Morning calls

Technical Calls on KEC International,SKM,Megasoft and Pirimal Health

Daily Calls - Sep 6 2010

 

Daily Market Outlook - Sep 6 2010

 

 Bank Nifty weekend update

 

Direct Tax Code does not have much for common man
Bakul Chugan Tongia 6 Sep 2010, 01:21

While the latest DTC provides some relief to tax payers, it still leaves much room for improvement.

Hot stocks which are under the institutional investors' radar
Amriteshwar Mathur 6 Sep 2010, 01:10

Analysing the trends in institutional stakeholding can be useful while evaluating the next big investment idea. ET tells you what’s hot on the institutional radar and what's not

Cox & Kings to post better show in Q3& Q4
Rajesh Naidu 5 Sep 2010, 15:55

Cox & Kings India is likely to post better show in third and fourth quarters given the rising occupancy levels of hotels and growing optimism for the airline business.

Shiv Vani Oil an attractive choice for long-term investors
Ramkrishna Kashelkar 5 Sep 2010, 15:50

Shiv Vani Oil seems to be an attractive choice for long-term investors considering strong visibility of earnings.

Long-term investors can buy MSP Steel and Power
Abhineet Singh 5 Sep 2010, 15:45

Given its expansion plans, MSP Steel and Power is likely to post better performance in the coming quarters. Long-term investors can buy this stock

Bull's Eye: Sun Pharma, Apollo Tyres, Cipla, Escorts
ET Bureau 5 Sep 2010, 15:29

Sun announces a final approval to market six dosages of a generic version of Strattera with a 180-day exclusivity.

Src: ET, Bramesh Blog, DP blog and etc

Heard on the street: Timken, Tata Motors

Heard on the street: Timken, Tata Motors

Delisting buzz sends Timken shares soaring

Shares of Timken India have risen around 29% so far in August on speculation the company may delist after buying back shares from public shareholders. Parent Timken Company holds around 80% in the Indian arm. The rumour doing the rounds is that a prominent Kolkata-based broker is active in the stock, which rose 8.5% to Rs 172.80 on Thursday. But some feel this is unlikely, as this broker is not known to take big bets in themes such as share buybacks.

A broker said the recent rally may have been in anticipation of good results in the June quarter, which was announced on Wednesday. Timken’s net profit rose about 80% to Rs 17.4 crore compared with the same quarter last year.

‘Smart’ operators seen exiting Tata Motors

SHARES of Tata Motors have been one of the best performers among large caps in the past three sessions, after the company’s earnings exceeded expectations. The buzz is that many of the astute names on Dalal Street, including a young broker who shot to fame in the past couple of years, and a suave broker who appeared on television frequently, have been active in the stock, of late.

If the talk of these players being active in the stock is true, investors in Tata Motors may have to brace for a sharp fall as and when they dump the stock. The stock, which rose 1.7% to a new high of Rs 1,024 on Thursday, has risen around 21% in the past six sessions.

Stake sale talk keeps HNIs busy with Mudra Lifestyle

High net worth investors have been buying shares of Mumbai-based integrated textile firm Mudra Lifestyle, of late. Grapevine has it that the company may sell a strategic stake to another textile firm. A senior company official declined to comment on the matter.

There is also talk that the treasury desk of a domestic PSU bank has bought a couple of lakh shares a few days ago. Brokers tracking the stock said that the company has recently completed its capex with an investment of over Rs 300 crore. The stock closed at Rs 48, up over 2% from the previous close.

A global PE may pick up stake in Shilpa Medicare

A GLOBAL private equity fund is likely to pick up a 10% stake in Raichur-based Shilpa Medicare for close to Rs 100 crore. The firm, which manufacturers and exports active pharmaceutical ingredients, fine chemicals and herbal products, is expected to make a preferential allotment to the private equity fund, said a person close to the development.

Shares of Shilpa Medicare rose 1% to Rs 351.30 on Thursday. It is learnt that Money Matters Investment was the advisor to the company for the proposed deal.

Contributed by Nishanth Vasudevan, Apurv Gupta & Reena Zachariah.  

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Bharti Airtel, India Banks, Bajaj Hindustan

 

Hercules Hoists

 

Tata Motors, Bharti Airtel, India Banking

 

JBF Industries

 

Daily Fundamental Report - Aug 13 2010

 

Daily Technical Report - Aug 13 2010

 

GMR Infrastructure

 

Daily Technical Report - Aug 13 2010

 

Daily Market Outlook - Aug 13 2010

 

Src: DP blog, ET

 

Stock calls

Trading Calls on Kalyani Forge,HZL,Rcom,Hanung Toys

Intra-day F&O calls

Technical calls for intra-day trading 

Read Full Article

Stock Calls

Heard on Street: Inox up on stake sale buzz

Ramsarup hits circuit as Arcelor seen circling

Shares of Kolkata-based Ramsarup Industries were frozen at its daily maximum permissible trading limit of 20% on speculation that ArcelorMittal, the world’s largest steelmaker, is close to buying a stake in the company. The stock, which has risen close to 30% in a week, closed at Rs 102.1. The buzz is that Arcelor is likely to buy the stake at Rs 120 apiece. A senior Ramsarup official declined to comment. Market sources said the deal is likely to be structured, with ArcelorMittal having an option to raise its minority stake in the company later. The company will get an infusion of about Rs 1,000 crore by way of partly convertible debentures shortly, according to a person in the know. The instrument will be converted into equity shares in future.

