SSKI - Sector report: Telecom (wireless) - Connecting the Blue Billion

Wireless subscriber base in India is soaring. Whereas 4.6m subscribers were added per month over H1CY06, 6.3m subscribers have been coming to the fold since then. Traditionally a price sensitive market, India has broken the mould with subscriber additions stepping up even sans tariff cuts. With infrastructure sharing facilitating rapid rollouts and thus wider coverage, increasing affordability would drive market expansion. We expect the wireless subscriber base to reach 504m by 2012. But for a tariff cut due to lower regulatory costs, we do not see any tariff wars in the offing despite Vodafone’s acquisition of Hutch. Hence, profitability of operators is likely to remain intact with an estimated 40% earnings CAGR for our wireless universe over FY07-09. However, spectrum unavailability could be a dampener. We rate Bharti Airtel and Reliance Communications as Outperformers and Idea Cellular as Neutral.

Indian wireless market – the floodgates have opened: The government has set a stiff target of expanding the current wireless subscriber base of 159m to 584m by 2012. While regulatory costs are set to fall and make tariffs more affordable, infrastructure sharing, still at a nascent stage, would facilitate faster coverage of rural areas. We expect India to have 504m subscribers by 2012 (25% CAGR from the current base).

Operators to see sustained profitability: The incremental 345m subscribers would largely come from rural areas. Though ARPU in rural areas would be lower, we believe coverage would induce increased usage from existing subscribers. Thus, we expect EBITDA margins to expand by 200bp over FY07-09 for our wireless universe on the back of higher outgoing usage and cost benefits arising from infrastructure sharing.

Buy Bharti and RCOM; Neutral on Idea: While lower tariffs make usage more affordable, rapid population coverage would increase the addressable market. At an estimated EBITDA CAGR of 40% over FY07-09 for Bharti and RCOM, the stocks trade at 10.1x and 8.5x FY09E EBITDA respectively. While Idea trades at a 28% premium to RCOM, we find the premium unjustified given that operations are restricted to 11 circles and NLD business would be fully operational only by end-FY08. Thus, we rate Bharti and RCOM as Outperformers and Idea as Neutral.

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Emkay - Morning Notes, Ashok Leyland

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ICICIDirect- Daily Derivatives Strategy

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Edelweiss - Daily Market Outlook 10th April, 07

Market Snapshot

Markets had opened the week's proceedings on a positive note, mirroring the firm trend in other Asian markets, Sensex opened with a positive gap of 49 points at 12,905 with buying being witnessed across all the sectors. Markets continued with their uni-directional journey as further gains were witnessed in the final hour of trade. The BSE Sensex closed at 13,178 (up 322 points) while the Nifty closed at 3,844 (up 92 points).

The NSE and BSE cash volumes were slightly lower compared to the previous day at INR 62 bn and INR 30 bn respectively. The F&O volumes were also lower at INR 237 bn.

Sentiment Indicators

The Implied Volatility (IV) across Nifty strikes has increased to 26-28% levels. The WPCR of Nifty Options increased to 1.15 compared to the previous 5 day average which is 0.77.

Outlook

The market will open flattish today in line with global markets and absence of any major news trigger. The Nifty is expected to cool down after the 200 point rally seen in last few trading sessions. We can see some profit booking to come in at current levels as markets continue to look for strong event before any movement.

Metals continued to gain strength at the LME and we continue to believe that metal stocks will continue to be market out performer. Auto stocks especially in the Four wheeler segment can show some weakness on the interest rate rise disturbing the demand coupled with increased raw material cost. After recovering yesterday, one can go short on Four-Wheeler counters at current levels today.

The Nifty is currently taking a resistance at the 60 DMA at 3843 and has shown a tendency of reversing from that average in the previous rally. Considering the volatility in the current phase of the market and the fact that the Nifty has already appreciated 210 points in the last four trading sessions, the probability of a profit booking in the coming days is high. We believe that it makes sense to chalk out an exit strategy within this pullback.

