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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Check out the Top 10 Fund Houses for the quarter

Market Watch: Nifty hovers around 4800; Bharti, Sterlite down

Inflation hits 14-month high at 8.56% in January

Tata Motors global sales grow by 93% in January

• Vascon Engineers slips below issue price
• Syncom H'thcare surges over 38% on listing

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Src: ET, Moneycontrol

Morning Calls

Short covering triggers rally

The market saw a technical pullback via short-covering ahead of a long weekend. The Nifty, which slid to a 2010 low of 4,675 points on Monday, closed at 4,826.85 for a week-on-week gain of 2.4 per cent. The Sensex closed at 16,152 for an identical gain. The Defty rose by 2.7 per cent as the rupee rallied from lower levels. Breadth was good with advances outnumbering declines for the week. However, volumes were low. The FIIs were heavy net sellers, counter-balanced to some degree by moderate domestic institutional buying. The BSE500 was up 2.4 per cent while Midcaps underperformed the major indices, rising only 1.8 per cent.

Outlook: The rally appears to have come on short-covering. There is significant resistance at 4,850 and if the FII attitude doesn’t reverse, there is every chance next week will open weak. On the downside, support between 4,650 and 4,700 remains crucial. On the upside, if 4,850 is broken, a rally till 5,000 is possible.

Rationale: A sharp jump on low volumes ahead of a weekend is characteristic of a short-covering rally. The market would need significant volume expansion to cross 4,850. If it does so, a move past 4,950 would suggest an end to the intermediate downtrend, which has lasted five weeks so far.

Counter-view: Most likely, shorts will be renewed and push the market down to the strong support in the 4,650-4,700 range, followed by range-trading between 4,650 and 4,850. But a dip below 4,650, and especially a close below 4,650, would be a serious danger signal. That would be a Southwards breach of the 200 Day Moving Average, which is between 4,660 (exponential) and 4,684 (simple), and perhaps, the beginning of a new bear market.

Bulls & Bears: The CNXIT index continued to outperform the overall market, gaining 3.6 per cent. The move here was sector-wide. The banking (and financials) sector underperformed, with the Bank Nifty gaining only 1.9 per cent.

Real estate saw a late rally, which could fizzle out soon. Metals saw short-covering, which may continue for a couple more sessions. Sugar and cement scrips also saw a rally as did auto-stocks and in all three cases, there could be a little upside. Oil production and exploration scrips saw speculative investments. In most cases, the rise came on low volumes and clearly seemed to be short-covering or buybacks following sales against delivery. However, a lot of stocks have consolidated at lower levels before moving up.

MICRO TECHNICALS

HIND OIL EXPLORATION
Current Price: Rs 269.95
Target Price: Rs 290

The stock jumped from Rs 229 to current levels in one session on massive volume expansion. This is an unusual, difficult to read pattern. On volumes alone, there should be an upside till Rs 290. Keep a stop at Rs 263 and go long. Raise the stop by 5 units for every 5-unit rise. Book at least 50 per cent profit at Rs 290.

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SESA GOA
Current Price: Rs 382.70
Target Price: Rs 405

The stock has rebounded from decent support between Rs 355 and Rs 365 to current levels. Volumes are average. If it can close above Rs 385, it has the potential to reach Rs 405. Keep a stop at Rs 375 and go long. Add to the position above Rs 385. Book profits at Rs 405.

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ORIENTAL BANK
Current Price: Rs 274
Target Price: Rs 255

The stock has shown volume expansion and a lot of volatility, while ranging between Rs 250 and Rs 290 in the past few sessions. It is likely to see a downside in the next week, till at least Rs 265 level and maybe till Rs 255. Keep a stop at Rs 280 and go short. Cover 50 per cent of the position at Rs 265 and reset the stop till Rs 270.

