Karvy - City Union Bank

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Close : Consolidation process !

Market slipped into negative territory right from the word go. and continued to venture further in the negative territory with every progressing hour on selling pressures witnessed throughout the day. Sensex however ended marginally positive on the back of buying in selective Index Heavy weights. Profit taking was seen in Bajaj Auto and Hindalco who lead the yesterdays rally. There was not much support from Global front as the Asian Indices ended mixed while their European counter parts were in red. The positive is that ECB and Bank of England have both kept interest rates unchanged. ! But really this is largely expected and so markets have not taken any positive cue from the same.

Sensex is closed up by 9 points at 14652 helped up by gains in ICICI Bk (997.9,+2 percent), Maruti (963.15,+1 percent), Rel Energy (565.85,+1 percent), Ranbaxy (421.5,+1 percent) and RCVL (489,+1 percent). Restricting the gains were Hindalco (175,-4 percent), Bajaj Auto (3008.25,-2 percent), HLL (205.15,-1 percent), Hero Honda (726.2,-1 percent) and Wipro (634.95,-1 percent).

There were some concerns regarding Cement Sector in a report by CRISIL. CRISIL opined that the Cement demand is expected to grow, on an average, by 9-10 per cent each year over the next 3 years due to healthy activity in end-user segments like housing, infrastructure, commercial construction etc. According to CRISIL bright prospects in the industry had attracted players - large and small - enough to have them announce capacity expansions (either greenfield or brownfield). The announced expansion exceeds 90 million tonnes - approximately 55 per cent of the current industry size. While this expansion may not notably influence the demand-supply situation over the short term, with more capacities materialising, operating rates as well as prices in the country would be significantly affected. CRISIL research expects supply to grow by a CAGR of 11 per cent over the next 5 years, exceeding the growth in demand. This is expected to bring down operating rates all across the country. But we are positive on this sector. Valuations are at high levels and thats where we believe could bring in the profit taking on such a report. Taking profits in Cement may not be a bad idea with a trading perspective. We believe cement prices will head higher in the next 12 months. Corrections should offer an opportunity when they come.

Eveready rallied on news that Hindustan Zinc had cut prices by 8.3%. Zinc is now priced at Rs. 1,59,100 a ton against Rs. 1,73,500 a ton. Eveready had reported a loss which was mainly due to the rise in Zinc prices. Eveready stands to gain from lower prices. With a wow call on in Eveready the gains for our patrons has been good and will be good going ahead too. The Stock ended the day higher 5%.

Punjab Tractors which rallied yesterday on Mahindra and Mahindras bid saw more gains today as well. Escorts confirmed that they were bidding for a stake in the company. Other firms like Sonalika's International tractors and TAFE have also shown interest for a stake in the company. This provided enough fuel for the stock to rally as the stock ended the day higher by 11%. The acquirer would benefit from this acquisition as it would increase market share by 10% also enable it get a hold of a manufacturing facility in the potentially huge Northern market.

Technically Speaking : As expected we have reached our first target of 14,700 and witnessed some profit booking after hitting the target yet there seems to be good support at lower levels. Declines outnumbered the Advances for the day as there were 1043 advances against 1613 declines. Sensex ranged between an intra day high of 14,698 and low of 14,523. Volumes were pretty good at Rs. 4,466 cr. Levels to watch above 14,700 is 14,850. Do keep reading for more.

IFCI , ENAM - TCS

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Market ends flat

The Sensex touched yet another peak at 14,698 in early trades on the back of buying in front-line stocks. The index opened firm at 14,691 and immediately touched an all-time high adding 48 points to its kitty. However the Sensex slipped on weak Asian markets and shed a major portion of its early gains. Thereafter the market remained range-bound with a negative bias and slipped further to touch the day's low of 14523. Strong buying at lower levels in the afternoon saw the Sensex pare its losses and end the session at 14652, up nine points. The Nifty closed at 4223, down a point.

The market breadth was negative. Of the 2,705 stocks traded on the BSE, 1,623 stocks declined, 1,022 stocks advanced and 60 stocks ended unchanged. Most of the sectoral indices ended in the red. The BSE Metal index shed 1.60% at 9275 followed by the BSE Auto index (down 0.35% at 5789) and the BSE HC index (down 0.17% at 3901).