The Nifty has a resistance at 3865 followed by 3890 and the support levels are at 3820 followed by 3801

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Intra-day Stock Ideas

NIFTY (3843) SUP 3799 RES 3878

BUY CANBK (193.40) SL 189 T 200, 202

BUY PUNJLLOYD (160.30) SL 156 T 168, 170

BUY ADANIENT (218.25) SL 214 T 226, 229

SELL SAKTISUGAR (98.05) @ 99 SL 102 T 93, 91

SELL ZEETELE (267.50) @ 269 SL 273 T 259, 256

Market Watch

Insider Trades:
Shree Renuka Sugars Limited: 1) Morgan Stanley & Co. International Limited A/C Morgan Stanley Dean Witter Mauritius Co. Ltd. 2) Morgan Stanley & Co. International Limited A/C Morgan Stanley Investment Mauritius Ltd has purchased from open market 90000 equity shares of Shree Renuka Sugars Limited on 2nd April, 2007.

Ruchi Soya Industries Ltd: Macquarie Bank Limited (with no PAC) has purchased from open market 283637 equity shares Ruchi Soya Industries Ltd on 4th April, 2007.

Mercator Lines Limited: AHM Investments Pvt. Ltd. ( in capacity as Person Acting in Concert/Group Company with Mr. H. K. Mittal, Chairman & Managing Director) has purchased from open market 300000 equity shars of Mercator Lines Limited on 5th April, 2007.

Market Volume:
The turnover on NSE was down by 9.5% to Rs62.87bn. BSE Banking index was the major gainer and gained 3.28%. BSE Metal index (up 3.26%), BSE FMCG index (up 3.11%), BSE Capital Good index (up 2.89%) and BSE Consumer Durable index (up 2.75%) were among the other major gainers.

Volume Toppers:
IFCI, SAIL, IDFC, Tata Steel, IB Real Estate, R Com, Gujarat NRE, Balrampur Chini, SRF, India Cement, ITC, HLL, Idea, Gujarat Ambuja, Praj Industries, Bajaj Hind, Ashok Leyland, Parsvnath and Bank of India

Upper Circuit:
Ansal Infrastructure, Gujarat Fluro, Harrison Malyalam, Mangalam Cement, Penland Ltd, Nirlon, Educomp Solution, Gitanjali Gems, India Infoline, McLeod Russel, Swan Mills, Shree Precoated, Aurionpro Solutions, Garware Offshore, Dolphine Offshore, KEI Industries and KLG Systel

Results Today:
Accentia Technologies, Core Projects, Raj Television, and Prism Cement.

Abnormal Delivery:
Sesa Goa, Saregama, Jet Airways, Bharti Airtel, Patni Computer, Unitech and Corporation Bank.

Delivery Delight:
3i Infotech, ABG Shipyard, Bajaj Hindustan, Bank of Baroda, Bharati Shipyard, Divis Laboratories, Gammon India, Grasim Industries, Gujarat Alkalies, Infosys, IDFC, ITC, LIC Housing Finance, M&M, Praj Industries, Reliance Industries, SBI, SAIL, Titan, VSNL and Wockhardt.

Stock Futures with Largest Increases in OI:
Crompton Greaves, Karnataka Bank, Bharat Earth Mover, Sobha Developers, Strides Arcolab, Gujarat Alkalies, Divi's Laboratories, Kotak Mahindra Bank and BILT.