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JP ASSOCIATES
Current Price: Rs 132.65
Target Price: Rs 140

The stock has bottomed out close to the current levels and it may be set for another up move. A technical recovery to the Rs 140 level is possible. Keep a stop at Rs 130 and go long. Volumes are not great. So a move past resistance at Rs 140 is unlikely.

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UNITECH
Current Price: Rs 74.80
Target Price: Rs 70

Short-covering has pulled the stock up but this looks like temporary relief. Another selloff next week could push the stock back till support at Rs 70. Keep a stop at Rs 77 and short. Cover 50 per cent of the position at Rs 72 and clear the rest at Rs 70.

Analysts' corner 15-FEB-10 Educomp reported robust performance recording 37.2 per cent year-on-year growth in top-line in the December 2009 quarter.

Attractive risk-reward ratios 15-FEB-10 It appears that the current month premiums are under-estimating the likely volatility ahead of the Budget.

Short covering triggers rally 15-FEB-10 The market saw a technical pullback via short-covering ahead of a long weekend.

Risk and innovation 15-FEB-10 Capital market vision is important as it tells us where we want our markets to head tomorrow.

Costly pipes 15-FEB-10 Lacklustre track record, competitive industry and stiff pricing render Texmo’s IPO unattractive.

Pitching for value 15-FEB-10 Tripling of its capacity and moving up the coal tar pitch value-chain should help Himadri Chemicals meet demand and maintain margins.

Firing on all cylinders 15-FEB-10 ITC’s cigarette business, its cash cow, has been doing well with volumes growing at a robust rate for three consecutive quarters.

Flying higher 15-FEB-10 If the sector is able to control costs and maintain higher load factors going ahead, then consistent profitability could become a reality.

"Be stock-specific, expect moderate returns in 2010" 15-FEB-10 In a new series of interviews, Ajay Parmar talks to Rex Cano about the outlook for 2010, review of corporate earnings, upcoming Union Budget and his approach to investments.

Markets at a glance 15-FEB-10 Volatility was order of the day, as investors were uncertain about global cues.

Value picks 15-FEB-10 Despite the run up in markets in the last one year, many good companies are still available at attractive valuations.

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'Frontline stocks can rise by up to 35 pc'

