Market Khabar 3 May 2010

Surviving the Greek tsunami, the markets have posted gains for the third straight month. Despite being a “down” week, the markets have ended on a optimistic note. On the BSE, the Sensex declined by 135 points to 17,559 and the Nifty on the NSE shed 26 points to end at 5,278.

However, true to predictions the BSE Midcap and Smallcap indices rose by 0.78 per cent and 0.08 per cent outperforming the benchmark indices. Market focus has shifted from frontline stocks to small and midcap stocks.

Spurt in the volumes accompanied by price rise in any particular company should not be the sole criteria for “entry”. Remember that good stocks always make a come back, while unknown stocks may disappear. Passage of the Finance Bill, prediction of normal monsoon and “soft” inflation numbers have kept the sentiment upbeat. Global markets are slightly nervous over the Goldman Sachs imbroglio.

Analysts feel that the US way of regulation by litigation will create an atmosphere of uncertainty. Keep close watch on global trends. In the coming week, apart from global cues and inflation numbers, volatility may set in over the Supreme Court verdict in RIL-RNRL case.

For the week ahead chartists predict wide trading range of 17,180-18,040 for the Sensex and 5,100-5,440. Supports for the week are at 17,420 and 17,260 and 5,230 and 5,160. Resistances for the near term are at 17,750, 18,000 5,340 and 5,400.

Futures & Options

Barring the first day of new series, derivative segment witnessed robust volumes. Despite the negative global cues, roll over of positions to the May series have been higher at 87 per cent in comparison with the three month average of 83 per cent. Overall open interest is “heavy” at Rs 1,03,281 crore and PCR is at 1.15.

Option activity clearly indicates strong resistance to Nifty in the 5,300-5,400 range and a strong support in the 5,100-5,200 range. Expectedly banking, auto, PSU and health care stocks were in the “buy” list; and realty, oil and gas, technology and cement were in the “sell” list of market players. Range bound activity was seen in metal and consumer durable stocks.

From the banking space good buying opportunities exist in smaller PSU banks. Buy on declines Andhra Bank, UCO Bank, OBC, Indian Bank and Allahabad Bank. Among the infra counters NCC and Lanco Infra are exhibiting good strength. Add on declines. Q4 numbers of HCC were pleasant surprise. Sudden spurt cannot be ruled out. Piramal Healthcare and Lupin look set to record 52-week highs. Stay invested. Use sharp corrections to “drive” into auto counters such as Tata Motors, M&M and Ashok Leyland.

After a long “rest” PSU oil marketing majors IOC, HPCL and BPCL are looking good for near term gains. Among the stock futures, BGR Energy, Godrej Inds, Praj Inds, Tata Chemicals, Siemens, HCL Tech, Lupin, EKC, Cairn GVKPIL, IDBI and RNRL.

Stock scan

Thinly traded counters such as India Motor Parts & Accessories Ltd, Hercules Hoists and Blue Star are attracting attention of some savvy market players. IMPAL, a TVS group company is one of the few all India distributors of motor parts and engine components representing over 50 manufacturers.

Through its 50+ branch network the company is engaged in the distribution of automobile spare parts and accessories like brake systems, radiators, fasteners, axles, wheels and instrument clusters. Good value stock to buy on declines. Sources indicate bonus in near future.

Hercules Hoists, a Bajaj group company is manufacturer of material handling equipment including light profile crane systems, stacker cranes, winches.

The company sells its products under the brand name Indef and has also recently set up four wind mills. Buy on declines for target price of Rs 300 in medium term.

Blue Star is India’s largest central air conditioning company and has business alliances with world renowned technology leaders in the field.

The company also offers services in air, water and energy management and LEED certification consultancy for Green Buildings and has extended its mechanical contracting to building electrification, plumbing and fire fighting projects. Buy on declines for target price of Rs 600 in medium term.

Kemrock Inds, Garware Poly and carbon companies Graphite, Goa Carbon and Phillips Carbon have been scaling 52-week highs on steady buying interest. Kemrock Inds is one of the largest manufacturers of composite materials and thermosetting resins for a wide range of applications.

Garware Poly is the largest manufacturer of polyester film in India catering to sun control, packaging and reprographic industries. Turnaround performance has triggered fresh buying in the counter.

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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Technical Analysis - BSE Outlook 2nd March 2010

Sensex (16,429.5)

The positives and negatives of the Union Budget balanced themselves to have little impact on stock prices. But Pranab Da, in a very subtle way, pleased market participants by giving them what they wanted the most – a clear plan to revert back to fiscal prudence. It may be recalled that not outlining a road-map for curtailing fiscal deficit was one of the prime reasons for the 870 points plunge in Sensex on the Budget day 2009.

