Friday, December 01, 2006
Poweryourtrade.com Trading Calls
Buy Rain Calcining at around Rs 48.85 with stop losso of Rs 48. (Intra-day call)
Buy Vakrangee Software at around Rs 251.35 with stop loss of Rs 247. (Intra-day call)
Sharekhan Commodities Buzz dated December 01, 2006
Bullions: Win-win situation
Gold prices rose to the highest level in more than three months following a drop in the value of the greenback against the euro and the sterling. A strong sterling rose up to a 14-year high level of $1.9694 on the back a stronger economy. Further expectations that the Bank of England may raise rates put pressure on the dollar on the narrowing yield spread.
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Market may witness profit-taking in early trades
The market is likely to remain subdued during the intraday trades. The weak FII participation in the last couple of sessions is also weighing on the sentiment. While, the domestic market the Nifty may witness resistance at 3975 on the upside while the near-term support at 3945 and below this the next support at 3925 on the downside. The Sensex has a likely support at 13650 and could witness resistance at 13800.
US indices ended with marginal loss on thursday, with the Dow Jones declined 5 points to close at 12,222 while the Nasdaq slipping by nearly half a points at 2432.
Indian ADRs had a mixed outing on the US bourses. Infosys, Wipro, Dr Reddy's, ICICI Bank, HDFC Bank, MTNL, Rediff closed positive and Satyam, Tata Motors, VSNL and Patni Computers declined 1% each.
In the commodity segment, the Comex gold for the February adavnced $11.10 to settle at $652.90 an ounce. The Nymex light crude oil for January delivery jumped 67 cents to close at $63.13 a barrel, while the London brent crude was up 62 cents at $59.46 per barrel.
Northgate Technologies Ltd.
Northgate is the best play amongst the listed stocks on the global Internet revolution. The Company is expected to get a major fillip from rapidly growing online advertising industry and rising popularity of e-commerce. Both the offerings of the company, Axill (online advertising network/exchange) and Globe7 (patented SIP based VoIP phone), are fast gaining popularity and mileage worldwide especially in US. Company’s revenues and earnings grew 58.7% and 199% respectively in FY06. It has already surpassed FY06 numbers in H1 FY07. At a P/E valuation of 27.7x based on annualized H1 FY07 EPS of Rs30, it is the most inexpensive play on the Internet revolution when compared with significantly higher valuations of Info Edge and global counterparts like Google, Rediff, etc. We expect significant upside from the current levels
5 Intra-day Stock Ideas
NIFTY (3955) SUP 3941 RES 3967
BUY Hero Honda (742) SL 736 T 751, 755
BUY GAIL (267) SL 262 T 275, 277
BUY Bharti Airtel (631) SL 625 T 641, 643
SELL Tata Tea (718) SL 725 T 709, 706
SELL HPCL (282) SL 287 T 275, 271
Indiainfoline - Strategy Inputs for the Day
Overheated…cool down a little!
Winter is on my head, but eternal spring is in my heart. – Victor Hugo
Winter has been on the bear’s head ever since summer May. And the bulls have had a favorable weather since then. The F&O settlement day is behind us now. It is the start of a new derivative series. The overall rollover was in line with expectations, but the same in Nifty Futures was lower than the market-wide rollover. Also, there are indications that investors and traders alike are getting a bit jittery about holding long positions. More short positions have been carried forward this time around, leading to a fall in the cost-of-carry and in the Nifty Futures premium to the spot Nifty. Market observers, including us, have been repeatedly warning of overheated conditions in the market and a possible correction. Though the same has not materialised so far, it may happen without any prior warning. FII inflows have also slowed down in the past few days, and if the trend continues the bulls will find it tough to retain their hold on the proceedings. Having said that the scene is not all that grim either, as the long-term outlook for the Indian economy and corporate earnings remains upbeat. Just that the market has rallied quite a bit since the carnage in May and June without any significant break and needs to pause. Globally, markets in the US ended flat overnight while Asian indices are mixed. Crude is still well above the $62 per barrel mark. We are expecting a cautious opening and a lackluster day ahead of the weekend.
Hero Honda could be the focus of attention as it has reported a 12% year-on-year increase in November sales. But, compared to the previous month, which was a festival month, the company's sales are down 22.6%. Moreover, a national daily reports that the Hero Group is considering entering the car manufacturing and auto component space. The company is also making an announcement this afternoon in Mumbai. Indiabulls is likely to gain as steel baron Lakshmi Mittal and Farallon Capital have together picked up 13.3% stake in its real estate arm for almost Rs4.5bn. Another stock to keep an eye on is Thomas Cook amid reports that it is buying Travel Corporation of India. City Union Bank is likely to be in action as a L&T arm has picked up a 10% stake in the Kumbakonam-based bank. However, the deal could face some hurdles as the RBI doesn't allow any corporate house to have more than 5% stake in a bank.
US shares closed nearly unchanged on Thursday. The Dow Jones was down 4.80 at 12,221.93, while the broader S&P 500 closed nearly flat at 1,400.63. The Nasdaq too finished nearly unchanged at 2,431.77.
