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Monday, December 17, 2007
IFCI, Cairn India and RNRL December futures at premium
Turnover in F&O segment increases
Nifty December 2007 futures were at 5791, at a premium of 14 points as compared to the spot closing of 5777.
The NSE's futures & options (F&O) segment turnover was Rs 73,373.37 crore, which was higher than Rs 61,326.39 crore on Friday, 14 December 2007.
IFCI December 2007 futures were at premium, at 111, compared to the spot closing of 108.65.
Cairn India December 2007 futures were at premium, at 216.15, compared to the spot closing of 214.35.
Reliance Natural Resources (RNRL) December 2007 futures were at premium, at 164.45, compared to the spot closing of 162.15.
In the cash market, the S&P CNX Nifty lost 270.70 points or 4.48% at 5777.
Sensex ends down 769pts, DLF drops 7%
The Sensex opened almost flat at 20,033 - up two points - but slipped soon on the back of weak global cues.
A heavy bout of selling in the late noon deals saw the index plunge to a low of 19,177 - down 856 points from the day's open.
The Sensex finally ended with a huge loss of 769 points (3.8%) at 19,261.
The market breadth was fairly negative at close - out of 2,954 stocks traded, 1,939 declined, 999 advanced and 16 were unchanged today.
INDEX DRAGGERS
DLF and NTPC slumped over 7% each to Rs 944 and Rs 229, respectively.
Tata Steel and HDFC plunged 6% each to Rs 824 and Rs 2,878, respectively.
ONGC and Tata Motors tumbled 5.8% each to Rs 1,166 and Rs 701, respectively.
Hindalco and Reliance Communications shed 5.5% each at Rs 201 and Rs 718, respectively.
BHEL and Bharti Airtel dropped over 5% each to Rs 2,425 and Rs 905, respectively.
SBI, Ranbaxy and Reliance declined around 4% each to Rs 2,315, Rs 406 and Rs 2,778, respectively.
ICICI Bank and TCS slipped 3.3% each to Rs 1,167 and Rs 1,010, respectively.
Hindustan Unilever was the sole gainer at Rs 219 - up nearly 1%
MOST ACTIVE COUNTERS
IFCI topped the value chart with a turnover of Rs 457.70 crore followed by Ispat Industries (Rs 309.50 crore), Kolte Patil (Rs 287.60 crore), HDFC (Rs 204.55 crore) and Reliance Petroleum (Rs 196 crore).
G V Films led the volume chart with trades of around 5.05 crore shares followed by IFCI (3.97 crore), Harig Cranks (3.81 crore), Ispat Industries (3.70 crore) and Bellary Steel (2.60 crore).
Global weakness drags market down
The market went into a major correction following weak trend in Asian markets, largely driven by consumer inflation figures released by the US. Presence of strong bullish sentiment helped Sensex resume marginally above its previous close, despite a sharp slump across international markets. But, across-the-board selling saw the Sensex shed over 380 points by afternoon. Thereafter, the market showed no signs of respite as widespread selling in metal, realty, oil, and power stocks dragged the index below the 19,200 mark to touch the day's low of 19,177. The Sensex finally ended the session with a loss of 770 points at 19,261. The Nifty, too, reeled under selling pressure and lost 271 points to close at 5,777.
Breadth of the market was negative, with losers outpacing gainers on the Bombay Stock Exchange (BSE). Of the 2,954 stocks traded on BSE, 1,944 stocks declined, 995 stocks advanced and 15 stocks remained unchanged. All the sectoral indices on the BSE were hammered. The BSE Metal index was the worst hit and tanked 7.28% at 18,325 followed by the BSE Realty index (down 5.65% at 11,699), the BSE PSU index (down 5.63% at 9,511) and the BSE Oil & Gas index (down 5.13% at 12,315), while other sectoral indices lost over 2-4% each.
Barring HLL, index stocks bore the brunt of heavy selling. DLF led the slump and crashed by 7.53% at Rs944. Among the other major laggards NTPC tumbled by 7.30% at Rs229, Tata Steel dropped 6.15% at Rs824, HDFC slumped 5.93% at Rs2,878, and ONGC fell 5.84% at Rs1,166. Tata Motors declined by 5.80% at Rs701 and Hindalco lost 5.69% at Rs201. Other major front-line stocks shed 2-5% each. However, HLL bucked the downtrend and rose 0.76% at Rs219.
Metal stocks lost significantly on relentless selling. JSW Steel dropped 12.98% at Rs1,164, Jindal Saw shed 10.06% at Rs930, Jindal Steel tumbled by 9.57% at Rs14,364, Sterlite Industries declined by 8.45% at Rs976, Shree Precoated Steel slipped by 7.87% at Rs367 and SAIL lost 7.20% at Rs260.
Over 5.05 crore G V Films shares changed hands on the BSE followed by IFCI (3.97 crore shares), Harig Cranks (3.80 crore shares), Ispat Industries (3.77 crore shares) and Bella Steel (2.60 crore shares).