Higher disposable income in the hands of the small investor through changes in income-tax slabs was a bonus. Since the Government needs a buoyant stock market to meet its colossal disinvestment target of Rs 40,000 crore, market is unlikely to face any unpleasant policy changes, at least in the ensuing months.

FIIs were net buyers on Friday though they have net sold almost Rs 2,000 crore so far this month according to BSE data. Domestic institutions continued to sell through last week. Volumes remained buoyant through the week and spiked sharply higher in the budget session. Expiry of the February contracts has resulted in the open interest coming down to a more sedate Rs 88,000 crore.

There was hardly any movement in the Sensex in the first four sessions, as the index oscillated in a very narrow range between 16,200 and 16,300. Friday's surge led the index to the intra-week peak of 16,669 but it could not sustain there for long and ended the week below 16,500.

We had outlined three possible routes that the Sensex could take on the Budget day last week. The index followed the second path -unable to move beyond 17,000 and closing the week at 16,500. The Budget day is a non-event as far as its impact on the market trend is concerned since it has altered neither the medium or the short-term trend.

It is interesting to note the similarity of patterns in the charts of all the global benchmarks. The medium term trend is down in all the indices since the mid-January peak. A mild pull-back is currently on since the beginning of February. This pull-back has however not progressed sufficiently to signal the end of the January correction.

To put it differently, all global equity markets are moving in tandem and the fate of Indian equities are strongly interwoven with that of the other markets. Since the Union Budget has not been able to scratch even the surface of the market trend, it is back to watching Greece, US, China et al to decipher where we are headed.

The medium term trend in the Sensex continues to be down and inability to move past 17,000 keeps open the risk of the third leg of the down-move from 17,790 peak unfolding that drags the index down to 15,347 or 14,530 in the days ahead. The 200 DMA at 15,910 is the critical support that most market participants would be watching in the event of a decline. A strong close above 17,000 is required to negate the current bearish medium-term view for the index.

The short-term trend in the Sensex is up. But since it is nearing key resistances at 16,775 where the 50 DMA is also poised, investors ought to stay cautious. The index could get back to a lacklustre state in the week ahead and decline to 16,280 or 16,040. The near term view will turn overtly negative on a close below the second target. Resistances for the week would be at 16,670, 16,800 and 17,000.

Source BL

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Market Khabar 8 Feb 2010

Markets ended in red for the third week in a row in the weekend following global worries on fiscal deficits of euro zone countries, continuous rise in food inflation and tepid response to NTPC FPO.

On the BSE, the Sensex shed 442 points to end below 16,000-level at 15,916 and the Nifty on the NSE closed 115 points lower at 4,767.

As expected market breadth continued to remain weak and jittery investors were seen cutting positions.

Sources suggest an aggressive policy action from the government to control inflation. The worst is over on inflation front.

Watch out for expectations over the Union Budget to spot likely beneficiary industries. Sources say stimulus packages will not be trimmed to a large extent and only minor tinkering is on cards. Weekend rebound in US markets from lower levels may trigger a relief rally from current levels.

For the week ahead, chartists predict a trading band of 15,550 and 16,420 for the Sensex and 4,540 and 4,960 for the Nifty.

Experts do not expect the indices to breach the 200-day moving averages at 15,530 and 4,650 levels easily and expect a mild recovery rally from current levels. Avoid aggressive shorts at current levels. Initiate fresh positions if indices sustain above 16,300 and 4,840 levels on closing basis.

You cannot tell how expensive a stock is. A stock’s value is depends on its earnings — a Rs 100 stock can be cheap if the firm’s earnings prospects are high, while a Rs 10 stock can be expensive if earnings potential is dim.

Futures & Options

High intra-day volatility is back and becoming a way of life for derivatives traders.

Overall open interest has again crossed Rs 1 lakh crore mark to settle at Rs 1,09,000 crore on Friday. As expected Nifty holds top position with 66 per cent share of the total. Contrarians tip buying of Nifty4,900 call option for unexpected returns in pre-budget rally.

Jittery market players were seen unwinding positions in bank, auto, realty and metal stocks. Punters suggest buying in SAIL, Tata Steel, Unitech, DLF and Nalco for relief rally gains. Among the stock futures looking good in an otherwise weak market are Asian Paints, Tata Power, Opto Circuits, Triveni, Essar Oil, Cummins, Mphasis and Petronet.

Buy oil marketing companies — IOC, BPCL and MRPL — for surprising returns. Side counters such as HCC, Punj Lloyd, JP Hydro and CESC are witnessing accumulation from savvy players.

