India Equity Analysis, Reports, Recommendations, Stock Tips and more!
Search Now
Recommendations
Thursday, September 20, 2007
Intraday Stock Ideas
NIFTY (4732) Supp 4678 Res 4796
Buy RCOM (564) SL 559
Target 571, 574
Buy Voltas (157) SL 153
Target 163, 165
Buy Praj Inds (224) SL 220 Target 232, 234
Sell Dabur (107) SL 110
Target 101, 100
Sell HPCL (240) SL 245
Target 232, 230
After Wonderful Wednesday, Tired Thursday!
On the day of victory no one is tired
The bulls batting on the bourses more or less resembled Yuvraj Singh smashing 36 runs (6x6) in an over. The bears, like the beaten bowler Stuart Broad had to look over the covers to find the ball. For the market, it was by far the best day for the bulls in recent memory. The Sensex surged past the 16k mark in the initial trades itself and made a new all-time high. The Nifty too crossed its own lifetime peak, as did some other indices. The fact that the trend has reversed in favour of the bulls after the carnage last month made it even better. The market's ability to bounce back after a brief correction has improved considerably. The main indices are taking less time now to stage a turnaround from an intermediate downtrend. This should be music to the ears of the bulls.
Today could be a tired Thursday as bulls may run out of energy. Expect indices to drop in the red. The bears will look at staging a comeback sooner or later. Liquidity in terms of FII inflows will be the key. We may have a situation of domestic funds booking profits even as FIIs may look at putting in fresh money.
The rate cuts by the Fed will boost inflows towards emerging markets where returns are better. India, with its strong economic fundamentals and earnings momentum, should get a big slice out of this. So, the outlook remains upbeat, though one needs to be careful as valuations may just be getting a little bit expensive.
A stock centric approach always pays rich dividends in every market cycle. Its no different today. While the global response to the Fed rate cuts so far has been positive, the question is what happens after investors get over the euphoria. Locally, we have to grapple with the developing political situation with mid-term polls a certainty. Oil is also on the boil again. And, of course how the RBI copes with the deluge of foreign money and what it does with interest rates remains a mystery.
IT stocks should be under pressure as the Rupee has risen past the 40 per dollar mark this morning.
Also keep an eye on Magnum Ventures, which gets listed on the bourses today.
US stocks extended their biggest rally in four years on hope that the interest rate cuts will help contain the housing sector mess and boost earnings growth.
AT&T helped lead the Dow Jones Industrial Average to within 1.4% of a record after saying sales of Apple's iPhone have increased. Freeport-McMoRan Copper & Gold, the world's second-largest copper producer, climbed to a new high.
The Standard & Poor's 500 Index rose 9.25 points, or 0.6%, to 1,529.03. The Dow gained 76.17 points, or 0.6%, to 13,815.56. The Nasdaq Composite Index added 14.82 points, or 0.6%, to 2,666.48. All 10 S&P 500 industry groups gained for a second day.
Ten-year Treasury notes fell for a third day as investors bet that rate cuts will fuel inflation, even after the government said consumer prices fell in August. The dollar rose from an all-time low against the euro and gold gained.
Thursday brings earnings reports from Bear Stearns, Goldman Sachs and Circuit City. Thursday also brings several economic reports after the start of trading, including the leading economic indicators and the Philadelphia Fed index - a regional manufacturing reading.
Fed chief Ben Bernanke is due to testify on Capitol Hill as part of a hearing on the subprime mortgage crisis. Treasury Secretary Henry Paulson is also due to testify.
The day's economic news seemed to support the Fed decision. Housing starts fell to a 12-month low in August, according to a government report that also showed a big drop in building permits, a measure of builder confidence. But another government report was more positive, showing a surprise drop in consumer prices in August, versus forecasts for a flat reading.
