier in the day, the company had bagged an order worth Rs 14.84 crore from Gujarat State Petronet Ltd for Laying of Olpad-Utran Gas Pipeline Project. The stock is up 5% at Rs 85.90 now.

European markets have opened on a weak note today with bank stocks drifting down sharply. U.S. index futures too are down in the red now. Back home, profit taking has wiped off early gains and a few heavyweights are seen struggling for support at present. Markets the world over are awaiting some key economic data from the U.S. today.

GMR Infrastructure (Rs 168) can rise to Rs 200 over a short run. Long term investors can hold the stock with a stoop loss near Rs 130. One can take some modest exposure in the counter now and go in for more at declines.

After recent strong gains, Mahindra & Mahindra is facing some pressure on profit taking. The stock is down by 4.2% at Rs 695 and a further fall from here is not ruled out. One looking at long term can stay invested and add more quantities at sharp dips. Fresh buying can be considered at Rs 600 - 610 levels.

Asian markets ended on a firm note today amid hopes of a global economic recovery. Strong economic data from U.S. and Australia aided sentiment in the region today. Indian markets are off their highs and are up just marginally at present.

Infrastructure firm MARG has signed an MoU with BSNL, India's leading telecommunication company, to provide world class telecommunication facilities in the upcoming mega infrastructure project, MARG Swarnabhoomi. As part of the MoU, BSNL will provide complete telecom solutions, including voice, data, WiFi hotspots, video and audio conferencing facility, broadband, leased lines and wireless services at MARG Swarnabhoomi.

One can buy ITC (Rs 202) for short to medium term. The stock can rise to Rs 220 - 225 where it is likely to face some stiff resistance. Short term traders can book some profits there and re-enter again at declines.

Balrampur Chini (Rs 95) looks set for a rise to around Rs 105 - 110. Investors with a reasonably good appetite for risk can try this stock now with a stop loss at Rs 85 - 87. Bajaj Hindustan, Renuka Sugars and Dwarikesh Sugars can also be tried at slight declines.

One looking for some sharp gains over a medium term can try Syndicate Bank (Rs 84) at current levels or slightly lower. The stock, which hit a new high at Rs 86 today, can move on to Rs 110 or even higher over a medium run. A stop loss can be placed near Rs 65.

Nucleus Software Limited has announced that it has further strengthened its six-year long relationship with United Finance Company SAOG (UFC), the largest finance company of Oman. Nucleus' FinnOne will now power UFC with its Lead Management System and Customer Service Module, to be implemented across 7 branches of the company. Buoyed up by the announcement, the Nucleus Software stock has jumped 6.5% to Rs 100 this morning.

Market Outlook

The market is likely to open on a positive note this morning. Though profit taking may cap gains, the undertone is likely to remain fairly bullish. A few volatile spells are not ruled out.

Sector Watch

Cement stocks are likely to remain in focus with most of the cement manufacturers reporting fairly strong shipment figures for May 2009. Steel, capital goods and infrastructure stocks are likely to attract attention.

Buying is expected to remain stock specific in information technology, FMCG and pharma sectors.

Scrip Watch

Hindustan Petroleum Corporation Limited has posted a net profit of Rs 51040.40 million for the quarter ended March 31, 2009 as compared to Rs 3845.10 million for the quarter ended March 31, 2008. Total Income has decreased from Rs 317794.90 million for the quarter ended March 31, 2008 to Rs 255804.60 million for the quarter ended March 31, 2009. The HPCL counter is likely to see some buying today.

SAIL may surge higher following an announcement from the company that its domestic sales increased by 12% to about a million tons for May over the year-ago period.

BHEL is likely to see action following the company successfully commissioning two grid-interactive solar power plants of 100 KWP each in Lakshadweep. With this, BHEL has commissioned a total of eleven solar power plants in the Lakshadweep islands, adding over 1 MW of solar power to the power generating capacity of the coral islands in the Arabian Sea.

McLeod Russel, DCM Shriram and Nalco will be announcing their quarterly results today.

Macro and Market Factors

The Wall Street ended on a positive note despite a choppy ride yesterday. Better than expected pending homes sales data buoyed up sentiment there. Asian markets are also trading firm after initial weakness.

With economy showing signs of improving and expectations from the newly formed government increasing by the day, investors are likely to stay invested and look at falls as opportunities to increase exposure.