Valuewise, IFCI registered a turnover of Rs458 crore on the BSE followed by Ispat Industries (Rs309 crore), Kolte Patil Developers (Rs287 crore), HDFC (Rs204 crore) and Reliance Petroleum (Rs196 crore).
Market Close: Global alarm ! Clear sell-off..
A sharp sell off across the globe hits Indian markets heavily. Markets opened flat but later proceeded to trade weak for the whole day. No sign of recovery as indices succumbed to heavy profit booking in late trades and finally slipped over 700 points at the end. Some market talk says that Morgan Stanley has issued full recession alert for the US economy which says "perfect storm" for consumers as the housing slump spreads. This was an excuse for the markets to sell off heavily. Selling was witnessed in the Metals (-7.28%), Realty (-5.65%), Power and Oil & gas stocks. Midcap and smallcap also joined the heavyweights for deep cut slide show witnessing second highest single day fall of 769.5 points. Almost all Asian markets ended in red & European markets also showed weakness in the start and currently trading 1% down.
Sensex ended down by 769 points at 19261.35. Weighing on the Sensex were losses in NTPC (228.6,-7 percent), TISCO (823.85,-6 percent), HDFC (2877.55,-6 percent), ONGC (1166.45,-6 percent) and Tata Motors (701.25,-6 percent). Losses were restricted by gains in HLL (218.6,+1 percent).
Cement space witnessed a clear sell-off after report says that Coal India (CIL) has announced a 10% across-the-board hike in the price of coal produced with an immediate effect. The effect of increased coal prices was seen in the cementing counter. Almost 80% of CIL's coal is consumed by the power sector while another 10-12% is consumed by the steel, cement and aluminum sector which will see pressure on there margin. After a three-and-a-half years CIL has reviewed the coal prices. The price rise is expected to improve the CIL bottomline. Cement stocks ended weak with India Cements (down 8%), ACC (-3.5%) Madras Cement (-3%) and Ambuja Cements (2.3% down) being the key losers for the day.
Gillette India performed well at the bourses even in the weak market trend. Gillette India is one of the largest and legendary player for shave blades, razors and shaving products over the global. In India this company has yet to break into the market leadership position. The stock has jumped on the back of interest in FMCG segment. Valuations appear to be fair. We believe that this is on the back of leveraging the distribution network. We expect the low priced penetration strategy to pay dividends. Margins have been maintained which may probably helped by stronger rupee. The company had undergone restructuring, for the same reason revenues were not heart-warming. But now the restructuring is over and production and distribution functions are in place. This is slowly showing it sharpness in the market with out performing its peers. Do read our detailed research note to know more and get benefited. Stock ended up by 5.8%.
Technically Speaking: Markets traded weak for the whole day with negative breadth on the back of global weakness. Sensex touched intraday high of 20032 and low of 19177. Turnover was quite impressive at Rs 9583 Cr. Market breadth was in favor of Decliners at 1950, while Advances stood at 1115. As we mentioned in earlier close that market will test the 19200 level which has been proven today. Technically Sensex has broken through the supports. market may be a bit oversold and a bounce could be expected. However, 19710 would be an important Resistance levels to cross to again get into an upward. Sensex support is placed at 19000 and if that is broken then that could attract significant selling.
Post Market Commentary
The Indian markets declined drastically by more than 850 points during the trading session on the back of heavy selling pressures across the counters. A major correction is witnessed in today market session after a strong rally for the past weeks. The cues from the global markets are not in favor, which led the domestic market to trade on the back foot. The market opened on a week note and keeps on marching backwards through out the trading session. Most selling is seen from the Metals, Capital Goods, Oil & Gas and Realty baskets as they declined sharply. Both the BSE Mid cap and Small cap slipped by 366.36 points and 355.48 points to close at 9,105.58 and 11,840.02 respectively. The BSE Sensex closed with a heavy loss of 769.48 points at 19,261.35 and NSE Nifty fell by 270.7 points to close at 5,777. Overall, the market breadth was week as 1,944 stocks are closed in red while 995 stocks are closed in green.
BSE Metal index closed lower by 1438.50 points at 18,324.50 as JSW Steel (12.98%), Jindal Saw (10.06%), Jindal Steel (9.57%), Sterlite Industries (8.45%), SAIL (7.20%), Bhusan Steel (6.27%) closed in red.
BSE Capital Goods slipped by 733.37 points to close at 19,129.14. Scrips that fell are Praj Industries (9.89%), Punj Lloyd (7.86%), AIA Engineering (6.42%), BHEL (5.32%) a
BSE Realty index closed down by 701.10points at 11,699.36 as Purvankara (10.33%), Penland (8.50%), Indiabull Real 8.26%), DLF (7.53%), Parsavnath (6.29%) closed lower.
BSE Oil & Gas index declined by 666.23 points to close at 12,314.72. Scrips that fell are Essar Oil (11.23%), HPCL (8.52%), RNRL (8.12%), Aban Offshore (6.75%), BPCL (5.33%) and GAIL (2.88%).
BSE Bankex index dropped by 416.25 points to close at 10,919.22. Pulled it down are Oriental bank (7.16%), Allahabad bank (6.10%), PNB (5.32%), Canara bank (4.64%) and SBI (3.98%).
