Market Khabar 29 March 2010

Shrugging away the surprise rate hike by the RBI and uncertain economic scenario of Euro zone, markets have posted seventh straight weekly gain.

On the BSE the Sensex ended 66 points higher at 17645 and the Nifty on the NSE logged 19 points to close at 5282. However, trading volumes have been disappointing reflecting lack of conviction among the market participants.

Strong FII inflows are being negated by flow of funds from the secondary market to the vibrant IPO market. Muted activity from domestic institutions has been a dampener for sentiment.

Barring any negative earnings surprises or weak global cues, markets are well placed for a strong rally in medium term. Monsoon forecast and inflation trends may dictate the trend of next couple of months. In short term for higher year end NAV, funds may “prop” up select counters feel punters.

For the week ahead chartists predict trading range of 17,340-18,200 for the Sensex and 5,120-5,440 for the Nifty.

Supports for the week are at 17,480 and 17,220 and 5,230 & 5,110. Cut short term longs if Nifty closes below 5,200.

Though the near term trend for the indices is up, expect choppy and volatile swings in the “results season”.

Long term earnings growth is what determines stock performance, but in the short term, a number of factors influence share price, including inflation, interest rates, index valuations, investor sentiment, FII inflows/outflows, and IPO activity.

Futures & Options

Despite being settlement week, subdued volumes were seen in the derivatives segment during the week ended. Lower rollover in the Nifty on the back of good gains in March series was disappointing and indicates that markets are close to short term highs. Extreme caution warranted at higher levels.

Rate sensitive sectors like auto, realty and banking have been subject to selling at higher levels. PSU banks are attracting good buying at lower levels on expectations that improvement in g-sec yields may see the banks post better earnings. Buy OBC, Andhra Bank, PNB and BOB for short term. HDFC, IDFC and ICICI Bank may move up further on institutional interest.

Expectedly capital goods counters are attracting good buying. Stay invested in Cummins, Siemens, APIL and Voltas for further gains. Improvement in gross refining margins has sparked activity in oil and gas space.

Further gains are indicated in Reliance Industries, Essar Oil, MRPL and Chennai Petro. Passage of the US Health Care Bill has triggered strong buying in pharma counters. Generic companies with MNC tie-ups are big beneficiaries say industry sources. Buy on declines Dr Reddy, Aurobindo and Ranbaxy.

Telecom stocks may see heightened action after announcement of 3G allotments. Buy on declines Bharti Telecom and Tata Communications. MTNL is expected to receive a very “big” refund from the IT Department. Punters tip surprise target of Rs88 for this routine underperformer.

Metal stocks are putting up a “resilient” performance. Use declines to buy Hindalco, JSW Steel and Tata Steel for the short term. Among the side counters, good support at lower levels may see Noida Toll, Welspun Guj., Hotel Leela and Sun TV, touch targets of Rs40, Rs320, Rs54, Rs460.

Stock scan

Wires and Fabriks is engaged in the business of manufacturing and marketing of technical fabrics. The company was first in India to manufacture Double and Triple layer Synthetic forming fabrics, and introduced a range of specialty paper making chemicals in partnership with leading international manufacturers. It also manufactures various types of Electro Discharge Machine wires for industrial applications. Buy at current levels for medium term target of Rs200.

After long hibernation Raymond Ltd has been witnessing good volumes on the bourses.

The company is the largest integrated manufacturer of worsted fabric in the world. It has many subsidiaries engaged in engineering, aviation and consumer goods .

Restructuring of operations and moves to unlock the value of huge land bank are underway say sources. Buy at current levels for target price of Rs350 in medium term.

Jubilant Organosys is an integrated pharmaceutical and life sciences company.

It is the largest Custom Research and Manufacturing Services player and a leading Drug Discovery and Development Solution provider out of India. It has global leadership position in Vitamin B3. Buy on declines for target price of Rs450 in next few months.

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

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Indian Stock Markets BSE, NSE Weekly review 08 Mar 2010

Colour and festivities continued during the Holi-day truncated week as the euphoria post-budget took the indices to over two-month highs. An improvement for India's merchandise exports for the third consecutive month spurred the sentiments of traders on Dalal Street.

Continuous buying by foreign institutions and robust monthly auto and cement numbers added reasons for the Street to rejoice. Finally, the BSE Sensex added 3.4% to end at 16,994 and NSE Nifty surged 3.4% to end at 5,089.

The BSE Sensex hit an intra-week high of 17,098 and low of 16,524 while, NSE Nifty hit intra-week high of 5,119 and low of 4,935.

The top gainers: The top gainers in the Sensex were Tata Motors (up 11.7%), Tata Power (up 9.7%), Tata Steel (up 7.6%), Bharti Airtel (up 6.8%) and DLF (up 6.1%).

The Top Losers: The top losers in the Sensex were ONGC (down 2.1%), Ranbaxy Labs (down 0.3%) and Maruti Suzuki (down 0.2%).

The BSE IT Index (up 1.1%): The top gainers in the IT sector were Sasken Communication (up 7.8%), Mahindra Satyam (up 4.8%), Patni Computer (up 3.5%), Oracle Financial (up 3.4%) and Financial Tech (up 3.1%).

HCL Tech fell 2.2% during the week.

The BSE Consumer Index: The top gainers in the consumer durables sector were Samtel Color (up 9.9%), Whirlpool (up 8.7%), Videocon Industries (up 6.7%), Mirc Electronics (up 5%) and Titan (up 4.8%).

The BSE Healthcare Index (up 2.8%): The top gainers in the Pharma space were Strides Arcolab (up 9%), Panacea Biotec (up 7.2%), Aurobindo Pharma (up 7%), Wockhardt (up 6.7%) and IPCA Labs (up 6.5%).

The BSE Banking Index (up 3.8%): The top gainers in the banking space were Karnataka Bank (up 14.4%), OBC (up 12.7%), Canara Bank (up 9.4%), Union Bank of India (up 8.3%) and Kotak Mahindra Bank (up 7.7%).

The top loser was Axis Bank during the week. The stock fell 1.9%.

The BSE Auto Index (up 5.3%): The top gainers in the auto space were Hindustan Motors (up 14%), Tata Motors (up 11.7%), Ashok Leyland (up 10.2%), Eicher Motors (up 8.1%) and M&M (up 6.8%).

Shares of Maruti Suzuki marginally slipped 0.2% during the week.

The BSE Oil & Gas Index (up 2%): The top gainers in the oil & gas space were Gujarat NRE Coke (up 20.2%), GSPL (up 9.5%), Hindustan Oil (up 8.5%), Essar Oil (up 6.5%) and MRPL (up 5.8%).

The top losers in the oil & gas space were BPCL (down 4.2%), IOC (down 3.3%), ONGC (down 2.1%), HPCL (down 1.8%) and Chennai Petroleum (down 1.4%).

The BSE Capital Goods Index (up 3%): The top gainers in the capital goods space were Kirloskar Brothers (up 13%), Areva T&D (up 8.5%), ELGI Equipments (up 8.1%), Thermax (up 7.2%) and Praj Industries (up 6.9%).

The Cement Sector: The top gainers in the cement sector were JK Cements (up 9.9%), Prism Cement (up 8.9%), Binani Indus (up 8.8%), India Cements (up 7.8%) and Madras Cements (up 7.5%) and Grasim (up 4.4%).

The Telecom Sector: The top gainers in the telecom space were Wire and Wireless (up 7.4%), Shyam Telecom (up 7.2%), Bharti Airtel (up 6.8%), Tata Teleservice (up 5.2%) and MTNL (up 4.9%).

