Friday, January 7, 2011
Buy and Hold....
R Power (BUY, above Rs161, Target Rs170): On the daily chart, the stock has given an upside breakout in Thursday’s trading session. It suggests that the consolidation range is about to end and it may reverse into an uptrend. On Thursday, the stock advanced in a declining market, confirming the bullish set up. Moreover, the stock has given a close above its clutches of key moving averages on expanding volumes (i.e.100-DMA and 200-DMA) on Thursday. Yesterday’s up move in the stock was supported by spurt in volumes which was higher than its 3-day average volumes. The stock is likely to stage a strong reversal from the current levels in the medium term. We advise buying the stock above Rs161 with stop loss of Rs157 for a target of Rs170 (Time period: 7 days).
Market Commentary ..
Freezing temperatures in northern India can’t take the heat off policymakers in New Delhi as inflation shows no sign of cooling. Prices of essential food items continue to soar even as the non-food element of WPI starts turning costlier triggering expectations of some interest rate hikes later this month. Add to it the fact that the Government has now linked NREGA pay with inflation. This will not only require more funds but will also push wage inflation higher.
So, all the boastful predictions that inflation will soften to 5-6% by March-end may be just hot air.
Coming to the markets, India seems to be underperforming vis-à-vis the developed counterparts like the US and Europe. A multitude of factors have combined to put the bulls on the backfoot. The near-term prospects continue to look slightly dim. Patiently await the start of a fresh intermediate up-trend before making fresh investments.
± Suzlon bags Rs8.7bn order from Hindustan Zinc to set-up wind-farms in four states. (ET)
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± Promoter of Reliance Infra to increase stake up to 48%. (ET)
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Corporate Snippets
± SBI to set-up 600 financial inclusion centres. (BL)
± JSW Steel to step-up coking coal imports by 40% next fiscal. (ET)
± JSW Steel has acquired Bellary Steel and Alloys for Rs2.1bn. (ET)
± ONGC Q3 FY11 profit may be hit by a higher subsidy pay-out, as per Chairman RS Sharma. (ET)
± PFC’s Rs70bn FPO likely in May. (ET)
± NTPC is eyeing Maldives to set-up solar power projects. (BS)
± SAIL in talks with Japanese companies for technology to set-up a cold rolled grain oriented steel manufacturing facility. (BS)
± L&T bags orders worth Rs11.8bn. (ET
Thursday, January 6, 2011
Market Commentary ..
Slight change in the political fortunes has rendered UPA II paralysed. After last week’s postponement of the EGoM on diesel price, the Centre has now deferred a call on urea deregulation as well. Also, Murli Deora has confirmed there won’t be any hike in diesel or LPG prices for now.
The trend of ‘go slow’ on reforms may continue given the current political equations and a couple of important state elections this year.
A spate of scams has besieged the Congress-led regime even as inflation remains stubbornly high. And, while the bumper harvest of 3G auction and disinvestment will see it meet fiscal deficit target, current account gap has spiked to 4% of GDP.
At the same time, economic reports in the US have been encouraging lately, powering the rally on Wall Street in recent days. Even the European markets have held their own. So, the underperformance of India is a bit surprising. One has to wait and see whether we can break that pattern.
We expect an improved start and perhaps a better day amid firm overseas markets. But, there might be some softening later in the day.
± Reliance Industries has abandoned the second exploratory well in a Krishna-Godavari block after encountering “disappointing” results. (BS)
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Wednesday, January 5, 2011
Buy & Hold Titagarh Wagons Ltd at Rs512 with SL of Rs500 for Target Rs536
Buy & Hold Titagarh Wagons Ltd
around Rs510 -515
with SL of Rs500 for
Target Rs536,544 ++
BUDGET PICK
around Rs510 -515
with SL of Rs500 for
Target Rs536,544 ++
BUDGET PICK
Our Sell Nifty BOOK Partial PROFIT below 6100,
Our Sell Nifty BOOK Partial PROFIT below 6100,
Hold for 6090 & 6077 below;
European markets update: CAC Index down 0.4% and DAX Index down 0.2%
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Market Commentary ..