BSE Auto index slipped by 174.56 points to close at 5,569.24 as TVS Motor (8.72%), Ashok Leyland (7.68%), Escorts (7.64%), Tata Motors (8.72%), M&M (2.16%) closed lower.
Sensex sheds 769 points on weak global equities
The market witnessed major correction as Sensex tumbled more than 850 points at one point of time in late trade tracking weak global markets. Metal, realty and power stocks declined sharply in late trade. Capital goods and banking stocks also declined heavily. Reliance Industries declined sharply. The market breadth turned negative in late trade in contrast to a strong breadth earlier during the day. All the sectoral indices on BSE were in red.
European markets which opened after Indian market were weak. Asian markets which opened before Indian markets were trading lower today. US stocks slumped on Friday, 14 December 2007, on concerns surging inflation may prevent the Federal Reserve from lowering interest rates.
Crude oil prices rose, supported by a US winter storm and renewed tensions in the Middle East as Turkish planes bombed Kurdish rebels in northern Iraq. US light, sweet crude for January delivery which expires on Tuesday, 18 December 2007, rose 48 cents to $91.75 a barrel.
The 30-share BSE Sensex slumped 769.48 points or 3.84% to 19,261.35. Sensex hit a low of 19,177.19 in late trade. At day’s low Sensex lost 853.64 points.
The S&P CNX Nifty declined 270.7 points or 4.48% to 5,777.
Market breadth was weak. On BSE, 972 stocks advanced, 1,932 stocks declined and 23 stocks remained unchanged. 29 out of 30 stocks from the Sensex pack declined.
BSE clocked a turnover of Rs 9524 crore as compared to Friday (14 December 2007)'s Rs 9,480.42 crore.
Nifty December 2007 futures were at 5791, at a premium of 14 points as compared to the spot closing of 5777.
The NSE's futures & options (F&O) segment turnover was Rs 73,373.37 crore, which was higher than Rs 61,326.39 crore on Friday, 14 December 2007.
BSE Mid-Cap index declined 3.87% to 9,105.58. It underperformed Sensex. The index hit all-time high of 9,541.03 today. BSE Small-Cap index declined 2.91% to 11,840.02. The index outperformed Sensex. It hit a record high of 12,402.86 today.
BSE Power index (down 4.8% to 4,222.68), BSE Oil & Gas index (down 5.13% to 12,314.72), BSE PSU index (down 5.63% to 9,511.13), BSE Realty index (down 5.65% to 11,699.36) and BSE Metal index (down 7.28% to 18,324.50) underperformed Sensex.
BSE Capital Goods index (down 3.69% to 19.129.14), BSE Bankex (down 3.67% to 10,919.22), BSE Consumer Durables index (down 3.41% to 5,992.76), BSE HealthCare index (down 2.55% to 4,198.20), BSE FMCG index (down 2.33% to 2,211.07) and BSE IT index (down 2.16% to 4,167.90) outperformed Sensex.
India’s largest private sector firm by market capitalization & oil refiner Reliance Industries declined 3.86% to Rs 2,777.50.
Metal stocks slumped. Tata Steel (down 6.15% to Rs 823.85), Sterlite Industries (down 8.45% to Rs 976.15), National Aluminium Company (down 6.87% to Rs 418.50) and Hindalco industries (down 5.69% to Rs 200.65) edged lower.
Steel Authority of India fell 7.2% to Rs 259.75 on reports the company plans to enter the equipment manufacturing business to profit from the boom in the domestic steel sector.
Reliance Communications declined 5.55% to Rs 717.80 after the company today said it has completed the acquisition of US-based Yipes Holdings that would give the company access to a Rs 4,00,000 crore global enterprise data market.
Capital goods stocks declined. Bharat Heavy Electricals declined 5.32% to Rs 2,425.25. It announced during the market hours today that it has signed a joint venture agreement between with NTPC for establishment and operation of joint venture company for engineering, procurement and construction (EPC) business.
Larsen & Toubro (down 2.2% to Rs 4,082.10) and Suzlon Energy (down 6.67% to Rs 1,828.10) edged lower.
Tata Motors declined 5.8% to Rs 701.25 on reports that Ford Motor Company is poised to name the company as preferred bidder for its Jaguar and Land Rover brands.
Banking stocks declined. ICICI Bank (down 3.29% to Rs 1,167.10), HDFC Bank (down 2.91% to Rs 1,678.30) edged lower.
State Bank of India fell 3.98% to Rs 2,314.50 on reports the bank is planning to buy an Indonesian bank.
Power stocks declined. Reliance Energy (down 4.22% to Rs 1,828.95), NTPC (down 7.3% to Rs 228.60), Tata Power Company (down 0.39% to Rs 1,295.90) and Power Grid corporation (down 5.56% to Rs 137.55) edged lower.
Realty stocks declined. Peninsula Land (down 8.5% to Rs 135.05) , DLF (down 7.53% to Rs 944.25), Indiabulls Real Estate (down 8.26% to Rs 679.25) and Unitech (down 2.72% to Rs 465.35) edged lower.
