Friday, June 01, 2007
News, Views and Stocks
US markets were Flat & Asian Markets are trading up. Levels for Nifty are support at 4280 - 4263 - 4248 & resistance at 4308 - 4322 - 4342. Bias for the day is +ve. Possible target for Nifty being 4325 with support at 4259.
News : FY2007 GDP growth was at 9.4% ahead of the market estimate of 9.0 %. Wockhardt gets US FDA nod to enter the $680 mln Lamisil market. UB holdings picks up 26% stake in Air deccan for Rs. 500 crs. BNP PARIBASpicks up 50% in SREI INFRASTUTURE FINANCE ARM.Inflation is expectation at 5.06% ( mkt estimate )vs estimate of 5.12 %. NDTV has anounced its funding program,they have raised 120mln & which works out to price of NDTV at 493.
Stocks with + ve bias for trading are : Bajaj Auto, Glaxo,TataTea, IDEA
Stocks for Short term Delivery are : KLG Systel(417), Hind Oil exploration(116), Biocon(464), Guj NRE coke(60)
Stocks for Investment are : HDFC Bank, CEAT, Crompton Greaves
Sensex may test all time high
The benchmark index, BSE Sensex, may test its al time high of 14,723.88, which was struck on 9 February 2007. It is now just 179 points away from its close of 14,544.46 on 31 May 20007.
Meanwhile, the NSE Nifty, which has been striking all time highs, since past few day’s, may hit a new all time high. Its present all time high is 4,306.75, struck on 31 May 2007.
The ongoing buying momentum is going to continue further for the June series, after the smooth rollover of May series on 31 May 2007. As per market data, marketwide rollover was 82.8%, which is slightly higher than 82.5% during April expiry. Nifty Futures rollover was 75% as compared to 71.7% in previous expiry.
Asian shares were trading higher today, led by Japan, as the yen's continued weakness against the dollar boosted shares of exporters. Japan's Nikkei 225 index gained 0.63% or 111.79 points at 17,987.54 while the Taiwan Weighted index surged 1.02% or 83.02 points at 8,227.97.
Singapore's Straits Times (up 1.30% or 45.80 points at 3,556.93), South Korea's Seoul Composite (up 1.76% or 29.96 points at 1,730.87) and Hong Kong's Hang Seng index (up 0.06% or 11.78 points at 20,646.25) also posted gains.
Stocks finished largely flat on 31 May 2007, after a weak reading of the nation's gross domestic product muted Wall Street's enthusiasm over a new spate of acquisitions. Technology stocks fared better than most, however.
The Dow Jones industrial average slipped 5.44 points, or 0.04%, to 13,627.64, after reaching a new all time high of 13,673.07. On Wednesday , 30 May 2007, the Dow had surged over 111 points and set a new closing high of 13,633.08.
However, the broader stock indices managed gains. The Standard & Poor's 500 index advanced 0.39 point, or 0.03%, to 1,530.62, after soaring to a record close Wednesday, 30 May 2007, for the first time since March 2000.
The technology-dominated Nasdaq composite index showed more pronounced movement, rising 11.93 points, or 0.46%, to 2,604.52.
As per provisional figures, FIIs were net buyers to the tune of Rs 168.86 crore while Domestic Institutional Investors (DIIs) were also net buyers of Rs 32.19 crore, on 31 May 2007
Crude oil prices rose on Friday after a U.S. government weekly fuel supply report showed an unexpected decline in crude oil stockpiles. Light, sweet crude for July delivery added 17 cents to $64.18 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore.
Good times ahead
Better GDP growth, inflation slowed to an eight and-a-half month low and firm Asian indices in current trades may help the market to march further. The good times are likely to continue as the Nifty recorded another high yesterday on strong GDP growth. But, worries of further hike in CRR from Reserve Bank of India to contain liquidity and inflation may exert some pressure on the domestic indices. However, players are maintaining their bets on almost all the sectors. Among the key local indices, the Nifty has a support at 4220 and on the upside the index could test higher level at 4300. The Sensex has a likely support at 14300 and may face resistance at 14600.
US indices ended mixed on Thursday. While the Dow Jones slipped five points at 13628, the Nasdaq composite hit its highest close in more than six years by adding 12 points to close at 2605.