Buy HCC for a target price of Rs 150 in the settlement. For the pre-budget trading, punters expect action in fertiliser, capital goods and power stocks. Buy Tata Power, Reliance Power and CESC at current levels.

Fallout from the luke warm response to the FPO of NTPC likely to be short lived. Buy strong PSU counters in the current weakness. Punters tip Engineers India, Power Finance and REC for short term.

Investors need to have realistic expectations. When expectations are too high, it results in overtrading underfinanced positions and very high levels of greed and fear, which makes objective decision-making impossible.

Stock scan

Vishnu Chemicals has posted good turnaround results. For the last nine months, the company has clocked net profit of Rs 4.18 crore in comparison to a loss of Rs 5.85 crore in the previous fiscal. Vishnu Chemicals is a world class manufacturer of chrome chemicals and animal feed ingredients and has recently set up a new state of the art manufacturing and R&D facility at Visakhapatnam. Sources indicate that the production of some peptides has also started and the company has reportedly tied up some CRAMS deals also. High promoter equity at 75 per cent reflects the confidence of the promoters. Buy at current levels for a target price of Rs 150.

Auto ancillary Subros continued its good performance on the back of reviving demand from its key clients — Maruti and Tata Motors. Volume and value led growth clearly reflect that cool times are back for the company. Buy at current levels for a target price of Rs 100.

AP Paper is reaping the benefits of its recently concluded expansion. Bettering the industry margins, the company has reported an excellent nine month performance. Stay invested in the counter for a target price of Rs 150.

Infoedge is a leading prov-ider of online recruitment (naukri.com), matrimonial (Jeevansaathi.com), real estate (99acres.com) and related services in India. The company is aggressively expanding into education, professional networking and other related segments. Buy the company’s stock at the current levels for a target price of Rs 1,300 in the next couple of 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 : deccan.com

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BSE NSE Outlook for 11-15 Jan 10

Market mood indicates horizontal or downward move in the next week on likely impact of rupee appreciation on future earnings of some of the major IT players

Despite buoyant trend in the international market, the Indian market continued to look southward for straight second day on concerns of appreciation rupee that could have a significant bearing on the realizations of the Indian IT sector. Thus IT stocks, besides the metal and the banking stocks edged lower during Friday 8^th January 2010. The S&P CNX Nifty corrected 18.35 points during the day to close at 5244.75. Although for the full week under review the benchmark underlying rose by 43.70 points. All throughout the previous week the nifty future closed at a premium to the underlying. The average volume in the futures and options (F&O) segment during the week under review was Rs 51350.80 crore, thus being insignificant despite the extended trading hours since the start of the new calendar year.

The nifty future started the week with excellent long built-up however during the past 2 days it shed some of its open interest (OI) due to profit booking. For the full week though the nifty January 2010 series added 21.54 lakh shares in OI to take the total OI as on 8^thJanuary 2010 to 2.42 crore shares. Similar was the trend in some of the frontline stock futures as well. Reliance January series for e.g. added 26.24 lakh shares in OI to take its total OI to 1.13 crore shares, while Tata Motors and Unitech added 15.12 lakh shares and 63.27 lakh shares in OI. Tata Steel during the week though shed its OI by 6.87 lakh shares. Sail, Bharti and Rcom also added OI by 12.18 lakh shares, 14.99 lakh shares and 14.32 lakh shares respectively during the week under review. Maruti also added 10.62 lakh shares in OI during the week ended 8^th January 2010.

Although the week started on a positive note, there was evident profit booking to wards the end of the week. Besides there were some negative indicators in the nifty option front as there was aggressive call writing at the 5200 and the 5300 strikes. Similarly there was some covering of put earlier wrote at the 5000 and 5100 strikes. Besides there was fresh put buying at the 5200 strike put. Thus the indications are clear negative.

Volume in the Futures & Options segment of the NSE (Turnover (Rs. Crore.)
Date	Index Futures	Stock Futures	Index Options	Stock Options	Total
4-Jan-10	7411	15019	18075	2054	42559
5-Jan-10	10499	22359	23829	2913	59599
6-Jan-10	9636	21199	19377	2490	52702
7-Jan-10	10029	20382	20455	2546	53412
8-Jan-10	8568	19503	17843	2567	48482
Source: NSE

Overall the market wide OI on Friday stood at 185.26 crore shares. Of these major additions in OI was witnessed in the stock options segment, while there was fair addition in index options and stock futures front as well. (See table OI breakup).