Among the Sensex stocks 14 stocks failed to attract buying support while 16 stocks closed with gains. ICICI Bank gained 1.58% at Rs998, Maruti Udyog added 1.28 % at Rs963 and Reliance Energy advanced 1.26% at Rs566. Ranbaxy at Rs422, Reliance Communication at Rs489, SBI at Rs1,205, BHEL at Rs2,508, HDFC Bank at Rs1,808 and L&T at Rs1,753 closed in positive territory with small gains. However, Hindalco shed 3.79% at Rs175, Bajaj Auto slipped 2.34% at Rs3,008, HLL was down 1.13% at Rs205 and Bharti Airtel declined 1.10% at Rs765. Hero Honda, Wipro, Satyam Computers and Tata Motors ended with marginal losses.

Metal scrips continued to reel under sustained selling pressure. Shree Precoated Steels tumbled 3.79% at Rs175, Jindal Steel dropped 2.27% at Rs2,524, Sterlite Industries shed 1.77% at Rs480 and Maharashtra Seamless declined 1.55% at Rs520.

Over 58.11 lakh SAIL shares changed hands on the BSE followed by IDBI (40.45 lakh shares), IDFC (24.33 lakh shares), RCF (20.92 lakh shares) and Indian Hotels (18.01 lakh shares).

Value-wise Satyam Computers registered a turnover of Rs87 crore on the BSE followed by Reliance Communication (Rs86 crore), SAIL (Rs67 crore), BHEL (Rs54 crore) and Century Textiles (Rs52 crore).

PSU stocks' day out

The Sensex finally ended in the green after suffering from a high degree of volatility right from the word go. It was in the red for a significant portion of the day’s session. PSU stocks advanced in late afternoon session of trade, buoyed by optimistic statements from the Finance Minister.

The 30-shares BSE Sensex rose a marginal 8.96 points, to an all-time closing high for the Sensex at 14,652.09. In early-trade, the Sensex struck a new all-time high of 14,697.69, surpassing its earlier all-time high of 14,663.26 attained only on Wednesday (7 February 2007).

After striking an all-time high on the back of a firm opening, the Sensex had slipped into the red partly tracking weak Asian markets, and partly on profit-taking after a solid surge of late. This continued till the benchmark index touched a low of 14,523.16, only to rebound sharply due to bottom-fishing.

The S&P CNX Nifty lost a negligible 0.85 points, to 4,223.40. It had surged to an all-time high of 4,245.30, in early-trade. The Nifty began the trading session in positive territory, but could not withstand the higher levels. It drifted into negative territory in early trade. Technically, the next resistance for Nifty is 4,250, on surpassing which the next target is 4,300 and 4,335. On the downside there is support in the 4,180 - 4,160 range. As long as the index closes above 4,160, the bias remains positive.

The market-breadth was sharply negative after being positive in the opening session, as heavy selling emerged for small-cap and mid-cap stocks. There were over 1.5 losers for every gainer on the BSE. For 1,613 shares declining on BSE, 1043 advanced. Just 59 shares were unchanged.

The BSE Mid-Cap Index ended at 6,173.55, down 13.31 points (0.22%), while the BSE Small-Cap Index settled 46.74 points (0.61%) lower, at 7,651.07.

The BSE clocked a turnover of Rs 4466 crore.

Among the 30-Sensex pack, 17 advanced while the rest declined.

Hindalco Industries was the top loser, down 3.68% to Rs 175.20, on a high volume of 13.97 lakh shares. The stock had slipped from a high of Rs 184.

Bajaj Auto slipped 2.61% to Rs 3000, on profit-taking, after Wednesday’s near 10% surge. The stock had advanced to touch a high of Rs 3100.10 in intra-day trade.

Global consulting and IT major Satyam Computer Services was down 1.10% to Rs 485. It had announced plans to launch its largest Global Delivery Campus outside India in Nanjing, a city in eastern China. The IT bigwig said it was keen to ramp up operations in China through strategic acquisitions. "We as a company firmly believe in strategic acquisitions and 97% of the people working (with Satyam) in China today are Chinese. The company will strengthen its operations in the country through strategic acquisitions," a company statement read.

