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Wednesday, January 10, 2007

STRATEGY INPUTS FOR THE DAY


Weak Wednesday…just bear it

Sometimes our greatest strength come from our weakness.

Investors would hope that some strength emerges after today’s weakness. We are more or less taking it for granted that the opening session will be weak. With a day to go for Infosys results, and given the recent dips, the bulls would not want to take too many risks at this point in time. What's worse, Asian markets have taken a severe beating this morning on the back of falling metals prices in London.

FIIs too do not seem to be in the mood to commit fresh money for the Indian market as yet. Perhaps they are also waiting for more positive signals from both the corporate world (read earnings) and the Government (read RBI policy review and the Budget). As a result, we may see the key indices opening sharply down and could remain so for the day. The undertone has suddenly turned weak after a promising start to the new year. There are some uncertainties like rising inflation and hardening of rates in the near term though the long-term outlook is strong as ever. Think long term and continue picking up your favorite counters in smaller quantities. Depending on your risk appetite you take position in counters like Infosys which could turn volatile due to the results.

Shares of WWIL (Zee's cable television arm) and Zee News will list on the bourses today. Shree Ashtavinayak Cine Vision will also make its stock market debut today.

Bihar Tubes is a counter which may see some intra-day swings as the company is likely to announce a 1:1 bonus today. Other lesser known companies which could see action in the coming weeks include Repro India, RS Software, Nicco Corp and Pyramid Saimira. Long term investors can buy Indraprastha Gas and Gayatri Projects.

FIIs were net sellers to the tune of Rs3.6bn (provisional) in the cash segment yesterday. In the F&O segment, they pumped in Rs657.4mn. Foreign funds sold off stocks worth Rs30.75bn in the cash segment on Monday. But, this includes the tendering of shares by FIIs in the i-flex open offer. On the other hand, Mutual funds poured in Rs1.48bn on the same day.

Birla Corporation may come under pressure as workers of its Birla Jute Mills unit have gone on strike from January 5. Nucleus Software might attract some attention after Yes Bank selected it's FinnOne Leading Product Suite. Atlanta is likely to advance as the company's Board will meet on January 16 to consider a stock split and fund raising plans for expansion. The company has also come out with strong results for the October to December quarter. i-Gate Global is expected to rally on the back of better than expected results for the third quarter. Reliance Communications will also be in the limelight as its Board meets to consider fund raising plans for its proposed bid for Hutch Essar.

Results Today:
Bihar Tubes, SBI Home Finance, Sintex Industries, BASF India and GEI Hammon.

Insider Trades:
Nahar Spinning Mills Ltd: Reliance Long Term Equity - Scheme of Reliance Mutual Fund has purchased from open market 130896 equity shares of Nahar Spinning Mills Ltd on 5th January, 2007.

Aditya Birla Nuvo Limited: Franklin Templeton Mutual Fund (Through it Various schemes) has sold in open market 24500 equity shares of Aditya Birla Nuvo Limited on 3 January, 2007.

Market Volumes:
The turnover on NSE was up by 15.5% to Rs88.06bn. BSE Capital Good index was the major loser and lost 1.35%, BSE Pharma index (down 0.95%), BSE Bank index (down 0.94%), BSE Technology index (down 0.85%) and BSE Auto index (down 0.75%) were among the major losers. However, BSE Oil & Gas index gained 0.47%.

Volume Toppers:
Cairn India, Pyramid Saimira, R Com, TTML, ITC, HLL, Satyam Computer, Essar Oil, Ashok Leyland, Praj Industries, Bank of India, Deccan Aviation, SAIL, India Cements, RIL, Polaris, IVRCL Industries, Hindalco and MTNL.

Delivery Delight:
ABG Shipyard, Abhishek Industries, Adlabs Films, AIA Engineering, Bata India, BEML, Educomp Solutions, Essar Shipping, GAIL, Geodesic Information Systems, ICICI Bank, I-Flex Solutions, India Cements, India Infoline, Infotech Enterprises, Pratibha Industries, Punj LLoyd, Sasken, UTI Bank and Zee Telefilms.

Upper Circuit Filters:
Flex Industries, Zandu Pharma, Goldstone Technology, Tanla, Pyramid Saimira, Nesco, ElectroTherm, KS Oils and Rajesh Exports.

Brokers Recommendations:
EKC - Buy from Kotak with price target of Rs924

Long Term Investment:
Gayatri Projects

Major News Headlines:
Chidambaram asks industry to cut prices
Punj Lloyd bags Rs 12.88bn order from ONGC
Teledata Informatics acquires 100% stake in Soltius Pte Ltd
ABB wins order from JSW Steel for Rs2.5bn
Honda Motor India to invest Rs20bn for second car plant
Sadbhav Engineering bags order worth Rs5.10bn
Rama Newsprint board approves spending Rs6.3bn to expand
Everest Kanto Cylinder secures orders worth Rs400mn from Defense authorities
HTMT completes buyout of Multicity BPO company in US
i-flex unit wins order from Friedman, Billings, Ramsey & Co
Suven Life gets patent from European Patent Office
Mefcom Agro to buy property in New Delhi