US light crude oil for October delivery rose 42 cents to settle at $81.93 a barrel on the New York Mercantile Exchange, briefly hitting a fresh record trading high of $82.50 after a report showed a negligible rise in weekly crude oil and gas inventories.
Treasury prices tanked, pushing the yield on the 10-year note to 4.53% from 4.47% late on Tuesday. In currency trading, the dollar slumped against the euro and was little changed versus the yen. COMEX gold for December delivery rallied $5.80 to $729.50 an ounce.
European shares ended higher. The broad pan-European Dow Jones Stoxx 600 index rose 2.7% to 377.61, putting in its best one-day gain this year. The UK's FTSE 100 index closed up 2.8% at 6,460.00, the German DAX 30 added 2.3% to 7,750.84 and the French CAC-40 climbed 3.3% to 5,730.82.
In the emerging markets, the Bovespa in Brazil rose 1% to 57,264 while the IPC index in Mexico was down 0.3% at 30,512. The RTS index in Russia shot up by nearly 4% to 2015 and the ISE National-30 index in Turkey soared by 7.4% to 68,691.
Asian markets were trading mixed this morning. The the Hang Seng in Hong Kong was up 0.5% while the rest of the markets were more or less flat.
Markets further extended its rally and the benchmark Sensex not only tested the 16k levels but managed to breach it as bulls were overjoyed after Federal Reserve announcement that it had cut its benchmark interest rate by 50 basis points. The Banking and the Realty stocks were the leading gainers on hopes that the Fed’s decision might also prompt the RBI to relax its hawkish stance on the monetary policy going forward.
The index heavyweights partied hard as RIL, SBI, DLF, BHEL, SAIL, Tata Steel and RPL hit their respective lifetime high. Further announcement from the government it may allow mills to make Ethanol directly from Cane juice lifted the sugar stocks from their lows and Cement stocks also recorded concrete gains after cement manufacturers increased prices by Rs3 a bag in the largest markets of Maharashtra and
Reliance Communication surged by over 5% to Rs564 after the company’s owned Flag Telecom signed a five year contract with
Bharti Airtel jumped by over 6.5% to Rs886 after reports stated that the company has awarded $150mn contract to Chinese vendor Huawei for building and managing GSM mobile infrastructure for its Sri Lankan operations. The scrip touched an intra-day high of Rs894 and a low of Rs845 and recorded volumes of over 11,00,000 shares on NSE.
Crompton Greaves advanced 2.2% to Rs316 following reports that the won bid to distribute and bill power in three major divisions in
BPCL ended flat at Rs310. Reports stated that the company has planned to submit a US$350mn non-binding bid to acquire 10% interest in a
ITC gained by 4% to Rs187 following reports that the company is planning to set up a third food factory in
Sugar stocks turned sweeter as government would allow mills to make Ethanol directly from Cane juice. Renuka Sugar jumped by over 24% to Rs683, Bajaj Hindustan surged by over 20% to Rs176, Sakhti Sugar was locked at 20% upper circuit to Rs92.80.
Cement stocks recorded concrete gains after cement manufacturers increased prices by Rs3 a bag in the largest markets of Maharashtra and
Banking stocks rallied after the Fed's decision to cut interest rates by 50 basis points. HDFC Bank surged by over 7.5% to Rs1324, ICICI Bank surged by over 5% to Rs973 and SBI added 4.4% to Rs1769. Union Bank, Bank of Baroda and PNB were the major gainers among the Mid-Cap stocks.
Realty stocks also were among the major gainers. DLF surged by over 8.5% to Rs713, Parsvnath advanced by 5.4% to Rs337, Sobha gained by 4.5% to Rs797, Akruti added 3.2% to Rs718 and Peninsula land added 2.6% to Rs586.
Tata Motors is planning to replace its existing range of 100-180hp trucks with the 'world truck' by September 2008 to meet competition from Volvo, Man and others.
The PMO has asked the Jharkhand Government to renew SAIL's Chiria mines lease.