The Realty Sector (up 7%): The top gainers in the real estate space were Akruti City (up 9.1%), Sobha Developers (up 8.9%), Unitech (up 7.9%), Ansal Props (up 7.8%), HDIL (up 6.5%) and DLF (up 6%).

Peninsula Land slipped 3.6% during the week.

The Metals sector (up 7.1%): The top gainers in the metals sector were Adhunik Metaliks (up 13.2%), Tata Metaliks (up 12.9%), JSW Steel (up 11.7%), Jindal Steel (up 10.1%) and Bhushan Steel (up 8.9%).

Source - Indiainfoline

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Market Khabar 8 March 2010

Buoyed by better than expected economic reports, positive vibes from the Union Budget and benign global cues markets posted their best weekly gains in 2010 during the week ended.

On the BSE the Sensex gained 565 points to end just below 17K mark at 16,994 and the Nifty on the NSE was up 166 points closing at 5,089. Strong breadth can be seen by the out performance of the midcap and smallcap indices. Momentum is back feel traders.

FII buying of $791 million of Indian equities in the last three sessions is clear sign of renewed interest. However, it is pertinent to note that domestic institutions have been big sellers in the last few sessions. After the lukewarm response to FPO’s of NTPC and REC, response to NMDC offering may become “trend changer”. Barring any unexpected “nasty” news from the global front, markets may trend upwards in near term till the next big triggers — RBI Credit policy and Q4 results season.

Watch updates on advance tax numbers for trading ideas. Keep an eye on the upcoming IIP Data and monthly inflation data. For the week ahead chartists predict trading range of 16,800-17,600 for the Sensex and 5,010-5,260 for the Nifty. If markets gain “momentum” new short term highs are not ruled out. Immediate supports for the indices are at 16,800 and 16,560, 5,020 and 4,880.

Markets change continuously and so must traders. What worked last year, or last month may not work today. Change thinking and tactics to respond to the market’s changing.

Futures & Options

Mirroring the strong undercurrent in the cash market, brisk trading volumes were seen in the derivative segment. Open interest has again crossed Rs1 lakh crore mark. Sentiment indicators like open interest, implied volatility, put/call ratio and VIX indicate reduced volatility and continuation of the ongoing uptrend.

Option activity in index options shows huge accumulation of options at 5,100 and 5,200 strikes. Crossing of 5,200 level may see Nifty make very sharp upmove. Metals, banking, realty, cement and auto stocks were in limelight.

Good dispatch numbers and hike in prices sparked buying in cement counters. Stocks to cement their recent gains in days ahead, buy on declines ACC, Ultratech, Birla Corp, India Cement and Ambuja Cement. Auto stocks have run up too fast for comfort say industry watchers. Wait for correction to buy. Buy on declines.

True to predictions banking counters led by biggie SBI are back in limelight. Buy smaller PSU banks like Vijaya Bank, Dena Bank and others for benefits accruing from recent budget moves. Among the stock futures “new” additions BGR Energy, Onmobile, Jain Irrigation and Fortis are witnessing good trader interest. Buy on declines BGR Energy for surprising gains. PSU counters Power Grid, Petronet LNG and GSPL may show sharp upmove.

Infrastructure counters may see renewed buying interest over the next few weeks. Stay invested for present. With NASDAQ at 18-month high, IT stocks are expected to attract buying from foreign funds at lower levels.

For the trader or investor, discipline means to exercise good and prudent money management and risk management.

Activity in newly listed counters like ARSS Infra and Jubilant Foods clearly indicates that “story” telling is back in vogue.

Delivery volumes clearly indicate that operators are back at work in connivance with some funds. Next counter on radar is Hathway. Be cautious while dabbling in the hyped counters.

Savvy fund managers are buying eClerx Services, M&M Financial, Cholamandalam DBS and Raymond say market watchers. eClerx offers services in data analytics, operations management, data audit and metrics management.

Good growth numbers spell bright future for next few quarters. Buy on declines for price target of Rs750.

Expectedly strong rumours are doing rounds that M&M group will try to acquire banking license through M&M Financial.

Use corrections to buy. Raymond has finalised plans for restructuring and also to “unlock” land value. Market watchers and analysts tip the target of Rs350 in the medium term.

Cholamandalam DBS is reinventing itself and is now aggressively eyeing the banking space. Buy on declines for the target price of Rs125.

Midcap counters such as Dalmia Cements, Ess Dee Aluminum, Blue Dart Express, Core Projects and Zuari Inds are tipped for further gains from the current levels.

Firmness on the part of the government to not rollback fuel prices may trigger mild rally in PSU oil marketing counters and may also affect private refiners such as Essar Oil.

Watch out for this sector for sharp swings.

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

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Market Khabar 3 March 2010

After moving in a narrow range for the most part of the week, markets gave a thumbs up to Budget and ended on an optimistic note during the week ended.

On the BSE, the Sensex added 1.5 per cent to close at 16,430 and the Nifty on the NSE gained 1.6 per cent to end at 4,922. Volumes remained robust through the week and spiked sharply higher in the budget session. Intraday cut in the gains at the fag end of the budget day has been attributed to some “devils” in the fine print of the budget. Sceptics warn that vision statements like higher GDP curve of 10 per cent and deficit curve of four per cent are for the consumption of FIIs. However, optimists say that market is unlikely to face any unpleasant policy changes in medium term since the government needs a buoyant stock market to meet its disinvestment targets. Any rollback of proposals like fuel price hike may dampen the sentiment. Despite no negatives in the Budget, excessive exuberance is not warranted, caution old timers.

Focus of the markets will now shift to upcoming credit policy, Q4 earnings season and monsoon predictions. For the week ahead, chartists predict trading range of 16,060-16,840 for the Sensex and 4,780-5,060 for the Nifty.

Expect strong resistance to the indices at 16,660 and 16,800 and 4,990 and 5,060. Immediate supports for the indices are at 16,280 and 15,940 and 4,860 and 4,780. With the Budget out of the way, it is back to watching global markets. The search for next Greece is already on; stay tuned for unexpected nasty surprises.

Futures & Options

Despite being settlement week and laced with the Budget, robust trading volumes were seen in the derivative segment. Overall rollover of 84 per cent as against three months average of 85 per cent was seen.

Sentiment indicators like open interest, put/call ratio, implied volatility and VIX indicate heightened volatility in near-term. Option activity in Nifty clearly indicates strong resistance at 5,000-5,100 and good support between 4,700-4,800 levels.

Recapitalisation proposals in the Budget are positive for PSU banks such as IDBI, Union Bank, Syndicate Bank, Dena Bank and other banks with tier-1 ratio of less than eight per cent. Use present weakness to accumulate bank stocks for the medium term. Higher allocations for construction and infrastructure spell good times for large infra players such as HCC, GVK Power, Lanco Infra and others. Stay invested for present. Avoid cement, IT and FMCG for present till the budget dust settles down.

Use sharp corrections to buy IT majors like Infosys, Wipro and TCS. Impacts of budget proposals on auto and auto components to be neutral say industry experts. With recall issues plaguing auto companies across the world, range bound activity indicated in auto counters in near term.

Ahead of 3G auctions, telecom stocks may rebo-und from current levels. Gutsy traders can buy Bharti, Idea and Tata Communications at current levels. Metal stocks are back in limelight on reports of firm international trends and domestic demand. Buy on declines Tata Steel, SAIL, Hindalco, Nalco and Sterlite. Announcement of split of Nalco divisions likely in near term, say sources.

