Pre-Market: Stocks to open flat on mixed global cues

Pre-Market: Stocks to open flat on mixed global cues



MUMBAI: Stocks are likely to open flat-to-positive on Thursday amid mixed cues from global shores.

“Nifty continued to hold its positive momentum as strong leadership was seen in metals, oil & gas and banking stocks. Market volumes also picked up and it seems that bulls have taken control of the market. If in the near term, Nifty manages to hold 4,825 then it’s quite possible that this rally could extend further 5,050 levels.

The daily RSI and MACD are also giving positive signs indicating that this intermediate uptrend will continue. Strong support seen at 4,860-4,825 and stiff resistance at 4,950, this positive trend could get reverse only if Nifty closes below 4,800,” said Nirmal Bang Securities.

US stocks rose on Wednesday as stronger-than-expected earnings from companies, and upbeat economic data fueled bets that the recovery will bolster corporate profits. The Dow Jones Industrial Average rose 40.36 points, or 0.39 per cent, to end at 10,309.17. The Standard & Poor's 500 Index climbed 4.64 points, or 0.42 per cent, to end at 1,099.51. The Nasdaq Composite Index rose 12.10 points, or 0.55 percent, to 2,226.29.

Stocks across Asia were trading with marginal losses. The Nikkei slipped 0.12 per cent, Topix lost 0.14 per cent, Kospi shed 0.21 per cent and Straits Times fell 0.61 per cent.

Back home, equities ended above psychological resistance levels on Wednesday, taking cues from positive global markets. All the sectoral indices ended in the green led by metals, banks and capital goods.

Bombay Stock Exchange’s Sensex closed at 16428.91, up 202.23 points or 1.25 per cent. The index touched a high of 16480.49 and low of 16228.91.

National Stock Exchange’s Nifty ended at 4914, up 58.25 points or 1.2 per cent. The broader index hit a high of 4929.70 and low of 4857.60



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Stocks of MNCs sizzle on delisting hopes

18 Feb 2010, 0812 hrs IST, VIJAY GURAV,ET Bureau

MNCs gained between 2% and 26% compared to a 6% fall in Sensex since Jan 1. Top 5 picks | MNCs that outperformed Sensex |

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Heard on the street: Punters jack up spot prices of new F&O members



Punters jack up spot prices of new F&O members

It was a busy day for punters, as they bid up prices of stocks that will be added to NSE’s futures & options list from Friday. Godrej Industries, Videocon Industries and Mundra Port were among the prominent gainers of the day, rising in the 7-9% range accompanied by heavy volumes. Inclusion on the F&O list means that punters get more time to play around with these stocks. Interestingly, Godrej Industries, Mundra Port and BGR Energy witnessed a higher-than-usual-delivery ratio on Thursday.

Short-covering fires up Tata Steel stock

A frenetic bout of short-covering fired up Tata Steel shares over 6% to Rs 584.90 on Wednesday. Many traders and a quite a few hedge funds are said to have gone ‘short’ on the stock, anticipating weak quarterly numbers. But with its performance turning out to be better than expected, these players had to cover up their positions. Among those caught on the wrong foot included a market operator who shares his first name with the Union agriculture minister.

‘Friendly circles’ buy Ruchi Soya shares

Huge blocks of shares changed hands at the Ruchi Soya counter on Wednesday. However, FIs were not involved on either sides of the transaction. Given that “friendly circles” are regularly active in
the stock, the market is not taking much notice of the bulk deals.

Insurers mop up shares of Manappuram General Fin

A couple of insurers are said to be accumulating shares of Manappuram General Finance. The buzz is that the Kochi-based NBFC’s proposed QIP will be priced at Rs 700 per share. Manappuram aims to a raise about Rs 300 crore through the equity issue, to be completed over the next 10 days.

Ranbaxy trades flat as market awaits earnings

Ranbaxy shares closed flat in a buoyant market on Wednesday, after having shot up over 7% the previous session. The company is set to announce its fourth quarter numbers next week. The talk doing the rounds is that a prominent domestic broking firm, known for its strong base of high net worth investors, has bought a sizeable chunk of the stock on behalf of its ‘bulge bracket’ clients. Are they betting on the quarterly numbers?