Stock Futures with Largest Decreases in OI:
Wockhardt, Bajaj Hindusthan, Reliance Communications, Nagarjuna Construction, Gateway Distripark, Great Eastern Shipping and IFCI

Brokers Recommendations:
Tata Power – Buy from Emkay Research with target of Rs758

RPL – Buy from CLSA with target of Rs90

Long Term investment:
GE Shipping

Major News Headlines:

Bajaj Auto cuts prices of Platina by Rs3000

Dolphin Offshore, L&T get $24mn order from ONGC

Dhanlakshmi Bank to consider rights issue on 16th April

HCC to recommend dividend on 27th April

Stone India receives order worth Rs140mn from Defence Ministry

Gitanjali Gems sets up unit in Dubai

Kirloskar Brother gets order worth Rs2.55bn from IVRCL

Orient Bank of Commerce to sell Rs5bn of bonds

Aban Offshore's subsidiary gets contract from GSPC

STRATEGY INPUTS FOR THE DAY

Resurrection revives bulls

The beautiful spring came; and when Nature resumes her loveliness, the human soul is apt to revive also.

We haven't seen any of the 'Men in Blues' hit a big century for a while on the cricket field. But the bulls surely haven't lost their touch despite the recent weakness. This was evident on Monday, when the Sensex struck a triple ton, buoyed by good global cues and some moderation in inflation. FIIs too seem to have capitalised on the recent crash by pumping fresh money in the past couple of days. After being net sellers for three days, foreign funds bought stocks worth Rs5.68bn on April 3. Yesterday's provisional figures show that FIIs poured in Rs4.93bn in the cash segment. In the F&O segment too, they were net buyers of Rs7.96bn. Mutual funds bought Rs410.2mn on April 5.

But, today is another day. US stocks finished flat overnight. European markets were shut for Easter. Asian markets are mixed. What may be heartening for the bulls is that oil has cooled off further, falling below the $62 per barrel mark. As far as local factors go, results will drive the sentiment at least for a month or two. IT stocks will remain in focus ahead of Infy results on Friday. Aside from the earnings for the latest quarter, the market will pay a lot of attention to what the software major has to say about FY08. That will set the tone for other IT results and perhaps for the market. Till then the market may remain rangebound and volatile with a positive bias. What the market has to watch out for is inflation numbers and possibility of further monetary tightening.

US stocks finished nearly unchanged on Monday as investors welcomed falling oil prices, a strong employment report and some deals but were not prepared to take undue risks ahead of the earnings season. The Dow Jones Industrial Average was up 8.94 points at 12,569.14, ending higher for the seventh session in a row, while the broader S&P 500 index closed flat at 1,444.61. The Nasdaq Composite index ended just in the red, breaking a six-session winning streak.

US stock markets were closed for Good Friday. Investors got the opportunity to react to last week's better than expected jobs report. But the reaction was pretty muted, may be because a healthy labour market means rate cuts will still take a while.

US light crude oil for May delivery fell $2.73 to settle at $61.55 a barrel on the New York Mercantile Exchange on fund selling and relief about the developments in Iran. The front-contract was quoting 36 cents lower at $61.87 a barrel in extended trading in Asia.

COMEX gold for June delivery fell $2.50 to settle at $676.90 an ounce. Treasury prices were little changed, with the yield on the 10-year note at 4.75%, just above where it was on Friday. In currency trading, the dollar inched higher versus the euro and held near a six-week high versus the yen, hit last week.

Major Latin American markets rose on Monday. Mexico's IPC rose 261 points, or 0.9%, to 29,632.20, breaking a record set last Wednesday. The IPC is now up 12% since the start of the year. Brazil's Bovespa stock index picked up 208 points, or 0.5%, to 46,854.71.

Asian markets are mixed this morning. The Nikkei in Tokyo is down 103 points at 17,640 while the Hang Seng in Hong Kong gained 104 points at 20,314. The Kospi in Seoul declined 7 points to 1493 and the Straits Times in Singapore shed 18 points to 3380.

Cambridge Solutions could gain amid reports that private equity firm Carlyle may team up with Ramesh Vangal to bid for the BPO firm. Sesa Goa might be in action amid an ongoing bidding war, where Arcelor Mittal still seems to be the frontrunner. Indiabulls Financial is another stock to keep an eye on. Reports suggest that the securities broking firm has asked some of its employees to leave and shut some offices. The company has denied any such development.

