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Tuesday, January 08, 2008
Post Session Market Commentary
The Indian market closed with modest gains after facing the volatility throughout the trading session. The market opened with handsome gains but was unable to sustain the momentum at higher levels and fell to compensate all its initial gains on the back of heavy selling pressure across the sectoral indices. But the market came off sharply towards the end of the session to close with marginal gains. Metal index remained out of favor as most selling is seen from this basket. The Small Caps and Mid Caps was the worst hit as they faced heavy selling across the counters and they closed lower by 459.06 points and 285.16 points at 13,516.13 and 9,817.07 respectively. The BSE Sensex closed higher by 60.68 points at 20,873.33 and NSE Nifty closed up by 8.75 points at 6,287.85.
BSE Metal index declined by 603.62 points to close at 19,538.34. Scrips that dropped are Ispat industries (6.59%), Nalco (4.74%), Tata Steel (3.66%), Bhushan Steel (3.73%) and Sail (2.93%).
BSE Realty index closed lower by 130.27 points at 13,483.90. Scrips that fell are Penland (5.51%), Indbul Real (4.97%), Parsvnath (4.18%), Mahindra Life (3.67%)
BSE Bankex index slipped by 105.42 points to close at 12,086.57 as Andhra bank (4.93%), CentBOP (4.29%), Allahabad bank (4.31%), Oriental bank (3.33%), BOB (3.24%) and ICICI bank (2.23%).
BSE Oil & Gas index closed higher by 76.97 points at 14,051.27. Scrips that grew are RNRL (7.15%), ONGC (1.69%), Reliance industries (1.16%) and Gail India (0.35%).
BSE Capital Goods index grew by 64.36 points to close at 20,214.92. Scrips that jumped are Suzlon energy (4.77%) and L&T (1.29%).
BSE Health Care fell by 55.77 points to close at 4,297.11 as Fortis Health Care (6.73%), Bilcare (4.62%), Dishman pharma (4.41%), Wockhardt (3.70%), Biocon (3.10%) and Cipla (1.30%).
BSE IT index rose by 49.32 points to close at 4,244.75. Scrips that advanced are Karut Net (4.39%), Satyam (2.67%), Mphasis (2.54%), Tech Mahindra (1.65%), TCS (1.48%) and Infosys (1.47%).
Manaksia ends 5% higher on debut
At Rs 168.10 on BSE
Manaksia settled at Rs 168.10 on BSE, a premium of 5.06% over the IPO price of Rs 160.
On BSE, 1.22 crore shares changed hands in the counter.
The stock debuted at Rs 200, a premium of 25% over the IPO price. It touched a high of Rs 248.70 and low of Rs 161.55.
The company had fixed the issue price at the top end of the Rs 140-160 price band. At the current price of Rs 168.10, the PE multiple works out to 12.73, based on the year ended March 2007 EPS of Rs 13.20.
The public issue of Kolkata-based Manaksia ended on 19 December 2007. The IPO was subscribed 9 times. It received bids for 13.61 crore shares against 1.55 crore shares on offer. The qualified institutional buyers portion was subscribed 13.07 times, the retail segment 5.08 times, and the non institutional investors portion 2.72 times.
Manaksia’s business is spread across aluminium sheets, galvanised steel sheets, mosquito coils and metal packaging products. The flat aluminium products are partly used for captive purposes to make metal containers and caps, and the rest is supplied to auto companies like Maruti Suzuki. Galvanised corrugated steel sheets are mainly used in the household sector in Nigeria.
The company plans to use the net proceeds of the IPO for expansion of the metals business at Haldia in West Bengal. A portion of money would also be used to pre-pay a certain amount of term debt and for general corporate purposes.
Manaksia reported a net profit of Rs 92.06 crore on revenue of Rs 827.78 crore in the year ended March 2007.
Small-cap, mid-cap indices retreat even as Sensex strikes record high
The market was highly volatile as stocks gyrated between zones throughout the trading session with the index witnessing an intra-day swing of 380 points. On the back of firm global indices, the Sensex began its initial trades on a positive note at 20,970, 157 points above its previous close and rallied sharply above the 21,000 level to touch an intra-day high of 21,078. Steady to firm selling pressure thereafter saw the index plunge deep into the red to slip below the 20,700 mark and touch the low of 20,696. The Sensex managed to erase most of its losses on buying in most of the heavyweights and ended 61 points up at 20,873. The Nifty ended marginally up by 9 points at 6,288.
The breadth of the market was negative. Of the 2,922 stocks traded on the BSE, 2,369 stocks declined, 541 stocks advanced and 12 stocks ended unchanged.
