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Monday, February 25, 2008
Post Market Commentary - Feb 25 2008
The market closed on a strong note on the back of heavy buying across the sectoral indices. Taking the favoring cues from the global markets, the domestic market opened with a bang but unable to sustain at higher levels and fell immediately as the profit booking prevailed. Then after the mid session, the market got the momentum to came off from the day''s low and marched forward till the final closing of the session. Reliance Power remained in the lime light during the trading session as the company''s board approved the proposal to issue bonus shares to all categories of shareholders excluding promoters in the ratio of 3 shares for every 5 shares held. From the sectoral front, the Oil & Gas, IT, Metal and Realty stocks remained in the lime light as most buying was seen from these baskets. The BSE Sensex closed higher by 301.50 points at 17,650.57 and NSE Nifty closed up by 89.95 points at 5,200.70. The BSE Mid Cap and Small Cap closed lower by 0.04 points and 69.13 points at 7,594.41 and 9,526.28 respectively.
BSE Bankex index closed lower by 37.08 points at 10,113.14. Losers are CentBOP (14.45%), HDFC bank (3.54%), Union bank (2.47%), BOI (1.66%), Canara bank (1.58%) and Axis bank (1.44%).
BSE Oil & Gas index closed higher by 384.38 points at 11,057.38. Gainers are Reliance Inds (5.02%), GAIL India (4.34%), RNRL (3.62%), Cairn India (2.74%), BPCL (1.87%) and IOCL (1.62%).
BSE Metal index grew by 161.22 points to close at 16,530.16. Major gainers are Gujrat NRE (5.17%), Nalco (3.98%), Hindalco (2.45%), Hind Zinc (2.36%), Sterlite Inds (2.27%) and Jindal Steel (1.59%).
BSE IT index grew by 74.26 points to close at 3,992.54 as Karut Net (4.99%), Educopm Soln (4.22%), Wipro (4.06%), HCL Tech (3.94%), Satyam (2.62%), Infosys (2.11%) and I-Flex (1.66%) closed higher.
BSE Realty index advanced by 108.17 points to close at 9,769.31. Scrips that gained are Unitech (3.34%), Omaxe (0.90%), Ansal Infra (0.88%) and DLF (0.64%)
Market overcomes early blues
The market witnessed a dramatic turnaround in mid-morning trades and rallied sharply over 500 points to touch the day's high of 17,674 towards the close. The market remained firm for better part of the trading session, as positive Asian markets created a perfect platform for the bulls to pursue buying. The Sensex resumed 175 points higher at 17,524, but shed over 211 points to touch the day's low of 17,138 amid heavy selling in banking and consumer durable stocks. However, the index rolled back into the green on buoyancy in heavyweight, oil, and IT stocks. The Sensex finally closed the session with gains of 1.74% and was up 302 points at 17,651, while the Nifty advanced 1.76% and was up 90 points to close at 5,201.
Surprisingly, the market breadth was negative. Of the 2,740 stocks traded on the Bombay Stock Exchange (BSE), 1,070 stocks advanced, 1,602 stocks declined and 68 stocks ended unchanged. Out of the 13 sectoral indices, eleven indices ended higher while two indices eased on profit taking. The BSE oil & gas index gained 3.60% followed by the BSE IT index (up 1.90%), the BSE Teck index (up 1.32%) and the BSE HC index (up 1.26%). However, the BSE Bankex index and the BSE CD index ended at lower levels.
Heavyweights participated in the late rally and notched up significant gains. ACC soared 5.69% at Rs818, Reliance Industries advanced 5.02% at Rs2,552, Ambuja Cement added 4.43% at Rs123, Reliance Energy scaled up 4.29% at Rs1,623, Grasim rose 4.21% at Rs2,912, Maruti Suzuki jumped 4.07% at Rs798 and Wipro gained 4.06% at Rs440. Among the laggards Bajaj Auto dropped 4.04% at Rs2,203, HDFC Bank lost 3.54% at Rs1,423 while, HLL and M&M were marginally down.
Over 3.62 crore Tulsi Extrusion shares changed hands on the BSE followed by RNRL (1.79 crore shares), Reliance Power (1.77 crore shares), IRB Infrastructure (1.60 crore shares) and Centurion Bank Of Punjab (1.50 crore shares).
Reliance Power was the most actively traded counter on the BSE with a turnover of Rs782 crore followed by Tulsi Extrusion (Rs465 crore), IRB Infrastructure (Rs296 crore), RNRL (Rs241 crore) and Reliance Capital (Rs218 crore).