Open Interest (OI) break-up as on 8th January 2010
	Open Interest (OI)*	Change**
Market wide	185.26	3.21
Index Future	2.77	-0.02
Stock Future	149.39	0.84
Index Options	9.15	0.23
Stock options	23.94	2.16
* No of shares in crores
** Change is vis-à-vis previous day
Source: NSE

The most active options in the January series were the 5200 to 5400 strike calls and 4900 to 5200 puts. Call strike witnessed addition of OI due to fresh call writing at the above mentioned strikes, while the puts witnessed fresh buying. The OI in 5200, 5300 and 5400 strikes increased by 1.04 lakh shares, 4.56 lakh shares and 0.74 lakh shares to 29.49 lakh shares, 48.09 lakh shares and 43.67 lakh shares respectively. The OI in 5000 and 5100 strike puts decreased by 0.28 lakh shares and 0.47 lakh shares to 52.49 lakh shares and 37.17 lakh shares respectively. The 5200 put witnessed fresh buying to take its total OI to 45.40 lakh shares as on Friday. (See most active Nifty options table).

Most active Nifty options (January 2010 series)
	OI
Call
Nifty 5200	2948750
Nifty 5300	4808500
Nifty 5400	4367200
Nifty 5600	1380200
Put
Nifty 4900	2906350
Nifty 5000	5248900
Nifty 5100	3717250
Nifty 5200	4540350
Source: NSE

Top 10 Open Interest (OI) gainers in January series stock futures on 8th January 2010
Scrip Name	OI*	Change*	% Change
BOSCHLTD	11800	6300	115
TECHM	718800	181200	34
CUMMINSIND	210900	52250	33
HCLTECH	2191800	414700	23
MOSERBAER	5516775	1029600	23
SUNTV	166000	30000	22
CROMPGREAV	513000	70000	16
TCS	5004000	572000	13
PFC	823200	86400	12
HDIL	9703638	989172	11
* No of shares Source: NSE

Top 10 Open Interest (OI) losers in January series stock futures on 8th January 2010
Scrip Name	OI*	Change*	% Change
BHUSANSTL	406000	-100000	-20
APIL	465000	-84000	-15
HINDZINC	518500	-73500	-12
KSOILS	10507900	-1345200	-11
TULIP	140000	-13000	-8
IVRCLINFRA	2989000	-268000	-8
RANBAXY	2795200	-231200	-8
SAIL	7844850	-610200	-7
CHENNPETRO	1492200	-95400	-6
ABB	1126500	-72000	-6
* No of shares Source: NSE

Besides the global action the quarter result of some of the major market players that could be declared in the proceeding weeks will provide either directional trigger. The mood indicates horizontal or downward move in the next week, as the rupee appreciation concerns would impact the future earnings of some of the major IT players, which could have a dent on the index.

Source : Capitalmarket.com

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Market Khabar 11 Jan 2010

The first week of 2010 started off nicely for the markets with indices closing near 22-month-high.

On the BSE, the Sensex ended 0.43 per cent or 75 points higher at 17,540 and the Nifty on the NSE inched up by 0.84 per cent or 44 points to 5,245. However, the real action was in midcap and smallcap stocks, both the BSE Midcap and smallcap indices moved up by 3.4 per cent and 4.1 per cent.

Strong FII buying and positive comments from the Prime Minister that India will return to 9-10 per cent growth rate kept the sentiment positive. Whether the market can sustain and bui-ld on last year’s gains will depend on corporate earnings, the government’s willingness to keep reforms on fast track and no negative surprises from global markets. Near-term direction of markets will depend on third quarter earnings season. For the week ahead, chartists predict a trading band of 17,160-18,000 for the Sensex and 5,080-5500 for the Nifty. Immediate supports exist at 17,320 and 17,080 and 5,160 and 5,080.

Expect resistance to the indices on upside at 17,740 and 17,960 and 5,330 and 5,420. The directional movement could be negative in short term, if the indices fall below 17,200 and 5,175. The movement of indices in narrow range clearly indicates that individual stocks would do better than the indices.

Knowing what stocks to avoid can be as important as knowing what to buy. No stock is perfect; every stock will have some drawback.

FUTURES & OPTIONS

The January series has started on a quiet note marked by low volumes and low volatility. Sentiment indicators like implied volatility, put/call ratio, open interest and VIX indicate possible increase in volatility again.

Punters advice strangle strategy — Buy Nifty5300 strike call option and Nifty5200 strike put option to take advantage of directional breakout after the onset of results season.

A strong rupee triggered selling pressure in IT stocks. However, the results of Infosys will set the tone for the sector in the week ahead. Savvy players are buying into Wipro, OFSS, Tech Mahindra, Moser Baer and Mphasis. Buy Mphasis for a target price of Rs 825.

