Friday, February 4, 2011
Market Commentary ..
Thank god there was no afternoon shocker on Thursday as was the case on Wednesday. After a five-day rout we had a solid advance. This could sustain as FIIs were net buyers after a long hiatus. Also, the Nifty breached short term resistance of 5470 and closed above 5500. Some short covering is expected around 5550, which may take the Nifty to 5570. A close above 5650 might just shore up investor confidence.
However, any major up-trend will take a while to develop and won’t be without hiccups. Resistance is likely at 5600 and later around 5700-5750.
We expect a flat to steady start after which the indices could gain traction. But be careful as the undertone remains jittery and avoid getting hit by intraday volatility. FII flows will continue to have a bearing on overall sentiment and so will the upcoming Budget.
US economic data has improved steadily, propelling the Dow above 12,000. All eyes are on Friday’s monthly jobs report.
Balrampur Chini, Cipla, Hindustan Copper, NCC and Suzlon will declare their results today.
Thursday, February 3, 2011
Corporate Snippets
± Infosys is rehauling its hierarchical system and making internal process more flexible for young employees to stem attrition and attract talent. (ET)
± NTPC will not open price bids for the Rs110bn bulk equipment supply tender on Friday. (ET)
± NTPC has floated bids for 800MW bulk super-critical units for Rs190bn. (BS)
± Vedanta may terminate US$9.6bn deal if Cairn India tweaks royalty clause. (ET)
± M&M has rolled out a ‘mobile seva’ initiative to provide services for its three wheelers and other commercial vehicles in AP, Tamil Nadu, Kerala and Karnataka. (BL)
± ITC may soon hike prices of its packaged foods product by 7-8%. (BL)
± Bank of India to raise Tier-I capital through the issue of 30mn fresh equity share. (BL)
± Mahindra Satyam is wooing back select former employees. (BL)
± Wipro to set up an exclusive delivery centre in Toronto to develop software solutions and cut down Canadian companies’ energy consumption bill. (BL)
± SAIL FPO is likely to hit the market only by end-March. (BL)
Wednesday, February 2, 2011
Buy and Hold....
Bharti Airtel (BUY, between Rs312-314, Target Rs331): Bharti Airtel after recent correction is currently trading near strong support which corresponds to 50% Fibonacci levels and followed with support of long term moving average of 200 days. Though stockprice closed in the negative terrain in yesterday ‘s trading session, but prices have managed to bounce back sharply from the support levels of Rs310 levels. Daily RSI too has been trading near its 3 month trough of 32 levels and there is high probability that stock to post decent recovery from these levels. We advise buying stock in the range of Rs312-314 with stop loss of Rs306 for target of Rs331 (duration 5 days).
Market Commentary ..
After a five-day rout, investors may feel adventurous this morning as the Indian market could see a much-needed relief rally. World markets, especially in the US, have ignored the political turmoil in Egypt with the Dow breaching 12,000. Other global markets have also been stable to positive amid growing optimism about the ongoing recovery in the US and elsewhere.
Unfortunately, the Indian market hasn’t benefited from the global rally in recent times. On the contrary, India has lost quite a bit of ground, with the key indices dropping below 200-DMA. Inflation has been the biggest bugbear for India, along with policy paralysis. FIIs have latched on to some of these negatives to pull out $1bn in January.
All eyes will be on the forthcoming Union Budget. There have been mere murmurs of a few bold steps being considered for the Budget. If that does happen we might see some semblance of recovery. But, more importantly inflation has to soften and the Government must act on crucial reforms.
Unfortunately, the Indian market hasn’t benefited from the global rally in recent times. On the contrary, India has lost quite a bit of ground, with the key indices dropping below 200-DMA. Inflation has been the biggest bugbear for India, along with policy paralysis. FIIs have latched on to some of these negatives to pull out $1bn in January.
All eyes will be on the forthcoming Union Budget. There have been mere murmurs of a few bold steps being considered for the Budget. If that does happen we might see some semblance of recovery. But, more importantly inflation has to soften and the Government must act on crucial reforms.
FPO shares of Tata Steel will come into the market from today.
Corporate Snippets
SBI will raise Rs100bn through bonds to augment its capital base to meet the growing business requirements. (BS)
± M&M said it plans to launch 8-10 new products, including a premium sports utility vehicle, across various segments by March 2012. (ET)
± M&M announced the launch of the Genio, its next generation commercial vehicle, in Chandigarh. (BS)
± M&M has formed a core committee to expedite the integration with Ssangyong Motors as it receives creditors’ approval to buy out 70% stake in the Korean sports utility vehicle maker. (ET)
± HDFC has entered the booming Indian education sector by picking up a stake in Indus World Schools, which is promoted by education company Career Launcher. (BS)
± HDFC has increased its retail prime lending rate by 25bps to 15.25%. (BS)
± DLF Ltd said that the company and its 22 subsidiaries have received an additional tax demand of Rs 11.8bn from Income-Tax authorities during December quarter. (BL)
± Glenmark Pharmaceuticals has started manufacturing samples at its new plant in Indore.(ET)
± US court lifted an injunction and cleared the sale of Dr Reddy's drug. (BS)
± Bank of India said it would raise Rs300mn by way of issuance of fresh shares on a preferential basis or by offering global receipts.(FE)
Tuesday, February 1, 2011
Result Update:
Results table
| Rs mn | Revenue | % yoy | PAT | % yoy |
| IDFC | 5,126 | 27.3 | 3,042 | 26.7 |
| Sun Pharma | 4,583 | (6.4) | 3,427 | 68.8 |
| Dabur | 9,006 | 17.8 | 1,272 | 12.5 |
| Indian Hotel | 4,853 | 69.7 | 503 | (22.5) |
| Jindal Saw | 10,634 | (22.4) | 1,250 | (26.5) |
| Canara Bank | 21,192 | 43.4 | 11,057 | 5.0 |
| Andhra Bank | 8,399 | 44.2 | 3,309 | 20.2 |
| Shriram Transport Finance | 13,687 | 18.5 | 3,014 | 27.3 |
| NALCO | 14,250 | 2.8 | 2,560 | 64.9 |
| OnMobile | 1,252 | 39.7 | 177 | 36.0 |
| KEC International | 8,691 | (7.3) | 351 | (16.4) |
| Greenply Inds | 3,165 | 44.9 | 72 | (48.3) |
| Phillips Carbon Black | 4,316 | 24.5 | 300 | (10.7) |
| Escorts | 8,278 | 37.9 | 255 | 8.9 |
| Mahindra Holiday Resorts | 1,279 | 12.8 | 311 | 30.6 |
| Tata Metaliks | 3,070 | 11.4 | 19 | (90.6) |
| Tata communication | 8,776 | 14.0 | 457 | (83.8) |
| Kalpataru Power | 7,897 | 10.3 | 508 | 15.2 |
| Rolta India | 3,551 | 24.6 | 1,950 | 137.4 |
Buy and Hold....