Market ends higher; breadth weak
The key benchmark indices, which opened with a positive gap but soon turned weak amid high volatility in eary trade, bounced back strongly in afternoon trade on account of sustained buying in oil & gas and information technology stocks.
Market breadth was weak. Cement pivotals spurted. Oil & Gas, IT stocks rose. Consumer durables stocks declined. The market breadth was weak. 25 stocks from 30-member Sensex pack were in the green.
The European markets, which opened after Indian markets, were strong. Most of Asian markets, which opened before Indian markets, ended in green.
Reliance Power surged 8.05% to Rs 450.40 on BSE, above its issue price of Rs 450 offered during recently concluded public issue
This is the first time the stock is trading at premium as compared to issue price of Rs 450 per share. On its listing on 11 February 2008, the stock debuted on 11 February at Rs 547.80 and hit a high of Rs 599.90. However barely within minute of its debut, it started declining and slipped to discount. The stock surge today after its board-approved issue of three bonus shares for every five held, to compensate for the slump in the stock price post listing.
The Reliance Power counter saw high volumes of 1.77 crore shares on BSE.
The market breadth was weak. 26 stocks from 30-member Sensex pack were in the green.
The 30-share BSE Sensex ended up 301.50 points or 1.74% at 17,650.57. It opened with a positive gap of 174.74 points. It hit a high of 17,674.06 in late trade. At day’s high Sensex gained 324.99 points. It hit a low of 17,137.99 in mid-morning trade. At the day’s low, the Sensex lost 211.08 points.
The broader based S&P CNX Nifty was up 89.95 points or 1.76% at 5,200.70.
Nifty February 2008 futures were at 5203, at a premium of 2.30 points as compared to spot closing of 5200.70.
The NSE futures & options (F&O) segment turnover was Rs 51,314.54 crore, which was higher than Rs 36,386.23 crore on Friday, 22 February 2008.
The market breadth was weak: on BSE 1,614 declined as compared to 1,060 that advanced. 45 shares remained unchanged.
The BSE Mid-Cap index was flat at 7,594.41 and BSE Small-Cap index down 0.72% to 9,526.28.
BSE IT index (up 1.9% to 3,992.54) and BSE Oil & Gas index (up 3.6% to 11,057.38), outperformed the Sensex.
BSE Auto index (up 0.29% to 4,721.15), BSE Bankex (down 0.37% to 10,113.14), BSE Consumer Durables index (down 1.2% to 4,831.37), BSE Capital Goods index (up 0.92% to 15,800.27), BSE FMCG index (up 0.39% to 2,239.84), BSE HealthCare index (up 1.26% to 3,792.07), BSE Metal index (up 0.98% to 16,530.16), BSE Power index (up 1.09% to 3,611.18) and BSE Realty index (up 1.12% to 9,769.31), underperformed the Sensex.
From the Sensex pack, ACC (up 5.9% to Rs 818.35), Ambuja Cements (up 4.43% to Rs 122.55), Reliance Energy (up 4.29% to Rs 1,622.70) and Grasim Industries (up 4.21% to Rs 2,012) are among the major gainers.
Bajaj Auto (down 4.04% to Rs 2,202.95), Hindustan Unilever (down 0.16% to Rs 215.40) and Mahindra & Mahindra (down 0.03% to Rs 628.60) edged lower.
Oil & Gas stocks rose. India’s largest private sector firm by market capitalization and oil refiner Reliance Industries (RIL) rose 5.02% to Rs 2,551.70. As per reports, Reliance Retail is locked in ‘substantial’ discussions to float an equal joint venture with iconic UK fashion retailer Marks & Spencer (M&S) for apparel, gourmet food and cafes.
Among thr other oil & gas sector stocks, Cairn India (up 2.74% to Rs 212), Gail India (up 4.34% to Rs 406.15), ONGC (up 1.55% to Rs 1,013.45) edged higher.
India’s largest truckmaker by sales Tata Motors rose 1.53% to Rs 705.35. It has reportedly started the process of raising nearly $2.5 billion, mostly from the overseas markets, by giving the mandate to a group of banks. A large chunk of this fund is expected to be utilised to purchase luxury British brands Jaguar and Land Rover from the US carmarker Ford, the reports added.