Inox gains 15% on stake sale speculation

Shares of Inox Leisure rose 14.7% to Rs 74.75 on speculation the Anil Ambani group is in talks to buy a stake in the company. Denying the talk, Deepak Asher, director of Inox Leisure, said, “The speculation is baseless.” An Anil Ambani group spokesperson declined comment. According to a market source, in this deal, Inox will be valued at Rs 400 crore. The promoters of Inox Leisure are locked in a takeover battle with Anil Ambani’s Reliance MediaWorks (RMW) to acquire Fame India. Inox bought Fame promoters’ 43% stake in the company for Rs 44 a share in early March and subsequentl

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Morning calls

Sell bonds, buy precious metals: Jim Rogers

SHANGHAI: Investors should sell bonds and buy commodities like silver and rice as a “refuge” as the world economy may continue having problems, Jim Rogers, chairman of Rogers Holdings said. “Bonds are not a good place to invest in. You should own commodities because that’s your only refuge,” said Mr Rogers, who predicted the start of the global commodities rally in 1999. Gold has gained 8.3% this year, leading advances in precious metals, as investors seek haven assets to protect their wealth amid concerns that global economic recovery will falter. Still, commodities overall capped their worst quarter in more than a year on investors’ concern that slower growth from China to the US will sap demand. The best place to be is in commodities and other natural resources, including precious metals like silver, platinum and palladium as supply shortages are already developing, said Mr Rogers, who co-founded the Quantum Hedge Fund in 1970. Gold prices will rise to more than $2,000 per ounce, said Mr Rogers, without giving a time-frame. Bullion for immediate delivery declined 0.4% at $1,187.85 an ounce. It reached a record $1,265.30 on June 21. While gold has been trading at an all-time high, silver remains 60 to 70% below its peak and is a better investment, he said. Silver reached an all-time high of $50.35 in New York in 1980. Silver for immediate delivery fell 1% to $17.6413 an ounce. Platinum dropped 0.6% to $1,507.68 and palladium declined 1.2% to $433.35. Still, agricultural commodities are better than metals as prices are “very depressed,” he said, pointing to sugar which is 75% below its all-time high in 1974. Raw sugar for October delivery slid 1.2% to 16.49 cents a pound on ICE Futures US in New York. It reached a record of 66 cents in November 1974. “Not many things are 75% cheaper that 36 years ago, but that’s true of sugar,” Mr Rogers said. “Agriculture commodities are desperately cheap compared to 20, 30, 40 years ago.” Rice futures on June 30 touched $9.55, the lowest price since October, 2006, on rising production and declining demand. The contract for September delivery gained 0.7% to $9.935 per 100 pounds on the Chicago board of trade in Shanghai.

Derivatives trade to get cheaper as Sebi halves exposure margins


MUMBAI: Trading in stock futures and options (F&O) contracts is set to get cheaper from July 15. The Securities and Exchange Board of India (Sebi) on Friday announced a cut in exposure margins in stock derivatives to 5% from 10% in a move to lift the sagging fortunes of these contracts.

“The step is aimed at bringing back retail traders, who are more impacted by higher costs of contracts. With the market trading range-bound in the past several weeks, the current exposure margins made it difficult to make money,” said Amit Gupta, derivatives strategist at retail broking firm ICICIdirect.

F&O margins comprise initial or SPAN and exposure margins. Initial margins are calculated by a software called SPAN, which is revised 6 times a day.

“As there is nothing that can be done to SPAN margins, the best way to encourage retail participation is by reducing exposure margins. With smaller lot sizes and more mid-cap stocks in the F&O list, there is a possibility that retail traders may come back to stock futures and options,” Mr Gupta said.

Sebi last revised exposure margins in October 2008 during the financial market crisis, following the Lehman Brothers collapse. Then, the market regulator increased exposure margins for stock derivatives to 10% from 5% to discourage retail traders from betting on stocks in volatile markets. Since then, retail traders mostly used the less-riskier index options to bet on the market.

“The step will boost intra-day volumes in stock derivatives. Traders have been loaded with costs such as SPAN margins and even mark-to-market margins in case of losses. So, a cut in exposure margins would be of great relief to them,” said Alex Mathews, head-research, Geojit BNP Paribas Financial Services.

Total number of contracts traded in stock futures and options in 2009-10 (April 2009-March 2010) were about 16 crore compared with 23.5 crore in 2008-09. In the current financial year starting April 1, 2010 to date, total number of contracts in stock futures and options was over 4.5 crore.

F&O traders say alternating bouts of volatility and range-bound movement in share prices for the past many months has led to most retail investors cutting down exposure to stock and index futures. This has set off a vicious cycle, where low liquidity further discouraged traders from betting on futures. When liquidity is low and prices move in a narrow range, traders are unable to exit their positions quickly enough and often end up suffering a loss.