Hindustan Unilever (up 0.76% to Rs 218.60) edged higher.
HDFC (down 5.93% to Rs 2,877.55), ONGC (down 5.84% to Rs 1,166.45) edged lower.
G V Films clocked the highest volume of 5.05 crore shares on BSE. It declined 7.41% to Rs 11.12. IFCI clocked the second highest volume of 3.97 crore shares on BSE. It declined 4.62% to Rs 108.40. Harig Crankshaft declined 3.43% to Rs 3.94 and clocked the third highest volume of 3.8 crore shares. Ispat Industries declined 1.45% to Rs 77.90 and clocked the fourth highest volume of 3.77 crore shares. Bellary Steels declined 0.13% to Rs 7.93 and clocked the fifth highest volume of 2.6 crore shares.
IFCI clocked the highest turnover of Rs 458.03 crore on BSE. Ispat Industries (Rs 309.58 crore), Kolte Patil Developers (Rs 287.71 crore), HDFC (Rs 204.55 crore) and Reliance Petroleum (Rs 196.28 crore) were the other turnover toppers on BSE in that order.
European markets were weak today. France’s CAC 40 (down 1.29% to 5,531.66), Germany’s DAX (down 1.32% to 7,843.41), FTSE 100 (down 1.17% to 6,321.90) edged lower.
Asian markets were trading lower today, 14 December 2007. Hong Kong's Hang Seng (down 3.51% at 26,580.38), Taiwan's Taiwan Weighted (down 3.54% at 7,830.85), Singapore's Straits Times (down 3.25% at 3,353.56), Shanghai Composite (down 2.53% to 4,881.40), Japan's Nikkei (down 1.71% to 15,249.79), South Korea's Seoul Composite (down 2.91% at 1,839.82) declined.
US stocks swooned on Friday, 14 December 2007, on concerns that surging inflation may prevent the Federal Reserve from lowering interest rates enough to pull the economy out of the grip of a housing and credit crisis. The three major indexes tumbled more than 1% each, and posted their worst week since 11 November 2007, after a report showing a jump in the consumer price index in November 2007.
Meanwhile, the advance tax figures, which will available this week, would trigger expectations regarding corporate performance of India Inc. in Q3 December 2007.
Bharatiya Janata Party (BJP) is poised to retain power in Gujarat but with a reduced majority losing some ground in Sunday (16 December 2007)'s second and final phase of polls in northern and central parts which was worst hit by 2002 communal riots, according to exit polls by four TV channels
Trading Calls
Buy Praj Industries with a stop loss of Rs 225 for a target of Rs 390
Buy Hindustan Oil Exploration with a stop loss of Rs 140 for a target of Rs 195
Buy BOC (I) with a stop loss of Rs 165 for a short-term targets of Rs 220-240
Pyramid Saimira
Pyramid Saimira Theatre Ltd. is the largest theatre chain company in India. We initiate coverage with a Buy and a 15-month price target of Rs1074.
Highlights
Largest theatre chain
The Pyramid Saimira Group currently owns the largest chain of cinema theatres in Asia through group flagship Pyramid Saimira Theatre Ltd. (PSTL). PSTL is set to become the world's largest theatre chain company soon. Its geographical footprint spans across India, SE Asia (Singapore and Malaysia) and the US. Its interests include film and television content production, film distribution and exhibition. Its well-experienced and aggressive management and unique business model are its major strengths. The group enjoys a tremendous early mover advantage in the film exhibition space.
Innovative business models of both PSTL and the group
PSTL's innovative business model involves benefit of scale, increased negotiation power with producers, distributors and theatre owners and scalability. PSTL focuses on leasing properties only after thorough due diligence and market research. Growth and success of the PSTL group is attributable to the uniqueness of its business model, wherein content distribution is closely linked with exhibition strengths and constitutes a strong entry barrier. Further, the strategy of content exclusivity leads to high occupancy rates, contributing to profitability in a big way.
Spanning the entire value chain from content production to distribution…
Its production arm, Pyramid Saimira Productions Ltd. (PSPL) plans to produce 50 films in a year in all Indian languages, going forward. Its content distribution arm Pyramid Saimira Entertainment Ltd. (PSEL) distributes films in various Indian languages as a content agglomerator in India as well as in overseas markets. Apart from these above, it has other entities for exploiting technology & technology advancements, advertisements, realty and post production & visual effects.
…to exhibition
In the film exhibition sector, PSTL is already the largest domestic theatre chain and also plans to have a global footprint. Currently it has operations in Malaysia and the US through subsidiaries .
Foray into theatre advertising
PSTL recently acquired 51% stake in Mumbai based Dimples Cine Advertising Pvt. Ltd. (Dimples). Through this acquisition PSTL will roll out a massive business plan for Dimples, thus it will have access to 4000 digital screens by FY10. With the stake acquisition in Dimples, PSTL will foray in theatre advertising, out-of-home advertising, etc.
Interests in related businessess through subsidiaries & JVs
PSTL has interests in related businesses of production and distribution, through subsidiary companies and joint ventures. Each of these will meet financial closure independently through issue of equity and / or debt.