Bharti Airtel is the only Indian company left in the fray for bagging the second mobile license in Qatar.
Shipping Corporation of India has floated four joint ventures to enter into shipbuilding, container terminal operation, dredging and offshore services.
Titan Industries has entered into a five-year tie-up for exclusive marketing-cum-distribution of Hugo Boss watches in India with MGI Luxury.
HCL Infosystems plans to set up a major systems integration hub in Kolkata over next 8-12 months.
L&T is close to acquiring a stake in Feedback Ventures.
ONGC Videsh, the overseas investment arm of ONGC, has won three exploration blocks in Colombia in the latest round of auctions.
The Carlyle Group and Citigroup Venture are in the race to acquire 15% stake in Pyramid Saimira.
Britannia will take legal action against Group Danone for unauthorized use of the Tiger biscuit brand in other countries.
SREI Infrastructure Finance has proposed a preferential issue of up to 25mn warrants to the promoter group at Rs100 per share.
The government is planning to allow manufacturing of ethanol directly from sugarcane.
Production of kharif foodgrains during FY08 will touch 112.24mn tons. This is 1.72mn tons more than that of last year.
The Ministry of Information & Broadcasting may cut the entertainment tax.
The Telecom Regulatory Authority of India has suggested that telecom operators can offer mobile television services to subscribers without licence.
Fund Activity:
FIIs were net buyers of Rs24.58bn (provisional) in the cash segment on Wednesday and the local institutions pulled out Rs3.28bn. In the F&O segment, foreign funds were net buyers of Rs42.55bn.
On Tuesday, FIIs were net sellers to the tune of Rs1.38bn in the cash segment. Mutual Funds were net sellers of Rs190mn on the same day.
Major Bulk Deals:
Macquaire Bank has sold Atul; Merrill Lynch has bought Dwarikesh Sugar while HSBC Global has sold it; Emerging Capital Advisors has sold Evinix and has purchased Gremac Infra; Deutsche Bank has sold Karuturi Networks; BNP Paribas has picked up Megasoft while Sundaram BNP Paribas Select Mid-Cap Fund has sold it; Deutsche Securities has bought Unity Infra.
Upper Circuit:
RIIL, Mawana Sugar, Rana Sugar, Tourism Finance, KM Sugar, Bombay Burmah, Goldstone Tech, Uttam Sugar, Jai Corp and Prakash Industries.
Lower Circuit:
Hindo SPG and Shree Precoated Steels.
Trading Calls
Buy SBI with stoploss of Rs 1700 for target of Rs 2100.
Buy Core Projects with a stop loss of Rs 168 for a short-term (3 Months) target of Rs 210.
Buy DLF with stoploss of Rs 640 for target of Rs 840.
More cheap cellphones coming soon
It’s official now. Along side the Nokias, Samsungs, Motorolas and Sony Ericssons there’ll be a new mass cellphone brand in India — Vodafone! Vodafone Essar, which will spend nearly Rs 250 crore on a high-profile brand transition from Hutch to Vodafone being unveiled on Thursday, is poised to launch cheap cellphones in India under the Vodafone brand. It will also launch co-branded handsets sourced from major global vendors.
“On the heels of the brand change from Hutch to Vodafone, Vodafone Essar will launch an array of low-cost cellular handsets in India which will be directly marketed under the Vodafone brand or co-branded with select overseas handset makers,” a Vodafone Essar director told ET on condition of anonymity. “The objective is to leverage Vodafone Group’s global scale in bringing millions of low-cost handsets from across the world into India and use Vodafone Essar’s famed cellphone distribution reach to maximise sales,” he added.
With Reliance Communications (RCOM) recently launching ultra budget handsets with prices starting at Rs 777, the industry buzz is that Vodafone would lower the entry barrier to an unbelievable Rs 666. There’s also speculation that Vodafone may follow the pricing model of Rs 666, Rs 777, Rs 888 and Rs 999 for its ultra-cheap handsets.