India Banks

BGR Energy Systems

Daily Market Outlook - July 8 2010

TIL

Daily Technicals - July 8 2010

SGX Nifty jumps very high

Voltas

Heritage Foods

DB Corp

Essar Oil, Greaves Cotton, Jubilant Organosys, Persistent Systems, Dewan Housing, Uflex

Bharat Forge: Set to gain from revival

Analysts' corner

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Trading desk

Reliance Capital
Current Price: Rs 760
Target Price: Rs 785

The stock appears to have bottomed out at least temporarily and should see an uptrend over the next two or three sessions. The initial targets would be in the range of 785-790, though the closing price today may not be able to sustain above 785. Keep a stop at 752 and go long. Increase the position between 765 and 768. Start booking profits above the 785-mark.

Sesa Goa
Current Price: Rs 347
Target Price: Rs 330

The stock had an aborted uptrend on Tuesday, hitting resistance at 355. It has a downside support till around the 340-mark. If 340 is broken, the stock could fall till 330 — but this will probably take more than one session. Keep a stop at 350 and go short with an initial target of 340. If you can hold overnight, book partial profits at 340 and hold the residual position with a new target of 330 and a reset stop loss of 345.

DLF
Current Price: Rs 279
Target Price: Rs 265

The stock has broken a key resistance at the 280-281 mark. It has a potential target in the 260 zone, but has supports at 265 and at 272. It is likely to break the first support at 272 and test the 265 support. Keep a stop at 285 and go short. Increase the position between 270 and 272 and reset the stop loss to 275. Start booking profits between 265 and 267.

The target price and projected movements given above are in terms of the next one trading session unless otherwise stated

Src: HDFCSEC, ET and DP blog and Smartinvestor

Morning calls

Shell-shocked investors dump RNRL


MUMBAI: Traders and investors in Reliance Natural Resources, or RNRL, watched in dismay on Monday as more than a fourth of the company’s market capitalisation was wiped out in what is being seen as a strong response to an unfavourable share-swap ratio with group firm Reliance Power.

The stock crashed 27% to close at Rs 46.40 as investors reacted to Sunday’s announcement that shareholders of RNRL would get one share in Reliance Power, also controlled by billionaire Anil Ambani, for every four shares they hold in the natural gas supplier. Most RNRL shareholders and analysts had counted on a swap ratio of one share of Reliance Power for every three they held in RNRL.

RNRL’s fall on Monday figures high in the list of stocks that have been pummelled the most in a single trading session. Realty firm Unitech is perched on top with its stock having slid 51% in October 2008 followed by Chennai-based pharma company Orchid, which slumped 39%.

Brokers say the stock could be under further pressure in the near term as many traders have heavily short sold the July futures. In short selling, an investor or trader sells a stock he does not own, betting on buying it later when the price slides.

Interestingly, the outstanding positions in RNRL July futures declined 7% while the futures closed at a premium of Rs 0.15 to the spot price. According to market participants, this indicates that many traders had squared off their short positions by purchasing the falling futures. They added these traders would have short sold the futures last week, in anticipation of an unfavourable merger ratio.

'RNRL shareholders stand to gain'

These traders are upset at what they reckon is an attempt by promoters to place their interests ahead of minority shareholders. Promoters control close to 85% in Reliance Power, and about 55% in RNRL.

Reliance Power CEO JP Chalasani told television channels that RNRL shareholders would benefit in the long run because of their exposure to the generation portfolio of R-Power.

More @ Shell-shocked investors dump RNRL


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Analysts' corner

Trading desk

BHARTI AIRTEL
Current price: Rs 267.5,
Target price: Rs 275

The stock seems to have made a mini upside breakout and it should have a target of Rs 275 on Tuesday. Keep a stop at Rs 265 and go long. Add to the position between Rs 269 and Rs 270. Start booking profits above Rs 274. If the scrip can close above Rs 275 on Wednesday, it will have a potential upside till Rs 285. This is worth bearing in mind if you can hold a futures position. On the downside, if support at Rs 263-265 is broken, the scrip could drop till Rs 255.

ONGC
Current price: Rs 1,285,
Target price: Rs 1,270

The stock is reacting after testing Rs 1,350 on the upside. It has hit what should be reasonable support at the first Fibonacci level. The pattern suggests a fall till Rs 1,270 (roughly the next Fibonacci level). The futures (Rs 1,295) is at premium to spot. Short the future with a stop-loss at Rs 1,305 and a target of Rs 1,270. Increase the position below Rs 1,285 and clear below Rs 1,270.

TATA STEEL
Current price: Rs 471,
Target price: Rs 460

The stock is still in a downtrend. The futures (Rs 464) is at discount to the spot and a target projection to the Rs 450 level can be made. In this case, it may be better to short the spot, though the position can't be rolled over. The one-session target could be about Rs 460. Take a short position with a stop-loss at Rs 477 and increase it below Rs 468. Start taking profits below Rs 462.

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Src: ET and Etc

Market cautious over rate hike, global mood

Market cautious over rate hike, global mood

MUMBAI: Banks, real estate and automobile shares could lead the stock market lower on Monday, after the Reserve Bank of India (RBI) raised interest rates sooner than expected to combat inflation.

