Friday, February 25, 2011
Market Commentary ..
Just when the sentiment on the Indian bourses was improving we have been hit hard by a swift and steep spike in crude oil amid worsening Middle-East turmoil. The crude shock has triggered fears of further uptick in inflation and interest rates. A bloated oil import bill also hits India’s external balance sheet and fiscal health.
And on Thursday, it almost seemed like the expiry of optimism with the key indices taking a huge pounding. But, we are likely to see a better opening as crude has cooled off slightly and there hasn’t been any fresh selloff in global equities. We might see a positive end to a tumultuous week, provided there are no further nasty surprises.
At least for the day and for a few more days, investors will have to pay close attention to the Railway Budget, Economic Survey and the Union Budget. Let's hope the Railway Minister’s proposals for FY12 will keep things on track for the local bourses.
The overall undertone may continue to be a little nervous, and so one needs to be very watchful before jumping the gun.
NIFTY FO CLOSED @ 5286 AS ON 24.02.2011
NIFTY FO has resistance @ 5297 to 5309, above which other resistance levels are @ 5317 to 5330. In down side support levels are @ 5247 to 5233 levels; below which other support levels are @ 5219 to 5209 levels in MARCH-2011. I am positive for next week above 5330 level but be with the trend. Let the market decide further moves. As we are saying from many days Buying is suggested in falls only and its still a better strategy in the given scenario. One can go for buy at those levels also, but in absence of that its time to BOOK PROFIT now. This is a pessimistic outlook but that's the way we tend to be, in this market.
Corporate Snippets
± RIL and BP will shortly float a joint venture company over next months, which will look at the trading and marketing of natural gas in India. (BS)
± Bajaj Auto on Thursday launched its 2011 edition of Discover 100. (ET)
± RPower joins US$3.5bn race to buy out Australian coal mining company Whitehaven Coal. (BS)
± RPower appears to be in the lead for the 3,000-MW long-term power purchase agreement called for by the Uttar Pradesh Power Corporation. (BL)
± Tata Steel UK signed a definitive sale agreement to sell certain assets of TCP to Sahaviriya Steel Industries UK, a subsidiary of Thailand’s largest steel producer, for US$469mn. (BS)
± NMDC is setting up a 300,000-tonne plant in Karnataka for making iron ore concentrate from iron ore waste with an investment of Rs1.5bn. (FE)
± TCS has been appointed as the official technology partner to the pro-cycling team – Team Garmin-Cervélo — for the racing season 2011. (BL)
± SBI has decided to withdraw from the certificate of deposit (CD) market. (BS)
± SBI has mopped up Rs39bn on the retail side through its latest bond issue. (BS)
± Shipping Corporation of India is planning to invest US$1bn every year to acquire new ships. (BS)
Thursday, February 24, 2011
Wednesday, February 23, 2011
Market Commentary ..
With risk appetite on the wane, investors are not really attempting to take any chances. Flight-to-safety seems to be the order of the day but the political strife in West Asia does not really make any place safe. Even as the pro-democracy wave rages, investors are now wondering what next after Libya?
Back to our bourses, the start today is set to be down but given the resilience being exhibited by some Asian markets, we could hope for some rebound later. The F&O expiry, geopolitical concerns and the Budget will ensure that caution reigns supreme. We expect the Nifty to perhaps retest the 5330 levels in the short term.
Airlines and oil & gas companies will be in focus due to the spike in crude. There is also talk of another fuel price hike but that will take some weeks at least.
ABB, Alfa Laval, Bata India, Gujarat Pipavav and SKF India will announce their results today.
Ranbaxy will be in focus after its Q4 results.
NIFTY FO CLOSED @ 5477 AS ON 22.02.2011
NIFTY FO has resistance @ 5589-5497; above which other resistance levels are @ 5503-5513. In down side support levels are @ 5444-5430 levels; below which other support levels are @ 5419 - 5409 levels in FEBRUARY-2011. I am positive for next week above 5513 level but be with the trend. Let the market decide further moves. As we are saying from many days Buying is suggested in falls only... and its still a better strategy in the given scenario. One can go for buy at those levels also, but in absence of that its time to BOOK PROFIT now. This is a pessimistic outlook but that's the way we tend to be, in this market.