Stock scan

At a time when the repercussions of recent global financial crises are still being felt and the attendant focus on shoring up the capital base of existing players with tighter supervision is there, budget proposals regarding new banking licenses to private sector including non-banking finance companies have been a big ‘surprise’ to the sector. Among those with ambitions of setting up a bank are ADAG Group (Reliance Capital), Tatas (Tata Capital), Aditya Birla Group and the TVS Group (Sundaram Finance). From the new age NBFCs like IndiaBulls, Religare and Edelweiss may also be inte-rested. Keep close watch on the sector.
Green budget has put focus on the stocks of renewable energy sector. Clean energy cess on coal and reduced duties for equipment required for setting up solar photovoltaic and wind energy units clearly reflect the renewed focus on the sector to tackle climate change. Stocks like Suzlon Energy, Moser Baer, Websol Energy and many smaller firms, which are moving into the sector may hog limelight in coming months. Fly by night promoters may use the same old game of ‘name change’ marking entry into this sunrise sector and exploit the market fancy for the sector. Discriminate between good and bad.
Food processing sector has been offered a slew of concessions in the budget. With agriculture retail business going organised with the entry of big players like ITC, Bharti, Reliance and smaller ones like REI Agro, the sector is poised for big take off. Keep watch on companies that may provide capital goods for the sector and also on agri stocks like Jain Irrigation and others.

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

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Market Khabar 04 Jan 2010

Buoyed by positive statements from the Prime Minister, Dr Manmohan Singh, and
the finance minister, Mr Pranab Mukherjee, that economic growth would
accelerate, markets bid farewell to year 2009 on optimistic note.

On the Bombay Stock Exchange (BSE), the Sensex rose 104 points to end at 17,465
and the Nifty on the NSE gained 23 points closing at 5,201. Midcap and smallcap
counters were in limelight on renewed speculative buying interest.

Analysts expect PSU firms to hog limelight in the first half of 2010 since the
government is expected to go ahead with disinvestment policy aggressively. Near
term focus will be on the third quarter earnings numbers of biggies. Events to
watch in the week ahead are new trading hours and listing of JSW Energy.

Chartists predict a trading range of 17,120-17,840 for the Sensex and
5,050-5,440 for the Nifty. Expect resistance to indices at 17.680 and 17,860 and
5,280 and 5,360. Last week's lows are good support levels for the near term. You
can go bearish only if the Sensex trades below 17,000-level on closing basis.

After the hyper volatility seen in last two years, even the most practiced
soothsayer will find it difficult to make detailed predictions for the next two
years.

Optimists hope that the Sensex will touch 25,000-level in its silver jubilee
year 2010. Buy good standard stocks that have stood the test of time. Buy
weakness and sell strength. Be just as willing to sell as you are to buy
.
Futures & Options
Reflecting the prevailing optimism, healthy rollovers were seen in the
derivatives segment.

Sentiment indicators like open interest, put/call ratio, implied volatility and
VIX indicate high volatility in the coming days. Protect profits with trailing
stops.

Stock futures looking good for positive gains are Ashok Leyland, Bharat Forge,
Biocon, Cairn, Cummins, Hindalco, Indian Hotels, Indusind Bank, India Cements,
Opto Circuits, Praj Inds, Tata Steel and Unitech. From the PSU pack BEL, BEML,
ONGC, NLC, Nalco and NMDC look good for short term. Expect spurt in metals and
cement stocks on reports of price increases. Stay invested for further gains.

Punters tip Tata Steel and Hindalco for Rs 700 and Rs 200 respectively. Ahead of
Q3 numbers IT stocks are expected to attract some buying. Concentrate on midcaps
advice industry watchers.
Use present weakness to buy smaller PSU banks such as Vijaya Bank, and Andhra
Bank.

Select FIIs are reportedly turning bullish on realty. Buy Unitech and DLF for
short-term targets of Rs 96 and Rs 395. Renewed buying indicated in capital
goods counters. Buy on declines BHEL, L&T, Voltas and Crompton Greaves. Don't
take advice from uninformed people, they know no more than you about the market.
Don't try to outguess the market.
Stock scan
Year 2009 was macro-issue based with indices swinging to news flow like IIP
numbers, revival in GDP growth, but Year 2010 will be stock specific.

Watch out for turnaround stories, companies associated with domestic consumption
and investment cycle and news on reforms in financial sector spot multibaggers.
Factors that can affect the markets negatively are any sudden or sharp
withdrawal of the stimulus packages, failure of Monsoon again and big bang
negative news from the US.

Some of the top picks from the frontline counters for Year 2010 are:
After the lau-nch of services by Uninor, the visibility of value in the telecom
business and debt restructuring could give Unitech a head start in execution
scale up, helping it to improve the balance sheet quickly. A new property cycle
may bring back demand for Unitech stock. Buy at current levels for a target
price of Rs 150.

Riding the new commodity cycle, Tata Steel Europe (Corus) may surprise
inv-estors in terms of capacity utilisation and profits. Turnaround of
operations and robust demand in India may see Tata Steel perform like Tata
Motors did in the past year. Buy on declines for a target price of Rs 1,250.

Bogged down by the court cases, Ambani companies were significant
underperformers in the year ended. Post Supreme Court judgment on gas dispute,
analysts expect RIL's GRMs to improve as global demand for oil rebounds, it
could see strong growth in E&P division.

Reliance Infrastructure's power distribution business may witness quantum jump,
Strong growth in EPC business and slated to be largest player in road projects
in next two years. Once the dispute was resolved, market players feel the Ambani
brothers may resume their old game for market capitalisation and drive the
indices to new highs.
Top picks from the mid cap segment are Pantaloon Retail, Titan Inds, Fortis
Healthcare, Bilcare, Jyothi Structures, Bajaj Finserve, Greaves Cotton, Godrej
Consumer, Gujarat Apollo, Ipca Labs, and NHPC.

Source - deccan.com

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.

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Market Khabar 26 Oct 2009

After closing Samvat 2065 on a “high” note, markets started the first week of new Samvat 2066 on a jittery note dampening the festive spirits.

On the Bombay Stock Exchange (BSE), the Sensex closed 515 points lower at 16,810 and the Nifty on the National Stock Exchange (NSE) fell by 145 points to settle below 5,000-mark at 4,997.

Renewed selling from FIIs and the reports of unwinding of Galleon and Lehman positions has dampened the sentiment. Weak global cues coupled with news flow like RIL’s “empty” gas well, the rise in inflation index and none too enthusiastic results from capital goods majors triggered short term negative trend. Promoters’ “greed” in raising funds is increasing supply of commercial ‘paper’ and resulting in drying up of liquidity in secondary markets.
Key events in the week ahead are F&O settlement and RBI’s midyear credit policy. Market players do not expect any changes in key rates but are more “interested” in “comments” of central bank over economy. Next week will also see last batch of Q2 results signaling heightened stock specific volatility.

For the week ahead, chartists predict a trading band of 16,340 and 17,200 for the Sensex and 4,820 and 5,180 for the Nifty. Supports for the indices are at 16,650 and 16,420 and 4,920 and 4,840.
Expect resistance to the indices at 17,050 and 17,190 and 5,060 and 5,140. Be bullish only above 17,150 or 5,100 on closing basis. Nifty closing below 4,860 may see markets trade range bound on weak note for next few weeks.
When expectations are too high, it results in overtrading underfinanced positions, and high levels of greed and fear-making objective decision making impossible.