With the Reserve Bank of India expected to go in for another increase in policy rates during its upcoming review on July 27, the market undertone is cautious, as investors fear these rate hikes may hamper economic growth. Weak global markets last week may also contribute to the subdued mood in the market.

Trading is seen light on Monday, as the nation-wide strike by opposition parties, protesting the recent fuel price hikes, would impact attendance in broking and investment houses. But market participants don’t expect any sharp fall throughout this week, unless the situation in European economies worsen.

“RBI had to make this move to curb inflation. So, it will be factored in after the initial shock,” said Jitendra Panda, assistant vice- president, Motilal Oswal Financial Services.

RBI on Friday evening raised the repo rate — the one at which banks borrow from the central bank — and the reverse repo — the rate at which the RBI absorbs money from banks — by 25 basis points each, after the wholesale price index inflation rose to 10.2% in May from 9.6% the previous month.

US markets fell on Friday, as the first decline in monthly non-farm payrolls this year for June and the biggest drop in factory orders in 14 months for May heightened fears of a slowing economic recovery.

“A run of weaker data has renewed investor concerns about the durability of the global recovery. We would caution against any substantive re-evaluation of the economic outlook, however,” said Barclays Capital, in its weekly note.

Back home, banks, real estate and auto shares could drop on concerns the rate hikes could dampen demand for loans, homes and vehicles.

Meanwhile, the boards of Reliance Power and Reliance Natural Resources (RNRL) on Sunday decided to fix the merger swap ratio at 1:4. The merger swap ratio is in line with the two companies’ market capitalisation, or the value of the total shares at ruling market price.

At Friday’s close, RNRL’s market capitalisation stood at Rs 10,394 crore, nearly one-fourth of that of R-Power’s Rs 41,979 crore.


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Reliance Power, RNRL merger ratio fixed at 1:4

Rate hike, rains and corporate results to shape the market

State-owned OMCs may revise fuel prices every fortnight

Check out stocks that are expensive but good for investors

Stocks which are expensive but still good for investors
5 Jul 2010, 0705 hrs IST

ET takes a look at stocks which are expensive but stil good for investors.

Bull's Eye: NIIT, Grasim Industries, Persistent Systems, Asian Paints, ITC
5 Jul 2010, 0415 hrs IST

Citi has upgraded NIIT from `Sell/High Risk’ to `Buy/Medium Risk’. It has set the target price at Rs 85 based on 15 times estimated earnings per share for September ‘11.

Ulips not favourable for policyholders of pension plans
5 Jul 2010, 0347 hrs IST, SKANDITA AGRAWAL

The new guidelines for Ulips are a mixed bag. While investors will gain from the higher insurance cover and reduced charges, it’s not favourable for policyholders of pension plans.

Max New York's pension plan 'SMART' not flexible in terms of features
5 Jul 2010, 0327 hrs IST, SKANDITA AGRAWAL

The cost of the product is a little high from the standpoint of the policy administration charges.

It is unlikely that Europeans economies will fail: Peter Staal
5 Jul 2010, 0248 hrs IST, Jigar Desai & Karan Sehgal

ET Intelligence Group caught up with Peter Staal, Head of Banking, Asia, Americas and the UK, ING Group.

Hindalco Industries good for long-term investment
5 Jul 2010, 0205 hrs IST, Abhineet Singh

Lower cost of operations, higher volumes and improved margins augur well for Hindalco. Investors with a long-term perspective can consider the stock.

Insecticides India looks attractive for long-term investors
5 Jul 2010, 0148 hrs IST, Parul Bhatnagar

Insecticides India is likely to gain from the increase in production capacities. The stock looks attractive for long-term investors.

Finolex Industries an attractive bet for long-term investors
5 Jul 2010, 0129 hrs IST, Ramkrishna Kashelkar

Finolex Industries' capex plans and higher cash earning ability make it an attractive bet for long-term investors.

Go for Hindustan Media Ventures only in secondary market
5 Jul 2010, 0116 hrs IST, Rajesh Naidu

Long-term investors should weigh the option of investing in Hindustan Media Ventures only in the secondary market.

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Indian stocks fare best among BRIC peers in first half of 2010

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GNFC

Monthly Report - July 5 2010

Astro View - July 5 2010

Daily Market Outlook - July 5 2010

Weekly Technicals - July 3 2010

Weekly Technical Report - July 5 2010

Fundamental Pick of the Week - July 5 2010

Weekly Watch - July 5 2010

Weekly Technicals - July 5 2010

Economy Calendar

Src: ET, Smartinvestor, HDFC Sec

Punters game for big play on IFCI counter

Market volatility rises as bears tighten grip


Nifty remained range-bound and was struggled to break the 5366 mark recorded on Thursday. A break above 5366 can lift the Nifty towards 5450 levels. But the chances are remote because the ongoing tussle between bulls and bears may end in favour of bears.

The daily declining open interest of Nifty put-call ratio (PCR) and volume PCR are in favour of bears. The increased implied volatility of Nifty put options at 5200 and 5100 clearly indicates weak market breadth. This can be re-confirmed if Nifty closes at or below 5214.

The NSE VIX is gaining upward momentum and represents uncertainty, which may rule for the time being in the market. The Nifty out-of-the-money call options have lower implied volatility than at-the-money call options, hinting strong call writing by bears.