Potential for value unlocking through subsidiaries
We believe there is potential for tremendous unlocking value in the subsidiary companies, viz., PSPL and PSEL. We note that Eros International , also a leading film distribution company, which listed on the LSE Alternative Investment Market (AIM) in the UK last year, trades at 29.7x FY08 earnings. We believe PSEL, if listed, can get a similar if not better valuation by virtue of its strong promoter background and track record.
Growth story to unfold…
On a standalone basis, topline and bottomline grew by 62.4% and 131.7% respectively in H1-FY08, over FY07. We expect sales and earnings growth at CAGR of 53.8% and 58.3% respectively over FY08-10.
Valuation
The stock trades at 9.9x FY08E and 5.2x FY09E earnings respectively, which is quite attractive vis-Ã -vis peers Adlabs Films ( 55.2x FY09E), Inox Leisure (24.2x FY09E), Shringar Cinemas (19.7x FY09E), and Cinemax India (10.9x FY09E). In view of its plans of a global footprint going forward, we would benchmark PSTL vis-Ã -vis US peers Regal Entertainment Group and Cinemark USA, which trade at 21.5x and and 21.1x Dec-2008 earnings respectively.
Market may slip further
The market is likely to remain under pressure after a fall in the US market and weakness among major Asian indices in the ongoing trades. Renewed concerns about the subprime crises could drag the market further during the intra-day trades amid sharp volatility. However, presence of strong bullish sentiment and FIIs remaining net buyers in equities for last couple of sessions may may bring some cheers to the market. The Nifty could test higher levels at 6,200 and may dip around 5,995, while the Sensex has a likely support at 19,833 and may face resistance at 21,000.
US indices had a biggest weekly decline in a month on Friday after Fed failed to assuage recession concerns. The Nasdaq slipping by 34 points to close at 2,636 amid selling in technology stocks and the Dow Jones end 178 points lower at 13,340.
Most of the Indian ADRs ended in the red on the US bourses. Infosys, Tata Motors, VSNL, Wipro, ICICI Bank, Patni Computers, MTNL and Rediff, HDFC Bank were down over 1-3% each. However, Dr Reddy's and Satyam were up around 1% each.
The Nymex light crude oil for January delivery shed 98 cents at $91.27 a barrel. In the commodity segment, the Comex gold for February series tumbled by $6 to settle at $798 an ounce.
Grey Market - Precision, Porwal, Manaksia
eClerx Services 270 to 315 35 to 40
BGR Energy 425 to 480 400 to 410
Transformers & Rectifiers 425 to 465 350 to 360
Brigade Enterprises 351 to 390 20 to 25
Jyothy Lab. 690 185 to 190
Burnpur Cement Ltd. 12 5 to 7
Aries Agro 120 to 130 25 to 30
Manaksia Ltd. 140 to 160 70 to 75
Porwal Auto Components 68 to 75 15 to 18
Precision Pipes & Profiles 140 to 150 40 to 45
Market may edge lower on weak Asian equities
The market may edge lower today, 17 December 2007, tracking weakness in global equities. Asian stocks edged lower on Monday, 17 December 2007, as fresh data pointed to a surge in US inflation. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore, Taiwan and China were down by between 0.93% to 2.5%.
US stocks swooned on Friday, 14 December 2007, on concerns that surging inflation may prevent the Federal Reserve from lowering interest rates enough to pull the economy out of the grip of a housing and credit crisis. The three major indexes tumbled more than 1% each, and posted their worst week since 11 November 2007, after a report showing a jump in the consumer price index in November 2007.
The advance tax figures, which will available this week, would trigger expectations regarding corporate performance of India Inc. in Q3 December 2007.
Bharatiya Janata Party (BJP) is poised to retain power in Gujarat but with a reduced majority losing some ground in Sunday (16 December 2007)'s second and final phase of polls in northern and central parts which was worst hit by 2002 communal riots, according to exit polls by four TV channels.
As per provisional data, FIIs sold shares worth a net Rs 647.10 crore on Friday, 14 December 2007. Domestic institutional investors bought shares worth a net Rs 105.18 crore on that day.
FIIs were net sellers of index futures worth Rs 1359.88 crore on Friday. They were net sellers to the tune of Rs 50.63 crore in index options on that day. FIIs net sold stock futures to the tune of Rs 785.05 crore. They net sold individual stock options to the tune of Rs 10.71 crore.
The 30-share BSE Sensex declined 73.56 points or 0.37% to 20,030.83 on Friday. The S&P CNX Nifty declined 10.4 points or 0.17% to 6,047.70 on that day.
Morning Call
Market Grape Wine :
In House :
Nifty at a supp of 5996 and 5947 with resis at 6080 and 6117
Mkt likely to stay in a range
Intra Day: Buy Aloktext above 91.25with a TGT of 97 and a SL of 89.45
Buy Apollotyre above 52.70 with a TGT of 58 and a SL of 51.90
F&O: Buy JPHYDRO above 133 with a TGT of 145 and a SL of 127
Buy Ultracemco above 1040 with a TGT of 1080 and a SL of 1015
Out House :
Markets at a support of 19786 & 19689 levels with resistance at 20314 & 20221 levels .
