Daily News Roundup - May 22 2012

Reliance Industries Ltd approaches banks seeking a five-year loan of about US$1bn (Rs54.74bn). (BS) L&T Infotech said it has entered in a global strategic partnership with BMC Software to provide infrastructure management solutions such as data centre automation, IT service management and cloud computing management. (BS) BHEL has won a contract for supply and installation of Electrostatic Precipitator package for 2x660 MW (1,320 MW) Solapur Supercritical Thermal Power Project. (BS) NTPC and Coal India have agreed to sign new fuel supply agreements (FSA) on 2009 terms. (BL)

Sensex manages slim gains in lackluster trade

After losing for four straight weeks, the Indian stock markets ended the first trading day of the week on a positive note at the end of a lackluster session. Markets did manage to surge higher in early trades on the back of extended rally in banking heavyweight SBI post its robust Q4 results, however those gains could not be sustained due to offloading in IT heavyweights, FMCG and Telecom stocks. Market players preferred to be cautious as the rise was used to reduce positions, leading to a clear distribution throughout the session. In addition, the Indian rupee continued to be weak against the US Dollar, touching intraday record low of 54.91 for a second straight session. The BSE Sensex ended at 16,183, adding 0.2% or 30 points from the last close. It had earlier touched a day’s high of 16,298 and a day’s low of 16,149. It opened at 16,187. The NSE Nifty settled at 4906, up by 14 points or 0.3%. It touched a day’s low of 4,888 and day’s high of 4,937. The market breadth was positive, 1643 stocks advanced and 1027 stocks declined.

Coming to terms…

One's first step in wisdom is to question everything and one's last is to come to terms with everything. - GC Lichtenberg. The ‘risk off’ trade is likely to take a backseat temporarily. The markets world over seem to be coming to terms with the fact that leaders in Europe could step up efforts to stem the long-running debt crisis. US stocks rallied on Monday. Most European markets inched higher in a choppy session, but Spanish markets remained under pressure due to its precarious fiscal condition. Investors will now look forward to the informal EU summit on Wednesday. Asian indices are up smartly this morning after Germany’s finance minister was quoted as saying that the nation will focus on measures to boost Europe’s economic growth. We expect a positive start for Indian indices. Whether the early pop will sustain remains to be seen. The risk-reward ratio is still not favourable though a technical rebound is not ruled out after a series of weekly losses. Stick to a stock-centric approach. Look for beaten down companies with sound fundamentals, clear earnings visibility and good management. The Nifty has been trading in a tight range of 4850-4950 and a breakout beyond this range could some solace in the near term. Telecom stocks could be in focus on reports of DoT’s unfavourable recommendations on 2G auction.

Precious metals end moderately lower

Lower dollar and firmer crude prices limit selling Bullion metal prices ended moderately lower on Monday, 21 May 2012 at Comex. The key outside markets were mildly bullish for the precious metals Monday, as the U.S. dollar index was slightly lower, while crude oil prices were firmer. That did limit selling pressure in the precious metals markets on Monday. Gold for June delivery ended lower by $3.2 or 0.2%, to end at $1,588.7 an ounce on the Comex division of the New York Mercantile Exchange on Monday. The yellow metal saw some consolidation and a corrective pullback after recent strong gains that pushed prices well up from last week's 10-month low of $1,526.70. On Monday, silver prices for July delivery ended lower by 39 cents or 1.4% at $28.32.

Crude ends losing streak

Prices end higher for first time in seven sessions as dollar edges lower Crude prices ended modestly higher on Monday, 21 May 2012 at Nymex. Prices managed to end their long losing streak after the dollar edged lower. Prices rose in tandem with US equities ahead of key meetings this week about Iran's nuclear program. Light and sweet crude for June delivery rose $1.09 (1.2%) to $92.57 a barrel on the New York Mercantile Exchange on Monday. Prices ended higher for first time in seven sessions. In the currency market on Monday, the U.S. dollar index, which weighs the strength of the dollar against a basket of six currencies fell by 0.14%.

Long Term Buys

 Long Term Buys

Better trades today - May 22 2012

Global Cues: The European stocks closed lower on Monday (May 21, 2012), FTSE100 declined by 1.33%, CAC40 fell by 0.13% and DAX slipped by 0.60%. The US stocks closed lower on Monday. Dow Jones fell by 0.59% and Nasdaq slipped by 1.24%. The Asian shares are trading higher on Tuesday (May 22, 2012). SGX Nifty up by 55 points. Events for the day: Results: Container Corporation of India, GTL, Opto Circuits (India), Power Finance Corporation, Wockhardt, Tata Power Co. Stock in news: Govt to provide Rs38,500 cr subsidy to oil cos for Q4 FY12. RBI to take steps to stabilise rupee: Gokarn. Cyrus Mistry, Mallika Srinivasan appointed on Tata Steel Board. ABB bags Rs175 cr order from NTPC.

SBI, RIL edge higher in volatile market

Key benchmark indices edged higher in volatile trade as European stocks rose on speculation European leaders will come up with a strategy to ease the region's debt crisis when they meet on Wednesday, 23 May 2012. The barometer index, BSE Sensex, advanced 30.51 points or 0.19%, off 115 points from the day's high and up about 35 points from the day's low. The market breadth was strong. Index heavyweight Reliance Industries (RIL) was firm. Auto major Tata Motors rose on bargain hunting after recent steep slide. The market extended gains for the third day in a row today, 21 May 2012. From a recent low of 16,030.09 on 16 May 2012, the Sensex has gained 153.17 points or 0.95% in three trading sessions. The Sensex has declined 1,135.55 points or 6.55% in May 2012 so far (till 21 May 2012). The Sensex has gained 728.34 points or 4.71% in calendar 2012 so far (till 21 May 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 1047.40 points or 6.91%. From a 52-week high of 19,131.70 on 8 July 2011, the Sensex has lost 2,948.44 points or 15.41%.