SATTA GUPSHUP
* Brahmaputra Infra is reportedly blessed by politicians and has bagged large infra projects in north India. Order book has swelled to over Rs 1,200 crore. Excellent Q2 results and expected annualised EPS of Rs25 make it good bet at current levels. Buy at current levels for a target price of Rs 175 in medium term. . * Nectar Lifesciences is one of the largest manufacturers of cephalosp-orin range of products and has recently diversified into phytochemicals (it has grabbed 25 per cent global market share in mint derivatives) and hard gelatin capsules. It is also a preferred CRAMS player for leading pharmaceutical companies. Buy for a target price of Rs 45.
* Vinati Organics is the world’s largest producer of IBB (prime raw material for manufacture of Ibuprofen, a vital bulk drug) and one of the few and second largest manufacturer of ATBS in the world. Excellent Q2 results indicate annualised EPS of over Rs 40. Buy on declines for a target price of Rs 450.
* Honeywell is a leading provider of integrated automation and software solutions for infrastructure, petrochemicals, automobiles, hospitality and mining sectors. Sources indicate buyback offer for delisting or liberal bonus issue in next few months.

F & O
Ahead of F&O settlement, robust volumes were seen in the derivatives segment. Open interest is at the “uncomfortable” level of Rs 1,12,000 crore. Other sentiment indicators like put/call ratio, implied volatility and VIX indicate “rough” times.
Avoid large positions and trade lightly. Among stock futures, short build up seen in ACC, BHEL, Grasim, RIL, RCom, Tata Motors, Unitech, Hero Honda, Punj Lloyd and GAIL. Good long build up was seen in GSPL, PTC, IDBI, Polaris, Bajaj Hindustan, Hindalco, Hind Zinc and IDFC.

FMCG and IT stocks were the “flavour” of the week ended. ITC, Colgate and Dabur look good for further gains. Add on declines. Midcap IT counters like Polaris, Mphasis, Rolta and Patni may see upside on short covering till expiry. Hold positions in frontline IT biggies for further gains. With copper prices touching multi month highs, non-ferrous counters Sterlite and Hindalco may log gains. JSPL looks good for four figure target.

DCHL, Welspun, Cummins and LIC Housing look good for near term gains.
Reform measure making states to bear the burden of difference between “advis-ed prices” and the Centre’s rate is a “relief” for sugar mills. Buy on declines Shree Renuka, Bajaj Hindustan and Triveni.

Ahead of RBI credit policy, banking stocks witnessed selling at higher levels. Use sharp declines to buy PSU banks. Barring M&M and Ashok Leyland auto counters are losing “speed” and are showing signs of fatigue. Trade cautiously. Don’t try to outguess the market. Buy in a selling market, when nob-ody wants stock. Sell in a buying market when everybody wants stock.

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 : deccan.com

Market Khabar

Outperforming all global markets, Indian markets closed near several months high in the holiday-shortened week. On the BSE, the Sensex gained 2.65 per cent to sail past the psychological 17,000-mark ending the week at 17,135 and the Nifty on the NSE rose 2.5 per cent to close above 5,000-mark at 5,083.

A strong liquidity situation, improving economic data and expectations over strong second quarter res-ults could improve earnings. However, savvy market players are concerned over the way many companies are raising funds either through QIP route or IPO.

Valuations are turning expensive; investors should reshuffle portfolios, separate wheat from the chaff, in terms of good and bad stocks. The road ahead is further zig-zag than the recent rally would imply.

Negative global cues over the weekend may cast their shadow over the markets during the early part of next week. For the week ahead, chartists predict a trading band of 16,740 and 17,460 for the Sensex and 4,900-5,200 for the Nifty.

Supports for the week are at 16,960 and 16,820 on the BSE and 5,020 and 4,900 on the NSE. Cut short term long positions, if indices trade below 16,960 or 5,000 levels.
Experts advice the investors to avoid large positions and trade lightly. Investors need to be wary of getting burned by unsubstantiated takeover chatter. Mergers are starting to make a comeback as the economy and stock market show signs of life. But there is a dark side to the pick up in deals. Takeover rumours with little to no basis in fact have also returned. The GSK-Dr Reddy “takeover” is just one such example of investors getting their hopes up only to have them dashed. Sniff at inside information; it is usually bunk.

SATTA GUPSHUP
* Pidilite Industries manufactures various types of adhesives, sealants and specialty chemicals. Its brands — Fevicol and Dr Fixit — are the market leaders in their segments. Buoyant end user industry and lower raw material prices due to fall in crude oil prices spell good times for the company. Buy for a target price of Rs 250.
* PTL Enterprises or erstwhile Premier Tyres Ltd is a shell company of the Apollo Tyres group. The company owns valuable real estate at Ernakulam and a 500-bed superspecialty hospital in Gurgaon. The value of its assets is reported to be higher than the company’s present market cap. Buy for surprising gains.
* Midcap pharma major Ipca Labs is on the radar of savvy fund managers. It has a strong presence in the semi-regulated markets like Africa and Russia. The growth of its domestic formulation business is outperforming the industry’s growth. Buy for a target price of Rs 1,200.
* Jindal Stainless is the only Indian composite stainless steel plant, which manufactures stainless steel slabs, blooms, HR and CR coils. Sources indicate that it has finalised the restructuring of its huge debt and also report improvement in sales realisations. Buy for a short-term target of Rs 140.
* Select counters like Alkali Metals, NHPC, Nelco, KLG Systel, Sunil Hitech and Henkel India are witnessing keen buying interest. Stay invested and
buy on decline for further gains.

F & O
Spurred by FII inflows, open interest in the derivative segment crossed Rs 90,000 crore. Nifty futures trading at a steep discount of 14 points to spot and the rise in Nifty PCR to 1.36 indicate a build up of short positions in the Nifty. Option activity indicates strong support for the Nifty at 4,900-5,000 level and strong resistance at 5,100-5,200 level.

Among the stock futures, accumulation of longs was seen in Aban Offshore, IDFC, HDIL, ICICI Bank, Wipro, Yes Bank, Rolta, BEL and Jindal Saw counters. A short build up seen in select counters like Hero Honda, Tata Steel, Idea, Grasim, Unitech, Divi Labs and Tata Power. Punters tip Aban Offshore, JP Associates, IDFC and PTC for a price target of Rs 1,800, Rs 265, Rs 168 and Rs 95.

Traders can sell Tata Steel, HDFC, Maruti Suzuki, Tata Motors, Divi Labs and Hindalco Industries for a price target of Rs 465, Rs 2,575, Rs 1,560, Rs 545, Rs 525 and Rs 112. Buy Shree Renuka and Bajaj Hind for a price target of Rs 220 and Rs 200. A jump likely in United Spirits, APIL and Chambal Fertilisers to Rs 955, Rs 588 and Rs 65.
Flavour of the week ended were banking and IT counters. Expectations of better second quarter numbers saw many counters touching 52-week highs. Use discretion to buy selectively on declines.

Weakness in global prices may trigger selling in metal counters. Short term players advised to book profits. Industry watchers say worst is over for realty. Use sharp declines to buy DLF, HDIL and IBRL. Stock specific activity indicated ahead of second quarter earnings season. Avoid uncertainty. Stay out when the trend is in doubt.

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 : deccan.com

Market Outlook 12-16 October 2009

Ignoring good news such as positive global cues, liberal bonus issue from Reliance Industries and better-than-expected results from Infosys, markets tumbled from highs on heavy selling pressure during the week ended.
On the Bombay Stock Exchange (BSE), the Sensex plunged 492 points to close at 16,643 and the Nifty on the National Stock Exchange (NSE) fell by 138 points to 4,945.

