Part of being a Master is learning how to sing in nobody else's voice but your own. -Hugh Macleod.
It's been a rock-n-roll fiscal year for bulls with underpinned by a smart economic recovery and healthy FII inflows. All eyes are now on FY11. The immediate trigger will be India Inc.’s report card, trend in inflation and RBI policy action. Fund flows will also a play a crucial role, and so will the monsoon. On the whole, India is poised to do a little bit better than FY10. A late spurt helped the key indices rebound after a mostly lackluster day. The Sensex and the Nifty gained 8% each in the March F&O series following a subdued February.
Today we expect another sedate start due to uncertain global cues. A rangebound trade with a positive bias is what we foresee in the near term. The NSE Nifty could surpass 5300 shortly if FII inflows remain firm but the market will face selling pressure at higher levels as valuations are not cheap. Avoid small-cap and mid-cap stocks as they have under-performed the frontline stocks post budget and are unlikely to see strength anytime soon. We would advise you to stay invested in fundamentally sound stocks. Get rid of weak scrips by selling into any rally.
A big worry is how the external environment shapes up, particularly in the US. Fed chief Ben Bernanke has yet again pledged to keep rates at record low for a long time. But, that also has its pitfalls like inflationary spirals. Of late, there have been concerns about sovereign debt in some parts of Europe while Dubai seems to have settled that issue. Reports do suggest a consensus on financial aid for Greece from the EU-IMF combine. One should keep a close watch on the movement of the Dollar index for gauging the direction of the overseas markets.
FIIs were net buyers in the cash segment on Thursday at Rs6.53bn on a provisional basis. Local funds were net sellers of Rs1.56bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers of Rs3.36bn. On Tuesday, FIIs were net buyers of Rs4.86bn in the cash segment, as per the SEBI web site.
After a problematic start on Thursday, the Indian markets marched ahead bidding good-buy to the March series on a high. The Indian markets shrugged off ratings downgrade of Portugal by Fitch even as the Dubai government announced new funding for Dubai World. Meanwhile, overall inflation levels dipped a little in the latest reporting week helping to improve the sentiment. In addition, FIIs have been constantly buying Indian stocks post the budget despite concerns on imminent rate hikes. Finally, the BSE Sensex advanced 108 points to end at 17,559 and NSE Nifty added 35 points to close at 5,260.
However, market breadth was in favour of the bears, out of total 2915 stocks, 1,528 declined against 1,317 advances while 70 stocks remained unchanged.
Among the BSE sectoral indices, the BSE Capital Goods index was top gainer, the index rose 1%, followed by BSE Pharma index up 1% and Bank index 1%.
Among the top losers were, BSE PSU index was down 0.8% and the BSE Consumer Durables index was down 0.3%. The BSE Mid-Cap index ended marginally higher by 0.2% while BSE Small-Cap index declined 0.2%.
Outside the frontline indices, the big gainers in the broader market were Gujarat NRE Coke, RPower, GMR Infra and OBC. On the other hand, losers included NMDC, Sterling Bio, Syndicate Bank and EIH.
In Asia, the Nikkei in Japan ended flat, while Australia's S&P/ASX marginally slipped by 0.2%. Shanghai SE Composite fell by 0.2% and Hang Seng index in Hong Kong was down 1.1%.
In Europe, stocks were trading with a positive bias. The DAX in Germany was up 0.7%, the CAC 40 index in France was up 0.7% and the FTSE in the UK was up 0.4%.
Shares of SAIL gained 0.4% to end at Rs242.4. Media reports had stated that the company’s proposed disinvestment will be taken on discussion in the Cabinet today. However later in the day, the government deferred the discussion on disinvestment in the company.
Shares of L&T gained by 2% to end at Rs1639 after the company’s electrical & gulf unit of the company bagged 6 orders aggregating Rs11.8bn for construction of power transmission line and substation works. The scrip opened at Rs1611 it touched an intra-day high of Rs1648 and a low of Rs1600 and recorded volumes of over 0.26mn shares on BSE.
Shares of Bajaj Auto advanced by 2% to Rs1879 after the company announced that it expects to close FY10 with sales of almost 2.9mn vehicles, the highest ever in its history. This includes exports of 900,000 vehicles, which is also the highest ever. The company also set itself a sales target of 4mn vehicles for FY11, representing a growth of almost 40%.This would include exports over 1mn vehicles.
Shares of Dr Reddy’s Labs gained by 1.1% to end at Rs1314 after media reports stated that the company has secured USFDA approval for generic Fluoxetine Hydrochloride. The scrip opened at Rs1300 it touched an intra-day high of Rs1318 and a low of Rs1295 and recorded volumes of over 85,000 shares on BSE.
Shares of HDIL gained by 1% to end at Rs287 after its unit Bluestar Realtors Pvt Ltd has got the commerce ministry's approval for an IT park in Kerala. The special economic zone would be set up in an area of 28.32 hectares. The scrip opened at Rs283 it touched an intra-day high of Rs290 and a low of Rs281 and recorded volumes of over 1.4mn shares on BSE.
SpiceJet reportedly received in- principle approval from government to fly overseas routes. Shares of SpiceJet gained by 1.7% to end at Rs57.75. The scrip opened at Rs56.05 it touched an intra-day high of Rs58.95 and a low of Rs55.60 and recorded volumes of over 3.9mn shares on BSE.
Cadila Healthcare reportedly received USFDA approval for Alzheimer’s drug Aricept generic. The scrip shot up hitting its new 52-eek high after the news announcement, however lost ground ending lower by 1% at Rs833. Total volumes on the counter was over 23,000 shares on BSE.
Shares of Tanla Solutions shot up by over 4.5% to end at Rs47.50 after the company announced that the board of directors has allotted 14,79,593 equity shares of Rs1/- each at a premium of Rs60.53/- to the investors on Preferential basis. The scrip opened at Rs45.75 it touched an intra-day high of Rs50.2 and a low of Rs45.25 and recorded volumes of over 1.9mn shares on BSE.