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Thursday, April 19, 2007

STRATEGY INPUTS FOR THE DAY


Weak Asian markets could hurt sentiment

One of the weaknesses of our age is our apparent inability to distinguish our needs from our greeds

When greed took a back seat, the markets skyrocketed ahead too fast too soon leaving most market watchers surprised.But don't despair. Enough opportunities will come your way. The weakness in Asian markets could dampen sentiment at start.

The Dow hit an all-time high ending above 12,800 for the first time ever. The Nasdaq composite was a tad lower.
However, the sitution with the Asian markets is different.

Asian stocks fell after the US dollar weakened against Asian currencies. The yen traded at 118.26 against the dollar while the Won gained to 926.60 to the dollar, set for its highest close since Jan. 3. US light crude oil for May delivery rose 4 cents to settle at $63.14 a barrel. Japan's Nikkei was down over a percent.

Back home, the Indian rupee eased on Wednesday. Reports say oil refiners stepped up dollar purchases and traders pared positions sending the rupee to 42.05/07 per dollar.

Metal stocks may be in action after copper futures in Shanghai rose by the daily limit of 4% to a 10-month high on signs of growing demand for the metal.

If heavyweights like Reliance manage to hold strong, the losses in the indices may be less. Incidentally, Mukesh Ambani celebrates his 50th birthday today and expectations are that the stock will cross the 1500 mark today. Profit booking can be expected at higher levels. Reports say
Reliance Industries has discovered "significant" amounts of gas in an offshore block in Saurashtra.

Reports say Malvika Steel promoter Vinay Rai has objected to the sale of the company. Reports say Rai has moved the Debt Recovery Tribunal, which is auctioning the company to settle the dues that it owes to IFCI.

Essar Global Ltd., agreed to buy Minnesota SteelIndustries LLC for an undisclosed price to add 1.4 billion tons of iron-ore reserves and a steel mill in North America.

NTPC is on a high following its plans to increase its power generation capacity to 50,000 mw by 2012 and 75,000 mw by 2017. At present its capacity is around 26,000 mw.

Banks would have to increase their Tier-I capital by about Rs512.55bn within March 31, 2009, including raising Rs455.21bn from the capital market to meet the Basel-II requirements on minimum capital adequacy of 9 per cent, according to a report.

HOW MARKET FARED

Consolidation to continue!

Markets managed to close in green as profit booking set in on the bourses in late trades. Auto and Capital Good index were the top draggers, however, Bank's, Pharma, and Technology indexes were the major gainers. Even the Mid-cap and the small cap indexes out performed the frontline index. Tata Steel was badly hit at open but made a come back in the later half of the session. Oil marketing stocks also ended in the receiving end. Finally, the 30-share benchmark Sensex gained 65 points to close at 13672. NSE Nifty was up 26 points to close at 4011.

Tata Steel declined by over 3% to Rs511 after the company announced that they have made rights offer at Rs300 each, to sell 1 share for every 5 shares held to fund corus acquisition. The scrip touched an intra-day high of Rs519 and a low of Rs472 and recorded volumes of over 1,00,00,000 shares on NSE.

CESC dropped over 3.5% to Rs384. The company announced that they would consider merging with holding company of Spencer's retail, to give 1 share for every 1.98 shares of Spencer's Retail. The scrip touched an intra-day high of Rs403 and a low of Rs381 and recorded volumes of over 12,00,000 shares on NSE.

Petron Engineering surged by over 5% to Rs148 after the company announced that they have received Letter of Award from Sichuan Fortune Project Management Co. Ltd, China. The scrip touched an intra-day high of Rs154 and a low of Rs141 and recorded volumes of over 26,000 shares on NSE.

TV Today advanced by over 5% to Rs147 following reports that Reliance Capital may offer to buy an additional 20% of TV Today Network Ltd. The scrip touched an intra-day high of Rs154 and a low of Rs142 and recorded volumes of over 16,00,000 shares on NSE.

Suzlon jumped by over 3% to Rs1180 after Repower Systems AG, announced that it supports a 1.2bn-euro takeover offer by the company which topped a bid by French atomic-power station builder Areva SA. The scrip touched an intra-day high of Rs1208 and a low of Rs1140 and recorded volumes of over 5,00,000 shares on NSE.