Crude oil for January delivery gained 67 cents to settle at $63.13 a barrel on the New York Mercantile Exchange, rising after Wednesday's weekly oil inventories report showed a surprise dip in crude, gas and distillate supplies. The contract was quoting 29 cents lower at $62.84 in extended trading in Asia.
COMEX gold for February delivery jumped $11.10 to $652.90 an ounce. Treasury bond prices rallied, lowering the yield on the 10-year note to 4.46% from 4.52% late on Wednesday. In currency trading, the dollar continued its retreat versus other major currencies.
Among the Indian ADRs, Patni was down nearly 1%, Wipro gained 2.35% and Dr. Reddy's rose 1.6%.
European shares closed lower after weak US manufacturing data put further pressure on the dollar. However, gains in shares of Rio Tinto and BHP Billiton helped curb losses. The French CAC-40 finished down 1% at 5,327.64, the German DAX Xetra 30 lost 0.9% to 6,309.19 and the UK's FTSE 100 declined 0.6% to 6,048.80.
In the emerging markets, ended lower by 0.1% at 41,931, while the IPC index in Mexico rose 0.75% to 24,962 and the RTS index in Russia gained 0.65% to 1776.
Asian stocks were mixed this morning. The Nikkei in Tokyo advanced 45 points to 16,320 while the Hang Seng in Hong Kong was down 56 points to 18,904. The Kospi in Seoul was flat at 1433 and the Straits Times in Singapore added 4 points to 2842.
The Morgan Stanley Capital International Asia-Pacific Index rose 0.2% to 136.62 as of 11:30 a.m. in Tokyo. The measure is set for a 3.1% jump this week, the most since the five days to Aug. 18.
Indexes advanced in Taiwan, Indonesia and China and fell elsewhere. Markets were closed in the Philippines.
Major Bulk Deals:
Morgan Stanley has sold Gitanjali Gems; Prudential ICICI MF has bought Gujarat Apollo Equipment; UTI MF has sold IDFC; Morgan Stanley has bought IOL Broadband but Bear Stearns has sold it; Lehman Brothers has purchased Pioneer Embroidery and T. Rowe Price has sold SREI Infrastructure.
Insider Trades:
TVS Motor Company Limited: T K Balaji, Director has sold in open market 29250 equity shares of TVS Motor Company Limited on 22nd November, 2006.
Goldiam International Limited: Mr. Rashesh M Bhansali (Vc Chairman & Mg. Director) has purchased from open market 57437 equity shares of Goldiam International Limited on 27th November 2006.
Nava Bharat Ventures Limited: P. Punnaiah, Director has sold in open market 7946 equity shares of Nava Bharat Ventures Limited on 27th November, 2006.
Market Volumes:
The turnover on NSE was up by 57% to Rs127.25bn. BSE Technology index was the major gainer and gained 1.37% and BSE Bank index (up 1.29%) was the other major gainer. However, BSE Metal index lost 1.13%, BSE Consumer Durable index (down 0.63%) and BSE Auto index (down 0.29%) were the other major losers.
Volume Toppers:
Parsvnath Dev, Torrent Power, Hindalco, R Com, ACE, IVRCL Infra, SAIL, NTPC, Zee, Guj NRE Coke, ITC, Indiabulls, ONGC, Gitanjali Gems, Ranbaxy and GE Ship.
Delivery Delight:
Aditya Birla Nuvo, Aurobindo Pharma, Bank of India, BHEL, Bharti Airtel, Dr Reddys, Educomp, GAIL, HDFC Bank, ICICI Bank, Indiabulls, Infosys, ITC, IVRCL Infrastructures, M&M, McDowell & Co, NIIT LTD, Rain Calcining, Reliance Communications, Sun TV, Wipro and Zee Telefilms.
Brokers Recommendations:
Elecon Engineering – Buy from Prabhudas Liladhar
Dr Reddy’s Labs – Neutral at HSBC
Long Term Investment:
BHEL
Major News Headlines:
MTNL revises Q2 net profit to Rs1.1bn from Rs1.2bn
IOC, other refiners cut Jet Fuel prices by 2.5%
PSL secures orders worth Rs3.08bn
Reliance units hire ICICI Bank for $925mn loan
GMR Infrastructure unit in pact with ACCOR for Hyderabad hotel
BHEL to expand annual capacity to 10,000 MW pa
How Market Fared
Future in favour of bulls
The Bulls ended with healthy gains, banking on impressive economy data and short covering in late afternoon trades. Fresh buying in Banking and Technology stocks towards the fag end also boosted the indices. Firm global markets once again aided the domestic bourses to surge at open but however bulls couldn’t hang on to their gains as Bomb scares in parliament and selling pressure weakened the key indices. The bulls, however against all odds gained momentum led by gains in HDFC Bank, BHEL, Bharti Airtel and Infosys. Finally, the BSE Benchmark Sensex gained 79 points, to close at 13696. NSE Nifty was up 26 points to close at 3954.
L&T slipped 1.2% to Rs1364. The company’s JV secured Rs4.56bn order from NTPC. The scrip touched an intra-day high of Rs1398 and a low of Rs1359 and recorded volumes of over 6,00,000 shares on NSE.