Indian ADRs had a mixed outing on US bourses. Infosys, MTNL ,Dr Reddy's Lab, ICICI Bank and Patni Computers dropped around 1-5% each. While, Satyam, Wipro, Tata Motors, HDFC Bank, VSNL and Rediff were up around 1% each.
Crude oil prices gained further, with the Nymex light crude oil added 52 cents at $64.01 per barrel. In the metals segment, the Comex gold for August series jumped by $7.40 to settle at $666.70 an ounce
Anand Rathi - Daily Strategist
The NIFTY futures saw a gain of 7.42 % in OI with prices coming up and closing dear day's high indicating long positions built up in the market thus suggesting some strength may be seen in the market in the new settlement month as market crossed the resistance of 4280 levels thus may force bears to cover their positions .The nifty June series futures closed at 17 points discount to spot nifty suggesting lack of confidence among players resulting in liquidation of positions by weak hands. Market if it sustains above 4240 levels then we may see further long positions built up in the market and shorts covering their positions. The FII were buyers of index futures to the tune of 392 crs and buyers in index options to the tune of 311 crs. The PCR has come down from 1.53 to 1.54 indicates some consolidation may be seen in the market.
IV in the market was 28.55 and HV was 23.79.
Among the Big guns, ONGC saw drop in OI with rise in prices indicating shorts covering up their positions in the counter suggesting some strength may be seen in the counter. Whereas RELIANCE saw drop in OI with prices remaining in a range suggesting some consolidation may be seen in the counter before taking any harp direction on either side.
In the TECH counters, INFOSYSTCH & WIPRO saw drop in OI with prices up indicating shorts covered their positions indicating buying support emerging at lower levels suggesting some strength may be seen in these counters. SATYAMCOMP saw drop in OI with prices coming up suggesting buying emerging at lower levels in the counter thus forcing bears to cover their positions .TCS saw rise in OI with prices coming down indicating short positions built up in the counter suggesting some weakness may be seen in the counter.
In the BANKING counters, SBIN saw rise in OI with prices up indicating fresh money coming in the counter with buying spree suggesting further strength in the counter.ICICIBANK saw rise in OI with prices remaining in a range suggesting some profit booking may be seen in the counter. HDFCBANK saw drop in OI with prices moving up and closing high indicating shorts covering their positions aggressively in the counter suggesting further strength may be seen in the counter.
In the Metal pack, TATASTEEL & SAIL saw rise in OI with prices facing resistance at higher levels indicating fresh short positions built up in the counter thus suggesting some weakness may be seen in the counter .HINDALCO saw gain in OI with prices in a range suggesting some consolidation may be seen in the counter .NALCO saw gain in OI with prices closing near day's low indicating short positions in the counter suggesting weakness in the counter .STER saw marginal drop in OI with rise in prices indicating fresh long positions built up in the counter suggesting strength in the counter.
We feel that the volume and built up in OI suggests that market may show some profit booking in the coming few days as lot of positions are outstanding in the market so one should not take aggressive positions in the market. Market may show further weakness and we may see fresh selling emerging in the market if market sustains below 4220 levels. One should trade with strict stop losses to be adhered too.
Morning Murmur - June 1 2007 - A Large Carry Over
The Nifty wrapped up the May settlement around the 4300 mark that we had expected, for change not deviating from the script. I don’t usually read too much into the expiry day close, as this is a culmination of a series of events and positions that
were built and stances taken during the settlement gone bye. But markets may do well, for reasons other than the higher closing. For instance, the buoyancy of the Asian markets and the sudden reduction in the Open interest on account of expiry
of may derivatives. But the intention of the punters on Thursday was only to ensure a close in the vicinity of 4300 mark and nothing more.
The discount for the June series, increased to 17 points, which would give an insight into the punters mind. A discount of 8 points is on account of dividends, but the balance 9 points is purely a statement that they have still not thought, how they
would ant the June series to shape up. We have the highest ever-opening balance of Rs 46,862 cr as Open Interest, though not a worry at this time, but may grow into an oak of a problem later during the series. Extend your luck a bit more this month and watch your steps after the 8th of this month or Rs 70,000 cr, which ever comes earlier.