Market breadth was negative during the most part of the week reflecting caution among market participants ahead of the “festival week.”

Telecom and IT scrips proved to be the biggest drag on the indices. FMCG and metal stocks were in demand on sustained buying interest. With several companies sucking liquidity by issuing QIP, IPO, GDR and other instruments, money flow to the secondary market is getting limited.

Simultaneously capital inflows have led to strengthening of rupee hitting hard the export-oriented companies. A result of one company does not change the overall outlook; keep track of broader markets to see whether the real recovery is in place.

For the week ahead, chartists predict a trading band of 16,060 and 16,970 for the Sensex and 4,780 and 5,100 for the Nifty.

Immediate supports for the indices are at 16,460 and 16,060 and 4,860 and 4,780. A close below 4,870 on the Nifty could see it plunge to 4680-level if the news flow dries up. Expect resistance to the indices at 16,880 and 17,160 and 4,980 and 5,040. You can be bullish only above 16,900 on the BSE or 5,020 on the NSE on closing basis. There is still enough scepticism about the recent rally and enough cash waiting to be invested at lower levels, feel analysts. You have to be just as willing to sell short as you are to buy.

SATTA GUPSHUP

* Shri Lakshmi Cotsyn is a diversified textile manufacturer with a product range from embroidery, quilting, fusible interlining and army products like camouflage fabric uniforms and bullet proof jackets. It has a fully-owned subsidiary for manufacturing bullet-proof armo-ured vehicles for armed for-ces and the police. The commissioning of new plants has made the firm an integr-ated textile player with div-ersified revenue mix. Buy for target price of Rs 150.
* TeleCanor is engaged in niche segments like mobile VAS, IVR-product solutions and payment gateways. Rec-ently the company has tied up with Buongiorno, one of the largest mobile entertainment and VAS firms. It has a huge chunk of land in Vis-akhapatnam near the petro corridor. Buy on declines.
* Henkel India is reportedly going to launch its international brands in cosmetics and toiletries. It is restructuring its operations like disposal of Kolkata factory and also beef up operations with the help of MNC parent. Buy at current levels.
n Gitanjali Gems is the largest integrated diamond jewellery retailer in India. It has 150 retail stores in the US by virtue of two acquisitions made last year. Adopting FMCG model to jewellery retailing, the company has grown from $300 million in 2005 to $1.2 billion in 2008. Restructuring of debt and improving economic environment spell good times for investors in the firm in the coming days. Buy for a target price of Rs 200.

F & O
Volumes were robust in both cash as well as the derivative segments. Overall open interest is presently close to Rs 1 lakh crore mark pointer of high speculative build up. Nifty PCR has fallen to 1.25 on higher addition of calls. A relief rally is not ruled out. VIX rose sharply to 30.25 reflecting concerns over sustainability of uptrend and bumpy road in near term. Accumulation of short positions seen in the counters of ACC, Bharti, Idea, Infosys, TCS, RIL, Unitech, Maruti and Tata Motors.

Unwinding of long positions seen in SBI, ICICI Bank, Reliance Infra, JP Associates, M&M, BHEL and L&T. Stocks showing positive bias are Century Textiles, Hotel Leela, IDBI Bank, HCC, GAIL, NCC, Neyveli, REC, Opto Circuits, Voltas, Welspun Guj and HDIL. These stocks are good for targets of Rs 525, Rs 45, Rs 145, Rs 155, Rs 420, Rs 190, Rs160, Rs 220, Rs 225, Rs 175, Rs 300 and Rs 385.

Industry experts feel that ‘bashing’ of telecom stocks on the basis of tariff wars is highly overdone. Gutsy traders can attempt buying in telecom counters Bharti, Reliance Communication, and Idea for short term ‘relief’ gains.
Metal stocks have been moving up on reports of weak dollar and expectations of higher demand.

However, valuations are stretched for near term view, avoid fresh exposure and book partial profits. Fears of rupee strength are again haunting IT stocks. Use sharp declines to buy and avoid aggressive shorts for present. Realty counters are attracting buyers at lower levels. Stay invested for further gains. Sugar, power, capital goods and pharma are likely to witness renewed buying interest.

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 : deccan.com

Market Khabar 21 Sept 09

Buoyed by firm global cues and encouraging reports indicating revival in the economy markets improved to 16-month highs during the week ended.

On the Bombay Stock Exchange, the Sensex gained 477 points closing in the vicinity of 17,000 at 16,741 and the Nifty on the National Stock Exchange ended 146 points higher at 4,976. Market breadth was not positive on all days reflecting abundant caution at higher levels. It is interesting to note that for once while FIIs are on buying spree, domestic institutions were in profit booking mode.

Inflation turned positive signaling that era of cheap credit may be over in near term and triggering rally in banking counters. However, signals from the Reserve Bank of India and the finance minister not to hike interest rates and not to roll back stimulus measures till the economic recovery is on a strong footing kept the sentiment positive.

Advance tax numbers suggest good quarter two performance from companies. Expectations for a broad earnings recovery could prove disappointing and that could create more volatility in October. Key events to watch for in the coming week are F&O settlement and US Fed Meet musings. For the week ahead chartists predict trading range of 16,400-17,180 for the Sensex and 4,840-5,180 for the Nifty.

Supports for the week would be at 16,560 and 15,380 and 4,920 and 4,840. Expect resistance to indices at 16,960 and 17,180 and 5,050 and 5,160.

Be bearish only below 16,300 or 4,850 levels in indices on closing basis. Sharp selling not ruled out at psychological level of 17,000. Short term traders can stay on long side if Nifty trades steadily above 5,000 level.

SATTA GUPSHUP

* Renewed interest was se-en in many footwear stocks on expectations of sharp improvement in exports and festive sales. Relaxo Footw-ears is one of the largest manufacturers of hawai slippers. Competing with Chinese manufacturers, it bagg-ed large orders from the global retailing giants Tesco and Wal-Mart. Excellent Q1 results and book value of Rs 62 make the stock good buy for steady gains in medium term. Buy on declines for a target price of Rs 175.

* Jupiter Biosciences is the only company in the world to have integrated model from raw materials to finished dosage form in ‘peptides’ and has manufacturing presence for peptides in Europe and the US. It is reportedly doing placement at hefty premium to current price and also unlocking value of subsidiaries. Low market cap makes Jupiter vulnerable for a takeover bid. It may be recalled that Ranbaxy earlier had a ‘look’ at the company. Recent Biocon-Amilyn tie up and Neuland Labs foray into peptides has put this pharmaceutical segment in limelight. High B.V. of Rs 203 makes the stock good bet at current levels for target price of Rs 150.

* Hatsun Agro Products and Heritage Foods are dairy majors. Hatsun has developed unique model of ‘contract’ farmers for captive source of milk supply. Heritage has launched many private labels from jams to mineral water to leverage its brand value. Buy Hatsun Agro and Heritage for Rs 150 and Rs 250.

F & O

Mirroring the strong bullish undercurrent volumes were robust in the derivatives segment and open interest increased sharply to Rs 11,8000 crore. Signs of irrational exuberance are beginning to show up.
Sharp rise in Nifty OI PCR to 1.73 on the back of put writing at 4800 and 4900 levels indicates that short sellers are trapped for the moment. Sharp short covering rally not ruled out. VIX has fallen sharply to 26 indicating confidence of the market players over the ongoing rally. Among the sectors that witnessed long build up are auto, banking, cement and metal. Expectations over good festival sales pushed auto counters into fast track mode. Stay on plus side and add on declines. Led by SBI, state owned banks vaulted to new highs. Momentum is on the side of the sector. Buy on declines for further gains.