Corporate Snippets
maintenance and repair contract worth Rs5.9bn to the US-based P&H Mining Equipment Inc. (BL)
± Maruti Suzuki launched the diesel variant of its SX4 sedan with an aggressive price tag of Rs 7.74-8.62 lakh (ex-showroom, Delhi). (BL)
± Chennai Metro Rail Ltd has awarded a Rs3bn contract for power supply and overhead equipments to Siemens AG, Germany, and Siemens India consortium. (BL)
± GlaxoSmithKline Consumer Healthcare is targeting the breakfast, snacks and mid-day meals categories for expanding its foods business. (BS)
± RCom today launched 3G services in Kashmir. (BS)
± Ashok Leyland Defence Systems and Krauss-Maffei Wegmann GmbH & Co. KG, Germany, will work together to develop defence systems for India and international markets. (BL)
± Sun Pharma has announced a plan to merge its US arm Caraco Pharma Laboratories in a deal for $5.25 a share. (ET)
± Petronet LNG is turning into a marketer of natural gas from being just an importer and regassifier of LNG. Company has launched a pilot project in Vadodara, Gujarat. (BS)
Tuesday, February 22, 2011
Intraday; Target achieved in Long Bata India Feb Fut
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Buy and Hold.... RIL tgt 1177 ++
± Global oil major BP will buy a 30% stake in Reliance Industries’ oil and gas blocks, including the D-6 block, for US$7.2bn as part of a long-term deal that involves a total investment of US$20bn. (ET)
Reliance Industries Ltd (RIL) and BP announced a major deal for E&P and gas marketing businesses. The highlights of the deal are as follows:
± BP will take a 30% stake in 23 oil and gas production sharing contracts that RIL operates in India, including the producing KG D6 block
± A 50:50 joint venture will be formed between the two companies for the sourcing and marketing of gas in India
± BP will pay RIL an aggregate consideration of US$7.2bn for the interests to be acquired in the 23 production sharing contracts.
Implications for RIL
± Deepwater technology expertise of BP to help RIL
± Lower interest outgo to offset lower profits from E&P EBIT from FY12
± Cash-flows to be strong for FY12
± Funds to be utilized for investments in other avenues such as power, telecom, shale gas etc
± Deal values RIL’s 23 blocks at US$24bn
Maintain BUY with a
target price of
Rs1177 ++
Market Commentary ..
Looks like some of the gains made in Monday’s late rally could be negated this morning as political tensions across Middle-East and North Africa continue to simmer. We are staring at a negative opening amid weak global cues. Things could improve later in the day but on the whole the trend will be choppy and rangebound. RIL will be in focus after striking a mega deal with BP but to an extent the stock already firmed up on Monday.
The turmoil in West Asia has had an impact on world markets. Crude oil has climbed past $92 while gold futures surpassed $1,400. Oil may remain elevated as companies in Libya have shut at least 100k bpd of production. It is trading at level not seen since Oct. 2008.
US markets were shut on Monday. European stocks took a beating after credit ratings of Libya and Bahrain were slashed.
Shanghai stocks touched 3-month high but are in the red today. Japanese shares have slumped after Moody's cut Japan’s outlook to negative from stable.
NIFTY FO CLOSED @ 5531 AS ON 11.02.2011
NIFTY FO has resistance @ 5557 - 5573, above which other resistance levels are @ 5597 -5610. In down side support levels are @ 5517 - 5503 levels; below which other support levels are @ 5497 - 5488 levels in FEBRUARY - 2011. I am positive for next week above 5610 level but be with the trend. Let the market decide further moves. As we are saying from many days Buying is suggested in falls only... and its still a better strategy in the given scenario...... One can go for buy at those levels also, but in absence of that its time to BOOK PROFIT now. This is a pessimistic outlook but that's the way we tend to be, in this market.