The Indian juggernaut continued to roll on the back of a boom in manufacturing and services sector, notching up a growth of 9.4% in the fiscal year ended March 31. According to the Central Statistical Organization The blistering pace was up slightly from the previous year's 9%. In the final quarter, India's gross domestic product grew at an annualised rate of 9.1%. The U.S. economy, on the other hand, grew at its weakest rate in more than four years during the opening three months of this calendar year , at 0.6%, as businesses sold off inventories and Americans imported more foreign goods.
The commerce department revised down its estimate for first-quarter expansion in gross domestic product, or GDP, to 0.6 percent from 1.3 percent that it estimated a month ago. It was the slowest rate of quarterly growth since the fourth quarter of 2002 when the economy edged ahead at a 0.2 percent rate and was below Wall Street economists' forecasts for a 0.8 percent quarterly growth rate Although the first-quarter growth rate was cut in half, some key components of GDP showed
continuing resilience that may foster a healthier pace of expansion later in the year.
Personal consumption spending that fuels two-thirds of national economic activity rose at an upwardly revised rate of 4.4 percent instead of 3.8 percent estimated a month ago.
Indiainfoline - Intraday Stock Ideas
NIFTY (4295) SUP 4278 RES 4324
BUY NDTV (396.9)
SL 391 T 405, 408
BUY CAMBRIDGE (133.30)
SL 129 T 141, 143
BUY WIPRO (543.70)
SL 538 T 554, 557
SELL ORCHIDCHEM (259.45)
@ 262 SL 266 T 252, 249
SELL COPRBANK (331.20)
@ 334 SL 338 T 323, 320
STRATEGY INPUTS FOR THE DAY
May the good times last
March wind ranges; April changes; Birds sing in tune. To flowers of May, And sunny June
Contrary to fears earlier, the month of May has seen the indices blossom. With the economy on fire (barring agriculture) and business confidence soaring (reflected in strong quarterly results and increased M&As), can global investors afford to stay away from India? A simple answer would be no. That perhaps explains the resurgence in foreign capital inflows in the last couple of months. Nearly $2bn has flowed into the stock market from overseas investors in April and May following the crash in the previous two months. This, coupled with good earnings momentum, lower inflation and firm global markets has lifted the Nifty past the 4300 mark to an all-time high. The Sensex is also within the striking distance of its earlier lifetime high. And, given the current momentum it won't be long before the BSE benchmark also scales a new peak.
Coming to the F&O expiry, the rollover has been pretty good. Provisional figures show Nifty futures rollover at around 75%. However, the action has actually been in the non-index single stock futures, where the rollover has been even better. This goes to show that investors are increasingly veering towards small- and mid-cap stocks for gains as large caps appear to be running out of steam. Having said that one must be careful while picking up these shares as it becomes difficult to exit when the going gets tough in the market. On the whole, the outlook looks positive and the market should hold firm barring the odd weak day here and there.
Today, we expect the market to open higher on the back of encouraging signs emanating from global markets. The Asian markets in particular are doing quite well this morning. Inflation has cooled down further to 5.06% in the week ended May 19, says the Finance Minister. A big worry, however, is the continuous rise in the rupee and its impact on exporters. Also, in the last couple of days call money rates have dived below 1%, reflecting excess liquidity in the system. As a result, some money market observers feel the RBI may have to resort to further tightening measures like a CRR hike or fresh bond auctions under the market stabilisation scheme. The market may give up some ground if and when that happens. Till then the bulls should remain in control.
FIIs were net buyers of Rs1.69bn (provisional) in the cash segment yesterday while the local institutions put in Rs321.9mn. In the F&O segment, foreign funds pumped in Rs3.46bn. On Wednesday, FIIs offloaded stocks worth Rs3.77bn in the cash segment.
Two more indices - the Nifty Junior and the CNX 100 - are going to commence trading on the F&O segment from today.
Sintex Industries has decided to acquire 81% shareholding of Wausaukee Composites Inc. Himatsingka Seide volume has been rising. While the buzz is that the company may acquire an overseas brand. The spurt in volume in recent times may be mainly on account of some MF selling. Deccan Aviation and UB Holdings are likely to be in the limelight following the official announcement of its acquisition by Kingfisher Airlines. GMR Infrastructure is seeking expression of interest from potential Indian and international Real Estate investors to build various categories of hotels and related facilities at the Delhi Airport site.