Top 5 stock picks | Mid-term picks | D-St's Budget expectations

Nifty resistance zone seen at 4900-5000

Idea Cellular

Bharti Airtel

Videocon Industries

Investor Conference - Feb 14 2010

Tulip Telecom

Transformers & Rectifiers

Consolidated Construction Consortium

Weekly Support and Resistance Levels - Feb 14 2010

SAIL

Cairn India

Src: ET, Business-Standard, DP Blog and etc

FIIs cut exposure to India, shift to safer markets

FIIs cut exposure to India, shift to safer markets

MUMBAI: The Indian stock market has witnessed net foreign fund outflows of Rs 3,550 crore since the start of 2010, making it one of most badly hit markets among emerging markets. A desire to shift a part of their money to safer dollar-denominated assets in the wake of the recent credit turmoil in Europe, concerns over further weakening of the rupee and stretched equity valuations have led foreign portfolio investors to cut their exposure to domestic equities. With a net withdrawal of $754 million in 29 trading sessions (since January), India trails just behind Taiwan ($2,488 million) in terms of foreign outflows, according to Bloomberg. Indonesia and Thailand, with net outflows of $238 million $294 million respectively, are among the other Asian market that have seen foreign capital outflows since the beginning of this year. Around $3 billion has been redeemed from the entire emerging market cluster during the first week of February, say market experts. While much preferred Asian equity hubs witnessed a sell-off, dormant markets like Japan, Philippines, Vietnam and Pakistan witnessed investments flowing in from foreign portfolio investors. South Korea logged inflows to the tune of $290 million since January while the surprise package was Japan, which witnessed inflows worth a whopping $18,868 million. Even if one takes a shorter time-frame from February, Japanese funds were winners as they witnessed seven consecutive weeks of net inflows. Key benchmarks in Japan, Vietnam and Philippines currently trade at 6-12 times price-to-earnings (P/E). In India’s case, despite a near-10% correction, the local market still commands a premium valuation of 20 times trailing P/E, making it a fairly-valued zone for any class of investor. “Japan currently offers investors a chance to gain on currency arbitrage. Moreover, asset prices (especially equities) in Japan are cheap. Astute cross-border investors will try to make most of this situation by moving their investments into Japanese shares,” said Gopal Agarwal, equities head, Mirae Asset Global Investment. In India’s case, according to market experts, the sell-off has been more because of global factors and stretched stock valuations. The sell-off in key emerging markets like India started after US President Barack Obama decided to limit financial risk-taking by banks. The sell-off aggravated after the credit crisis in Greece and Portugal. The hardening of the dollar also resulted in foreign investors shifting their rupee-based investments to dollar denominated assets. A rise in (dollar) value (against the rupee) increases the borrowing cost for foreign investors who had borrowed dollars to invest in Indian market. They exit their rupee investment at higher levels, pocketing currency value differential along with portfolio gains, if any. “Investors will start coming back once the rupee moves up to 48 - 49 levels,” said Mr Agarwal. Echoing his views, Ambareesh Baliga, vice-president, Karvy Stock Broking said: “FIIs are likely to stay away from Indian shares until there is clarity in world markets. It may be 2-3 months before they start reinvesting in Indian shares,” he said. According to Mr Baliga, while the market may not see a deep fall from current levels; it probably will be locked in a narrow range at lower levels. Investors should be cautious while investing in these markets, he added.

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India Strategy - Feb 13 2010

NTPC

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Dabur India

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Capital Goods and Engineering

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Src: ET, DP Blog and etc

Record industrial growth strengthens case for stimulus exit

Record industrial growth strengthens case for stimulus exit


With the Index of Industrial Production (IIP) rising 16.8 per cent on the back of record manufacturing growth, the pressure has increased on the government and the Reserve Bank of India (RBI) to consider an early exit from the stimulus measures of the past 15 months.

Manufacturing, with an almost 80 per cent weight in the index, grew 18.46 per cent compared to a 0.6 per cent decline in the same month in 2008.

The electricity sector, however, grew far more slowly at 5.4 per cent (up from 1.59 per cent a year ago), prompting analysts to suggest that the industrial recovery was not broad-based enough to merit an immediate withdrawal of stimulus measures.

The mining sector’s 9.5 per cent growth was below double-digit levels, recorded three times in the previous six months, but much higher than the 2.17 per cent growth achieved in December 2008.

Manufacturing growth was propelled by the robust performance of capital goods (38 per cent), consumer durables (46 per cent) and intermediate goods (21.7 per cent). In sharp contrast, consumer non-durables grew only 3.7 per cent, once again pointing to the narrow base of the industrial recovery.

	Mining	Mfg	Elcty	General
2008-09	2.6	2.8	2.8	2.8
2009-10	8.5	9	5.8	8.6
(Apr-Dec)

The low base effect — industrial output in December 2008 fell a quarter per cent — also contributed to the record December numbers. On a month-ago basis (with no seasonal adjustments), however, the December 2009 performance showed an industrial growth rate of 10.81 per cent, the highest since the industrial slowdown began in the third quarter of 2008.

On a month-ago basis (with no seasonal adjustments), however, the December 2009 performance showed an industrial growth rate of 10.81 per cent, the highest since the industrial slowdown began in the third quarter of 2008.

Finance Minister Pranab Mukherjee expressed satisfaction at the numbers and said the third-quarter GDP growth numbers would be strengthened by the IIP figures. “It is quite encouraging and I do hope that the third-quarter GDP figures will also be encouraging…It will get reflected in the overall GDP,” Mukherjee told reporters.