The profit booking in auto stocks likely to be short lived. Use sharp declines to accumulate Ashok Leyland and M&M. Metal and cement stocks are likely to continue their upward journey after a mild sell off.

Ahead of RBI’s credit policy review, heightened activity indicated in banking counters. Buy private banks like Axis Bank and Kotak Bank for short term gains. Realty stocks are beginning to show good strength. Hold Unitech, IBREL and DLF for gains.

Among the side counters, India Infoline, Petronet LNG, Sun TV, Nagarjuna Const. and HCC are good for a target of Rs 175, Rs 90, Rs 390, Rs 195 and Rs 185. Sebi’s plan to standardise lot sizes for F&O stocks would make it convenient for the traders to remember lot sizes and improve volumes in the derivative segment.

STOCK SCAN

Mundra Port and SEZ runs India’s largest private port, whose cargo traffic is gro-wing at four times the speed of other major ports. The real trump card is the 100 sq km industrial zone, where Mundra is attracting factories such as Alstom-Bharat Forge JV for power equipment and others that will provide the port’s future traffic. Buy on declines for a target price of Rs 900 in next few months.

Escorts is tur-ning out to be a good turnaround candidate after it focused on tractor and construction machinery segments. To tap good opportunities from railways, the company has introduced four new railway products for coaches and wagons. Buy for a target price of Rs 225.

Minda Industries designs, develops and manufactures switches and batteries for 2/3/4 wheelers and off-road vehicles. It enjoys more than 70 per cent market share for switches in the two- and three-wheeler segment and is amongst the top few globally. Buy only on declines to Rs 240 for a target price of Rs 400.

Autoline Industries supplies sheet metal components, sub-assemblies and assemblies for large OEMs in the automobile industry. Buy for target price of Rs 200.

ZF Steering manufactures, and assembles mechanical steering gears, hydraulic power steering gears and other gear assemblies. A sharp increase in exports and a robust demand from domestic original equipment manufacturers (OEMs) augur well for the company. Buy for a long term target price of Rs 500.

Shrewd market players are accumulating BGR Energy, Sunil Hitech, Ramkrishna Forgings, Solectron EM and Indian Hume Pipes. Sharp gains indicated from current levels 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 : deccan.com

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Weekly Review 31 Dec 2009

Sensex vaults 81% in 2009 on ample global liquidity, higher risk
appetite

The key benchmark indices attained their highest closing level in
nearly 20 months on the last trading day of calendar 2009 as Asian
stocks rose. Volatility surged in late trade as traders rolled over
positions in the derivatives segment, to January 2010 series from the
near-month December 2009 series. The December 2009 derivatives
contracts expired today, 31 December 2009. The BSE 30-share Sensex
rose 120.99 points or 0.7%, off close to 65 points from the day's
high.

The Sensex and S&P CNX Nifty today, 31 December 2009, scaled their
highest closing level in nearly 20 months. Reliance Industries rose.
Capital goods and auto stocks, also edged higher. But banking stocks
pared gains. Telecom stocks were mixed. The market breadth was strong.
Rollover in Nifty futures from December 2009 series to January 2010
stood at 58% at the end of Wednesday's (30 December 2009) trade.
Rollover in Mini Nifty futures stood at about 50% and the market wide
rollover was about 67%.

From 4 January 2010, trading will start at 9:00 IST and end at 15:30
IST compared to the current timing of 9:55 IST to 15:30 IST. The
market remains closed on Friday, 1 January 2010, for the New Year
holiday.

The Reserve Bank of India (RBI) will review interest rates at its next
policy review scheduled for 29 January 2010 and not before, K.C.
Chakrabarty,a deputy RBI governor said on Thursday. He further said
credit growth will rise to 17-18% when GDP growth reaches 8-9%.
The government is reportedly expected to sell shares in 17 to 18 state
firms in each of the next two fiscal years, with an issue happening
every two to three weeks. The ministry of disinvestment was consulting
with administrative ministries of more than 50 state-owned firms to
assess the preparedness for public offer, report said.

Meanwhile, the Thirteenth Finance Commission has suggested the path of
fiscal consolidation and sharing of tax revenues between the Centre
and the states, in its report submitted to President Pratibha Patil on
Wednesday. The report has assessed the impact of the proposed goods
and services tax (GST) on trade. It has also suggested steps to deal
with the growing off-Budget expenditure, especially, oil bonds, the
implications of environment and climate change, and ways to improve
outcomes and outputs of public expenditure.