UTV is looking at a business reorganisation by splitting three core operations into three separate wholly-owned units. Bajaj Auto has launched operations at its Pantnagar plant and has slashed the price of 100cc Platina by as much as Rs3000. RPG Cables is on an expansion spree.

Essar Oil has got its first Clean Development Mechanism (CDM) project registered with the UN. Steel shares may benefit after Baoshan Iron & Steel Co., China's largest maker of the alloy, said it expects first-quarter profit to more than double.

HOW MARKET FARED

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Profit booking likely at peaks

The markets ended on a strong note led by buying in scrip’s across the sectors. Strong Asian markets boosted the key indices at open and buying momentum in Banking and the Metal stocks led the rally from the front. Others like the Auto, Capital Good and FMCG stocks also followed suit lifting the benchmark index Sensex to hit an intra-day high of 13194. All the key sectoral indices finished in green even the Mid-Cap and the small cap indexes participated in the rally aiding the markets to close near its day’s peak.

Technology stocks also were on the move after U.S. unemployment rate unexpectedly dropped, easing concern that demand will slow in the world's largest economy. Frontline stocks like Tata Steel, R Com and ITC were the major gainers; however Dabur, Zee Telefilms and Nalco were among the major losers. Finally, the 30-share benchmark Sensex rallied 321 points to close at 13177. NSE Nifty also surged 91 points to close at 3843.

Reliance Industries gained by 1.8% to Rs1384 as the company declared that it will finalise sales agreements in the next few months for natural gas from its Krishna Godavari basin. The scrip touched an intra-day high of Rs1388 and a low of Rs1362 and recorded volumes of over 11,00,000 shares on NSE.

HCC advanced by 3.6% to Rs93 after the company announced that they would recommend dividend on 27th April. The scrip touched an intra-day high of Rs93 and a low of Rs91 and recorded volumes of over 10,00,000 shares on NSE

Reliance Communications surged nearly by 5% to Rs416 after the company announced that they acquired over 1.2mn wireless subscribers in the month of March 2007. The scrip touched an intra-day high of Rs418 and a low of Rs400 and recorded volumes of over 51,00,000 shares on NSE.

Hindustan Zinc spurred by over 3% to Rs670 after the company raises lead price by 2.2%. The scrip touched an intra-day high of Rs674 and a low of Rs656 and recorded volumes of over 1,00,000 shares on NSE.

SRF rallied by over 17% to Rs139 amid reports that it has raised Rs5bn through the sale of carbon credits in FY07. The scrip touched an intra-day high of Rs142 and a low of Rs118 and recorded volumes of over 46,00,000 shares on NSE

Banking stocks also ended firm. Heavy weight SBI gained 4.1% to Rs987, HDFC Bank was up 3.3% to Rs974 and ICICI bank added 2.9% to Rs863. Bank of Baroda, PNB and Canara Bank were the major gainers among the Mid-Cap stocks.

Technology stocks also were on the move after U.S. unemployment rate unexpectedly dropped, easing concern that demand will slow in the world's largest economy. Infosys gained 2.8% to Rs2047, Wipro was up 1.8% to Rs562 and Satyam Computer added 1.5% to Rs462. Rolta, Mphasis and HCL Tech were the major gainers among the Mid-Cap stocks.

Cement stocks recorded concrete gains. Heavy weights ACC advanced 2.7% to Rs741, Grasim rose over 4% to Rs2205, Gujarat Ambuja gained 2.4% to Rs108 and India Cement spurred by over 7% to Rs163.

Telecom stocks also rang with gains. Bharti Airtel advanced 2% to Rs761, VSNL was up by 2% to Rs409 and MTNL added 3.9% to Rs153.