(Contributed by Santosh Nair & Shailesh Menon)

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Tax Saving - Planning Options for Employees

Daily News Roundup - Feb 18 2010

Avoid the risk

India Infrastructure

United Bank of India sets IPO price band at Rs 60-66 a piece

PVR

Top Stocks for 2010

NHPC

Stock Picks

Bharti Airtel Limited

Sugar Sector

Src: ET, DP Blog and etc

Sensex may drop to 12K: Shankar Sharma

Sensex may drop to 12K: Shankar Sharma


ET Now caught up with Shankar Sharma, Vice Chairman & Joint MD, First Global to seek his views on where the markets were headed in 2010 and

Not a good time to start buying Mid term picks Top 5 picks of the day Correction offers opportunities

which stocks could be an attractive bet. Excerpts:

Where do you see the markets heading where in a surprising pullback, we have broken that resistance level that we were tracking. We are past 4900 on the Nifty. Do you actually see the markets witnessing a further correction in 2010 and what kind of returns do you expect from equities, especially in emerging markets?

The pullback was very much in order because we had sold off from 17,500 to 15,500. It can easily pull back another 200-500 points on the Sensex. This year is the down year for equities and within the context, emerging markets will do worse than the US markets. The markets that did really well in 2009, that is the BRIC pack, will actually underperform the markets. The markets that did not do that well, like Taiwan or South Korea, have relatively more stable markets than the volatile BRIC pack markets. Overall, this year is the down year for equities by and large.

When you say a down year, what kind of correction do you see both in the short-term and in the long-term?

In the short-term, we definitely do see the markets in the first half coming down 20-30% from the highs of the year, which was 17,500. The markets could easily go down to 12,000-12,500 in the first half and from there, I suspect there will be some measure of recovery. Markets could still ultimately end the year down 10-15% from the close of 2009 which may be around 16,000, but that is a long call or a long short to make just yet. For now, markets are headed lower. However, once they have reached a certain level, then we will see if things have changed enough for them to rally all the way back to close enough to the levels of 2009 December.

Do you think that's going to be a valuation call or is it going to be liquidity driven because we have also just had news that LIC would be pumping in another Rs 15,000 crores by the end of March and other insurance companies are waiting to put more money in. Also, FIIs are bringing in the money. Do you still see corrections coming in?

When the markets sold out 2000 points, the money was still there. These are facile arguments that liquidity ensures the markets will never fall. Throughout the history of the world, there has always been liquidity chasing markets and not markets chasing liquidity and that's the way it is. If the markets have to fall, they will fall. It does not matter whether LIC puts in $2 billion or everybody in the whole world puts in money. I do not waste my time looking at liquidity at all, it makes no difference to broad market trends at all. It might make a difference to thinly traded Z Group stock but other than that, I do not see that being a factor. The overall situation globally is probably headed to be a lot worse than what we saw in 2008. At that time, particularly the second half, we saw the collapse of one investment bank which was not a huge investment bank by any standards, compared to the top 3-4. It was a smallish bank but that itself was large enough to bring down markets substantially and shake the entire world financial system.


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Valuation game hots up: Dozen cos trade at P/E of 100;
analysts chant caution


Tata Steel profit dips to Rs 473 cr




Src: ET

Heard on the street: Punters ramp up NMDC ahead of FPO

Heard on the street: Punters ramp up NMDC ahead of FPO


Punters ramp up NMDC ahead of FPO

The run-up in the share price of the NMDC counter over the past week has once again raised the bogey about valuations among investment bankers managing the company’s impending follow-on public offering. The stock hit a high of Rs 511.95 on February 10, with barely 50% of the trades resulting in delivery. This indicates that punters are ramping up the stock ahead of the FPO, and trying to get institutional investors to bid higher during the auction process.

Institutional investors are said to be showing interest in the stock only around Rs 200-220 levels. This has put the bankers to the issue in a spot, as the prevailing market price is closer to Rs 500. It seems unlikely if the government will be willing to divest stake at such a steep discount to market price.

