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Monday, September 13, 2010
Post Market Review - Sep 13 2010
It was a blowout rally on the dalal street as benchmark indices surged more than 2% in today’s trade, registering highest percentage gain after 26th May 2010. Bank stocks gained across Asia after global regulator announced new capital rules that weren’t as harsh as expected. A stronger than expected 13.9% rise in August industrial production reported by China over the weekend and our own 13.8% July IIP growth reported on Friday also boosted the sentiment. Sensex gained 409 points to close at 19208 while Nifty finished at 5760, up 120 points. European markets were trading higher by more than a percent while US stock indices futures were up about 1.5%.
Nifty September 2010 futures above 5,760
Turnover jumps
Nifty September 2010 futures were at 5,762.90, at a premium of 2.90 points compared to spot closing of 5,760. Turnover in NSE's futures & options (F&O) segment jumped to Rs 1,49,175.14 crore from Rs 98,765.76 crore on Thursday, 9 September 2010.
Vishal Retail vaults as board approves sale of retail, wholesale units
Vishal Retail jumped 9.54% to Rs 55.70 at 11:45 IST on BSE, after the company's board approved sale of its retail business to Shriram Group.
Stocks surge in Asia
Markets witness a wonderful start to the week
Asian markets recorded good gains today as buying emerged with force following decent cues from the US markets and strong set of economic numbers from China. The US Commerce Department stated that wholesale inventories rose by 1.3% in July, which was substantially higher than the expected increase of 0.4%. The jump in inventories marked the largest increase since July of 2008. US stocks moved up by moderate margins to close out the week on Friday. DOW witnessed steady upside, hitting its best levels in nearly one month. The Dow gained 47.53 points or 0.5% to end at 10,462.77. On the week, the Dow inched up by 0.1%, while the Nasdaq and the S&P 500 moved up by 0.4% and 0.5%, respectively.
BSE Bulk Deals to Watch - Sep 13 2010
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
13/9/2010 530901 ACIL Cot Inds ABHIJAI INVESTMENT B 67997 35.46
13/9/2010 511706 Action Fin SHRISH L KENIYA B 50000 26.40
13/9/2010 532351 Aksh Optifibre ASP INVESTMENT CONSULTANTS PVT LTD B 505000 20.51
NSE Bulk Deals to Watch - Sep 13 2010
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
13-SEP-2010,AKSHOPTFBR,Aksh Optifibre Limited,ASP INVESTMENT CONSULTANTS PVT LTD,BUY,479000,20.50,-
13-SEP-2010,GSSAMERICA,GSS America Infotech Limi,BHARGAV MAREPALLY,BUY,75000,339.97,-
Bulls ride on robust IIP data, Sensex above 19K
Major headlines
Banks gain on new capital norms
Gujarat NRE Coke spurts on fund raising plan; the stock closes 2.21% higher
ARSS Infrastructure bags Rs93.72 crore order; the stock ends higher by 0.11%
RIL, bank stocks lead rally
Robust July 2010 industrial production growth, good monsoon rains this year, data showing sustained buying by foreign funds and firm global stocks, helped domestic bourses kick off the new trading week with a bang. The two key benchmark indices, the BSE Sensex and the 50-unit S&P CNX Nifty, struck their highest levels in nearly 32 months. The market gained for the fifth straight trading session. The BSE 30-share Sensex was up 408.67 points or 2.17%, up close to 360 points from the day's low and off close to 35 points from the day's high.
Sensex ends above 19k since Jan 2008
Indian equities continued to gain for the fifth day on Monday. It was a spectacular rally witnessed in D-Street today. Indian shares risen to their peak level in more than two and a half years (since 2008) after data showed industrial output rose faster than expected. July`` factory output was up 13.8% compared with a year ago. As the day progressed, the index mounted further sustaining 19,000 mark on the back of strong global confidence and aggressive buying funds by investors. Finally, it ended on a bright note after hitting a high of 19,243.44 and Nifty maitaining its 5,700 mark. Both Sensex and Nifty traded 32 month high
Adani Enterprises leads gainers in 'A' group
Kotak Mahindra Bank, Mahindra & Mahindra Financial Services, SBI and HDFC are among the other gainers.
Adani Enterprises jumped 5.77% to Rs 698.65. The scrip topped the gainers in BSE's 'A' group. Adani Enterprises, which is the country's largest coal importing company, last month, entered into a $1.65 billion tripartite pact with an Indonesian firm to source coal. Adani Enterprises also entered into an agreement, last month, to buy the coal assets of Australia's Linc Energy.