India’s largest IT exporter by sales Tata Consultancy Services declined 0.29% to Rs 900.05. The company and the Nasdaq-listed Cognizant are reportedly in a race to acquire the billion-dollar systems integration business (SI) of Germany-based T-Systems. T-Systems is the IT solutions unit of Deutsche Telekom, Europe’s telecommunications giant.
Among the other IT sector stocks, Infosys (up 2.11% to Rs 1,613.45), Wipro (up 4.06% to Rs 439.55) and Satyam Computer Services (up 2.62% to Rs 450.30) edged higher.
Consumer Durable stocks declined. Videocon Industries (down 1.52% to Rs 421.40), Blue Star (down 3.33% to Rs 469.05), Titan Industries (down 2.55% to Rs 1,161.05) and Lloyd Electric (down 2.52% to Rs 124) edged lower.
India's biggest power equipment maker by sales Bharat Heavy Electricals rose 1.27% to Rs 2,085.10. The company and Nuclear Power Corporation of India (NPCIL) are reportedly planning to float a joint venture to take up construction activities for nuclear power plants. At present, NPCIL generates about 3,900 mega watts (MW) of electricity from its 16 power plants. The company plans to more than double its capacity to 10,000 MW over the next six years.
Banking stocks recovered. Indian bank unions called off a planned two-day strike that was due to start on Monday after the unions and banking officials decided to meet next month to resolve their differences.
HDFC Bank declined 3.54% to Rs 1,422.70.The Board of Centurion Bank of Punjab (CBoP) at the meeting held on 23 February 2008, has given an in-principle approval for a merger of CBoP with HDFC Bank. The board of CBoP will meet on 25 February 2008 to consider the terms of the merger including swap ratio after receipt of the valuation reports. Centurion Bank of Punjab declined 14.45% to Rs 48.25.
Among the other banking sector stocks, State Bank of India (up 0.61% to Rs 2,127.55) and ICICI Bank ( up 0.97% to Rs 1,110.05) edged higher.
Reliance Natural Resources clocked the highest volume of 1.79 crore shares on BSE. Reliance Power (1.77 crore shares), Centurion Bank of Punjab (1.5 crore shares), Ispat Industries (67.6 lakh shares) and Reliance Petroleum (65.22 lakh shares) are among the other volume toppers in that order.
Reliance Power clocked the highest turnover of Rs 782.24 crore on BSE. Reliance Natural Resources (Rs 241.2 crore), Reliance Capital (Rs 218.25 crore), ICICI Bank (Rs 214.62 crore) and State Bank of India (Rs 197.7 crore) were among the other turnover toppers in that order.
Most of Asian markets were strong today, 25 February 2008. Japan's Nikkei Taiwan's Taiwan Weighted index, Singapore's Straits Times index, South Korea's Seoul Composite and rose between 0.64-3.07%. However China’s Shanghai Composite index declined 4.07% to 4,192.53 and Hong Kong's Hang Seng fell 0.15% to 23,269.14.
European markets were strong. France’s CAC 40, Germany’s DAX and UK’s FTSE 100 were up between 1.18-1.79%.
US stocks rallied late on Friday on news that banks were near an agreement to bail out bond insurer Ambac Financial, a deal that could prevent further damage to the banking industry and credit markets. After trading in negative territory for most of the session, US stocks turned positive in the last half hour after reports of a bank rescue may come as soon as next week.
The Dow Jones industrial average rose 96.72 points, or 0.79 %, to end at 12,381.02. The Standard & Poor's 500 Index gained 10.58 points, or 0.79 %, to 1,353.11. The Nasdaq Composite Indexadded 3.57 points, or 0.16 %, to 2,303.35.
Inflation based on the wholesale price index (WPI) rose to 4.35% for the week ended 9 February 2008 from 4.07% in the previous week, data released by the government today showed.
Morning Call - Feb 25 2008
Market Grape Wine :
In House :
Nifty at a supp of 5090 and 5020 with resis at 5146 and 5185
F&O: Buy Voltas above 210 with a TGT of 222 and a SL of205
Buy Siemens above 1559 with a TGT of 1595 and a SL of 1540
Cash: Buy RElcapital above 1902 with a TGT of 1950 and a SL of 1879
Buy Indiacement above 200 with a TGT of 209 and a SL of 196
Out House :
Markets at a support of 17272 & 17171 levels with resistance at 17591 & 17786 levels .