True to predictions correction in cement counters was short lived. Selective buying suggested for outperformance returns. Among the stock futures long build up was seen in BEL, GE Shipping, GMR Infra, Mphasis, Nagarjuna Construction, JP Associates, Ispat Inds, Reliance Power, Divi Labs, Suzlon, IFCI, Unitech and IBRL. Sharp rally indicated in realty counters DLF, Unitech and Indiabulls Real for target prices of Rs475, Rs130 and Rs300.

Expectedly Orchid hogged limelight. Buy on declines to Rs150 for target price of Rs200 in next few weeks. Ahead of Q2 results season IT stocks are again witnessing good accumulation. Spurt in Rolta, Mastek, Moser Baer, HCL Tech and TechMahindra not ruled out. Stock specific movement to continue till the onset of Q2 results season. Focus more on midcaps than frontline counters.

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 : deccan.com

Market Khabar 14 Sept 09

One year after the collapse of Lehman Brothers, the stock market is right back where it was.
Stock markets across the globe have touched multi-month high on hopes of sustainability in the recovery in global economy.

Clocking a 15-month high on the BSE, the Sensex ended 575 points higher at 16,264 and the Nifty on the NSE logged a 149 point gain to close at 4,830 during the week ended.
Though frontline indices remained buoyant, midcap and smallcap stocks were in correction mode.

The market breadth was negative for the most of the sessions. A renewed buying from foreign institutional investors (FIIs), the revival of monsoon in many parts of the country, firm global cues, good IIP numbers, the Ficci survey of confidence level of India Inc and a strong response to Oil India IPO kept the sentiment positive.

Advance tax numbers of companies and key consumer reports from the United States will dictate near-term direction of the markets.

For the week ahead, chartists predict a trading range of 15,800 and 16,680 for the Sensex and 4,680 and 5,050 for the Nifty.

Supports for the week would be at 16,120 and 15,800 and 4,740 and 4,680.
Expect resistance to the Sensex at 16,460 and 16,700 and Nifty at 4,890 and 5,050. Go into a bearish mode, only below 15,950 (Sensex) or 4,700 (Nifty) levels in indices on closing basis. Sharp selling not ruled out at 16,500 and 16,600 or 4,880 and 4,930 levels.

Stock specific movements predicted on expectations over second quarter results and news driven activity. Sell a stock if the company’s fundamentals deteriorate and not because the stock price is falling.

SATTA GUPSHUP

* Samkrg Pistons is one of the largest manufacturers of advanced pistons, piston rings and other critical auto parts. Its clientele include Hero Honda, Tata Motors, TVS, Piaggio, Yamaha and other overseas companies. A steady performance, good dividend track record and a cash EPS of Rs 12 makes the stock a good buy for target price of Rs 90.

* Pennar Industries is a supplier of engineered products for the railways, road safety and pre-engineered building requirements. It is shifting its focus from commodity CR to value added steel products. It has also developed new business segments including ESPS, tube products and railway coach profiles. Recently commissio-ned Chennai facility caters to auto sector and railways. Pennar offered to buy back of shares for not more than Rs 40. Buy the stock at current levels for a price target of Rs 60 in medium term.

* Dolphin Offshore Enterprises provides diving and underwater services, fabrication, installation of plant and equipment on offshore platforms and repairs. Rec-ent change in focus to the offshore construction market has boosted its order book. Buy on declines for a target price of Rs 350.

* Usha Martin is a leading producer of specialty steel and one of the largest wire rope manufacturers globally. Integrating backwards, the company has captive mineral linkages of iron ore and coal making it one of the cheapest cost producers. Buy on declines for a target price of Rs 125.

F & O
Open interest in the derivative segment increas-ed sharply to Rs1,02,00 crore, the highest since January 2008. Nifty puts added 30 per cent in open interest and calls added 11 per cent in open interest resulting in Nifty PCR spiking to 1.39, highest since April’09.

Sentiment indicators cle-arly indicate that 4,700 level will hold support in the near term. Among the sectors that witnessed long build-up were banking, pharma, metals and autos.

A correction is likely in IT, realty, sugar and cement counters. Metal stocks have attracted good buying interest on the back of rise in metal prices on LME. Reports of a turnaround at Corus have given fillip to Tata Steel counter. Buy on declines for a target price of Rs 540 in near term. Stay invested in Sail, JSPL and JSW Steel for further gains.

Bank stocks have risen strongly after rerating by a foreign brokerage and also on expectations of improvement in margins due to likely hike in interest rates. Led by SBI, nearly all PSU banks witnessed a sharp rise in open interest. Vijaya Bank, Allahabad Bank, IOB, Dena Bank, Syndicate Bank and Andhra Bank look set to touch new short term highs. Stay invested for further gains. Mild correction not ruled out in private bank counters.

Looking good are Ranbaxy, Mphasis, GE Shipping, GVKPIL, Patel Engg., BEML, Indusind, IFCI, Lupin and Yes Bank for a price target of Rs 368, Rs 630, Rs 315, Rs 58, Rs 525, Rs 1,280, Rs 118, Rs 66, Rs 1,150 and Rs 200.

Select counters which attracted selling PTC, Punj Lloyd, Orchid, TechMahindra and Dish TV are expected to bounce back to Rs 94, Rs 285, Rs 145, Rs 950 and Rs 49.

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.

Market Khabar 7 Sept 09

After getting hit Shanghai cues during the early part of the week, markets covered some of the losses on Friday to close on an optimistic note during the week ended.

On the Bombay Stock Exchange (BSE), the Sensex shed 233 points closing at 15,689 and the Nifty on the National Stock Exchange (NSE) fell 52 points to finish at 4,680.

It is quite interesting to note that while benchmark indices posted losses, smallcap indices have ended in the positive territory. Volumes continued to be more robust in the derivative segment than cash market indicating heightened speculative activity.

In the absence of fresh triggers, markets are likely to consolidate at current levels with an upward bias. The near term direction of the markets will be dictated by the IIP (Index of Industrial Production) data, the progress of revived monsoon and global cues.

The expectations over the financial results of companies pertaining to the second quarter may result in stock specific movements in next few weeks.

A rally in US markets ahead of the Labour Day weekend may see stocks spike during the early part of the coming week.
Chartists predict a trading band between 15,300 and 16,400 for the Sensex and 4,540 and 4,960 for the Nifty in the week ahead.
Immediate supports for the indices are between 15,320 and 15,160 for the Sensex and 4,580 and 4,520 for the Nifty. Short term targets for the indices above 16,000 and 4,740 levels are 16,180 and 16,400 and 4,820 and 4,900. Cut short term longs if indices trade below 15,400 and 4,580 levels.
Don’t trade on the basis of “tips.” In other words, “trade with the trend, not your friend.” Trade with a plan and stick to it.

SATTA GUPSHUP
* Fenoplast Ltd is one of the largest manufacturers of non-toxic rigid PVC film and PVC leather cloth. Its client list includes Pfizer, Cipla, Merck, Cadila, M&M and others. A 90 per cent growth in turnover and a 150 per cent rise in net profit for the quarter makes the stock good bargain for a target price of Rs 65.