The Vodafone director refused to confirm this: “I cannot share pricing details but there will be no discounts or subsidised handset offers. Instead, Vodafone Essar may come up with innovative handset-bundled schemes for its 35 million consumers.” Company sources also said that the bundled handsets will primarily be distributed through Vodafone Essar’s four lakh-odd distribution outlets. “Vodafone Essar is also entering collaborative arrangements with some of the top vendors to achieve unprecedented sales,” a top company official told ET.
While CDMA players like RCOM and Tata Teleservices have adopted handset-driven expansion strategies to drive up subscriber base, this is the first time that a GSM player is venturing into this space on a pan-India level.
China’s ZTE, which is looking to set up a cellphone manufacturing unit in India, is expected to provide many Vodafone handsets in India. Early this year, Vodafone inked a global low-cost handset procurement deal with ZTE.
ZTE global vice-president (handset systems) He Shiyou told ET that as per the deal, Vodafone would offer ZTE’s handsets to its subscribers in India. “ZTE hopes to ship over 10 million of these to India. Though, we ship high-end phones to the West, our plan for India revolves around low-cost phones, which we offer in collaboration with operators there,” Mr Shiyou added.
The company will unveil the Vodafone brand on Thursday in one of the biggest brand transition exercises in the recent times. According to PTI, Vodafone will keep in-tact its predecessor’s assurance of following customers wher-ever they go, but will replace Hutch’s ‘Wherever you go our network follows’ catchline with ‘Make the most of now’.
Market Close : 16k conquered with aplomb !
It took 53 days for the journey from 15k to 16k for the Sensex. .The magical figure of 16k was crossed early in the morning as the indices zoomed like a rocket sparked by a rally across global markets. The US Fed slashed benchmark interest rates by half a percent. As the day started markets were on a rampage as major stocks cutting across sectors rose sharply for the day. The Reality stocks sang their way as the reality index moved up by almost 6%. But Sugar shares were stars as the Agriculture Minister Sharad Pawar said the government plans to give more fiscal incentives to sugar mills and that it would decide on monetary sugar sops in 8-10 days.
Tech stocks started positive but soon were the weaker of the lot. The Rupee attempted its highest levels in more than nine years after it rose by 0.7% to 40.20 per Dollar. The appreciating Rupee would put more pressure on the Tech stocks. The Banking and financial sectors saw action as they felt that the Fed move to cut the rates would put pressure on RBI to loosen its monetary policy. Buying was witnessed across the board with Auto, Banking, and Energy stocks leading the way. BSE Oil & Gas Index and the BSE Bank advanced by 5% and 4.8% respectively. Mid & Small caps also joined the rally with the frontline stocks.
Sensex ended the day up by 653 points at 16322 helped up by gains in HDFC (2367,+9 percent), HDFC Bk (1322,+7 percent), ONGC (899,+6 percent), Maruti (923.2,+5 percent) and Bharti Tele (874.5,+5 percent). There were no drags on the Sensex components.
Sugar was the story for the day. The sugar stocks rallied and most sugar stocks locked in upper circuit. This was on the back of the news that government will decide on monetary sops in 8-10 days. If this goes in line with the market expectations it would be a big positive for the sugar industry. There were other rules allowing them to manufacture Ethanol and that was seen as a profitable initiative. Integrated players like Shree Renuka Sugars and Balrampur Chini in particular would be benefited the most by the impending government move. And on the Ethanol blending issue sugar industry will need to increase ethanol production capacity by 40%. With this even the bigger market for ethanol will improve the sugar market. Currently a price of Rs 21.50 for ethanol translates to a price of Rs 14.50 for sugar. This is seen fairly attractive in the ethanol market. Requirement is for yet another 1 bn litre of ethanol production capacity for the current demand. Another report said that the sugar mills may be allowed to produce ethanol directly from cane juice instead of molasses to lower dependence on sugar prices. It was a sweet day.
