Another choppy day ahead
Never be frightened to take a profit. Better in your pocket then theirs.
The markets bounced back from their lows yesterday. So, that's a good sign for the bulls going into trade on the last day of the week. However, it is better to pocket some profit when the going is good. After a fairly choppy week, the market could look to settle down a bit. The key indexes may remain sideways though with a positive bias. The pre-budget rally is definitely in tact, but one needs to remain alert for any untoward incident. The market always has a way of surprising the investors. Remember May-June period last year.
Global cues are mixed yet again. One negative factor at this juncture could be the spike in oil prices above the $60 per barrel. Having said that the jump in FII inflows in the past few days is heartening and could keep the market from falling sharply. We expect a cautious to higher opening and a volatile day. The inflation data will be released at noon, and it may spook the party for the bulls if the WPI-based reading on prices inches higher.
Making money in the market from these levels is going to be tough. At the same time interest rates are on their way up and inflation remains at an uncomfortable level. So, expect market returns to moderate this year. The absolute level of open interest in the F&O segment is quite high and so is the cost of carry. Much of the good news is in the prices. Valuations look expensive vis-a-vis other emerging markets as well as the historical average. Earnings growth may also slow down given the high base and increasing costs. The risk-reward ratio is skewed more towards risk compared to say in 2003 or even last year.
Going by the high volatility in the market this year so far, investors must be finding it difficult to take a decisive step. One way out is to focus on one's own portfolio and adopt a trading/investing strategy that suits one's style.
Shares of Pochiraju Industries Ltd. will get listed on the bourses today.
Bajaj Auto is likely to be in the thick of things amid reports of a possible split in the company and the reported rift between the sons of Rahul Bajaj. United Breweries could advance as a financial daily has reported that the company could snap up Whyte & Mackay for $1bn.
Keep an eye on Sagar Cements. The company's Board will meet today to consider issue of further equity shares on a preferential basis. Grapevine has it that private equity major Blackstone could pick up a stake. The stock was up nearly 5% yesterday.
The Indian Bank IPO will close today. It has been subscribed 6.4 times so far. C&C Construction IPO will also close today. It has been subscribed more than 3 times. SMS Pharma IPO closed yesterday. It has been subscribed 2.6 times only.
The IPOs of Broadcast Initiatives and MindTree Consulting will open today.
Major Bulk Deals:
UBS has bought BPL; Reliance Vision Fund has sold Cambridge Technology; Morgan Stanley has sold Electrotherm; Reliance Capital has picked up Global Broadcast News; Deutsche Securities has purchased GVK Power while Jpmsi A/C Copthall has sold the stock; T Rowe Price has sold Network Fincap; Bear Stearns has bought Northgate; Lehman Brothers has picked up Prajay Engineers while Bear Stearns has sold it; Goldman Sachs has bought Sujana Metal.
Insider Trades:
Orient Abrasives Limited: Mr. S. G. Rajgarhia, Managing Director has purchased from open market 41250 equity shares of Orient Abrasives Limited from 1st February to 2nd February.
Market Volumes:
BSE Metal index was the major loser and lost 1.60%. BSE Auto index (down 0.35%), BSE Pharma index (down 0.17%) and BSE FMCG index (down 0.16%) were among the other major gainers. However, BSE Bank index gained 0.90%.
Volume Toppers:
IFCI, GBN, IDBI, Aftek, Hindustan Motors, Reliance Communication, SREI Infrastructure, Shree Ashtavinyak, Satyam Computer, Hindalco, NTPC, Autoline Industries, Akruti Nirman, Zee News, Centurion Bank and GMR Infrastructure.
Delivery Delight:
Adlabs Films, APIL, BEML, Bharat Forge, BHEL, Cummins India, Gujarat State Fertilizers & Chemicals, HEG, IDBI, Jet Airways, Neyveli Lignite, Patni, Praj Industries, Ranbaxy Laboratories, RCF, Reliance Capital, Reliance Com, Sasken, SCI, Sun TV, UTI Bank and Zee Telefilms.
Upper Circuit Filters:
Goldstone Technology, Indiainfoline, ACE, Swan Mills and HOV Services.
Brokers Recommendation:
Spanco Tele - Buy from Emkay with target of Rs302.
Long Term Investment:
Valecha Engineering.
Major News Headlines:
Govt to sell 7% in BEML, price not yet decided
GMR Infra buys 51% in Cadence Cargo, a cargo handling firm
Ranbaxy gets US FDA nod to sell copy of Pfizer’s Zoloft
ABB wins order worth Rs3.11bn from Grasim, Ultratech
Ram Informatics signs accord with Sunrise Systems Inc
Patni Q4 group profit at Rs1.14bn (up 73%), revenues Rs6.841 (up 23%)
BHEL wins order worth Rs4bn
NIIT Tech to set up 12000 seat campus in Noida in 3 phases: reports
ONGC wins 24 exploration blocks, RIL wins 7
HCL Tech in accord with Crane Aerospace for engineering services
Mahindra Defense unit to sell Jordan's Seabird planes
L&T & Boeing to explore opportunities in defense industry
KEI Industries buys land in Rajasthan for expansion
Petron Engineering secures 2 orders worth Rs100mn from RPL