Corporate Snippets
± SAIL plans to put up four 3mtpa manufacturing facilities - one each in Indonesia, Mongolia, South Africa and Oman – at a cumulative investment of US$12bn. (FE)
± Tata Motors' Jaguar and Land Rover unit is in talks with Chinese sport utility vehicle maker Great Wall Motor Co about a potential China tie-up. (BS)
± Tata Steel expects to start production from a new Orissa plant by end-March 2013. (BS)
± The Godrej group could hike soap prices in order to offset rising input costs, particularly those of vegetable oils. (BS)
± Unitech Ltd will develop an integrated township at Rewari in Haryana with an estimated construction cost of Rs0.6bn. (BL)
± Despite dismissal of legal suits filed against it by Global Vehicles, Mahindra & Mahindra's plan to enter the US market will be further delayed till the outcome of an arbitration process in London later this year. (BS)
± Orient Green Power (OGP), a renewable energy venture of the Shriram group, has decided to move its proposed 300MW wind farm project from Tamil Nadu to Maharashtra and Gujarat due to issues relating to evacuation of power. (ET)
± Mahindra Satyam’s business process outsourcing arm has renewed contract with NAVTEQ, a global provider of digital map data, for a further period of two years. (ET)
Monday, February 21, 2011
Book Profits in Nifty Feb Futures at 5520-5535
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European markets update: FTSE Index down 0.4%, CAC Index down 0.3% and DAX Index down 0.3%
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Book Profit in Long DLF Feb Futs at Rs233
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sell ..................
ITC (SELL, between Rs157.5-158.5, Target Rs150): The recent pullback in ITC has fizzled out near its 200 DMA accompanied with bearish formation of Friday’s trading session. A consolidating rising rectangle resembling to more a like of ‘rising wedge’ implies that downtrend in the counter is likely to resume in coming days. Below Rs155 we expect stock to test levels of Rs149, however a pullback attempt towards Rs157.5 may be possible before a final breakdown. We advise going short of ITC Feb Fut in the range of Rs 157.5 -158.5 with stop loss of Rs161.20 for Target of Rs150
Market Commentary ..
From the start of this year, market participants have learnt valuable lessons in the school of affliction. Rewards aren’t coming in anytime soon and this week is sure to keep investors on tenterhooks. The start today is going to be cautious following Friday's selloff and nervous Asian markets.
The Budget session kicks off today. It promises to be a stormy affair amid rising hostility between the ruling dispensation and the principal Opposition party. A formal announcement on the JPC probe into the 2G scam is likely soon; but that is now unlikely to lead to any easing of the war of words between the Congress and the BJP.
The multiple setbacks suffered by the UPA II calls for credible and decisive measures aimed at taming inflation while keeping the growth momentum going. It will take yet another fine balancing act from FM & Co. Hopefully they will hit the bull’s eye.
On the flip side, there might be some disappointment(s) as well. So, one should brace for a volatile period on bourses for a few days. Don’t take undue risks in the interim.
Corporate Snippets
± SAIL in talks with Japanese, Korean companies for value-added steel. (BL)
± NTPC is planning to step up its negotiated purchase of low-ash Ranigunj coal from Coal India from 2.5mn tons to 5mn tons. (BL)
± The TDSAT has directed Reliance Communications to pay in a week principal amount and 50% of the interest demanded by the telecom department for access deficit charge for walky service. (BL)
± Abbott Laboratories has settled a patent litigation case against Ranbaxy, allowing the firm to launch a generic version of the US drugmaker’s cholesterol lowering medicine Tricor. (ET)
± JSW Steel ropes in SBI, Bank of India to refinance US$2.2bn Ispat debt. (ET)
± The government plans to infuse Rs9.07bn as equity capital into two PSU lenders Dena Bank and Vijaya Bank as part of recapitalisation package to shore up equity capital. (BL)
± HDFC has no plans to raise its stake in private lender Ratnakar Bank. (BS)
± ONGC expects to increase its daily gas production by 2mn standard cubic meters and 9,400 barrels of associated oil per day initially from KG—Basin once the two offshore blocks — G1 and GS—15 starts production from May. (BL)
± Hindustan Copper may sell 20% in 2 mines to Nalco. (ET)
± Andhra Bank plans to raise Rs6.18bn by way of allotting preferential shares to the Government of India. (BL)
± Finance, Steel Ministries differ over SAIL FPO. (BS)
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