* TRF provides engineered equipment, systems and ser-vices including EPC/EPCM services. A strong revenue visibility, good pedigree (Tata Steel), good execution capabilities and the acquisition of DLTML makes the stock a good buy for a target price of Rs 650.

* Auto ancillary Steel Strips & Wheels has reported a sharp increase in sales of wheel rims for last two months indicating that good times are back. After commissioning of the new plant in Jamshedpur, its turnover will increase two-fold.
Buy on declines for a target price of Rs 125 in medium term.

* Phoenix Mills is expanding to Tier I and Tier II cities. A risk-free balance sheet helped the company report good Q1 numbers. Buy on declines for a target price of Rs 225.

A strong order book and a good track record of execution of projects makes Simplex Infrastructures stock a good bet from infra segment for a target price of Rs 600.

* OnMobile Global has entered into separate strategic deals with Vodafone and Telefonica to provide a suite of VAS services. Buy on declines for a target price of Rs 700.

F & O
Though Nifty lost 1.1 per cent during the week, overall open interest increased sharply by 20 per cent to
Rs 86,000 crore indicating that all the supply has been absorbed and the market is poised for a fresh rally.
A crossover of a 52-week-high of 4,743 points on Nifty will move the markets into a new orbit. Hedge portfolio positions by buying 4,600 put option. Gutsy traders can buy Nifty futures with trailing stop and OTM call options of 4,800 and 4,900 strikes.
Auto stocks are back on track. Buy on declines Tata motors, Ashok Leyland, M&M and Maruti for further gains. Buy auto ancillary Bharat Forge for short term. Name change to Reliance MediaWorks likely to give Adlabs Films counter good box office returns. Technically Adlabs Films looks good for a price target of Rs 450. The move to include IDFC and JP Associates in the Nifty index may trigger renewed buying interest in the counters. Buy at current levels for targets of Rs 160 and Rs 265 in October. Good Q1 results, reduced capital intensity, higher subscriber forecasts, the launch of EVDO cards and third party revenues from Reliance Inf-ratel have turned Reliance Communications a good bet. Buy for a target price of Rs 375.
From current price trends, Allahabad Bank, Andhra Bank and IDBI Bank look good for targets of Rs 115, Rs 110 and Rs 130 in near term. A fall in crude oil prices gave momentum to HPCL, BPCL and IOC. Buy IOC ahead of bonus meeting for a target price of Rs 750. Arcelor Mittal move to buy stake in Uttam Galva is expected to improve valuations of many ‘steel’ stocks. Stay invested in steel counters for shining gains.

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 " Deccan.com

BSE NSE Outlook 31 Aug 09

Buoyed by the revival of the monsoon, extension of tax sops in the foreign trade policy and positive cues from the global economic front, key benchmark indic-es touched short-term highs during the week ended.

On the Bombay Stock Exchange (BSE), the Sensex ended 682 points higher at 15,922 and the Nifty on the National Stock Exch-ange (NSE) closed higher by 203 points at a 15-month peak of 4,732. Market breadth was good with market players angling midcap and smallcap counters.

The statements from the US Federal Reserve chairman, Mr Ben S. Bernanke, and the European Central Bank president, Mr Jean-Claude Trichet, that the global economy is pulling out of its deepest recession since the 1930s triggered an optimistic recovery in the global markets.

Renewed buying from foreign institutional investors (FIIs) kept the sentiment positive.
India’s Central Statistical Organisation data on GDP and cues from global markets are likely to dictate near term direction of markets. Barring any negative surprises from global markets, markets are likely to consolidate their recent gains and trend upwards till the start of second quarter results season.

For the week ahead, cha-rtists predict a trading band of 15,460 and 16,380 for the Sensex and 4,550 and 4,880 for the Nifty. Supports for the week are at 15,580 and 15,200 and 4,620 and 4,540.

Expect resistance to the indices at 16,180 and 16,320 and 4,790 and 4,880.
Above the psychological barriers of 16,000 and 4,800, indices may touch 17,000-level and 5200-level in a very short time frame. However, remember Newton’s Laws is applicable to markets too. They are most dangerous when they look the best.

SATTA GUPSHUP

* Kerala Ayurveda and Coimbatore-based Arya Vaidya Pharmacy have merged to form the largest organised Ayurveda pharmacy chain. It is emerging as a Ayurveda major with operations ranging from herbal farming to medicines, hospitals and resorts. Buy at current levels for a long term target of Rs 100.
* FIEM Inds is one of the leading manufacturers of automotive lighting and signalling equipment and rear view mirrors. It has shown a growth in the turnover due to commissioning of new plant. Buy on declines for a price target of Rs 120.
* Sterlite Technologies is India’s only fully integrated optical fibre producer and global power conductor manufacturer. The stock is a good bet for Rs 350 in medium-term.
* Peninsula Land is one of the Mumbai’s leading property developers. The company has shifted its focus to self-financing residential pr-ojects. Buy at current levels for target price of Rs 150.
* Dhanalakshmi Bank could be the target of a friendly-takeover, say insiders. Excellent first quarter results also make the bank a good bet for a price target of Rs 200.
* Indian Metals & Ferro Alloys is India’s largest fully integrated and lowest cost producer of ferro alloys. The company has the benefit of owing chrome ore and quartz mines. Buy on declines for a price target of Rs 500.

F & O

Robust volumes were seen in the derivatives segment as the rollover was 84 per cent — the highest since August 2008. However, if a correction sets in, then the intense downward pressure on the back of unwinding of positions is not ruled out. Option activity clearly indicates a strong resistance for the Nifty between 4,800-4,900 level and likely support at 4,500-4,600 level. Be bearish only below 4,500. Among the sectors that showed higher rollover are auto, engineering, metals, oil and gas, pharma, sugar, textiles and telecom.
Stock futures that witnessed a long rollover were Adlabs, DCHL, Punj Lloyd, GSPL, IFCI, PTC, Unitech, Bharat Forge, LITL, GE Shipping, AB Nuvo and BEL. Select frontlines like Infosys, SBI and ICICI Bank saw rollover of shorts.

Realty counters are gaining steam on strong buying interest. Buy DLF, Unitech and HDIL for a target price of Rs 475, Rs 115 and Rs 350 respectively. Power equipment firms like BHEL, Siemens, ABB and APIL may witness heig-htened activity on the back of huge government orders. True to predictions, aggressive buying seen in Orchid Chemicals from sources close to management. Punters tip unexpected target of Rs160 in short term.

Reports of follow on IPOs may trigger buying action in select PSU counters. Buy SAIL, IDBI and IOC at current levels for smart gains. Expect profit-booking at higher levels in IT and auto counters, moderation of ‘irrational exuberance’.

Buy at current levels IOB, Indian Bank, UCO Bank and IDBI in banking stocks and India Cements, Ambuja and ACC in the cement industry. Acquire Nag Construction, IVRCL, and JP Associates are expected to give handsome gains.
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 : deccan.com

Market Khabar 17 August 2009

Markets continued their uptrend during the week ended on the back of promising industrial growth data, the draft of new Direct Tax Code and the Free Trade Agreement with Asean.
On the Bombay Stock Exchange (BSE), the Sensex added 251 points to close at 15,412 and the Nifty on the National Stock Exchange (NSE) logged 100 points ending at 4,580.
Heightened action was seen midcap and smallcap counters. Sluggish trading volumes were attributed to jitters over the spread of H1N1 virus and fears over impact of below normal monsoon on the economy.
The statement of Federal Reserve on the state of United States economy and the reports of France, Germany and Israel coming out of recession have infused optimism in the world markets.
The near-term direction of the markets will depend on the revival of monsoon and global cues. The Chinese markets will continue to be a cause of concern for the investors.
Policy announcements by the central government on its economic agenda likely to help markets consolidate their recent gains till the start of second quarter results season.
For the week ahead, chartists predict a trading band of 14,800 and 15,940 for the Sensex and 4,330 and 4,700 for the Nifty. Immediate supports for the Sensex are between 15,160 and 14,800 and for the Nifty are between 4,480 and 4,390.
Expect resistance on upside between 15,620 and 15,940 for the Sensex and between 4,640 and 4,730 for the Nifty.
Investors can be bullish above 4,700 and likewise be bearish below 4,400 on closing basis.
Avoid large positions and trade lightly till the indices break out of the current trading range.