Buy : RIL & REL
Buy : Praj & Lupin bullet
Buy : JpAsso & Jphydro
Buy : Centextile & PunjLLoyd
Buy : SKumar & ABAN
Buy : IBUllsreal & DLF
Buy : Neyvelli & GujNRE
Buy : Kotak & SBIN
Buy : IOlBroad bullet
Dark Horse : IOL Broad , JpAsso , IBullReal , Balrampur , GE , RIL , SBIN & JpHydro
Bullet for the Day : Primesecurities & PRAJ with strict stop loss .
Pre Market Watch
The market is likely to have negative opening as the cues from the global markets are not in favor. The Indian Market closed marginally lower on Friday after struggling a lot during the trading session. The market keeps on moving in positive and negative region through out the trading session as the volatility gripped the market. But buying at the lower levels led the market to shed most of its losses to closed marginally lower. On Friday, the BSE Sensex closed lower by 73.56 points at 20,030.83 and NSE Nifty fell by 10.4 points to close at 6,047.70. We expect the market to remain cautious during the trading session.
On Friday, the US market closed in red. The DJIA closed lower by 178.11 points at 13,339.85 along with S&P 500 index fell 20.46 points to close at 1,467.95 and NASDAQ dropped by 32.75 points to close at 2,635.74.
Indian ADRs ended in negative territory. In technology sector, Wipro declined by (3.85%) along with Patni computers by (1.94%) and Infosys by (0.72%). In banking sector, ICICI bank and HDFC bank fell (2.94%) and (0.78%) respectively. In telecommunication sector, MTNL and VSNL dropped by (1.99%) and (0.12%). The major stock markets in Asia are trading weak. Hang Seng is trading lower by 601.71 points at 26,961.93. Taiwan weighted is trading down by 204.23 points at 7,913.85 and Japan''s Nikkei is trading at 15,482.15 slipped by 32.36 points. Singapore Strait Times is down by 70.15 points to trade at 3,396.23. South Korea''s Seoul Composite slipped by 30.05 points to trade at 1,865.
The FIIs on Friday stood as the net buyer in equity while net seller in debt. The gross equity purchased was Rs6,909.50 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs5,827.40 Crore and gross debt sold stood at Rs9Crore. Therefore, the net investment of equity reported was Rs1,082.10 Crore and net debt was (Rs9Crore).
Today, Nifty has support at 5,923 and resistance at 6,102 and BSE Sensex has support at 19,680 and resistance at 20,125.
Daily Trading Calls
Nifty (6048) Sup 6006 Res 6090
Buy Hind Oil Exp (167) SL 163 Target 175, 178
Buy Karnatake Bank (225) SL 220 Target 234, 236
Buy MTNL (186) SL 182
Target 194, 197
Sell Chennai Petro (420) SL 425 Target 411, 408
Sell MPhasis (280) SL 285
Target 270, 268
Mid-cap mania…take it or leave it!
It is better to take what does not belong to you than to let it lie around neglected.
Neglected mid-caps are more than warming up while markets and the weather appear to cool down. There’s snowfall in the north but the political temperature in the country has gone up several notches thanks to the Gujarat polls. In the global markets, the bulls are feeling the heat again due to fresh worries over the health of the US economy and its possible ramifications for the whole world. But, the Indian market has surprisingly been resilient during the same period, with Sensex and the Nifty hitting new lifetime highs. The small-cap and mid-cap shares have actually outperformed the large caps over the past few weeks. Going by the frenzied buying in some of these stocks, without any major events, there is a case for being cautious. Corrections, slight or sharp come in anyways. For the time being though, the current trend of small-cap and mid-cap stocks outperforming their larger counterparts will remain.
Coming to the Sensex and the Nifty, they could take a hit early in the morning given the weak global cues. US shares fell sharply on Friday a bigger than expected jump in a key inflation measure sparked fears that the Fed may not be aggressive in jacking up rates. The next FOMC meeting is in January. Next month anyways will be crucial, as companies will also announce their latest quarterly results and the RBI will also unveil its latest plan on monetary policy. FIIs will make their annual allocation across markets as well as asset classes. How much money India is able to garner only time will tell. For now though, FII inflows seem to have tapered off compared to the pre-November days. For the Sensex and the Nifty to appreciate at a much faster pace, overseas investors will have to step up their investments, which may only happen sometime next year. We expect a softer opening today and another volatile day for the market today. The main attraction will be outside the key indices.
Surya Roshni and Phoenix Lamps will attract attention as the latter is reportedly considering buying out the former. Jindal Drilling may come under some pressure as the company has approved issue of 1,200,000 new shares to Citigroup under a preferential allotment at Rs1,280 per share. The stock hit a 52-week high of Rs1,395 on Dec. 13.
Steel Strips Wheels will see some action as the company has decided to issue 12,55,856 shares at Rs170 each on a preferential basis to Kalimati Investment Company Ltd. (a wholly owned subsidiary of Tata Steel).