A little bit of fatigue seems to be creeping into the Indian markets even as their overseas counterparts are enjoying an extended rally. September was spectacular for India. October and November were not so kind. In December, we somehow managed to claw our way back. But, early in January the markets seem to be lacking the spark again.
The road ahead is murky and there are no clear answers on which way the cookie will crumble for the Indian markets. The short-term direction will hinge on global cues, quarterly earnings and the outcome of RBI’s policy meeting.
The start today will be down, as US stocks closed mixed and key Asian markets are in the red. European markets rose anew, with UK’s FTSE pacing the advance. The broad range for the Nifty appears to be 6000-6300. It could be stuck between 6100-6200 in the immediate future. A close below 6115 could result in selling pressure.
Individual stocks, especially outside the main indices, will hog the limelight. But beware of the volatility in the small-cap and mid-cap counters.
Corporate Snippets
± Reliance MediaWorks through Reliance Capital acquired 31.92% stake in Fame India through its open offer. (BL)
± Jindal SAW Ltd has executed a mining lease agreement for 30 years with Rajasthan for iron ore mines in the State. (BL)
± Lanco Infratech plans to borrow from Chinese banks, joining rivals in seeking cheaper funds for equipment contracts for plants. (ET)
± Suzlon Energy is in talks with Gamesa Corporacion Tecnologica of Spain for a strategic alliance. (BS)
± Natco Pharma has sought a voluntary licence from Pfizer to make and sell copies of the US company’s HIV drug in India. (ET)
± Ashok Leyland has hired top expat executives from global automobile companies. (ET)
± Lakshmi Vilas Bank eyes QIP in February-March to improve its capital adequacy ratio and raise capital to fund growth. (BS)
± BPCL has granted Kingfisher Airlines a three-month reprieve to pay jet fuel dues. (BS)
± Great Eastern Shipping expects to raise Rs1bn via issue of 12-year bonds later this week. (ET)
± Diamond Power Infrastructure has bagged orders from Power Grid Corporation of India and SMO-SPIC for supply of 400 KV D/C line conductors. (ET)
Tuesday, January 4, 2011
Book profit in Biocon at Rs430.5, recommended to buy on 31st Dec
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Buy MTNL (57.40) with s/L 55 tgt 59, 60
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The speculator’s deadly enemies are:
Ignorance, greed, fear and hope. All the statue books in the world and all the rule books on all the Exchanges of the earth cannot eliminate these from the human animal.
“I can’t sleep” answered the nervous one.
“Why not?” asked the friend.
“I am carrying so much cotton that I can’t sleep thinking about. It is
wearing me out. What can I do?”
“Sell down to the sleeping point”, answered the friend.
Buy and Hold....
Buy Grasim Industries Jan Future in range of Rs2376 - 2379 for the target price of Rs2406 with a stop loss placed at Rs2361. Lot size: 125...Remarks: Net maximum profit of Rs3,750 and net maximum loss of Rs1,875.
Market Commentary ..
The New Year experience of global equities sets the tone for another positive start for the Indian stocks. However, the sudden turnaround intra-day in the key indices on Monday is a cause for worry. In the near term, the sentiment will be largely driven by global cues before Q3 results start kicking in.
Growing optimism about the state of the global economy and an upbeat report on manufacturing PM led US stocks to extend the so-called “Santa Clause” rally of December. European shares too closed smartly up. London markets remained shut.
In Asian stocks in South Korea surged to an all-time high. This morning, Japanese and Chinese markets have resumed trading on a strong note. The Hang Seng is a little subdued though after Monday’s rally.
The RBI policy review later this month is another important event for the markets. As far as this week is concerned, global markets will keenly follow the monthly US jobs data.