Mukherjee’s statement comes after several positive economic indicators were released during the week, all of which augured well for private investment prospects. These indicators included the sharp rise in the business confidence index to a two-year high, a 14 per cent growth in exports and a healthy flow of foreign investments estimated at over $20 billion in the first nine months of the current financial year (compared to $21 billion last year).

Exuding similar optimism, D K Joshi, Crisil India’s principal economist, said: “It is definitely better than any forecast. The high growth in manufacturing and consumer durables have been sustained and that is a big positive surprise”.

Joshi added a caveat, however, observing that “The data is getting more and more broad-based but it still continues to be quite narrow”. He also pointed out that the base effect had a role to play in the December numbers and sustaining the high level would be difficult even though the month-on-month growth would continue.

Jyotinder Kaur, economist with HDFC Bank, differed. “The numbers are encouraging because they clearly point to a sequential spurt and it is across the board. Considering the strong performance in the past few months the numbers have reached a level where they are not purely driven by stimulus measures. So the growth, even though not this high, can be sustained with a gradual pull back of the stimulus,” said Kaur.

Some analysts also suggested that the number might lead to a rise in policy rates by the RBI before the fourth quarter policy rates.

“With industrial production growing at a record pace, capital goods production surging, business confidence high and foreign direct investment rapidly returning, there are now a number of signs that private investment is set for strong growth. This should facilitate the RBI putting a greater focus on inflation. The current situation no longer necessitates a repo rate of 4.75 per cent and a cash reserve ratio of 5.75 per cent, which are low by historical standards and more appropriate for a slow recovery scenario,” said Nikhilesh Bhattacharyya, economist with Moody’s economy.com.

The cumulative growth rate for April-December of the current financial year stands at 8.6 per cent against a low 3.6 per cent during the corresponding period in the previous fiscal. Industrial growth, on a cumulative basis, for the third quarter of the current fiscal stands at 13 per cent,compared to one per cent in the comparable period last year.

Consumer durables led the growth in manufacturing by expanding at a significant rate of 46 per cent in December 2009. The sector had contracted 4.2 per cent in the corresponding period in 2008. Consumer non-durables also showed a marginal acceleration in growth rate at 3.7 per cent compared to 3.2 per cent last year.

Intermediate goods, which were the worst hit due to the downturn and had contracted 8.9 per cent in December 2008, also posted a robust growth of 21.7 per cent in December 2009.

Src: Business-Standard

Europe prepares to help Greece out of crisis

Europe prepares to help Greece out of crisis



BRUSSELS: EU leaders are under increasing pressure to lend support to cash-strapped Greece when they meet in Brussels on Thursday, with attention increasingly on offering financial guarantees to soothe the markets.

On Wednesday, finance ministers from the European single currency area planned phone talks with European Central Bank president Jean-Claude Trichet, a European Commission spokesman said, in an attempt to firm up a deal.

So sensitive are the markets that the news Trichet was leaving a central bankers' meeting in Sydney early to attend the EU summit on Thursday was enough to bolster speculation that a deal was in the works.

That in turn eased worries over Europe's debt troubles and brought most markets higher following a rally on Wall Street.

It's the kind of boost that the EU leaders are hoping to encourage.

"At the moment it's a vicious circle," one EU insider said. "You have the Greek crisis, then massive media coverage that then leads to market movements which makes the crisis worse, which leads to more media speculation."

The 27 heads of state and government will begin meeting at 10:15 (0915 GMT) Thursday for their emergency summit focussed on the economic crisis in Europe.

The meeting was called by new EU president Herman Van Rompuy, who is emerging from the self-imposed shadows where he has dwelt since his appointment to the post in December.

So far "there is no agreement" on a plan to help Greece, which is suffering under a massive budget deficit which is heightening fears that Athens will find borrowing increasingly difficult, one informed source said.

However the signs were multiplying that a support mechanism for Greece will emerge.

An official from the conservative party of German Chancellor Angela Merkel indicated that preparations were underway in Berlin for a support plan.