On the put option side, higher implied volatility at out-of-the-money put option infers buying of put options. However, a decline in open interest of the in-the-money put options indicates profit-booking by put buyers on an intra-day basis because of lack of conviction about the future course of the market. The Nifty Bank Index is showing signs of fatigue and it can fall towards 9301-9100 levels.

With the given Nifty outlook, put-ratio-spread strategy on Nifty is more suitable. Buy one lot of July 5300 put at Rs 131 and sell two lots of 5100 put options at around Rs 65. The maximum profit will be around Rs 9,950 at 5100 level. The maximum loss of Rs 50 if Nifty moves above 5300 on July expiry, and the down-side break-even point will be at 4901.

This strategy is a classical example of delta-neutral strategy. The risk will be minimal in nature if we will recalculate the net deltas on a weekly basis to eliminate the trading risk completely.

(Alex Mathews, Head-Research, Geojit BNP Paribas Fin Svcs)



Heard on the street: Punters game for big play on IFCI counter

Punters game for big play on IFCI counter

Who says defensive stocks belong only to the fast moving consumer goods (FMCG) and pharmaceutical sectors? If a handful of influential market participants get together, they can confer that tag to any stock of their choice, or so it appears.

IFCI is turning out to be one such stock which operators turn to for a quick buck in uncertain market conditions. The stock has been a happy punting ground for day-traders, operators and short-term institutional players right for some years now.

It is usually a safe haven for bull traders who take up positions and spread rumours about favourable government policies. By the time smaller players realise they have been taken for ride, the big fish have already cashed out. This has been the pattern at the counter for at least three or four times a year since 2007.

The latest buzz is that IFCI will be granted a banking licence in a few days. Volumes in the stock have surged in the past couple of sessions, with nearly 4 crore shares being traded on the National Stock Exchange (NSE) alone.

The stock held firm in a falling market to close at Rs 57.80, up 1.5% over the previous close. Either the smaller punters are being set up for the kill, or the big boys are accumulating shares on privileged information.

HPCL may find pride of place in Nifty, again

What goes round comes around, and this seems especially true of some of the stocks that form the benchmark indices. Speculation is that the renewed interest in oil marketing shares could eventually lead to a higher weightage for the segment in the Nifty.
Hindustan Petroleum (HPCL), which was excluded from the index in 2007, is being talked of as one of the possible entrants. If the stock does manage to re-enter the Nifty, it will become the second company since Hero Honda to achieve that distinction.

However, some market players are sceptical if HPCL will be able to regain its place, since the oil sector is already well represented in the index by Reliance Industries, ONGC, Cairn and Bharat Petroleum.

There is also speculation of some stocks being excluded from the Nifty, with Suzlon Energy topping the list of probables. The stock on Thursday has the least weightage in the Nifty, with market capitalisation down 85% from its peak of Rs 65,459 crore seen in January 2008.

(Contributed by Santosh Nair)

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Top 5 picks I Mid-term picks I How to invest in gold

RCOM acquires Digicable in all-stock deal

Infosys - Top Pick

Tata Chemicals, India Autos

How To Write A Business Plan

HCC - Lavasa Visit

Petronet LNG

Annual Report - ITC - 2009-2010

Technical Calls - July 2 2010

Dish TV

Daily Market - July 2 2010

Technical Watch - July 2 2010

Daily Derivative Strategy - July 2 2010

Daily Technical - July 2 2010

ITC

Oil India

ICICI Bank

AMD Metals

Cadila Healthcare

Nifty fall may accelerate below 5220

ANALYSIS: Alembic to demerge pharma biz




Src: EConomictimes, Smartivestor, DP blog and etc

Shoppers Stop: Profiting from rising consumption

Stock and Market Views

Global crisis won’t affect India much: Macquarie Capital


Michael Carapeit, ED and global head of Macquarie Capital, is no stranger to India. Of Armenian descent, Mr Carapeit was born in Kolkata and studied in the city till 1974, after which his family migrated to Australia. His message to Indian companies looking to expand overseas is: dominate your home market before setting your sights abroad. In an interview with ET, Mr Carapeit says that the second half of 2010 will be much better for equity markets globally. Excerpts:

Is the worst of the European debt crisis over? Do you see some more unpleasant surprises?

We have a pretty good view of what the issues are, but the actual solutions are country and organisation-specific. From our point of view, we broadly see the economies moving into a positive territory. There will always be pain and there will always will be good times, regardless of market sentiment.

From an investment banking point of view, there are lots of M&A transactions happening right now, be it in the financial institution space or governments privatising infrastructure and utilities. A falling euro has seen many manufacturing firms across Europe becoming very competitive on a pricing basis than they would have been 18 months ago.

In Asia, we have a high single-digit growth and the actual ability to now source quality European equipment far more cheaply. It is a much more compelling proposition, and as a result, we see the manufacturing sector in countries, such as Germany, doing quite well. Financial services are going to be a challenge for a while, and obviously, the sovereign debt problem is there for everybody to see.

Do you see more M&As happening from Asia into Europe?