The issue is said to have come up for discussion at a meeting between the company’s bankers and divestment ministry officials last Saturday. Government officials also debated the rationale for taking the French auction route for the NMDC issue, with some present at that meeting of the view that the methodology needs to be reviewed. NMDC shares closed flat at Rs 485 on Monday.

Traders lap up Titagarh on hopes of Budget boost

Day traders have apparently taken control of the Titagarh Wagons counter ahead of the Railway Budget on February 24. The trigger for the frenzied action in the stock, according to brokers, could be expectations of some measures that would have a positive impact on the company’s prospects.

Titagarh Wagons, one of the leading railway wagon manufacturers in the country, stands to benefit if the government announces introduction of new trains or any such proposal that would push up demand for the company’s products. The stock climbed 17% in just two trading sessions, before ending at Rs 466.6 on Monday.

The spurt in the share price took place amid a significant improvement in volumes as on a daily average basis, 25 lakh shares changed hands on Monday and last Thursday, compared to nearly one lakh shares in the previous two sessions. The interest in the counter, however, was mostly speculative as reflected in low delivery-based volumes. The delivery ratio — the percentage of shares actually delivered in the market — stood 10.7% on Monday and 6.3% on Thursday.

(Contributed by Deeptha Rajkumar & Vijay Gurav)


Src: ET

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Daily Newsletter - Feb 16 2010

Morning Note - Feb 16 2010

Bharti Airtel - Zain Deal

All India GSM Figures

India Budget Previews

Geodesic

Src: Deadpresident Blog

Bharti shares plunge 10% on Zain deal

Bharti to buy Zain's SA assets for $10.7 bn, street cautious

Bharti shares plunge 10% on Zain deal


MUMBAI - Shares of Bharti Airtel plunged nearly 10 per cent Monday as brokerages gave a thumbs down to the company’s deal with Kuwaiti telecom

Full Coverage: Bharti-Zain deal Stock quote: Bharti Airtel

Zain for its African cellular assets. Brokerages were concerned that the company’s $10.7 billion offer could strain its finances.

Bank of America-Merrill Lynch cut Bharti Airtel to ‘underperform’ from ‘buy’ after the mobile operator began its exclusive talks with Zain. The investment bank said the valuation seems rich, the growth outlook for Zain's African portfolio appears unexciting and a potential deal could materially stress Bharti's balance sheet.

Bharti announced Monday an offer to buy the African assets of Kuwait's Zain telecom for $10.7 billion. Bharti Airtel and Zain Africa "have agreed to enter into exclusive
discussions until 25 March, 2010 for the acquisition of Zain's African unit based on an enterprise value of $10.7 billion," Bharti said in a statement.

A consortium of Asian investors has for months been trying to buy Zain's stakes estimated to be worth $13.7 billion from Kuwaiti family conglomerate Kharafi Group, which is one of the main shareholders in Zain.

Meanwhile, Telecom Minister A Raja commented that the Bharti-Zain deal is good for the industry.

Also Read

→ Telecom sector under pressure; Bharti strongest of the lot: Deepak Mohoni

→ Bharti-Zain deal: Will Sunil Mittal be third time lucky?

→ Bharti to acquire 100% of Zain's African operations: Sources

→ Govt backs Bharti-Zain deal

Ambareesh Baliga, vice president at Karvy Stock Broking feels that the deal seems too expensive for Bharti and although the stock may stand to benefit in the long term, the short term is negative. “This looks a bit expensive for Bharti considering these are not extremely profitable operations. Those are future growth areas. But the growth will come only in 5-8 years time and in the short-term there is a risk of straining Bharti's balance sheet," said Baliga.

Giving a fundamental take on the deal, Romal Shetty, head- telecom, KPMG said, “Bharti’s bid is a step in the right direction to make its footprint in Africa. This is where the next round of growth is going to happen. India is becoming more and more saturated in the coming years. Africa is under-pentrated and has lesser competition thus making the Zean deal an attractive buy for Bharti.”

At 3 pm, shares of Bharti Airtel tumbled 9.11 per cent to Rs 285.85 in reaction to the deal.


Full Coverage: Bharti-Zain deal | Stock quote: Bharti Airtel

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Src: ET, Moneycontrol