Omaxe may also be in the limelight as its subsidiaries have bid for a highway project in the Delhi-Agra section and a real estate project in Andhra Pradesh. India Glycols has acquired 3,17,24,200 shares of Shakumbari Sugar and Allied Industries, which is 96.6% of the total paid-up share capital of the company.
IFCI may remain in the spotlight as it has received three responses from interested parties. These responses would be considered at the Board meeting to be held today. Indiabulls Financial will be in action as the Delhi High Court has cleared its demerger plans.
US stocks tumbled on Friday, ending a tough week on a down note, after a report showing higher inflation raised worries that the Fed won't be able to keep cutting interest rates, even as the economy continues to struggle.
Market breadth was negative. All but two of the Dow's 30 issues closed lower on Friday. For the week, the Dow lost 2%, the Nasdaq lost 2.6% and the S&P 500 lost 2.4%.
The Consumer Price Index (CPI) jumped 0.8% in November, the biggest monthly jump in more than two years. CPI topped forecasts and was up from the 0.3% reading in October. It was the second day in a row that the government released reports showing higher inflationary pressures, following the Producer Price Index (PPI).
This week brings earnings reports from a few big companies, including Goldman Sachs, Morgan Stanley, Bear Stearns, FedEx, Best Buy and Oracle. Wall Street will also get a snapshot of the housing market. The National Association of Home Builders will release its December housing index. The Commerce Department will report November housing starts and building permits.
The Commerce Department will also release its final reading on third-quarter GDP. Late in the week will be the Labor Department's report on personal income and spending in November, which will also include the Fed's preferred inflation measure.
Treasury prices dipped, raising the yield on the 10-year note to 4.24% from 4.2% late on Thursday. In currency trading, the dollar rose versus the euro and yen. US light crude oil for January delivery fell 98 cents to settle at $91.27 a barrel in New York. COMEX gold for February delivery fell $6 to settle at $798 an ounce, falling with other dollar-traded commodities.
Stock indices across Europe snapped their losing streak to close higher on Friday, supported by a rally in shares of oil and utility companies. The pan-European Dow Jones Stoxx 600 index gained 0.5% to 367.24, with the utility sector gaining the most ground, up 1.2%. The UK's FTSE 100 closed up 0.5% at 6,397.00, while the German DAX 30 added 0.3% to 7,948.36 and the French CAC-40 rose 0.3% to 5,605.36.
In the emerging markets, the Bovespa in Brazil was down 0.67% to 62,444, while the IPC index in Mexico fell 0.3% to 29,994. The RTS index in Russia plunged 2% to 2269 and the ISE National-30 index in dropped 0.6% to 69,970.
Asian stocks were down this morning, with the Hang Seng in Hong Kong leading the sell-off across the region. The MSCI Asia Pacific (Ex-Japan) index is set for its longest losing streak in a month, after accelerating inflation in the US heightened concern that higher prices will curb consumer spending there.
BHP Billiton and Samsung Electronics led declines on speculation that the Fed has less elbow room to cut rates and boost growth in the world's biggest economy. US consumer prices rose the most since September 2005 last month on record energy costs.
The MSCI Asia Pacific Index fell 0.7% to 155.67 as of 10 a.m. in Tokyo, adding to a three-day, 5.1% drop. That would be the measure's longest losing streak since the period ended Nov. 13. Seven of the 10 industry indexes on the benchmark slid.
Monday blues for bulls!
It was second straight day of loses for the markets as a weakening trend in the US and other Asian equity markets influenced the slide on the Indian bourses.
Key indices started off the day with strong gains with the benchmark Sensex rising to an intra-day high of 20,171.57. However, weak global cues and selling pressure emerging in the large cap stocks like Bharti Airtel, ICICI Bank, HDFC and Tata Motors dragged the markets to close in red.
The Pharma stocks which were under-performing from quite some time were in action as the index was the top gainer adding 2.5% on Friday, even the FMCG stocks gained momentum with ITC and Hindustan Unilever being the major gainers, the index was up 1.4%. The BSE Small-Cap and Mid-Cap stocks continued to be the attention seekers as both the index added over 1% each.
Finally, 30-share Sensex slipped 73 points to close at 20,030 and Nifty closed at 6,047 losing 10 points.
Atlanta gained 4.5% to Rs327 after the company announced that its unit purchased Olympic Cinema for Rs486mn. The scrip touched an intra-day high of Rs345 and a low of Rs313 and recorded volumes of over 3,00,000 shares on NSE.
Maharashtra Seamless edged lower 0.4% to Rs608. The company announced that it secured $40mn order from US. The scrip touched an intra-day high of Rs625 and a low of Rs601 and recorded volumes of over 93,00,000 shares on NSE.
Videocon Industries surged by over 6.5% to Rs648 after reports stated that the company is planning to spin-off its energy business in to a separate company. The scrip touched an intra-day high of Rs664 and a low of Rs617 and recorded volumes of over 14,00,000 shares on NSE.