Cement stocks were a mixed bag. India Cement gained by 1.2% to Rs171 and ACC was up 1% to Rs816. However, Grasim was down by 1.3% to Rs2342.

Oil exploration stocks were on the move. Reliance Industries gained 0.8% to Rs1485 and ONGC surged over 1.3% to Rs905.

Technology stocks also ended higher. Index heavy weight Wipro was up 2% to Rs585 and Satyam Computer gained 1.3% to Rs461. HCL Tech, Mphasis BFL and Polaris were the major gainers among the Mid-Cap stocks. .

Pharma stocks were in pink of health, Sun Pharma surged by over 3.5% to Rs1156, Lupin was up by 0.5% to Rs660, Ranbaxy gained 0.9% to Rs340 and Cipla added 1.6% to Rs233.

The markets bounced back on Wednesday on back of buying at lower levels. However, the bulls are not out of the woods yet as volatility is likely to remain high. We are expecting the market to consolidate further. A lot of other big companies are yet to announce their quarterly earnings. If they hit bull's eye we may see the market rally. Metal stocks would continue to be in action after copper futures in Shanghai rose by the daily limit of 4% to a 10-month high on signs of growing demand for the metal.

Insider Trades:

XL Telecom Limited: Mr.Dinesh Kumar, Managing Director has purchased from open market 89610 equity shares of XL Telecom Limited from 10th to 13th April, 2007.

Market Volumes:

The turnover on NSE was down by 10.5% to Rs86bn. BSE Pharma index was the major gainer and gained 1.56%. BSE PSU index (up 1.40%), BSE Bank index (up 1.07%) and BSE Technology index (up 0.85%) were among the other major gainers. However, BSE Auto index lost 0.45%.

Volume Toppers:

IFCI, Tata Steel, SAIL, TTML, Tele Data Informatics, GTL, ICRA, RNRL, NTPC, RPL, IDEA, IDFC, Bank of India, PFC, Praj Industries, HCl Tech, MTNL, R Com, Sterling Bio, India Cements and IDBI.

Upper Circuit:

RIIL, Tele Data, Aptech, Deep Industries, ACE, Tanla, Country Club and Ganesh Housing

Results Today:

ACC, Bartronics, Biocon, Garware Offshore, Kirloskar Brothers, MRF, Mukta Arts, Mysore Cements, Shiva Cement and Sterling Biotech

Delivery Delight:

Amtek India, Cambridge Solutions, CEAT, Dabur India, GAIL, HCL Technologies, Hero Honda, HDFC, Ipca Lab, Jagran Prakashan, Kesoram Industries, MTNL, Marico, Neyveli Lignite, Sterling Biotech and Suzlon Energy

Abnormal Delivery:

Tata Tea, I-Flex, UTI Bank, ITC, MTNL, Titan, Siemens and Kotak Mahindra Bank

Stock Futures with Largest Increases in OI:

Siemens, Corp Bank, Dabur India, PFC, Chennai Petro, Bongaigaon Refinery, Lupin, Ktk Bank and GSK Pharma

Stock Futures with Largest Decreases in OI:

Bank of India, i-Flex, IVRCL Infra, Essar Oil, Neyveli Lignite, GE Ship, UTI Bank, HCL Tech, IPCL and Can Bank.

Brokers Recommendation:

Garware Offshore – Buy from Emkay with target of Rs286
Sun TV –
Sell from CLSA with target of Rs1408

Long Term investment:

HCL Tech


Results Corner:

Praj Industries Q4 profit at Rs269.9mn (up 158%), sales at Rs2.01bn and approves 1:1 ratio bonus

Major News Headlines:

Valecha Engineering gets orders worth Rs1bn

Deccan Aviation plans to raise as much as USD100mn

GTL Board to consider dividend, share buy back on 25th April

Aptech ties up with Infosys to deliver end user training on its renowned core banking solution Finacle

Infotech Enterprises to pay Rs2.25 per share as dividend

Reliance Capital offers Rs130.5 apiece for TV Today share