Bharti Airtel (down 1.10% to Rs 765.25), HLL (down 1.41% to Rs 204.55), and Wipro (down 0.95% to Rs 635) were the other losers.

Reliance Energy was the top gainer, up 1.66% to Rs 568.05, extending a recent surge. Recently, Reliance Energy (REL) won an engineering, procurement and construction (EPC) contract worth Rs 3,800 crore for a 1,200 Megawatt (Mw) coal-fired power plant at Yamuna Nagar, Haryana.

ICICI Bank advanced 1.40% to Rs 996, after striking an all-time high of Rs 1003.90. The stock rose for the second day in a row after the nation's largest private sector bank on Tuesday said it had raised the reference rate by 1% for corporate loans and home loans, from 9 February 2007. On Wednesday, ICICI Bank's ADR gained 2.4% to $46.13.

Maruti Udyog bounced back smartly from a low of Rs 944, to finish 1.47% higher at Rs 965 on 2.14 lakh shares.

Reliance Communications rose 0.98% to Rs 490.50, on a volume of 17.86 lakh shares. It had slipped to a low of Rs 474. As per a newspaper report, Hutchison Telecommunications International had asked bidders for Indian mobile firm, Hutchisson Essar, to submit their offers by Friday (9 February 2007). Reliance Communications is in the fray to acquire Hutchisson Essar. Britain's Vodafone Group and the Hinduja group are also in the race for Hutch.

PSU engineering major, Bhel, rose 0.65% to Rs 2509, on a volume of 2.15 lakh shares. The stock had surged to a high of Rs 2572, in intra-day trade. As per reports, Bharat Heavy Electricals (BHEL) secured a contract worth Rs 400 crore for setting up a 520 Mw (4x130 MW) Hydro Electric Project in Himachal Pradesh. The order for Parbati Hydro Electric Project, Stage-III, was placed by National Hydroelectric Power Corp (NHPC).

Index heavyweight Reliance Industries (RIL) was up 0.11% to Rs 1395.90, after striking a low of Rs 1384.

Another heavyweight, Infosys, gained 0.37% to Rs 2367.50. On Wednesday, Infosys' ADR surged 3% to $60.55.

Global Broadcast News settled at a sharp premium, at Rs 510.10, on BSE. The scrip posted high volumes of 1.30 crore shares on the premier exchange. The company had issued shares at Rs 250 a piece in the recently concluded IPO. The stock surged to a high of Rs 524, while its low was at Rs 381.25. As per market sources, a lot of FIIs and institutions, who could not get any allotment, were buying heavily in the counter.

In the late-afternoon session, the Union Government approved initial public offers in three state-run power firms. The three PSUs which will be able to launch their IPOs are Rural Electrification Corp., Power Grid Corp., and National Hydroelectric Power Corp. India, on Thursday, approved a public offer of shares in Bharat Earth Movers, Finance Minister (FM) P Chidambaram revealed. This triggered a rally for a host of PSU stocks.

Select PSU stocks surged following this statement from the FM. The BSE PSU index was up 0.31%. The Shipping Corporation of India (SCI) jumped 15.75% to Rs 207.40 on a volume of 10.44 lakh shares, and was the star performer among the PSU pack.

RCF (up 9.31% to Rs 48.15), Vijaya Bank (up 5.53% to Rs 52.50), Neyveli Lignite (up 5.15% to Rs 63.25), BEML (up 2.80% to Rs 1218), HPCL (up 1.80% to Rs 297), HMT (up 1.20% to Rs 81.10) and IDBI (up 0.57% to Rs 106.50), ONGC (up 0.15% to Rs 893), and GAIL (up 0.93% to Rs 292.75) advanced.

Shares from the metal sector saw renewed selling following weak global metal prices. The BSE Metal Index was down 1.6% to close at 9,275.10, and was the biggest loser among sectoral indices. Jindal Steel (down 3% to Rs 2505.50), Sterlite Industries (down 2.24% to Rs 478), JSW Steel (down 2.10% to Rs 455.30), SAIL (down 1.60% to Rs 114.35), Maharashtra Seamless (down 0.71% to Rs 525), and Jindal Stainless (down 0.88% to Rs 123.50) ended in the red.