Buy : RIL & RPower
Buy : Sail & Tisco
Buy : SBIN & CBOP
Buy : Powergrid , NTPC & Neyvelli
Buy : EssarOIL & MRPL
Buy : Adhunik & GujNreCoke
Buy : Educomp & JPasso
Buy : INFY & Satyam
Dark Horse : RPower , SKumar , Geship , RELCAP , INFY , NTPC , RIL , Sbin , & Aban
ADAG IPOs on track
Undeterred by a dismal performance of Reliance Power IPO, which it attributes to abnormalities in the equity market, Anil Ambani Group Sunday said it will go ahead with listing plans of its other firms.
The firm has lodged a complaint with market regulator Securities and Exchange Board of India, seeking investigation in "price hammering" of its shares since listing on February 11.
"The fact that seven Mauritius-based FIIs sell in a falling market has got to do something more than that meets the eye," group chairman Anil Ambani told reporters here.
"Our common complaint to SEBI is price hammering where within four minutes of listing, the stock price comes down from Rs 540 to rs 380," he said.
The scrip, after listing at Rs 547.8, slid into red within a minute and closed at Rs 372.5, a level much below the issue price. Investors in the company lost over Rs 1,700 crore on February 11, the day the scrip debuted on the stock exchanges.
On whether he would go slow on listing other group companies such as Reliance Infratel, he said: "there is no rethink on the issue. A DRHP has been filed. We will wait for the right time."
The group had raised USD 3 billion through the Reliance Power IPO - the largest in the country. It has also filed draft papers for initial public offer of Reliance Infratel, a subsidiary of Reliance Communications.
The company proposes to raise Rs 6,000 crore through the offer with an issue of 8.91 crore shares, representing about 10.05 per cent equity in Reliance Infratel. The issue proceeds are proposed to be utilised toward funding development of passive infrastructure and general corporate purposes.
Outlook remains positive
The modest rally in the US markets and a rise in several Asian indices in the ongoing trading session may help the domestic indices pull-back from lower levels. However, lack of clarity in the market and volatility may drag down the market. Among the indices, the Nifty could face a resistance at 5,500 level and has a likely supports at 5,040 level.
US indices bounced back moderately and finished higher on Friday, helped by the report stated that troubled bond insurer Ambac Financial could see a bailout as soon as next week. While the Dow Jones moved up by 97 points at 12,381, the Nasdaq managed to add four points at 2,303.
Barring MTNL, all the Indian floats slipped on the US bourses. ICICI Bank tumbled up by 4.60% and HDFC Bank slipped 2.63% , while Dr Reddy's, Tata Motors, Infosys, Patni Computer and Rediff were down by 0.5%-2% each.
Crude oil prices rose marginally, with the Nymex light crude oil for April delivery gaining by 58 cents to close at $98.81 a barrel. In the commodity space, the Comex gold for April delivery slipped by $1.40 to settle at $937.80 an ounce.
Today's Pick - Pfizer
We recommend a buy in Pfizer from a short-term perspective. From the chart, we see that it had been on a medium-term downtrend from December 2007 high of Rs 850 to mid-February low of Rs 587. However, the stock’s medium-term downtrend got arrested at around Rs 600 more recently and the stock reversed the direction. The positive divergence in the daily momentum indicator supports the stock’s reversal trend. The daily momentum indicator has entered the neutral region from the bearish zone. We see that the current upmove has breached the medium-term down trendline. We also notice a crossover in the daily moving average convergence divergence, which indicates establishment of bullishness. Our short-term outlook for the stock is bullish. We expect the stock’s ongoing rally to continue to our target price of Rs 700 in the short-term. Investors with a short-term perspective can buy the stock while keeping the stop loss at Rs 587 levels.
Via BL
Market may move up
Market is expected to edge higher today backed by strong Asian markets. US stocks rebound late on Friday on positive news for the banking industry will further boost the sentiments.The market may see a pre-budget rally. The market may also see some upside from short covering ahead of the expiry of February 2008 derivatives contracts on Thursday, 28 February 2008.
The Union Budget 2008-09, to be presented by Finance Minister P Chidambaram on Friday, 29 February 2008, will be one event that market will look forward to in this week
Apart from the budget, another trigger for the market is prospects of further softening of interest rates by the US Federal Reserve.
Market is expecting a populist budget from the United progressive Alliance (UPA) government this year, considering that the parliamentary elections are due in 2009. Thus, the Finance Minister is likely to provider higher allocations to several social initiatives like rural upliftment, employment, education, agricultural growth and public health.