Market may open weak

Market may resume on a weak note on the back of weak Asian indices in the early trades and mixed US markets in overnight trades. However, optimism in the market likely to persist on strong bullish sentiment and the market may turn positive in the afternoon trades. Among the local indices, the Nifty could face resistance around 3885 and has a likely support at 3775.

US indices struggled for direction on Monday as investors welcomed falling oil prices, a strong employment report and some company deals but showed reluctance after last week's rally. While the Dow Jones gained 9 points at 12569, the Nasdaq shed two points to close at 2469.

Crude oil prices eased further, with the Nymex light crude oil slipping by $2.77 at $61.51 per barrel. In the metals segment, the Comex gold for June series slumped $2.50 to settle at $679.40 an ounce.

Market may drift lower

Profit booking may take place after Monday’s 322-point surge in the Sensex. Market men say the undertone remains cautious. Caution on the bourses is due to concerns that rising interest rates will slow economic growth. Late last month, RBI had announced a surprise rate hike. Nevertheless, a poll carried by a newspaper on Monday showed that corporate chieftains are bullish on business prospects for the current financial year (FY 2008), rising interest rates notwithstanding. That in turn aided Sensex’s rally on Monday. The rally was also part of a global rally triggered by strong US job data.

Asian markets were mixed on Tuesday (10 April). Key benchmark indices in China, Japan, South Korea and Taiwan were down by between 0.3% to 0.5%. Key benchmark indices in Hong Kong and Singapore were up by between 0.01% to 0.4%

Bank of Japan (BoJ)’s two-day policy meeting concludes today. The BoJ is seen keeping the overnight call rate unchanged at 0.5% at the meeting. Investors will look for clues about the BoJ's view on prices, as well as the health of the economy, in comments from BoJ Governor Toshihiko Fukui at a post-meeting news conference.

US stocks closed flat on Monday (9 April) as news that billionaire investor Warren Buffett had bought stakes in the railroad sector and strong jobs data offset worries about earnings and subprime loans. The Dow Jones industrial average rose 8.94 points, or 0.07 percent, to end at 12,569.14. The Standard & Poor's 500 Index gained 0.85 of a point, or 0.06 percent, to finish at 1,444.61. But the Nasdaq Composite Index dipped 2.16 points, or 0.09 percent, to close at 2,469.18.

US crude oil for May delivery fell $2.77 to settle at $61.51 a barrel on Monday on some profit-taking after Iran's release last week of captured British sailors and marines.

FIIs resumed buying of equities on Thursday 5 April. FIIs bought shares worth a net Rs 567.50 crore on Thursday. Earlier, FIIs were net sellers for three days in a row from Monday 2 April to Wednesday 4 April. As per provisional data, FIIs were net buyers to the tune of Rs 493 crore on Monday 9 April, the day when Sensex had surged 322 points in global rally.

FIIs were net buyers to the tune of Rs 430 crore in index-based futures on Monday. They were net buyers to the tune of Rs 181 crore in individual stock futures on that day.

Infosys’ FY 2008 guidance is the next major trigger for the market. The rupee’s sharp surge in late-March 2007 - early April 2007, and mixed reports from the US economy, have raised concerns that the FY 2008 guidance by Infosys Technologies may turn out conservative. Infosys unveils full year guidance at the beginning of the financial year along with Q4 March results, due on 13 April 2007.

Anand Rathi - Daily Technical Note

Nifty and Sensex have exhibited a bullish candlestick.

Technically, one may use the level of 3745 (Nifty) and 12900 (Sensex) as the stop loss level.

Nifty faces resistance at 3900 and Sensex at 13400.

BSE Smallcap and BSE Midcap exhibited a bullish candlestick.

CNX IT has gained ground.

In the Punter's zone we have a BUY in KTK BANK , CROMPTON GREAVES & SELL in TATA STEEL.

In the Technical call section, we have a BUY in KOTAK BANK , BHARTI AIRTEL & BOMBAY DYEING.