HOV Services, a BPO, jumped 5% to Rs 301, after one of the world’s largest telecom organisations decided to use its transaction management software. Under the terms of the pact, the telecom giant will use OASIS, the software mentioned, to manage and audit accounts receivables assigned to collection agencies and attorneys servicing bad debt throughout the US.

OASIS provides end-to-end transaction management and includes sophisticated modules to strategically distribute accounts to internal departments, or to vendors. OASIS also includes tools to work, manage, audit and dynamically analyze inventory.

Punjab Tractors (PTL) is on a roll following reports of a greater number of companies entering the fray for private equity firm Actis’ 29% stake in the north-India based tractor firm. The stock jumped 11.30% to Rs 343 on 4.88 lakh shares on BSE. A newspaper report said, Escorts was interested in buying stake in Punjab Tractors (PTL). Reports add that the stake sale is likely to be around Rs 400 per share. PTL stock had spurted 8.7% to Rs 308.20 on Wednesday (7 February 2007) to Rs 308.20, boosted by reports that Mahindra & Mahindra (M&M) had already put in a non-binding bid for Punjab Tractors.

Sasken Communication Technologies lost 1% to Rs 543, after hitting a high of Rs 577. The company announced that it expects net profit to rise 50 - 60% in 2007-08 due to cost-reduction. Operating profit margins will improve 2%, to reach 24% of revenue. The communication services firm expected a loss of about $5-6 million from its product business in 2006/07 and hoped to break-even the next year.

KEI Industries surged 4.62% to Rs 106.50, after the company purchased approximately five acres for expanding the cables facility at Bhiwadi, Rajasthan. KEI Industries bought approximately five acres at its existing LT / HT cable making unit for capacity expansion, as also to upgrade HT power cable manufacture up to 132 KV (up from 66 KV at the existing plant) by installing balancing equipments.

The cost of the expansion project is estimated at around Rs 30-35 crore including the cost of land, plant and machinery. The revenue expectations from the project are approximately around Rs 150 - Rs 200 crore. The project is expected to commence operations within the next 7 - 8 months.

Deccan Cements rose 2.73% to Rs 175, after the company approved setting up a 1 million-tonne cement plant along with a captive power plant. The mini-cement plant enjoys lower excise duty than large plants. While large plants are levied duties at Rs 400 per tonne, mini-cement plants are levied excise duties at Rs 250 per tonne.

Hindustan Zinc rose 0.13% to Rs 670, after slipping to a low of Rs 635.20. The company said on Thursday it had cut zinc prices by 8.3% with immediate effect to Rs 1,59,100 a tonne, its second reduction in February.

The Nikkei average closed flat on Thursday, as investors sold Nippon Yusen KK and other shipping firms after their earnings reports, offsetting gains led by high-tech shares. The Nikkei closed up 0.16 points, at 17,292.48. The broader TOPIX index lost 0.47% to 1,720.18. The market will be closed on 12 February 2007 for a national holiday.

US technology stocks rose on Wednesday, as Cisco Systems' profit and outlook reinforced optimism over earnings, while blue-chips ended little changed after a slump in oil prices weighed on energy plays.

The Dow Jones industrial average inched up just 0.56 points, to end at 12,666.87, after touching an intraday record of 12,700.28. The Standard & Poor's 500 Index gained 2.02 points, or 0.14%, to finish at 1,450.02, just shy of its six-year high at 1,452.99 reached earlier in the day, while the Nasdaq Composite Index climbed 19.01 points, or 0.77%, to close at 2,490.50.

Crude oil fell after failing to break above $60 a barrel in New York for a third-straight day and as a government report showed ample US fuel stockpiles. Crude oil for March delivery fell $1.17, or 2%, to close at $57.71 a barrel on the New York Mercantile Exchange. Futures are 8.5% lower than a year ago. Brent crude oil for March settlement fell $1.19, or 2%, to close at $57.23 a barrel on the London-based ICE Futures exchange.

As per provisional data, FIIs were net buyers to the tune of Rs 543 crore on 7 February, when the Sensex surged 165 points.