The report of the Thirteenth Finance Commission, headed by former
finance secretary Vijay Kelkar, will be given by the President to the
finance ministry, which will take it up with the Cabinet.
Food price index rose 19.83% in the 12 months to 19 December 2009,
data released by the government today, 31 December 2009, showed. The
primary article index jumped 15.49% and the fuel price index rose
4.45%. The worst monsoon in nearly four decades and flooding in some
parts of the country have pushed up food prices.

Finance Minister Pranab Mukherjee said on Wednesday that the
government needs to strike a balance between economic growth and
cutting fiscal deficit. India's fiscal deficit is estimated at 6.8% of
gross domestic product for 2009/10 (April-March), higher than 6.2% in
the previous year as the government cut tax rates and boosted
spending.

Recently C. Rangarajan, Chairman of the Economic Advisory Council to
the Prime Minister, raised concern over the rising food inflation,
which is at an 11-month high now, stating that the task ahead was to
check food inflation. He indicated that the Reserve Bank of India
could look at raising the cash reserve ratio (CRR) to suck out excess
liquidity from the system, even though the central bank may watch the
price movements for some more time before taking any decision on rate
hike.

The focus of India's monetary policy is shifting to managing recovery
and containing inflation from one concentrated on fostering growth
after the global downturn, Reserve Bank of India deputy governor
Shyamala Gopinath said early this week. She said rising food prices
were fuelling concerns of broader price pressures in India and the
policy challenge was to address the supply-side constraints.

She said effective assessment of the inflation process and using
monetary policy actions at the right time would be critical.
Gopinath's comments follow those from fellow Deputy Governor Subir
Gokarn on Thursday, 24 December 2009, who said the January 2010 policy
review would focus both on growth and inflation, instead of the
previous policy focus on growth.

Finance Minister Pranab Mukherjee said last week that containing
inflation and cutting fiscal deficit are the major challenges for the
government in the short-to-medium term. The Indian economy can grow at
7.75% in the fiscal year ending March 2010, the Finance Minister said.
Data earlier this month showed that corporate advance tax payments for
the October-December 2009 quarter shot up sharply, suggesting a higher
profit growth in corporate sector in the third quarter (October-
December) of the current fiscal. Corporate advance tax payments for
the quarter were up 44% to Rs 48,300 crore against a 3.7% decline in
April-June quarter and a 14.7% increase in July-September quarter. The
company-wise break-up of advance tax collection suggests a broad-based
recovery with automobiles, cement, metals and consumer goods, doing
well.

European shares gained on Thursday on the final day of the year, as
banks and commodity stocks gained ground amid firm risk appetite. The
key benchmark indices in France and UK rose by between 0.12% to 0.29%.
Stock markets in Germany were closed.

Asia stocks rose on Thursday, racking up a 68% gain for the year, as a
jump in US consumer confidence reinforced views that the world's
largest economy is gradually recovering. The key benchmark indices in
China, Hong Kong, Singapore and Taiwan rose by between 0.45% to 1.75%.
Markets in Japan, South Korea, Thailand, Indonesia and the Philippines
were closed. Most markets in the world will be closed on Friday for
the New Year day holiday.

Beijing will stick to its loose monetary stance, but will try to be
more flexible in implementing its policies, People's Bank of China
Governor Zhou Xiaochuan said on Thursday.

Trading in US index futures indicated the Dow could gain 15 points at
the opening bell on Thursday, 31 December 2009.

US stocks spent almost the entire session trading with moderate losses
until some late support helped the major indices improve their
position on Wednesday. Better-than-expected report on Midwest
manufacturing helped sentiment. The Dow Jones industrial average added
3.10 points, or 0.03%, at 10,548.51. The Standard & Poor's 500 Index
was up 0.22 point, or 0.02%, to finish at 1,126.42. The Nasdaq
Composite Index gained 2.88 points, or 0.13%, to close at 2,291.28.
The Chicago purchasing-manager's index jumped to 60 in December 2009
from 56.1 in November 2009, the highest since January 2006 and well
above expectations. The employment gauge also rose, hitting its
highest since November 2007.

With many of the major market players done for the year, prices were
moderately higher Wednesday for US interest rate futures even as data
revealed a significant pick-up in the economy. The July 2010 fed-funds
contract priced in a 76% chance for the Federal Open Market Committee
to raise the Fed funds rate to 0.5% at its meeting in late June 2010.
On Tuesday, the July 2010 contract had priced in a 78% chance for a
0.5% rate. The funds rate has stayed inside a record low range of 0%
to 0.25% for the past year, one of many Fed actions designed to
stimulate the economy.

Closer home, the BSE 30-share Sensex rose 120.99 points or 0.7% to
17,464.81 its highest closing since 5 May 2008. The Sensex gained
187.12 points at the day's high of 17,530.94 in afternoon trade. The
Sensex opened with an upward gap of 21.55 points at 17,365.37, also
the day's low.