Yes, much more. We have seen Indian companies do this progressively over time. Larger players have had international operations for a while. The strategic issue for many companies is when you have such strong domestic demand where do you allocate your scarce capital.

In my opinion, unless you dominate your home market, it’s pretty hard offshore. I see many companies, very often, say that well, the domestic market is very competitive, so let me try elsewhere. It is quite rare that a niche player in the home market can go offshore and suddenly become successful.

How do you see India faring relative to other emerging markets?

Very well, actually. The vast majority of the Indian economy is driven on a domestic basis. While not totally immune to what is happening around the world, it is a much more domestic demand-driven story rather than an international story for most of your companies.

Mega companies that have operations around the world will have to take these changes into account. The bulk of the Indian economy and majority of the Indian companies are going to see a 7-8% growth this year and if you are linked to GDP that is quite a good place to be to what is happening elsewhere.


More @ Global crisis won’t affect India much: Macquarie Capital




Nifty may get good support around 5200

India to become a bigger economy than others: HSBC

Buy Alstom Project at current levels: Mileen Vasudeo, Angel Broking

Buy Aurobindo Pharma for a target of 955: Huseini Vadharia, Techno Shares and Stocks Ltd.

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Daily Derivative Strategy - July 1 2010

Daily Technical - July 1 2010

Technical Watch - July 1 2010

India Strategy, Bharti Airtel, Banks

100 Billion Dollar Club

Media shares in limelight as Trai recommends 74% FDI in broadcast carriage services

Analysts' corner


Trading desk

Tech view: Bias positive above 5300

Alok Sheel: Fiscal paradoxes

STOCK ANALYSIS: JSW Energy

Jyothy Labs: The complete value chain



Src: ET, DP blog and SMartinvestor

On the verge of a collapse

On the verge of a collapse

With the S&P 500 now closing at a new low for the year 2010, the US markets are now on the verge of a collapse. A clear downward break out has not happened in the Dow as yet, but if the neckline of the head and shoulders formation breaks, it could be catastrophic in these days of high frequency trading market that shoots first and asks questions later.

The S&P closed at 1041 after touching 1035, a fall of 33 points or 3.10%. What’s more important, it closed below the closing low of 1050 (7th June) and broke the intraday low of 1040 (25th May).

The Dow closed at 9870 after touching 9812, a fall of 268 points or 2.65%. The Dow’s lows are still intact. The closing low of the Dow is 9816 (7th June) and intraday low of 9757 (8th June).

The technical behavior of the markets yesterday had more do with fundamentals than mere weak technical of Asia.

The Conference Board, a private research firm, on Tuesday cut its leading indicator index for China, sending stocks and commodities across the globe sharply lower. The research group said it revised down the index - which aggregates six indicators that measure economic activity in China -- to growth of 0.3% for the month of April, down from the previously reported 1.7% gain. With the revision, the index has now slowed from March's 1.2% rise. The research firm cited a "calculation error" for the dramatic change.

Also weighing on the Chinese market, Agricultural Bank of China's initial public offering saw a lower-than-expected pricing range.

European markets fell as investors eyed the $545.5 billion coming due for banks to the European Central Bank on Thursday. In addition to concerns about whether banks will be able to meet their repayments, investors also worried that debt obligations would leave banks with liquidity shortfalls.

A dip in the consumer confidence also made matters worse for the US markets as they ignored a 0.8% rise in home prices in April, according to the Case-Shiller home price index.

What happens to our markets?

Our markets had discounted the revision in the Chinese advanced economic indicators yesterday and by the close, a 100-point dip in the Dow was also accounted for. What has not been discounted is the lower levels seen by the S&P 500 and the possibilities of the Dow now going the S&P way in follow up trading.

Our markets have had buoyancy of their own with Government and the Reliance groups doing their bit to keep the embers hot. But one can’t swim against the current. So any larger positions in these recently loved stocks need to be pruned and those that have missed the bus earlier can try and get on one when these stocks reverse, with an eventual objective of either booking profits in the usual intraday rally that happens after the first two minutes of mourning or get their trades stopped out if the markets continue their fall.

From a fundamental perspective, while the US and European troubles ca still be resolved, there is no panacea for Chinese trouble, even acupressure. We, along with the rest of the world were waiting for the trouble signs to appear in the Chinese economic landscape. This is one.

In plain simple English, the times are getting tougher and we are sitting on huge gains. Don’t be greedy. Take them. Especially in the commodities.

Disclosure : No holdings or trading positions in stocks mentioned or recommended to clients

Check out small and mid-cap companies that offered higher returns

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Kotak Mahindra selling stake to SMFG for $296 mn

Heard on the street: Bajaj Finserv back on punters’ radar

Bajaj Finserv back on punters’ radar

Shares of Bajaj Finserv rose for the fifth consecutive session on Tuesday amid speculation that the company may retain a controlling stake in both its insurance arms even if foreign direct investment (FDI) norms in the sector are relaxed in the future. The stock closed at Rs 436.50, with around 15 lakh shares being traded on both the exchanges, more than twice the two-week average daily volume.