Q3FY2007 earnings review: Sharekhan Special dated February 07, 2007

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Sharekhan Commodities Buzz dated February 08, 2007

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Edelweiss - PCG DAILY MARKET CALL 08-FEB-2007

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Sharekhan Highnoon dated February 08, 2007

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Kotak Morning Call + Mather Platt and Pumps

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PowerYourTrade Trading Calls

Ashwani Gujral

Buy Reliance Capital with stop loss of Rs 680 for target of Rs 800

Buy Punjab Tractor with stop loss of Rs 260 for target of Rs 450

Deepak Mohoni

Short sell Balrampur Chini above Rs 66.50 with stop loss of Rs 68; This is a day-trading recommendation.


Buy Indiabulls below Rs 452 with stop loss of Rs 442; This is a day-trading recommendation.

Rajat K Bose

Sell Amtek Auto around the last close with stop loss above Rs 414.10 for target of Rs 394-385

Buy Bharat Electronics around the last close with stop below Rs 1643 for target of Rs 1746 - 1767.

Anagram - Daily Call

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Upmove may continue

The market is likely to stay firm on overnight gains in US markets and the encouraging advance estimates from Central Statistical Organization. Further increasing FII fund inflows may boost the sentiment. However, weak Asian indices in morning trades may put pressure on domestic indices. The Nifty could test higher levels between 4250 and 4280 and may dip around 4180, while the Sensex has a likely support at 14580 and may face resistance at 14720

US indices ended firm on Wednesday, with the Nasdaq gaining by 19 points to close at 2491 and Dow Jones ended 0.56 points higher at 12667

Indian ADRs had a mixed outing on the US bourses. Infosys soared over 3% and ICICI Bank jumped 2.49% while Satyam, Wipro, HDFC Bank, Rediff were up around 1-2% each. However Dr Reddy's, Tata Motors,MTNL and Patni Computers ended in the red with steady losses.

Crude oil prices in dipped further, with the Nymex light crude oil for March delivery slipped by $1.17 at $57.71 a barrel. In the commodity segment, the Comex gold for April series dipped $1.40 to settle at $657.30 an ounce.

Intra-day Stock Ideas

NIFTY (4224) SUP 4195 RES 4253

BUY Shasun Chem (125)
SL 121 T 133, 135

BUY Hexaware (170)
SL 166 T 178, 181

BUY Cipla (258)
SL 254 T 266, 269

SELL BILT (123)
@ 125 SL 129 T 117,115

SELL Balaji Tel (137)
@ 140 SL 144 T 131, 129

STRATEGY INPUTS FOR THE DAY

Daily Market Strategy - Don't just aim

Next in importance to having a good aim is to recognize when to pull the trigger.

The pre-budget rally which we mentioned seems to be well underway. The bulls are ignoring all warnings about expensive valuations and an imminent correction. Even the spiraling inflation and the consequent hardening of interest rates have not had any impact on the bulls. The stronger than expected GDP estimate for FY07 yesterday added fuel to the fire. The aim of those who come into the market can't be anything more than making money. But set your goals and then aim. With markets having run up substantially, it pays to rejig not just your portfolio but also ensure that your assets are comfortably allocated.

FIIs have pumped in $366.4mn in three sessions starting Feb. 2 till Feb. 6. Yesterday, overseas investors were net buyers of Rs5.43bn (provisional) in the cash segment. In the F&O space, they were net buyers at Rs3.41bn. As long as FIIs keep the money tap open, it will pour gains. Having said that, one should 'bear' in mind irrational exuberance can lead to heavy losses and a lot of heartburn. For today, we see the momentum continuing at least at the start. But, beware of any cooling at higher levels.

Global cues remain mixed. In the US, the Nasdaq managed some gains while the Dow closed flat. Oil prices have come off after hitting $60 per barrel. In Asia, the Nikkei in Tokyo is up slightly while other indices are in the red. The Hang Seng has slid by nearly 300 points. Asian benchmarks open for trading fell, except in Australia and China. Metal prices on the London Metal Exchange (LME) fell overnight. A measure of six metals traded on the LME, including copper and zinc, was down 1.1%.