Divi's Labs
Investors with a long-term perspective can consider accumulating the stock of Divi's Laboratories, an established player in the global pharmaceutical outsourcing market. Divi has well-established working relationships with a number of the top 20 global innovator firms. With global pharma companies beginning to restock inventories, it will only be a matter of time before it reflects in the company's financial performance.
Grey Market Premiums - Eros International, Ashok Buildcon, CTV Network
| Company Name | Offer Price (Rs.) | Premium (Rs.) |
| Indosolar Ltd. | 29 to 32 | 2.50 to 3 |
| Tirupati Inks (FPO) | 41 to 43 | -- |
| Eros International | -- | 29 to 30 |
| Microsec Fin | 110 to 120 (Approx) | 29 to 30 |
| CTV Network | 100 to 110 (Approx) | 17 to 18 |
| Ashok Buildcon | 280 to 300 (Approx) | 47 to 48 |
| VA Tech Wabag | 1200 to 1300 (Approx) | 260 to 265 |
Market may extend gains on robust industrial production growth
Data showing robust industrial prodcution growth in July 2010, sustained buying by foreign funds and firm Asian stocks will help domestic bourses score further gains. Indian stocks are currently hovering at their highest level in nearly 32 months. Trading of the S&P CNX Nifty futures on the Singapore stock exchange indicate that the Nifty could gain 41 points at the opening bell.
Daily News Roundup - Sep 13 2010
The government expects to complete the ONGC and IOC divestments in this financial year and to raise up to Rs190bn from the process. (BS)
Dr Reddy's plans to spend Rs16bn for capacity expansion in two years. (BS)
HCL Tech bags 3-year IT infra deal from New Zealand government. (ET)
Weekly: Sensex, Nifty gains 3% each
It was the short and sweet week for the bulls as the Nifty managed to scale up 2.9% and Sensex advanced by 3.2% during the week. Indian benchmark indices managed to outperform the world markets led by a rally seen in the large cap stocks. Better-than-expected US monthly jobs report acted as a sentiment booster for Dalal Street.
Rejoice on the street!
Too few rejoice at a friend's good fortune. - Aeschylus.
If trend is the friend, then bulls may look at some more rejoicing on the street. Festive fervour is picking up in India and the bulls appear in high spirits going by last week’s breakout above 5600.
Markets set for a strong opening
Headlines for the day:
Land prices up 50 times in 10 years
3G operators may come under scrutiny of CAG
Vedanta set to source bauxite from Gujarat
Copper weakens
Prices register weekly losses for first time in four weeks
Copper prices registered weekly losses for the first time in four weeks on Friday, 10 September at Comex. Prices dropped on reports that Chinese regulators are investigating positions in rubber
futures that spurred speculation that some traders may be forced to sell commodities.
Orient Ceramics
The revival in demand for tiles with pick-up in real-estate activities, the company's growing retail presence and modest valuations are reasons for investing in the stock of Orient Ceramics and Industries.
IDBI Bank
Fresh investments with a two-to-three year time horizon can be considered in the stock of IDBI Bank, the youngest of the public sector banks. The bank focuses mainly on infrastructure lending, a segment expected to contribute heavily to the incremental credit growth of the banking system, going forward.
Weekly Recommendations - Sep 13 2010
Axis Bank
* Current market price (CMP): Rs 1,380/ target price (TP): Rs 1,688/ Upside: 22%
* Rationale: The Bank has expanded its network at 33% CAGR since FY2005, doubling its CASA market share to 4.0% by FY2010 (20bp yoy increase in FY2010). Angel Broking expects the bank to continue market share gains of 30-50bp every year driven by strong branch expansion. Fee income contribution across a spectrum of services has been a meaningful 2% of assets (almost twice the level in PSBs) over FY2007-10. The bank`s high credit growth was backed by strong low-cost deposit growth, rather than chasing risky loans using high-cost deposits. Moreover, with the improving economic outlook and reducing corporate leverage, NPA concerns are receding and could provide upside to our earnings estimates (which still factor NPA provisions at 0.5% of assets in FY2011E vs. an average of 0.4% over FY2006-10). The stock is trading at attractive valuations of 2.6x FY2012E P/ABV. Hence, it maintains a `Buy` on the stock with a target price of Rs1,688 (at 3.2x FY2012E P/ABV).
US stocks stay steady for the week
Energy sector and Chinese data impart good momentum to US stocks
US stocks ended almost near the unchanged mark by registering little gains for the week that ended on Friday, 10 September 2010. The holiday-shortened week did not have much of corporate news and economic reports. The week ended on a positive note following a better-than-expected initial claims data and higher crude oil prices. Banks were in focus throughout the week.
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