The S&P CNX Nifty gained 31.60 points or 0.61% at 5201.05, its highest
closing since 2 May 2008. It hit a high of 5221.85 in intraday trade
BSE clocked a turnover of Rs 4618 crore, higher than Rs 4327.29 crore
on Wednesday, 30 December 2009.

The market breadth, indicating the overall health of the market was
positive. On BSE, 1672 shares advanced as compared with 1210 that
declined. A total of 83 shares remained unchanged.

Among the 30-member Sensex pack, 22 rose while rest declined.
A deluge of global liquidity boosted stocks across the globe this
year. Governments and central banks around the world have injected
trillions of dollars in the past one year to pull the world out of a
most severe recession since the 1930s Great Depression. The Sensex
rose 7817.50 points or 81.03% in calendar year 2009. From a 3-year
closing low of 8,160.40 on 9 March 2009, the Sensex was up 9304.41
points or 114.01% as on 31 December 2009. The S&P CNX Nifty rose
2241.90 points or 75.76% in calendar year 2009.

FII inflow in December 2009 totaled Rs 10,233.10 crore (till 30
December 2009). FII had bought equities worth Rs 5469 crore in
November 2009. FII inflow in the calendar year 2009 totaled Rs
83,423.90 crore (till 30 December 2009).

Coming back to today's trade, the BSE Mid-Cap index rose 0.31% and the
BSE Small-Cap index rose 0.6%. Both these indices underperformed the
Sensex.

Sectoral indices on BSE showed mixed trend. The BSE Power index (up
1.16%), the BSE Capital Goods index (up 1.1%), the BSE Consumer
Durables index (up 1.07%), the BSE Oil & Gas index (up 1%), the BSE
Auto index (up 0.96%), the BSE IT index (up 0.73%), the BSE PSU index
(up 0.71%), outperformed the Sensex.

The BSE FMCG index (down 0.19%), the BSE Healthcare index (down
0.14%), the BSE Realty index (down 0.09%), the BSE Bankex (up 0.19%),
the BSE Metal index (up 0.23%), the BSE Teck index (up 0.55%),
underperformed the Sensex.

India's largest private sector firm by market capitalisation Reliance
Industries (RIL) rose 1.34%. RIL has successfully tested the design
capacity of its massive eastern offshore Krishna-Godavari basin D6
field production facilities. A flow rate of 80 million standard cubic
meters was achieved through the KG-D6 facilities and delivered to the
pipeline, the company said in a statement recently.

Oil exploration firms rose, after the crude oil moved past $79 a
barrel. India's second biggest oil and gas exploration firm by
revenue, India's biggest state-run oil exploration firm by revenue Oil
& Natural Gas Corporation (ONGC) rose 0.23%. Cairn India advanced
1.19%. But, Oil India, fell 0.35%. Rise in crude oil prices would
result in higher realizations from crude sales for oil exploration
firms. Light, sweet crude oil gained 41 cents, or 0.52%, to $79.28 a
barrel on the New York Mercantile Exchange on Wednesday, 30 December
2009 after US government inventory data showed a draw down in
stockpiles last week.

Banking stocks pared early gains triggered by reports credit offtake
has picked up this month. According to the latest Reserve Bank of
India (RBI) figures, total loans, including food credit loans to Food
Corporation of India for foodgrain procurement and non-food credit
(all other loans) amounted to Rs 29,41,293.07 crore as on 19 December
2009. This represents a sequential growth of Rs 34,028 crore since 27
November 2009 compared to a growth of Rs 7,698 crore in the whole of
November 2009.

India's largest bank by net profit and branch network State Bank of
India rose 1.99% to Rs 2269.45. But the stock came off the day's high
of Rs 2283.80. The state-run bank paid advance tax of Rs 1795 crore
versus Rs 1700 crore. India's second largest private sector bank by
net profit HDFC Bank rose 0.55% to Rs 1700.40. The stock came off the
day's high of Rs 1708.70.

India's largest private sector bank by net profit ICICI Bank fell
0.49% to Rs 875.70. The stock came off the day's high of Rs 890. The
bank is reportedly raising up to Rs 1200 crore by selling bonds.
India's largest engineering & construction firm by sales Larsen &
Toubro rose 0.67% after it won two orders totaling Rs 580 crore.
Among other capital goods stocks, ABB, Bharat Heavy Electricals, BEML
and Praj Industries rose by between 1.47% to 4.91%.

Auto stocks extended recent gains on the back of strong sales in the
month of November 2009 and higher advance tax payment in the third
quarter.