The Cabinet Committee on Economic Affairs (CCEA) will meet today. A proposal for disinvesting 10% Government stake in Rural Electrification Corporation (REC) and 5% each in Power Grid Corporation of India Ltd (PGCIL) and National Hydroelectric Power Corporation (NHPC) is expected to be considered.

We mentioned about NIIT Technologies and a couple of stocks in this column. NIIT hit a high of Rs460 after opening at Rs406. Today some more intra-day action is expected as the company announces its entry into the insurance vertical later in the day. Pyramid Saimira has been on a one-way journey upwards. While market expectations are that the counter could cross Rs700 in the near term, we advice extreme caution as the stock has run up significantly in a short period.

Satyam could witness some action on reports that it has bid for 20 contracts worth about $2bn. The new orders are expected to be announced post April 1, 2007. Wipro's Chief Strategy Officer was quoted as saying that the company expects to close at least one acquisition in the current quarter. GlaxoSmithKline Consumer Healthcare (GSKCH) said that it plans to acquire nutritional and over-the-counter (OTC) medicinal brands, businesses and technologies.

Shares of Global Broadcast News will get listed on the BSE and NSE today. The IPO of Mudra Lifestyle, Vijayeswari Textiles and Oriental Trimex will open today. The IPO of SMS Pharmaceuticals will close today. So far, it hasn't received a good response.

Abbott India will announce its results for the year ended November 30, 2006 and recommend dividend. FAG Bearings, Oswal Spinning and Rain Commodities will also declare their results today. Berger Paints will announce an interim dividend. Diamond Cables' Board will meet today to consider expansion into HT Power Cables.

Major Bulk Deals:
Morgan Stanley has bought Aftek; Merrill Lynch has picked up Cambridge Technology while Reliance Vision Fund has sold the stock; Deutsche Securities has purchased Ceat; Macquarie Bank has sold Crew BOS; Bear Stearns has sold Country Club; Templeton MF has bought Federal Bank; Morgan Stanley has picked up Lloyd Electric; Reliance Capital has picked up Orient Paper; HDFC Prudence Fund has bought Punj Lloyd while New York Life Investment has sold it; Goldman Sachs has sold RPG Transmission but has picked up Sujana Metal.

Insider Trades:
Mahindra & Mahindra Ltd: Mr. Nadir B Godrej, Director has purchased from open market 9500 equity shares of Mahindra & Mahindra Ltd on 2nd February, 2007.

Market Volumes:
The turnover on NSE was up by 5% to Rs103.3bn. The BSE Metal index was the major gainer and gained 2.19%. BSE Auto index (up 1.48%), BSE Technology index (up 1.45%) and BSE Bank index (up 1.35%) were among the other major gainers.

Delivery Delight:
ABB, APIL, ACC, Bajaj Auto, Bata India, Cipla, Greaves Cotton, HDFC Bank, Hero Honda, Hindalco, Hindustan Motors, Infosys Technologies, Jet Airways, L&T, Nicholas Piramal, Prism Cement, Reliance Capital, Shasun Chemicals, Siemens, Taneja Aerospace, Unitech and Wipro.

Volume Toppers:
IFCI, Aftek Ltd, SAIL, IndusInd Bank, IDBI, IDFC, Reliance Communication, Shree Ashtavinyak, Hindustan Motors, Hindalco, Ashok Leyland, Indiabulls, Unitech, Syndicate Bank and NTPC.

Upper Circuit Filters:
Goldstone Technologies, Auto Industries, Pyramid Saimira, Kew Industries, Swan Mills, Anant Raj Industries, BPL, HOV Services and Taneja Aerospace.

Long Term Investment:
Bata India

Major News Headlines:
Taneja Aerospace forms JV with France's TAT for Aircraft MRO
Cabinet gives initial approval on chip-making incentives
BSEL Infra secures order worth Rs21bn
Jupiter Bioscience receives order from Bachem AG
Subex Azure to raise $200mn via GDRs, bonds
Reliance Life Sciences buys GeneMedix of UK
Lupin gets USFDA approval for Sertraline
Northrop, BEL to explore joint production opportunities
M&M makes bid to buy Punjab Tractors