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Anagram - Daily Call - Apr 10

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US Market closes higher on deal news and job data

Friday’s job data ease concerns of significant slowdown in economic growth giving market the required boost

US Market posted its first seven-straight day gains in current year on Monday. While Dow was up for the 7th consecutive day, S&P 500 was up for the 5th consecutive day. Crude oil futures tanked almost 4.3% in a single day but the Energy sector's resilience in the face of falling oil prices for a fourth consecutive session acted as a source of market support. Ongoing mergers and acquisition activity also remained the key factor behind the market's momentum.

After today’s close, Dow is 220 points below its record close on 20 February. The last time the Dow had seven higher closes in a row was in June, 2005.

20 out of 30 stocks closed higher on Monday. For the day (9 April, Friday) the Dow Jones Industrial Average closed higher by 8.94 points at 12539.14, Nasdaq lower by 2.16 points at 2469.18 and S&P 500 higher by 0.86 points at 1444.61. Mc Donalads, Intel, DuPont, Alcoa and American Express were the main Dow winners while Altria, H-P, Exxon Mobil and Boeing were the main Dow losers.

With this continuous 7 days of winning streak, Dow is up by 2.2% on these 7 days. S&P 500 is up by 1.7%.

Of the six sectors closing higher today, Materials paced the way following reports that Dow Chemical was being acquired by private investors at a $50 bln offer. The stock jumped 4.9% to close at $49.63. Among other major stocks, Exxon Mobil closed lower by 0.5% as crude oil plunged.

Tech shares were hit early after Advanced Micro Devices lowered its first-quarter revenue forecast and said it would aim to cut $500 million in capital spending in 2007. The scrip which has already shed almost 40% since 2007 rebounded 3.8% today to close at $13.35. Wall Street's enthusiasm for AMD also helped arch-rival Intel whose shares were up 2.7% to $20.10. Intel was responsible for almost 5 point gain of Dow.

Friday’s upbeat jobs data gives an early boost to market but reminds that rate cut is far away

When market opened in the morning, stocks got the pending lift from Friday’s job market report. The Labor Department released a surprisingly positive March jobs report on Friday where it said 180,000 jobs were added in March, more than the expected 168,000, and the jobless rate fell to 4.4% from 4.5% in February. But the data also served as another reminder that the Fed won't be cutting interest rates anytime soon,

The Industrials sector was in focus after Berkshire Hathaway disclosed that it took a 10.9% stake in Burlington Northern Santa Fe. The news earmarked Railroads as the day's best performer and also charged up transportation stocks which also benefited from oil's biggest decline in three months.

Crude futures witnessed their biggest slide in 3 months as risk premium unwounded on the first trading day at Nymex after Iran released the British hostages last Thursday. Crude-oil futures for light sweet crude for May delivery closed at $61.51/barrel (lower by $2.77/barrel or 4.31%) on the New York Mercantile Exchange. Crude prices fell today on speculation that an Energy Department report will show U.S. inventories jumped last week as refiners unexpectedly shut units. The rollover from the May contract to the June contract is believed to have started early and is further weakening crude prices.

Trading volumes were light with 1.260 billion shares exchanging hands on the New York Stock Exchange and 1.761 billion on the Nasdaq stock market. Declining issues slightly outpaced gainers on the NYSE, and by 16 to 13 on the Nasdaq.

No major economic reports are on the schedule for this week. Market's focus will be on quarterly results with Alcoa's earning report after Tuesday's closing bell.

Motilal Oswal - Derivatives, Daily Margin, Corporate News, Market Diary, Weekly, Market Action

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Citigroup - India Technicals & India Equity Strategy

India Technicals

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Sharekhan Eagle Eye & Daring Derivatives

Sharekhan Daring Derivatives for April 10, 2007Sharekhan Eagle Eye (equities) & Derivatives Info Kit for April 10, 2007