US technology stocks rose on Thursday, pushing the Nasdaq Composite index to its highest close in more than six years. The S&P 500 index barely managed a fresh all-time high in a tough session for the blue chips. Citigroup led the Dow Jones Industrial Average's to its first decline in four days.
The S&P 500 finished flat at 1530.62, leaving it with a 3.3% advance this month. The Nasdaq rose 11.93 points, or 0.5%, to 2604.52, the highest since February 2001. The Dow slipped 5.44 points to 13,627.64.
The US stock market completed its best May since 2003. For the month, the Dow rose 4.4%, the S&P 500 gained 3.2%, the Nasdaq advanced 3.1% and the Russell 2000 rose nearly 4%.
Reports on manufacturing, construction and jobless claims showed improvement. But first-quarter economic growth came in weaker than first thought, at the slowest pace since 2002.
After the close of trade, Dell reported quarterly sales and earnings that topped Wall Street estimates and said that it will cut about 10% of its workforce over the next year. Shares jumped 6% in extended-hours trading.
US light crude oil for July delivery rose 52 cents to settle at $64.01 a barrel in New York. Prices were volatile following the weekly oil inventories report, which showed a surprise drop in crude oil supplies. The front-month contract was quoting 22 cents higher at $64.23 a barrel in extended trading.
COMEX gold rose $7.40 to $666.70 an ounce. Treasury prices slipped, raising the yield on the 10-year note to 4.9% from 4.87% late on Wednesday. In currency trading, the dollar fell versus the euro and rose against the yen.
European shares rebounded. The Dow Jones Stoxx 600 index advanced 0.7% to 396.49. In Frankfurt, the DAX Xetra 30 closed up 1.5% at 7,883.04, after hitting a high of 7,895.71 - a level not seen since March 2000 - earlier in the session. The French CAC-40 advanced 1% to 6,104.00, while the UK's FTSE 100 rose 0.3% to 6,621.40.
In the emerging markets, the Ibovespa in Brazil was down 0.5% at 52,268 while the IPC index in Mexico was more or less flat at 31,398 and the RTS index in Russia surged by 3.2% to 1780.
Most Asian markets are trading up this morning, led by commodity producers as prices of metals and crude oil rallied. The Morgan Stanley Capital International Asia-Pacific Index is on course for its biggest weekly gain in more than two months.
The MSCI index added 0.9% to 151.53 as of 10:55 a.m. in Tokyo after rising 1.3% yesterday to a record. The benchmark is poised for a 2.6% advance this week, the most since a similar period ended March 23.
Japan's Nikkei 225 Stock Average added 0.6%. Benchmarks in markets open for trading advanced, except in New Zealand. South Korea's Kospi index surged 1.8% to a new high, the biggest advance among regional measures.
A measure of six metals traded on the London Metal Exchange (LME), including copper and zinc, rose 1.4% yesterday. Copper climbed 2.4%, zinc added 2.9% and lead gained 1.8%.
Markets had a strong session after losing ground in the previous trading session; bulls made a solid come back on the bourses shrugging off the bears. Firm regional markets, better than expected GDP figures for FY07 which was at 9.4% against 9.2% and short covering towards the fag end of the session all participated in the celebration, lifting the NSE Nifty to hit a new pinnacle
BSE Consumer Durable index led from the front as the index gained by 4.47%. Others like Auto, Bank, Technology and FMCG index followed suit. Zee Telefilms, Hero Honda and Tata Tea were the major gainers among the 50-scrip’s of NSE Nifty.
Finally, the 30-share Sensex surged higher by 133 points to close at 14544. NSE-50 Nifty gained 46 points to close at 4295.
Air Deccan surged to higher altitude; the scrip surged by over 11% to Rs146 as reports stated that the low-cost carrier is set to be taken over by Vijay Mallya's Kingfisher Airlines. The scrip touched intra-day high of Rs149 and a low of Rs130 and has recorded volumes of over 10,00,000 shares on NSE.
Hindustan Oil Exploration spurred by over 3.5% to Rs115 on speculation that a large corporate may take stake. The scrip touched intra-day high of Rs120 and a low of Rs113 and recorded volumes of over 23,00,000 shares on NSE.
Hind Rectifiers rallied by over 3% to Rs857 after the company announced that they would consider stocks split. The scrip touched intra-day high of Rs900 and a low of Rs820 and recorded volumes of over 8,000 shares on NSE.