DLF reported that the company plans to raise about $2 bn and list as a real estate investment trust in Singapore. The company also plans to enter the business of retail of luxury brands and is in talks with well-known retail chains including Georgio Armani, Versace and Dolce Gabbana. DLF may tie up with a foreign major for the supermarket business at a later stage. However, its first priority would be to partner with luxury brands. DLF is looking at franchising as well as joint ventures through the single brand FDI route. On real estate front the company continues to be in talks with international firms for investing in DLF projects. It had also tied up with Prudential for insurance, Hilton for hospitality segment, Nakheel group for SEZ's. This move is a part of the company's strategy to diversify its area of operations. All Reality stocks ended the day on a high note following DLF which ended the day up by 9%.
It was a rally of the Sensex stocks and the Index rallied. The current actions of the US and Europe will see their economies slow. Asia is seen as the haven for equities and the the rally reflects that. Asia is suddently becoming hot and thats the reason.
Technically Speaking: Sensex scaled up to 16000 levels and sustained above this levels. Indices made a high of 16335 and low of 16192. Whooping Turnover of Rs 7405 Cr for the the day. Sensex has done our target of 16100+ which we have been advocating for long. The rally is strong and 16600 is the next target for Sensex..
Wednesday, September 19, 2007
Experts on the Markets
| The Sensex closed above 16,000-mark for the first time, and market experts feel more gains will follow with some hiccups on the way. |
| Though nobody is taking a call on where the index will be in the near-term, experts, across-the-board, continue to be bullish on Indian equities. Nimesh Kampani, chairman, JM Financial "The basic issue is that the way the markets have gone up. The flow of FII money will increase in India and that is the expectation of the market. With the interest rates being cut, the appreciation of rupee, and looking at the rise in Asian markets today, it can be assumed that there has been a flow of FII money into the Asian markets. Sectors such as infrastructure, cement, steel and power look good, as we expect growth in these sectors. Rakesh Jhunjhunwala, billionaire investor and stock trader I’m and I have been bullish on the Indian markets. There is no change in my view S Ramesh, COO, Kotak Investment Banking Markets will be driven by liquidity, and money will move into markets like India where the growth story remains intact. The rise from this level will be driven by sectors like banking, construction and engineering. We are just coming out of a global meltdown, and the rise from here will be sector-specific and global-event driven. Krishnamurthy Vijayan, CEO, JP Morgan Asset Management We believe that since India is one of the best investment opportunities in the next few years, we will continue to attract investments - onshore and offshore. We have been consistently overweight on sectors that capture the Indian growth story, and have been underweight on auto and downstream oil. Vijai Mantri, CEO, Deutsche AMC We are very positive on India. The Indian growth story is completely driven by domestic demand. While there may be some bouts of volatility, I don't see any constraint on corporate earnings growth. We are very bullish on capital goods, engineering and power. I think Indian markets are fairly valued but India may see a rate cut taking cues from FOMC. Alok Vajpayee, CEO, Dawnay Day AV The Indian market is following the global trend. I will not be surprised to see it at a much higher level. Some ups and downs will be there, but we will continue to see markets moving up. There could be a rate cut in India. There is lot of momentum in liquidity in Indian markets and I think they are at a fair valuation. Investors should look at specific companies rather than across-the-board buying. Second quarter results will be in line with our expectations. Ramesh Damani, member, BSE Markets have clinched 16,000 with a huge bang. Bulls are going to be in command. It reflects the strength of the Indian economy. We can say that it is India's time under the sun. The road from here onwards looks very good. India's domestic story is being driven by corporate fundamentals and earnings that are very strong. I am bullish on domestic sectors like logistics, cement, banking and underweight for the time being on technology. May be by Diwali this year, we can expect a rate cut. Amar Ambani, Vice President (research), India Infoline The 50bps rate cut by the Fed, the first in over four years, has keyed up global markets as well as Indian equities with investors breathing a sigh of