If the budget is market friendly, the sentiments may turn positive in the immediate term at least. Expectations are that the corporate income tax rate may be cut or the 10% surcharge on corporate tax may be abolished. Another possibility is that of a cut in dividend distribution tax from 15% to 12.5%. Meanwhile, FM may raise the Securities Transaction Tax slightly.
Meanwhile, as per reports, railway minister Lalu Prasad in his Railway budget to be presented this week, is likely to reduce both passenger fares and freight rates, riding a strong revenue growth and reduced operational costs. Rail fares are likely to be cut by 3% to 5% while freight rates for petroleum, steel and iron ore may come down by 4% to 5% due to reclassification of goods.
Most of Asian markets were trading strong today, 25 February 2008. Japan's Nikkei (up 2.07% at 13,780.35), Taiwan's Taiwan Weighted index (up 2.1% at 8,278.67), Singapore's Straits Times index (up 0.47% at 3,062.84), South Korea's Seoul Composite index (up 1.17% at 1,706.17) edged higher. However, Hong Kong's Hang Seng (down 0.21% at 23,256.57) and China’s Shanghai Composite index (down 2.43% to 4,264.24) edged lower.
U.S. stocks rallied late on Friday on news that banks were near an agreement to bail out bond insurer Ambac Financial, a deal that could prevent further damage to the banking industry and credit markets. After trading in negative territory for most of the session, US stocks turned positive in the last half hour after reports of a bank rescue may come as soon as next week. The Dow Jones industrial average rose 96.72 points, or 0.79 %, to end at 12,381.02. The Standard & Poor's 500 Index gained 10.58 points, or 0.79 %, to 1,353.11. The Nasdaq Composite Indexadded 3.57 points, or 0.16 %, to 2,303.35.
As per provisional data, foreign institutional investors (FIIs) sold shares worth Rs 709.54 crore Friday, 22 February 2008. Domestic institutional investors (DIIs) were net buyers of shares worth Rs 105.49 crore on that day.
The 30-share BSE Sensex was down 385.61 points or 2.17% to 17,349.07 on Friday, 22 February 2008.
Inflation based on the wholesale price index (WPI) rose to 4.35% for the week ended 9 February 2008 from 4.07% in the previous week, data released by the government today showed.
Grey Market - Rural Electrification begins to rise
Rural Electrification 90 to 105 23 to 25
GSS America InfoTech 400 to 440 Discount
IRB Infra 185 12 to 15
Manjushree Extrusion 45 5 to 7
Tulsi Extrusions 85 7 to 10
V. Guard Ind. 80 to 85 12 to 15
Pre Market Watch - Feb 25 2008
The Indian Market is likely to have a positive opening as the cues from he global markets are in favor. On Friday, the market closed on a disappointing note with heavy losses across the sectoral indices. Taking the negative cues from the global markets, the domestic market opened with a heavy gap down and kept on hovering in the negative territory through out the trading session. Lack of investor''s interest in buying to book their positions led the frontline indices to close in the negative territory. Also, the weekly inflation figures that rose 4.35% for the week ended February 9, 2008 from 4.07% last week also add to the negative sentiments in the market. Also, the Union Budget 2008-09 due next week on Feb 29 led the investors to take calculative steps to book their positions. The BSE Sensex closed lower by 385.61 points at 17,349.09 and NSE Nifty closed down by 81.05 points at 5,110.75. We expect that the market may gain some grounds during the trading session.
Reliance Power''s board yesterday approved the proposal to issue bonus shares to all categories of shareholders excluding promoters in the ratio of 3 shares for every 5 shares held. This offer will reduce the cost of its share below the issue price to Rs269 per share for retail investors and Rs281 for other investors.
On Friday, the US market was closed in positive territory. The Dow Jones Industrial Average (DJIA) closed higher by 96.72 points at 12,381.02. S&P 500 index closed up by 10.58 points at 1,353.11 and NASDAQ grew by 3.57 points to close at 2,303.35.
Today, the major stock markets in Asia are trading strong. Japan''s Nikkei is trading higher by 279.89 points at 13,780.35 along with Hang Seng trading up by 100.32 points at 23,405.36 and Taiwan Weighted trading at 8.293.21 up by 184.50 points.
Today, Nifty has support at 5,096 and resistance at 5,311 and BSE Sensex has support at 17,392 and resistance at 18,139.
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