Tantia Construction lost by 1.5% to Rs115 after the company secured order worth Rs1.78bn. The scrip touched intra-day high of Rs118 and a low of Rs114 and recorded volumes of over 1,00,000 shares on NSE.
FMCG stocks were also in the limelight led by gains in the index heavy weight HLL which gained by over 2.5% to Rs203, McDowell gained by over 5.5% to Rs1264, Colgate advanced by 2.3% to Rs362 and Dabur added 1.7% to Rs99.
Consumer Durable stocks were the top gainer of the day as the index surged by 4.47%. Videocon Industries rallied by over 7% to Rs492, Rajesh Exports surged by over 4.5% to Rs502, Titan Industries rose over 3% to Rs1124 and Lloyd ELE added 4.7% to Rs170.
Banking stocks recorded smart gains. Index heavy weight HDFC Bank surged by 4% to Rs1147, SBI was up by 2% to Rs1353 and ICICI Bank gained by 0.6% to Rs919. PNB, Bank of Baroda and Bank of India were the major gainers among the Mid-Cap stocks.
Auto stocks were in top gear on expectations of impressive monthly sales numbers. Hero Honda led from front as the scrip surged by 5% to Rs732, Tata Motors was up by 1.8% to Rs755, Maruti gained 1.5% to Rs817 and Bajaj Auto advanced 1.1% to Rs2224.
Sectoral Movement:
The BSE Consumer Durable index was the major gainer and gained 4.47%. The BSE Bank index (up 1.36%), BSE Auto index (up 1.30%), BSE FMCG index (up 1.39%) and BSE Technology index (up 1.12%) were among the other major gainers.
Volume Toppers:
RNRL, RPL, IFCI, TTML, JP Hydro, Deccan Aviation, ITC, SAIL, Sterling Biotech, Punj Lloyd, Idea, Unitech, Arvind Mills, R Com, Ashok Leyland, Dena Bank and HLL.
Upper Circuit:
Karutri Network, Marg Construction, Shasun Chemicals, United Breweries, SREI Infrastructure, GTC Industries, MIC Holding, TVS Electronics, Tanla, Accel Frontline and Infomedia.
Delivery Delight:
Aditya Birla Nuvo, Alfa-Laval, Andhra Bank, Apollo Tyres, Arvind Mills, Bajaj Auto, Bank of Baroda, CEAT, Crompton Greaves, Divis Laboratories, Gammon India, HDFC Bank, ICICI Bank, IVRCL Infrastructures, Mercator Lines, Nagarjuna Construction, ONGC, PNB, RPL, SBI, STER and UTI Bank.
Abnormal Delivery:
ABB, Tata Chemicals, BEL, Ashok Leyland, CEAT, Aurobindo Pharma, Dr Reddys Labs, Ucal Fuel, ICICI Bank, Neyveli Lignite Corporation Ltd and Wockhardt.
Results Today:
Neyveli Lignite, Shreyas Shipping, Tata Tea, TV Today and VSNL.
Results Corner:
Cummins Q4 profit at Rs656mn (up 21.4%) and revenue at Rs5.29bn (up 29.9%)
Brokers Recommendation:
ABB – Buy from Citigroup with target of Rs5516
Long Term investment:
Cummins India
Major News Headlines:
Chidambaram says RBI monitoring rupee movement
India's economy grew 9.1% in Q4 and 9.4% in FY07
FM clears 23 FDI proposals worth Rs4.18bn
Tata Tea to buy majority stake in Mt. Everest Mineral Water: Reports
Mitsubishi Heavy to License pump Technology to BHEL
NDTV unit raises $120mn by selling securities
Tantia Construction gets order worth Rs1.78bn
TCS raises hedge on currency to $1.5bn from $1.2bn
Lupin gets US FDA approval for Cefadroxil Capsules
Madras Cements Ltd. (MCL) – Q4 FY07
CMP: Rs2754
Rating: HOLD
Target: Rs2921
Q4FY07 Financial Highlights
Net Sales increases yoy by 45.1% to Rs4.4bn
Operating profit increases by 100.4% to Rs1.3bn
Operating margin increases by 840 bps to 30.6%
Realization per ton increases by 32% to Rs2923
Cost per ton increases by 17.7% to Rs2028
PAT stood at Rs710mn for Q4FY07 compared to Rs326mn for Q4FY06
Valuation
The series of negative measures for cement industry has reduced the upside possibilities in cement pricing. We expect demand supply situation to be favourable for players in Southern market in FY08 and surplus situation is expected from second of FY09. MCL is expanding its capacity from 6mn tpa to 8mn tpa in FY08 and to 10mn tpa in FY09 which is expected to take care of price moderation in FY09. MCL is putting up 36MW captive power plant in two phases at Jayanthipuram which is expected to bring down power expenditure. We have revised down our estimates for FY08 and FY09 as MCL is unable to pass on the cost increases. MCL is trading at 9.7x and 9.4x of its estimated FY08 and FY09 earnings of Rs283.5 and Rs292.1 respectively. Recommend HOLD with target price of Rs2921. Our target price discounts estimated FY09 earnings by 10.0x.