Among the sectoral indices, all the sectoral indices except BSE IT index, BSE Teck index and BSE Bankex index were trading with the marginal gains. The BSE Metal index has dropped 3%, the BSE CD index has declined 2.93% and the BSE PSU index has shed 1.70% while BSE FMCG, Auto, HC, Oil & Gas, Reality and Power were in red at the close of trading.
Selective buying helped the index overcome its losses. Bharti Airtel flared up 4.01% at Rs974, HDFC Bank advanced 3.58% at Rs1,716, Satyam Computer rose 2.67% at Rs424.50 and SBI added 2.59% at Rs2,465. M&M, Reliance Communications, ONGC, TCS, Infosys and DLF witnessed steady gains.
Selling was evident in select heavyweight counters. Hindalco dropped 3.78% at Rs208.95, Tata Steel declined 3.66% at Rs891.80, Grasim tumbled 3.26% at Rs3,400.60, Maruti shed 2.43% at Rs939.65, ICICI Bank dipped 2.23% at Rs1,333.50, Reliance Energy moved down by 1.86% at Rs2,536 and HDFC 1.54% at Rs3,064.
BSE Metal stocks dropped sharply. Ispat Industries dipped 6.59% at Rs69.40, Nalco dropped 4.74% at Rs500.50, SH Precoated declined by 3.91% at Rs453.75. However, Bhushan Steel gained 3.73% at Rs1,607.95. Tisco, Jindal Saw, and Sterlite scaled down 3-2.50% each.
Over 52.21 lakh ITC shares changed hands on the BSE followed by Reliance Communications (41.53 lakh shares), NTPC (27.81 lakh shares), ONGC (15.66 lakh shares) and Hindalco (13.40 lakh shares).
Market ends flat amid volatility
The market was highly volatile as stocks gyrated between zones throughout the trading session with the index witnessing an intra-day swing of 380 points. On the back of firm global indices, the Sensex began its initial trades on a positive note at 20,970, 157 points above its previous close and rallied sharply above the 21,000 level to touch an intra-day high of 21,078. Steady to firm selling pressure thereafter saw the index plunge deep into the red to slip below the 20,700 mark and touch the low of 20,696. The Sensex managed to erase most of its losses on buying in most of the heavyweights and ended 61 points up at 20,873. The Nifty ended marginally up by 9 points at 6,288.
The breadth of the market was negative. Of the 2,922 stocks traded on the BSE, 2,369 stocks declined, 541 stocks advanced and 12 stocks ended unchanged.
Among the sectoral indices, all the sectoral indices except BSE IT index, BSE Teck index and BSE Bankex index were trading with the marginal gains. The BSE Metal index has dropped 3%, the BSE CD index has declined 2.93% and the BSE PSU index has shed 1.70% while BSE FMCG, Auto, HC, Oil & Gas, Reality and Power were in red at the close of trading.
Selective buying helped the index overcome its losses. Bharti Airtel flared up 4.01% at Rs974, HDFC Bank advanced 3.58% at Rs1,716, Satyam Computer rose 2.67% at Rs424.50 and SBI added 2.59% at Rs2,465. M&M, Reliance Communications, ONGC, TCS, Infosys and DLF witnessed steady gains.
Selling was evident in select heavyweight counters. Hindalco dropped 3.78% at Rs208.95, Tata Steel declined 3.66% at Rs891.80, Grasim tumbled 3.26% at Rs3,400.60, Maruti shed 2.43% at Rs939.65, ICICI Bank dipped 2.23% at Rs1,333.50, Reliance Energy moved down by 1.86% at Rs2,536 and HDFC 1.54% at Rs3,064.
BSE Metal stocks dropped sharply. Ispat Industries dipped 6.59% at Rs69.40, Nalco dropped 4.74% at Rs500.50, SH Precoated declined by 3.91% at Rs453.75. However, Bhushan Steel gained 3.73% at Rs1,607.95. Tisco, Jindal Saw, and Sterlite scaled down 3-2.50% each.
Over 52.21 lakh ITC shares changed hands on the BSE followed by Reliance Communications (41.53 lakh shares), NTPC (27.81 lakh shares), ONGC (15.66 lakh shares) and Hindalco (13.40 lakh shares).
Market may advance further
Stocks across sectors along with heavyweights may gyrate sharply. Overnight weakness in the US indices and mixed Asian markets in mornings trades may further dampen the investors' sentiment. On the technical side, the Nifty has a stiff resistance at 6300 and the downside cap at 6193, while the Sensex could test higher levels of 21000 and has a likely support at 20438.
US indices ended mixed on Monday, with the Dow Jones closing below at 12827, 27 points up. The Nasdaq lost 5 points at 2499.