BUY Union Bank of India Feb Future in range of Rs329-331 for the target price of Rs343 with a stop loss placed at Rs324.
| Lot size: 1000 | Remarks: Net maximum profit of Rs14,000 and net maximum loss of Rs7,000. |
Corporate Snippets
± The Comptroller and Auditor General of India is finalising a report that questions the government’s move to allow Reliance Industries to increase its expenditure in developing the D-6 field in the Krishna-Godavari basin by over US$6bn. (ET)
± RPG Group company Phillips Carbon Black (PCBL) has indicated that the company is in the race for the US$1.2bn carbon black division of Germany’s Evonik Industries. (BS)
± Private equity firm Bain Capital LLC and Government of Singapore Investment Corporation (GIC), a sovereign fund owned by the government, are close to picking up part of Honda’s 26% equity stake in the world’s largest two-wheeler manufacturer Hero Honda. (BS)
± HCL Infosystems has bagged Rs25bn project from state-run telecom firm BSNL. (BL)
± PNB has hiked its base rate as well as benchmark prime lending rate (BPLR) by 50bps each. (BL)
± The environment ministry has imposed 61 conditions before giving approval to South Korean steel major Pohang Steel Company’s (Posco) US$12bn steel plant. (BS)
Monday, January 31, 2011
Buy and Hold....
Cipla (BUY, between Rs326-329, Target Rs345): Cipla Ltd on the daily chart has formed ‘hammer’ combined with ‘harami black’ pattern on candle stick. As such pattern has appeared near the fibonnaci retracement support of 61.8% , the probability of bounce back remains extremely high. Adding to despite weakness in the broader markets on Friday’s trading session stock has managed to close in the green supported with increase in the volume activity compared to previous trading session. The long term support of 200 DMA also is placed at levels of Rs334 which supports buying argument in the counter. We advise buying stock in the range of Rs326-329 with stop loss of Rs321. (Duration 5 days).
Market Commentary ..
After last week’s big selloff (that saw the Nifty breaching 200-DMA) many would have hoped for some relief. But those prayers may not yield a desired result, not at least at the start of today’s trading session. World markets have been rattled by the sudden spurt in public unrest in Egypt against the three-decade rule of President Hosni Mubarak.
The Egyptian political turmoil could continue to cast its ugly shadow over world markets for a few days. It is tough to predict which way the cookie will crumble in Egypt. One only hopes that the uprising doesn’t spread in other parts of the Arab world.
Brace for a gap-down opening, as our market reacts to developments in Egypt. Keep an eye on global cues for any improvement in the sentiment. One should remain cautious and wait for the situation to stabilise. We expect investors to take refuge in safe havens like the dollar, yen, gold and government bonds. Crude oil has rallied above $90. The undertone may continue to be fragile for a while and a close below 5450 levels could further aggravate the selling pressure.
Corporate Snippets
± Suzlon Energy receives an order worth US$1.3bn for supply of wind turbines aggregating to 1,000MW to Caparo Energy India. (ET)
± JK Paper plans to raise Rs2.5bn through a rights issue to part fund its Rs16bn capacity expansion programme. (ET)
± Cadila Healthcare and Bayer HealthCare have agreed to set up an equal JV - Bayer Zydus Pharma. (ET)
± NTPC is scouting for new suppliers to speed up pending power projects. (ET)
± Technical arm of the oil ministry certifies that Vedanta Resources has sufficient technical capabilities to operate the oil and gas blocks held by Cairn India. (ET)
± Simbhaoli Sugars announced a JV with UK-based ED & F Man Holdings to set up a sugar refinery in Kandla for an investment of Rs2.3bn. (ET)
± Adani Power has denied that it plans to raise US$500mn in a convertible bonds issue by mid-February for a possible funding of coal mine purchase. (ET)
± NMDC is re-evaluating its two-year-old agreement with Rio Tinto. (BS)
± Deepak Fertilisers plans to invest Rs800mn-Rs1bn to set up a plant for the manufacture of customized fertilisers in the next 18-24 months. (BS)
± ITC plans to invest up to Rs30bn to set up a paper manufacturing unit in Andhra Pradesh. (BS)
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