Finolex Cables surged by over 11% to Rs108 after the company announced that they entered into a Joint Venture with J-Power Systems to manufacture very high voltage power cables and offer complete turnkey solutions in extra high voltage cable systems. The scrip touched an intra-day high of Rs109 and a low of Rs95 and recorded volumes of over 24,00,000 shares on NSE.
Banking stocks were on the receiving end on back of profit booking in the heavyweights like ICICI Bank was down 3% to Rs1206, HDFC Bank slipped 1.6% to Rs1728, Kotak Bank fell 3.1% to Rs1262. However, SBI added 0.6% to Rs2410.
The Telecom stocks also ended lower. Bharti Airtel slipped 3.5% to Rs952, MTNL was down 1.5% to Rs185 and RCOM marginally dropped 0.3% to Rs759.
The declining trend for the IT stocks prolonged as the rupee appreciation continued to hit the IT companies. IT bellwether fell 1% to Rs1646, Satyam Computer dipped 2.3% to Rs411 and Wipro slipped 1% to Rs495.
What the FIIs are doing
FIIs were net sellers of Rs6.47bn (provisional) in the cash segment on Friday while the local institutions pumped in Rs1.05bn. In the F&O segment, foreign funds were net sellers of Rs22bn on the same day.
On Thursday, FIIs were net buyers of Rs10.82bn in the cash segment. Mutual Funds were net sellers of Rs1.81bn on the same day.
Stocks in News:
Daimler Trucks forms JV with Hero Group to produce light, medium and heavy duty trucks.
Cummins to source US$2bn worth of auto components from Indian vendors by 2009-10; double the current year's target.
Power Grid Corp gets government approval to procure US$1.6bn loan from World Bank and Asian Development Bank (ADB).
Turkish authorities grant license to Indian Oil Corp-Calik Holding JV to set up a US$4.9bn refinery in port city of Ceyhan: media reports.
Ford Motor may name Tata Motors as a preferred bidder for its Jaguar and Land Rover brands, according to a British newspaper.
L&T shortlists three locations for its next shipyards for which the company will invest Rs20bn.
Hindustan Zinc commissions its second zinc smelter; annual production capacity to expand to 6.7mn tons by 2010.
Reliance Power and Tata Power may have to pay more as bid bond for the Tilaiya project as the government may impose revised bidding norms for UMPPs.
Coal India hikes prices by 10% after a gap of three and a half years; may consider JV for supplying imported low ash thermal coal.
Financial Technologies sells 9.6% stake in MCX, the commodity exchange, to three financial institutions for Rs4bn.
Three consortia submit their financial bids to acquire a 26% stake in IFCI.
Tech Mahindra plans to offer BPO services to banking, financial, retail and healthcare sectors to diversify its customer base.
L&T JV in Oman to set up an equipment manufacturing plant with Sohar Industrial Port Company.
S Kumars Nationwide may acquire an European company for Rs5bn, its first foreign acquisition.
Westside, the lifestyle stores chain owned by Trent, plans to expand to 65 stores in next two years from 28 stores at present.
TRAI endorses Communications Ministers’ view that spectrum for existing 2G services cannot be auctioned as telecom policy does not permit it.
General insurers to get full pricing freedom from January 1st.
WPI rises by 3.75% during the week ended December 1, higher than the previous rise of 3.01%, on dearer food items.
Cement industry to add 13mn tons in new capacity in the current fiscal year.
Non-food credit increased by Rs621bn in November as against Rs16bn in October, according to the RBI.
TRAI to recommend auction for allocation of spectrum for mobile TV.
Prime Minister expresses concerns over rising subsidies; says neither equity nor efficiency objectives are being met.
Entry fee for dual technology license as per TRAI proposals, according to DoT.
Corporate India may witness slowdown in sales to 13% in third quarter of current fiscal year.
SEBI is planning to set up a dedicated bourse for the small and medium enterprises sector.
Cipla
We recommend a buy in Cipla. From the weekly chart of Cipla, we note that it was on a long-term downtrend since its all-time high of Rs 304, made in April 2006. However, the stock found support at Rs 165 in late August 2007 (which coincides with the 200-week moving average line) and with this the long-term downtrend got arrested. Since then the stock has been on an up move. We note that the stock has moved above the 200-day moving average line and a key resistance of Rs 200 recently on good volumes. The daily momentum indicator is featuring in the bullish zone and the weekly momentum indicator is on the verge of entering this zone. The immediate support for the stock is at Rs 180 and the next support is pegged at Rs 165. Taking cues from the above mentioned factors, we direct the investors to buy the stock at current market price. We expect the stock to move up to Rs 240 in the short-term. The short-term traders can buy the stock with a stop loss at Rs 190.
Via Businessline
Weekly Trading Calls
BUYS:
SHIRAM TRANSPORT FINANCE ( buy arnd 360 levels)
MONNET ISPAT ( arnd 465 levels)
DR REDDYS LABS ( arnd 724 levels)
AXIS BANK ( arnd 993 levels)
FORTIS HEALTHCARE ( arnd 100 levels)
( use appropiate stoploss at 3-4% , buy around previous close
avoid incase of gap opening)
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