All the Indian floats had a field day on the US bourses. ICICI Bank jumped 9.81%, HDFC Bank surged 6.53% and Tata Motors moved up by 3.26% while Satyam, Wipro, Infosys and Dr Reddy's gained around 1-3% each. However Rediff lost 2.42% followed by Patni Computers by 2.23%.
Crude oil prices in the US market slipped on Monday, with the Nymex light crude oil for February delivery falling by $2.82 to close at $95.09 a barrel and in the commodity space, the Comex gold for February series also lost $3.70to settle at $862 a troy ounce.
Market may extend gains
The market may extend gains amid steady-to-firm Asian markets. Market men expect stepping up of buying by foreign institutional investors (FIIs). With the beginning of the new calendar year, FIIs are expected to make fresh fund allocations. FIIs pumped in Rs 71486.50 crore or $17.23 billion in Indian equities in calendar year 2007.
FIIs bought shares worth a net Rs 508.80 crore on Friday, 4 January 2008. But as per provisional data, FIIs sold shares worth a net Rs 1543.44 crore on Monday, 7 January 2008. Domestic funds bought shares worth a net Rs 327.64 crore on that day.
FIIs were net sellers to the tune of Rs 728.98 crore in the futures & options segment on Monday. According to data released by the NSE, FIIs were net buyers of index futures to the tune of Rs 716.51 crore and bought index options worth Rs 348.08 crore. They were net sellers of stock futures to the tune of Rs 1,762.35 crore and sold stock options worth Rs 31.22 crore.
The market has hit a record high at the onset of the New Year on expectations of FII inflows and also on expectations of good Q3 December 2007 results. Stock-specific activity may rule the roost in the near term based on expectations of results of individual firms. Earnings surprises hold the key for the market in the near term.
The 30-share BSE Sensex rose 125.76 points or 0.61% to 20,812.65, a record closing high, on Monday, 7 January 2008. Gains in index heavyweights Reliance Industries and ICICI Bank led the upmove.
Telecom sector is expected to continue to post strong earnings growth in Q3 December 2007 on the back of rising new subscriber additions whereas healthy order book will ensure that capital goods firms such as Larsen & Toubro and Bharat Heavy Electricals will turn out good performance for yet another quarter.
Media sector, too, is expected to post decent to strong growth on the back of higher advertisement rates. On the other hand, the IT sector is likely to be hit by the appreciation of the rupee against the dollar.
Steel sector is expected to show strong growth on the back of volume growth and higher price realizations. The performance of the auto sector is expected to be sluggish due to sluggish sales and pressure on margins on account of higher input costs. The banking sector is expected see increase in margins due to cut in deposit rates, and higher fee based income. Increase in costs and dismal volume growth is expected to weight on the performance of the cement sector.
IT bellwether Infosys Technologies kickstarts the reporting season on Friday, 11 January 2008.
Meanwhile, Reliance Power, a 50% subsidiary of Reliance Energy (REL) will raise over Rs 11000 crore from India's biggest ever IPO scheduled to open for subscription next week.
Asian markets edged higher on Tuesday, 8 January 2008, recovering from Monday (7 January 2008)’s fall caused by fears that the US economy may be headed into a recession. Key benchmark indices in Hong Kong, China, Japan, South Korea, Singapore and Taiwan were up by between 0.18% to 1.5%.
The Dow industrials and the S&P 500 rose on Monday, 7 January 2008, led by health-care and consumer staple shares, as investors snapped up stock in companies seen able to withstand any economic slowdown following dismal employment data last Friday. But the Nasdaq finished lower, as technology shares with global exposure fell on concerns a US slowdown could damage the global economy. The Dow Jones industrial average ended up 27.31 points, or 0.21%, at 12,827.49. The Standard & Poor's 500 Index added 4.55 points, or 0.32%, at 1,416.18. The Nasdaq Composite Index fell 5.19 points, or 0.21%, to close at 2,499.46.
Recent economic data has raised concerns that the US economy may be headed towards a recession. A US recession may not impact India’s economic growth in a big way given that domestic demand is a key driver of the Indian economy. India's economy is expected to post strong growth for a long period due to favourable demographics. Economists also reckon that a healthy investment cycle will continue to support growth through a self-perpetuating cycle of income creation, savings and investment.
Though the Indian economy may be relatively insulated from the US recession, any risk aversion globally causing setback in global markets, may cast its shadow on the Indian bourses.
Short Term Trading Calls - Jan 8 2008
Buy Ballarpur Industries SL - Rs 170 Target - Rs 222 and Rs 251.
Buy Balrampur Chini SL - Rs 110 Target - Rs 131 and Rs 164.
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