India's largest tractor marker by sales Mahindra & Mahindra (M&M)
advanced 1.73%. After announcing its entry into the medium and heavy
commercial space, the company is reportedly making new inroads in the
mini truck segment. It is set to launch one tonner Maxximo at the
upcoming Auto Expo from its light commercial vehicle (LCV) space.
From two wheeler space, Hero Honda Motors and Bajaj Auto rose by
between 0.54% to 3.72%.

India's top truck maker by sales Tata Motors rose 0.61%. The company
has reportedly commenced trial production of the first batch of the
Nano at the new mother plant at the Sanand facility last week. The
company will start commercial production of the 'People's Car' from
March 2010 onwards.

Tata Motors had shifted its mother plant to Gujarat last year after
facing local protests in West Bengal spearheaded by Trinamool Congress
leader Mamata Banerjee.

But, India's top small car marker by sales Maruti Suzuki India fell
0.64%.

Telecom stocks were mixed after government said it will introduce
mobile number portability across the country by 31 March 2010, pushing
back its introduction by up to 3 months. India's largest mobile
services provider by sales Bharti Airtel rose 1.01%. India's second
largest mobile services provider by sales Reliance Communications fell
0.52%.
Mobile Number Portability (MNP), which allows users to retain their
number even if they switch operators, was to be introduced in metro
cities and the so-called Category A telecom zones from 31 December
2009 and in other areas by March 20, 2010.

India's largest thermal power generator by sales NTPC rose 1.2% on
reports the government plans to allow the firm to sell around 10% of
its power capacity at market-determined prices.

Among other power stocks, Tata Power Company, Torrent Powr and Power
Grid Corporation of India rose by between 1.19% to 2.72%.
Consumer durables stocks gained on hopes higher sales in the ongoing
festive season will boost profitability. Lloyd Electric, Videocon
Industries, and Gitanjali Gems gained by between 0.98% to 5.98%.
Some FMCG stocks fell on profit taking. Tata Tea, Hindustan Unilever
and United Spirits fell by between 0.26% to 1.57%.
Cement shares gained on speculation cement prices will increase in the
first quarter of calendar year 2010 on rise in infrastructure
activity. Ambuja Cement, UltraTech Cement, Birla Corporation ACC (up
1.17%), rose by between 0.07% to 2.92%.

Software pivotals rose on encouraging economic data in the United
States. US is the biggest market for Indian IT firms. India's second
largest software services exporter Infosys rose 1.01%. India's largest
software services exporter TCS rose 0.91%. But, India's third largest
software services exporter Wipro fell 0.26%.

Rate sensitive realty realty stocks fell on profit taking. India's
largest realty player by market capitalization DLF fell 1.27%. On 16
December 2009, the company's board approved merger of its commercial
realty arm DLF Assets (DAL) with itself, a move aimed at repaying some
of DAL's debt.

Among other realty stocks, Housing Development & Infrastructure,
Parsvanath Developers and Unitech fell by between 0.42% to 2.01%.
Metal stocks rose as the base metals traded on the Shanghai Futures
Exchange racing higher as the April 2010 copper, zinc, aluminum
contracts all hit new 2009 highs on fund buying. Steel makers rose as
steel companies are reportedly eyeing higher prices in 2010 as
stronger economic growth worldwide drives up demand for the critical
building material. Tata Steel, Steel Authority of India, JSW Steel
rose by between 0.01% to 1.18%.

Last week, Tata Steel raised prices by Rs 2,000 a tonne, while state-
owned Steel Authority of India (SAIL) withdrew the Rs 750-1,500 per
tonne rebate it had started offering in November 2009, following the
increase in raw material cost.

Among non ferrous stocks, National Aluminum Company, Stelite
Industries, Hindalco Industries rose by between 0.44% to 7.29%.
Cals Refineries clocked the highest volume of 2.64 crore shares on
BSE. Radhe Developers (1.42 crore shares), Triplate Company (1.32
crore shares), Gammon Infrastructure (1.18 crore shares) and Ispat
Industries (0.92 crore shares) were the other volume toppers in that
order.

State Bank of India clocked the highest turnover of Rs 153.01 crore on
BSE. Tata Steel (Rs 130.79 crore), Triplate Company (Rs 119.66 crore),
Reliance Industries (Rs 78.70 crore) and Larsen & Toubro (Rs 77.94
crore) were the other turnover toppers in that order.

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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.

Bought to you by :

Ingenious Investor
Equity Research Division

Ravina Consulting
No.429 Mahavir Tuscan
Near Hoodi Circle, Whitefield
Mahadevapura Post
BANGALORE 560048

Read - www.ingeniousinvestor.blogspot.com
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