On the National Stock Exchange (NSE), less than one-third of the 10.46 lakh shares that were traded resulted in delivery, underscoring the speculative action on the counter. Bajaj Finserv has an agreement with its foreign insurance partner Allianz SE, whereby the latter can increase its stake in both the life and general ventures once the FDI limit is raised.

Bajaj Finserv currently holds 74% in both the insurance arms, while Allianz has 26%. The stock had taken a beating around 10 days ago when the insurance regulator clarified that Reserve Bank of India’s (RBI) pricing guidelines for equity share transfer to foreign investors will not apply to insurance companies.

Investors were worried that this will result in Allianz being able to hike its stake in Bajaj Finserv at a pre-determined price, which is lower than current valuations, according to analysts’ estimates. The stock had risen to a high of Rs 557.55 in May this year, as analysts felt RBI’s pricing guidelines will lead to higher valuations for the company.

Large mutual fund stocks up on Jay Shree Tea

A heavyweight mutual fund owned by a private sector bank is said to have bought Jay Shree Tea shares for one of its sector funds. The stock closed at Rs 295.30, down marginally over the previous close. The stock, however, has risen over 20% in the past one month, defying the volatile market trend.

Brokers tracking the fund house say it has been a regular buyer in fast moving consumer goods over the past month. But much of these purchases have been of short-term nature, with the fund house sometimes booking profits within a week.

ICICI Pru’s PMS head may move to Reliance MF

Shahzad Madon, who previously headed the portfolio management services (PMS) division of ICICI Prudential Asset Management, is said to be joining Reliance Mutual Fund (MF) as head of its PMS division. Madon, who is learnt to have put in his papers at ICICI Prudential earlier this month, could not be reached for comment. Reliance Mutual Fund officials too were not available for comment.

(Contributed by Deeptha Rajkumar, Harish Rao & Nishanth Vasudevan)

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Prime Focus

Aurobindo Pharma - rerating on the cards ?

India Insurance - danda padgaya

Adhunik Metaliks - good upside

Nahar Spinning Mills


Tech view: More losses seen in Bank Nifty

Src: ET, DP blog and HDFC Sec

Fuel price hike may be big drag on Dalal Street

Fuel price hike may be big drag on Dalal Street

MUMBAI: Domestic shares may be under pressure early this week on fears that the government’s decision to hike fuel prices will boost inflation. Investors are concerned that a further rise in prices could prompt the Reserve Bank of India (RBI) to take stronger steps in monetary policy to combat inflation. Shares of automakers are likely to be subdued on concerns that higher fuel prices could dent demand for vehicles. Shares of oil marketing companies (OMCs) such as HPCL, BPCL and IOC and explorers, including ONGC, could rise. “We may see these stocks (oil) going higher in the next few days because they had been lacklustre for a very long time,” said Ambareesh Baliga, vice-president, Karvy Stock Broking. He added that auto stocks should be avoided, as they will see some profit-booking, after a good rally in the past few weeks. Though the move to raise oil and gas prices is expected to improve the government’s finances in the long run, a section of the market is concerned about the timing of the increase, as inflation is still high. Also Read → ONGC, IOC could hit market soon with FPO → How to make exit decisions in volatile market → Private oil companies to go full throttle with expansion Inflation, as measured by the wholesale price index (WPI), rose to 10.16% in May. A silver lining for the stock market would be the better-than-expected progress in the monsoon, which is likely to bring down food prices. “A good monsoon will take care of food inflation and will boost the agricultural sector, which is one of the key constituents of economic growth,” said Mr Baliga. Mid-cap shares are likely to see more activity than their frontline peers, if futures and options data are any indication. “There have been aggressive rollovers in the mid-cap space. So, they will witness an increase in trading activity in the days to come,” said Bhavin Desai, manager-derivatives, Motilal Oswal Financial Services. Analysts said the drop in volumes in the futures segment, despite a strong rollover to the July series, suggests investors have become more risk-averse. Global investors will closely watch the outcome of the G-20 meeting over the weekend. On Friday, overseas markets ended weak on concerns that the decision by European governments to cut down on spending and increase taxes could delay global recovery.

Greek crisis, inflation and rate hike may impact India's economic growth
28 Jun 2010, 0539 hrs IST

Pace of India's economic growth depends on growth in global economy and its impact on Indian economy through trade linkages.

UTI Leadership Equity a highly conservative equity scheme
28 Jun 2010, 0537 hrs IST, Bakul Chugan Tongia

UTI Leadership Equity’s extremely conservative play has led the fund to miss out on some of the brilliant opportunities.

Financial planning can limit the impact of job loss
28 Jun 2010, 0537 hrs IST, Amrit Mathur

Loss of employment is a difficult period for salaried individuals and their families, but suitable financial planning can limit the impact.

Technofab an attractive bet for investors
28 Jun 2010, 0536 hrs IST, Shikha Sharma

Technofab seems to be an attractive bet for investors considering its strong order book and superior EBITDA margins.

Bull's eye: Sintex Industries, Bank of India, Dish TV, Gruh Finance, HDFC Bank
28 Jun 2010, 0535 hrs IST

JP Morgan initiates coverage on Sintex Industries with an `Overweight’ rating and a target price of Rs 435.