Anand Rathi - Daily Technical Note
BSE Sensex and Nifty have exhibited a bullish candlestick and closed near the all time high. This indicates that there was genuine short covering coupled with bears squaring their short positions that led the speed of the rise in markets emerging from lower levels.
Based on the chart pattern developed to date, one may use the level of 4260 (Nifty) and 14,470 in Sensex as the stop loss level for long positions. Breach of these support levels may lead to a correction. On the resistance front, the Nifty faces resistance at around 4,340-4370 level and the Sensex at around 14,600 -14,750 levels.
BSE Small cap Index has exhibited a bullish candlestick. One may use the level of 7,370 as the stop loss level for long positions.
BSE Midcap Index has e x h i b i t e d a b u l l i s h candlestick. One may use the level of 6230 as the stop loss level for long positions.
CNX IT Index has gained ground. One may use the level of 5190 as the stop loss level
for long positions for the time being.
SSKI Entertainment & Media conference, 11-12th June, Ritz Carlton Singapore
Click on the image to get a bigger image
Growth story just got better
GDP at 19-year high of 9.4%.
Consistent double-digit growth in manufacturing, services and sizeable upward revisions saw the country record a 19-year high in gross domestic product (GDP) growth at 9.4 per cent for 2006-07.
This is the highest growth rate after 10.5 per cent recorded in 1988-89, according to data released by the Central Statistical Organisation today, prompting Finance Minister P Chidambaram to estimate growth at over 9 per cent in the current financial year as well.
GDP at current prices stood at Rs 37,43,472 crore, making India an $826 billion economy in 2006-07 (at an average exchange rate of Rs 45.29 to the US dollar for the year).
The underlying feature of the growth story is that manufacturing saw sustained double-digit growth, at levels almost similar to services. Agricultural growth decelerated to 2.77 per cent, a development chiefly attributed to a high base effect.
“On the production side, the story is manufacturing, which has suddenly come alive and is now growing about as fast as services,” said Joshua Felman, senior resident representative of the International Monetary Fund.
However, fourth-quarter GDP growth at 9.1 per cent was slower than over 10 per cent in the same period a year ago. This was chiefly on account of slower growth in agriculture, construction, financial and social services, suggesting a deceleration of the growth momentum.
Economists expect the deceleration to continue. M Govinda Rao, director, National Institute of Public Finance and Policy, (NIPFP) predicted that growth for the current fiscal (2007-08) would be “somewhere between 8.5 and 9 per cent”.
Added Robert Prior-Wandesforde, from HSBC’s Asian economics team, “The economy is not yet responding in any meaningful way to the monetary medicine administered by the Reserve Bank of India (RBI). The interest rate changes will take at least a year to impact fully.” He, however, said the economy would expand at an impressive rate.
The latest data show that India continues to be the world’s second-fastest growing economy, behind China. In the first three quarters of 2006, China recorded an average GDP growth rate of 10.7 per cent.
In terms of the average growth rate target for the Tenth Plan (2002-07), the actual average growth rate stood at 7.64 per cent, slightly short of the targeted 8 per cent growth rate.
There is other good news hidden in the data. Per capita income in 2006-07, at current prices (that is, including inflation), grew faster than the previous two years, at 14.3 per cent to Rs 29,382 against 10.65 per cent (Rs 25,716) in 2005-06.
The growth prompted comments that money supply may be tightened further. “I expect the RBI to increase the cash reserve ratio since growth has not slowed to its comfort level and inflation pressure remains high,” Crisil’s DK Joshi said.