Corporate Snippets
± GAIL has entered into an agreement with ONGC, under which it will exclusively purchase and market the natural gas produced from the latter’s various fields during the next three years. (BS)
± HDFC Bank has raised interest rates on retail term deposits by up to 1.25% across various maturities. (ET)
± Kotak Mahindra Bank has increased interest rates on retail term deposits of various maturities by up to 0.50%. (ET)
± Reliance Industries is mulling the establishment of a US$1.2bn liquefied natural gas import terminal on either the East or West Coast to meet demand at its refineries and petrochemical plants. (FE)
± Jindal Power plans to launch its initial public offer to raise Rs72bn by May, 2011. (ET)
± Dabur has completed the acquisition of the US based personal care firm Namaste Group for US$100mn. (ET)
± Coal India will enter into contracts with private firms to develop underground coal gasification projects and set up at least one 50:50 joint venture to create marketing infrastructure and sell the gas. (ET)
± IOC is looking at increasing its imports from Angola in southern Africa. (BS)
± KEC International has bagged three substation orders worth Rs9.8bn from Kazakhstan Electricity Grid Operating Company and Power Grid Corporation of India. (ET)
± Larsen & Toubro has bagged Rs11bn order from various power plant developers, including Maithon Power, Nebha Power, Balco and Sterlite Energy. (ET)
Monday, January 3, 2011
Nifty near HIGH, CAUTION for 2011!!!
Nifty is likely to witness some amount of correction to the levels of 5,900 in the near term. With last week’s recovery along with improvement in sentiments (locally and globally), traders are expecting a new high very soon (bullish hype generally associated with every pullback). However, with key indexes approaching key resistance levels, traders should consider taking some caution for 2011.
Buy KALINDEE RAIL Target 197, 200 + +
our buy call given at 170
GET READY FOR
RAIL BUDGET...
Range since last 10years
at budget time is 166-209
Market Commentary ..
The first trading day in the New Year is here and bulls will hope there are no hangovers owing to the extended weekend. Many markets around the world are shut for extended New Year holidays. Asian markets which are open for trading are mostly positive. We expect the bulls to shake off any weariness and kick off 2011 on a bright note.
US stocks closed mixed in Friday’s truncated session while European benchmarks finished in the red. On the whole, most asset classes had a pretty good year in 2010.
Naturally, there will be a lot of conjecture on how 2011 will unfold. It will take a while to have any grip on the prospects for the New Year. So, don’t be too anxious and focus on the short-term horizon, which appears to be fairly okay.
The key indices may advance further and if the momentum is strong enough, we could see new highs in the coming days. The bulls collective resolution seem to be a new high for the indices this year if not this month itself.
Sector Watch: Banking, Auto & Realty
Markets may open in GREEN
Short Term Trend may positive
during the session
Small & mid cap
stocks may in focus
Corporate Snippets
± With an eye on having a global footprint as well as securing supplies of key raw material like coking coal and iron ore, SAIL is looking at building steel plants abroad. (FE)
± Hero Group says its exposure in the alleged financial fraud at Citigroup was Rs287.5mn. (ET)
± ICICI Bank raised its base rate 50bps to 8.25% and PLR by 25bps to 17%. (ET)
± BHEL is exploring the possibility of setting up an assembly unit in Indonesia to grab a sizeable market share of the growing demand for power equipment in the South-East Asian country. (BL)
± HDFC Bank decided to increase its base rate by 25bps to 7.75% effective January 1. (ET)
± Tata Motors hiked the prices of some its passenger vehicles and all of its commercial vehicles by a range of Rs3,000-30,000. (BS)
± Tata Steel plans to ink an agreement with Japan-based Nippon Steel by end-this month to set up a Rs24bn steel plant for producing auto-grade steel. (BS)
± JSW Steel emerges the highest bidder for debt-laden Bellary Steel & Alloys. (BS)
± Jindal Steel & Power plans to build its first oil refinery to expand its energy business in the domestic and overseas markets. (BS)
± ICICI Bank is keen to acquire more local banks to expand in the smaller towns in India. (ET)
± Marg is planning to hive-off its residential projects business to a wholly-owned new subsidiary Marg Properties. (BS)
± PNB has said that it plans to enter the life and general insurance business and has appointed Boston Consulting Group as its adviser. (TOI)
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