SATTA GUPSHUP
* Tera Software is a unique e-governance firm with pro-ven capabilities. It has a good order book, which is expected to increase due to rise in government’s spending on e-governance. It has steady dividend yield and is good buy at current levels for a target price of Rs 80.

* Kiri Dyes and Chemicals, a manufacturer of reactive dyes, has commissioned its new venture at Vadodra in alliance with Chinese major Longsheng. Kiri Dyes is one of the very few certified and accredited contract supplier to the world’s top five dye-stuff majors. Buy at current levels for target price of Rs 500 in medium term.

* Amara Raja Batteries has reported excellent first quarter results. The firm manufactures specialised batteries for the telecom sector and railways and has reportedly developed batteries for hybrid cars. Buy at current levels for steady returns.

* Indraprastha Gas Ltd, a JV of GAIL, BPCL and the Delhi government, has excl-usivity for city gas distribution network for the National Capital Region. It has recently tied up with RIL for augmenting its needs and expanding its network. Buy on decline for target price of Rs 250 in next few weeks.

* Linc Pens is aiming to be among the top two pen manufacturers in the country in 2009-10. Buy on declines for target price of Rs 60 in medium term.

F & O
Volumes were a tad lower in the derivatives segment on the lack of confidence among the market players over the near term direction of markets.
Sharp swings on alternate bouts of buying and selling kept traders on the edge. Nifty futures were seen trading at a discount to spot at the end of the week. Adopt strangle strategy for Nifty options to take advantage of directional change.
FII positions as percentage of gross positions has declined sharply reflecting their bias to sell. Metals, realty and oil and gas counters witnessed a good buying interest. Tata Steel, Sterlite, JSPL, HDIL, Unitech, Cairn and BPCL look good for further gains from current levels.
Auto and cement counters are attracting profit booking at higher levels. Avoid auto stocks for now. Rebound in cement counters indicated. Buy India Cements at current levels for a target price of Rs 160.

Correction in sugar stocks likely to be short lived. Availability of cane makes Shree Renuka a good bet for further gains. Range bound trading seen in banking cou-nters. Use sharp declines to accumulate private banks. Buying suggested in LIC Hsg and Reliance Capital. Punters tip Jindal Steel & Power and Financial Technologies for short term targets of Rs 3,600 and Rs 1,800. Among the second-tier IT counters, Firstsource, Polaris, Rolta and Mphasis may touch Rs 38, Rs 155, Rs 190 and Rs 575 in next few weeks.

Courtesy swine flu, pharma counters are witnessing volume and price action in both cash and derivative segments. Buy on declines Ranbaxy, Dr Reddy and Aurobindo. News driven activity indicated in Cipla and Orchid.

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 : deccan.com

Market Khabar 10 August 2009

Spooked by negative global cues and renewed fears about the impact of monsoon deficit on the economy, markets closed on a weak note during the week-ended.
On the BSE, the Sensex shed 510 points to end at 15,160 and the Nifty on the NSE lost 155 points ending lower at 4,481. Market breadth turned negative on the weak sentiment. Heightened worries over the impact of monsoon deficit on the GDP and renewed selling from FIIs kept investors at bay. With the end of the results season and no fresh triggers on the horizon, the markets are likely to swing on macroeconomic news and global cues. Market players feel that the flow of funds from secondary markets to primary markets may impact liquidity in near-term. The spat between the Ambani brothers over the Krishna-Godavari gas is also hurting the markets. A quick and lasting solution is necessary to improve the sentiment.
The weekend rally in the US markets may spark a short covering rally at the start of the coming week.
However, the traders feel that only the rain god’s blessings will put the markets back on fast track in the near-term. For the week ahead, chartists predict a trading band of 14,780 and 15,650 for the Sensex and 4,320 and 4,620 for the Nifty. Supports for the week are at 14,800 and 14,540 and 4,380 and 4,260. Short term targets for the indices are 15,480 and15,640 and 4,570 and 4,640. Initiate fresh long positions only on a close above 4,560 on the Nifty or 15,500 on the Sensex. Fresh shorts can be attempted if the Nifty breaches 4,400-level on the downside. Markets change continuously and so must investors and traders. Flexibility, sound strategy, discipline and good execution are important for success.

SATTA GUPSHUP
* Godrej Consumer has a presence in soap, hair dye and colour, liquid detergent and toiletries. Use correction to accumulate the stock.

* Omnitech, an IT services company, has won best SME award for best corporate governance and plans to expand using both organic and inorganic strategies. Buy at current levels for target price of Rs 125.

* Emco is a leading player in the domestic power transmission and distribution space. It is fast emerging as an end-to-end solution provider in the space. Buy for target price of Rs 150.

* Low priced Suditi Inds has reported turnaround performance. Punters tip the counter for dark horse gains.

* Apollo Tyres, the market leader in truck and bus tyres, has expanded its presence to South Africa and Netherlands. Buy on declines for steady returns in medium term.

* Volume action in Prism Cement foretells some major development in the near-term. Punters indicate M&A activity and could touch Rs 75 a share. Buy for speculative gains.

* DCM Shriram has interest in sugar, chemicals and rayon tyre cord. Buy on declines.

F & O
Volumes in the derivative segment continued to be robust on alternate bouts of buying and selling. True to predictions, short sellers turned aggressive the moment market ‘fragility’ got exposed. After touching a new 2009 high during the early part of the week ended, Nifty futures witnessed a sharp sell-off and ended the week lower by 3.4 per cent. Initiate fresh shorts only if Nifty futures trade below 4,400-level on the closing basis. Use short covering rallies to exit from weak counters. Sectors that witnessed brutal selling were auto, realty and FMCG. After the recent sharp spurt, auto counters hit a speed breaker to correct sharply. Position traders can use sharp declines to take long positions at lower levels in counters such as M&M, Maruti, Hero Honda and Tata Motors. Use rallies to short DLF, HDIL and Unitech. A China shadow on metal stocks triggered wild swings in the counters. Buy Sterlite Industries, Jindal Steel and Power, Tata Steel and JSW Steel at lower levels. Punters do not rule out an unusual spurt in Jindal Steel. A heightened action indicated in Global Telesystems, which punters see touching Rs 360 in the near-term. Expectedly sugar counters have risen on the reports of a worldwide sugar scarcity. Buy sugar companies having a good inventory or those located in areas having cane availability. Further gains indicated in Sree Renuka and Balrampur Chini. Pharma counters such as Lupin Labs, Sun Pharma and Dr Reddy have seen buying interest. Stay invested for further gains. After the recent correction, BEML, Pantaloon, Financial Technologies, TechMahindra and United Spirits look good for ‘fresh’ rally.

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 : deccanchronicle