Parsvnath Developers one of the leading real estate developers in the country made an impressive opening on the bourses. The stock opened at Rs540 as against the issue price of Rs300, at premium of 80%. However the scrip ended at Rs526 (up 75%).It touched an intra-day high of Rs575 and a low of Rs456 and recorded volumes of over 4,00, 00,000 shares on NSE.
Reliance Communication gained 1.3% to Rs427 as reports stated that the company was setting its sights on distribution of mobile content to service provider across the globe. The scrip touched an intra-day high of Rs432 and a low of Rs421 and recorded volumes of over 79,00,000 shares on NSE.
PSL surged 1.8% to Rs205 after the company secured Rs3.08bn order to supply Carbon Steel Barc Line Pipes to BINA Refinery in Sultanate of Oman. The scrip touched an intra-day high of Rs213 and a low of Rs201 and recorded volumes of over 1,00,000 shares on NSE.
Banking stocks witness fresh buying in choppy trades. Index heavy weights like led from front. HDFC Bank, ICICI Bank and SBI were among the major gains. However Mid-Cap stocks witnessed profit booking Bank of Baroda fell by over 1.8% to Rs260, Syndicate Bank was down 0.9% to Rs81and OBC lost 0.55 to Rs245.
Technology stocks ended with smart gains. IT front runner Infosys after slipping yesterday gained 1% to Rs2179, Satyam Computer gained 1.8% to Rs459 and Wipro advanced 2.9% to Rs599. Among the Mid-Cap stocks NIIT Ltd, HCL Tech and Moser Baer were among the major gainers.
Oil & Gas stocks tumbled as petrol prices were cut by Rs2 per lite and diesel by Rs1per litre. BPCL, HPCL and IOC were among the major losers.
Pharma stocks are mixed bag. Dr Reddy’s Lab surged 2.2% to Rs750, after the company entered in an accord with Torrent Pharma for selling drug in Russia, Cipla gained 2.2% to Rs254. however Ranbaxy slipped 2.8% to Rs369 and Sun Pharma was down 2.7% to Rs1015.Firmness may prevail
Strong Q2 GDP growth data, firm global markets and short covering in derivatives segment due to expiry of November derivatives contracts pushed Sensex up 80 points on Thursday (30 November). The market sentiment remains bullish due to strong FII-inflow and an upward revision in earnings growth of corporates by brokerages, on the back of strong Q2 results. The market would today eye monthly auto sales.
As per provisional data, FIIs were net buyers to the tune of Rs 88 crore on Thursday. Though FIIs were net sellers for the second day in a row on Wednesday (29 November), their outflow on that day of Rs 63 crore was much lower than Tuesday (28 November)’s Rs 335.30 crore.
Cumulative inflow of FIIs for November 2006 totaled Rs 9380.10 crore (till 29 November). FII inflow in November included their subscription to IPOs of Parsvnath Developers, Lanco Infratech and Info Edge India. There are expectations that FIIs may step up buying this month as allocations will be made for New Year calendar 2007.
But profit taking may cap further upside from the current level with the Sensex having risen sharply in the past few weeks. From 12,623.28 on 23 October, the BSE Sensex is up 8.5% in a little over a month.
Asian stock markets were mixed on Friday, with Japanese stocks rising and South Korean shares touching a six-month high, while Australia and Hong Kong dropped back from recent life highs.
US stocks ended little changed on Thursday as a report showing slowing Midwestern business activity offset gains in energy stocks on the back of rising oil prices. The Dow Jones industrial average fell 4.80 points, or 0.04 percent, to end at 12,221.93. The Standard & Poor's 500 Index rose 1.15 points, or 0.08 percent, to finish at 1,400.63. The Nasdaq Composite Index inched down just 0.46 of a point, or 0.02 percent, to close at 2,431.77.
Oil slipped more than half a percent, as profit-taking took the steam out of a four-session rally driven by a fall in US winter fuel stocks that had pushed prices to a two-month high above $63 a barrel. NYMEX crude for January delivery fell 34 cents to $62.79 a barrel, partially reversing a 67 cent rally on Thursday, when prices pushed up to their highest since Sept. 28.
November Reports
If you are looking for November posts - Go here
Do take a look at the Most Popular Pages for November
L.T.Overseas Ltd. Subscription Details
QIB - 8.39 times
NII/HNI - 4.29 times
Retail - 7.6 times
Overall - 7.18 times
Technical Comment - Nov 30
(Click on the image to view Full Size)
It was a choppy session as Sensex opened with upside gap and attempted to fill the gap which it created on Tuesday but failed. In second half it slipped towards days low by violating the importance of 13650 levels which is a opening gap.
Sensex has formed a Bearish candle with higher upper shadow which indicates weakness in the trend i.e. the down trend witnessed a day earlier would remain intact. As of now Sensex is trading in a channel and still maintained the importance of channel. As per this channel important support lies at 13480 level which is a channels lower lines value. As long as Sensex maintain this level the bias seems to be positive and 14000 levels could be witness. Failure of this could lead to 13180 levels.
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