relief. Talking about Indian markets in particular, the Fed cut, along with control over inflation and an improved political situation, has helped boost enthusiasm. A look at the advance tax figures also suggest that quarterly numbers are likely to be healthy. The feel-good factor of the Fed verdict will continue for some more time with increasing inflows in India where there are some very good investment opportunities. Suyash Choudhary, Fund Manager, StanChart Asset Management By delivering a 50 bps cut in the federal funds rate yesterday, the Fed has aimed at countering the detrimental effect on the broader economy arising from the tight credit conditions. The move has been accompanied by a cut by 50 bps on the discount window, which will further facilitate liquidity transmission into the financial system. While bonds world-wide are still cautious, equities have reacted very positively to the Fed move. Given that the move will help in restoring global financial stability, it is likely to positively affect domestic asset markets as well. Ritesh Jain, Fund Manager (Debt), Principal Mutual Fund The change in the Fed policy reinforces our near-term view on the benign interest rate environment. Inflation risk should continue to subside in this environment and will lend an element of flexibility to policy. The foreign flows in emerging markets may look up putting pressure on the domestic currencies to appreciate. The central bank may have to intervene aggressively to stem the uptrend in local currencies adding to domestic liquidity. While equity flows into emerging markets are likely to be good, the markets will also be watching for the corporate earnings in the current quarter. We expect the markets to remain strong. With the global interest rate environment turning benign and with most of the prominent central banks changing their stance in favor of growth than their concern on inflation, we may see even the domestic yield curve shifting lower over a period of time. Kaushal Sampat, Chief Operating Officer, Dun & Bradstreet India The cut in the Fed rate is likely to have some impact on the Indian economy. The widened interest rate differential between India and the US could result in a further surge of capital inflows (especially FIIs), which may lead to an appreciation of the rupee. The RBI may be under pressure to intervene in the forex market to preclude appreciation of the rupee beyond its comfort zone. The RBI could consider a decline in interest rates given the recent dip in the growth rate of industrial production and inflation being at a 17-month low thereby allowing the excess liquidity to flow into the economy through increased credit off take. Sandeep Nanda, executive vice president (research), Sharekhan The 50bps rate cut by the US Fed was ahead of expectation and thus a positive surprise. This prompt action has allayed concerns about a slowdown and will be positive for equities across the world including India. We expect cyclical and interest rate sensitive sectors such as banks, autos, metals to do well. There will now be greater pressure on the RBI to cut interest rates in India, which should boost earnings growth in FY2009. Kunj Bansal, CIO (portfolio management services), Religare With the FOMC announcing a 0.5% cut in the rate, the debate of an impending slowdown in the US has only increased. Moreover, the exact magnitude of the subprime crisis is yet to play out. Signals from Europe and Japan are not as salutary as they were in July. Crude has resumed its relentless pursuit of a three-figure price after a brief pause. These developments portend a steady increase of lows to those economies, which are essentially growing due to the domestic demand factor. Therefore, India would stand to benefit as a consequence. That does not mean that everything is fine in the domestic space and that we are likely to see an out performance across sectors. The political undercurrents are far from positive. Further, the latest set of IIP numbers has revived the talk of a possible slowdown in the industrial growth going forward. The performance of the monsoon, on the other hand, has given sufficient reason for cheer. In essence, what we are saying is that whereas directionally there is nothing much to worry as far as the way forward is concerned, and the markets shall continue their northward journey. However, intermittent blips cannot be ruled out. |
Market Gossip - Patni Computers
We are hearing that Patni management is playing some fun and games with their shareholders. They want to sell or not ?
We are hearing that deal might happen at around Rs 700 but looks like they don't want to give out any statements or make as if nothing is happening
Disclaimer: This is just gossip, so you need not believe it.
Subscribe to:
Posts (Atom)