Long-term investors can consider Parenteral Drug
28 Jun 2010, 0534 hrs IST, Jwalit Vyas

Given its growth prospects, Parenteral Drug’s stock looks reasonably priced at the current levels. Long-term investors can consider the stock.

Some upside still left in Ess Dee Aluminium
28 Jun 2010, 0533 hrs IST, Abhineet Singh

Given the pace of growth in the organised packaging industry, there can still be some upside left for Ess Dee Aluminium's stock.

Cairn India lucrative for long-term investors
28 Jun 2010, 0530 hrs IST, Ramkrishna Kashelkar

With the commissioning of its pipeline, Cairn India’s profits are set to soar in FY11. Its growing resource base and focussed efforts on E&P make it lucrative for long-term investors.

Deregulation of prices a relief to oil industry
28 Jun 2010, 0529 hrs IST, Ramkrishna Kashelkar

The government’s move to deregulate oil prices may give a sigh of relief to the debt-burdened industry. Investors of oil companies are also likely to benefit from this as they will be rewarded with good dividends in future.

GTL - Reliance Communication - Relinace Infratel merger details

Pidilite Industries

Weekly Outlook - June 27 2010

Src: ET and DP blog and etc

ET:Heard on Street

Heard on Street: Indian Hotels gains 3%

SBI ropes in six i-banks for $1 billion overseas debt

State Bank of India plans to raise $1 billion from overseas markets in July and has identified six merchant bankers for it. Insiders say that it’s not yet clear if the bank plans to raise money in the form of bonds or by issuing medium-term notes. The six merchant bankers include UBS, Bank of America Merrill Lynch, Citibank, Deutsche Bank, Royal Bank of Scotland and HSBC. Insiders say that the bank is likely to raise money for five years and the issue will be in the form of senior debt and not subordinated debt. This will be SBI’s first overseas borrowing this year, after the turmoil in European markets. Many Indian banks are following SBI’s overseas borrowing, since they will plan their overseas borrowing based on the pricing and the response that SBI receives for its forthcoming issue.

Indian Hotels gains 3% as ‘operators’ buy shares

Having taken losses on their trading bets due to the recent market volatility, market operators now seem to have turned to the tried and tested formula of investing blue-chips. The Old Fox of Dalal Street, and the operator who shares his first name with the Union Agriculture minister, are said to be accumulating shares of HLL, ITC and Indian Hotels over the past few sessions. Indian Hotels shares rose 3% to close at Rs 104.80. On the BSE, 5.41 lakh shares were traded, compared to the two-week average daily volume of 1.75 lakh shares.

Domestic funds use rally to book profit in Sesa Goa

Select domestic mutual funds were seen booking profits in Sesa Goa on Thursday. The stock gained close to 1% to Rs 378.95, after touching an intraday high of Rs 385.90. According to dealers, these funds had bought Sesa Goa shares at around Rs 320-325 almost a month back, when the stock was reeling under selling pressure led by a fall in global commodity prices. In the past week or so, the stock has risen roughly 7%. Analysts don’t recommend buying the stock at these levels citing steep valuations.

Contributed by Sangita Mehta, Santosh Nair & Harish Rao



Aqua offers action-packed fare


Aqua Logistics, a recently listed mid-cap player in the logistics sector, is witnessing higher investor interest following the current boom in demand from key user industries including auto, construction and pharma.

The stock touched a 52-week high of Rs 545 intra-day on Thursday before it ended the day at Rs 541.3. Since its listing on February 23, the stock has more than doubled compared to an 8.7% rise in the broader Sensex.

During the same period, the stock of its larger peer Transport Corporation of India gained 32% while Allcargo Global Logistics scrip declined 6.2%.

Apart from the strong growth in the domestic economy, investor sentiment has also been boosted by Aqua Logistics’ recent expansion into the booming East Asian market. As part of this strategy, Aqua Logistics had recently completed the acquisition of a 60% stake in three Hong Kong-based companies for $7.1 million (nearly 32.5 crore). The company via its recent IPO had raised Rs 150 crore and funding this acquisition should not be a problem.

However, Aqua Logistics’ operating margin declined 40 basis points 10.1% in FY10, despite the year-on-year 51% jump in its income from operations. Pressure on its operating margin was due to higher operating expenses. Nevertheless, the company’s net profit increased 84% to Rs 20.5 crore in FY10.

Aqua’s stock may continue to see some more action in the coming days given its plans to split shares. The company’s board is considering the sub-division of its share, from the current face value of Rs 10. It is likely to declare the exact split ratio next week. Though the move will not change its paid-up capital, the number of traded shares will increase, adding to the stock’s liquidity.

In addition, the company plans to seek shareholders’ approval for a fresh issue of shares of a size not exceeding $70 million (nearly Rs 320 crore). Aqua’s stock currently trades at 37.7 times its trailing 12-month earnings. This makes it one of the most expensive stocks in the sector.

Godrej Properties: High-rise dreams

PNB: Next level of rationalisation

A healthy dose for your investment portfolio

Analysts' corner

SAIL

Steel Sector Update

IDFC - upside potential

KPIT Cummins

Persistent Systems

Daily Technicals - June 25 2010

Direct Tax Code 2.0

Container Corporation

Src: ET , Smartinvestor, DP blog etc