Cash reserve ratio refers to the amount of money banks have to keep with the RBI.
Prior-Wandesforde added that he would be surprised if the CRR was not raised by 50 basis points, from the present 6.5 per cent.
NIPFP’s Rao disagreed. “I do not think the RBI is going to tighten interest rates further. If it does, it will create more trouble for interest rate-sensitive sectors like construction,” he said.
Business Standard
Citigroup - Daily Technicals
Citigroup in their daily technical report,
Nifty — The index began on a strong note in the opening trades, after which it saw
range-bound trading before moving up sharply towards the close. The index ended
the day up 46 points.
Range-bound — The index is stuck in a narrow trading range of 4307 on the
upside and 4241 on the downside, trading in this range for the last four sessions. A
breakout from the trading range around 4307 could see the index move towards
4350 levels.
Support — The index has support around the lower end of the trading range at
4241 and 10dma at 4255. Intra-day declines should find support around the 4255-
4241 band. The index trading above the 10dma at 4255 on a closing basis should
be considered positive.
Conclusion — Intra-day strength can be expected on the Nifty sustaining above
4307.
Sharekhan Investor's Eye dated May 31, 2007
Sanghvi Movers
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs1,050
Current market price: Rs818
Results in line with estimates
Result highlights
- The Q4FY2007 results of Sanghvi Movers Ltd (SML) are in line with our expectations. The company's revenues increased by 23.6% to Rs52.1 crore and the net profit grew by 70% to Rs15.1 crore year on year (yoy).
- We had mentioned in our previous update that the Q3FY2007 performance was not up to the mark because of the high base effect. The company had got an additional order of around Rs20 crore from Reliance Industries in Q3FY2006 due to a shutdown in the latter's refinery; this boosted the base of the previous year. The fourth quarter's splendid performance after the subdued Q3FY2007 numbers reaffirms our faith in the company. On a sequential basis, the revenues grew by 34% and the net profit grew by 80%.
- The operating profit margin (OPM) for the quarter improved by 680 basis points to 75.5% against 68.6% in Q3FY2006 yoy and by 330 basis points on a sequential basis. The operating profit for the quarter grew by 36% to Rs39.3 crore.
- The interest expense for the quarter increased by 43% to Rs6.3 crore, while the depreciation cost for the quarter declined by 3.8% to Rs10 crore.
- For the full year, the net revenue grew 19.8% to Rs170 crore and the net profit rose by 99.8% to Rs64.3 crore. Adjusting for the extraordinary item to the tune of Rs17.1 crore (on account of a change in the deprecation policy) in the current financial year, the net profit grew by 46.6%.
- The company has announced a stock split in the ratio of five equity shares of Rs2 each for every existing equity share of Rs10.
- The company did a capital expenditure (capex) of Rs70 crore during this quarter and of Rs189 crore in the full year. It now plans to add more cranes worth Rs150 crore in FY2008.
- The company added 21 new cranes and a total of 42 cranes in this year. What's more, it has already placed order for 15 new cranes to be added in FY2008.
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Sharekhan Eagle Eye - June 1 2007
Following global cues the Indian markets kicked off on positive note and touched an all-time high of 4306. During the day we saw a fight between bulls and bears but the
bulls dominated the session by taking the Nifty to an alltime high of 4306. The index finally closed at 4296.
We have observed that in the last few trading sessions the Nifty has taken strong support around 4252 levels, which is around the 10-DMA. It is facing stiff resistance around 4300 levels. On sustaining above this level the Nifty is likely to move towards the 4320-4350 mark. Our short-term bias remains Up with target of 4320.
On intra-day basis or on the hourly chart, the RSI is showing positive bias and we can expect buying to continue for a while. As KST is still not showing any clear direction, one can expect some profit booking at 4300 level, with support at around 20-hour simple moving average of 4274.
SBI looks good with a strong support around Rs1,332 and resistance around Rs1,368. Tata Motors is positively biased with support at around Rs748 and short-term target at Rs776. M&M looks strong with support at Rs753 and resistance at Rs766-773.
Deccan Aviation–Buy
CMP: Rs144.5
Buy Deccan Aviation at the current market price of Rs144.5 with the stop loss of Rs126.9 for the target of Rs199. The stock has broke out of wave 2 triangle.
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