Germany is looking to lead an EU "firewall" to contain the Greek debt crisis, possibly by guaranteeing loans to calm fears of a government default, press reports said on Wednesday.

The Financial Times Deutschland said Finance Minister Wolfgang Schaeuble was working on both a bilateral basis and at the European level on putting together a package to help Athens.

A "standing facility" to show that money is available, a kind of cheque guarantee, is being considered to provide market confidence for Greece.

"If this can be done by providing some extra standing facility that may or may not in due course have to be used that would in itself be very helpful," one EU official said.

Athens is pressing on with efforts to slash expenditure and raise revenue to narrow its 12.7 percent deficit -- more than four times the eurozone limit of three percent of gross domestic product that a host of European countries are also flouting.

The Greek crisis has driven up borrowing costs for governments across Europe, with pressure mounting on a number of other heavily-indebted eurozone members, and sent the euro sliding against the dollar.

Royal Bank of Scotland economist Jacques Cailloux said a facility of 50 or 100 billion euros available to Greece would act as a useful riot shield.

Other forms of aid could also be considered.

Google gives Gmail a 'Buzz' to challenge Facebook, Twitter 10 Feb 2010, 0233 hrs IST, AGENCIES

Save Print EMail Share Comment Text:

Topics: Internet Google Facebook social networking Orkut Twitter Buzz

SAN FRANCISCO: Google on Tuesday gave its free email service a "Buzz," adding Twitter and Facebook style social networking features. Significant China related cyber events Timeline: Google's China woes Google's new Wave Google Google Chrome Brain behind Google Chrome Google Buzz product manager Todd Jackson equated the enhanced offering to "an entirely new world in Gmail" during an unveiling presentation at the Internet giant's headquarters in Mountain View, California. Buzz began rolling out on Tuesday with Google Web-based email service getting updates about what friends are doing online and ways to share video, photos and other digitized snippets with others of one's choosing. As is the case with wildly popular microblogging service Twitter, Buzz lets users "follow" people that share updates with the world. Google also unveiled a handful of new products designed to make the new social networking features suited to mobile devices, like smartphones based on Google's Android operating system. Also Read → Google warns Chinese knock-off to stop using logo → Disney, Google eye deal with China bus media firm → Google warns Chinese copycat website: report → Google facing many risks in standoff with China → Google, NSA to team up in cyberattack probe Google's move comes as a direct challenge to social-networking stars Facebook and Twitter, which thrive on enabling people to share experiences, activities and thoughts as they go through their days. In addition to the Buzz features for Gmail, Google said it is launching a special mobile application for Buzz, as well as weaving Buzz technology into the mobile versions of its flagship Web site and its maps products. Google has tried to ride the social networking wave before, launching the Orkut social network in 2004. But while Orkut is big in certain overseas markets, like Brazil, it has failed to attract as many users as social giants like Facebook and MySpace in the United States. In building a social network on top of an email product, Google is following in the footsteps of Yahoo, which has taken a similar approach in efforts to keep up with Facebook. Yahoo! added a similar feature to its email program, Yahoo Mail, last year, allowing users to see whether friends have uploaded a photo to a photo-sharing site such as Flickr. In what could signal an escalating battle between Google and Facebook, the leading social-networking service celebrated its sixth birthday last week with changes that included a new message inbox that echoes the Gmail format. Gmail is the third most popular Web based email in the world, with 176.5 million unique visitors in December, according to comScore. Microsoft Corp's Windows Live Hotmail and Yahoo Inc's Mail were No 1 and No 2, with 369.2 million unique visitors and 303.7 million unique visitors respectively.

Src: ET

Critical support at 4,650

Critical support at 4,650

Prices slid through last week in a series of high volume, high volatility sessions. The Nifty hit a low of 4,766 points before making a partial recovery to 4,882.05, for a week-on-week loss of 3.05 per cent. The Sensex closed at 16,357.96 points for a loss of 2.98 per cent. The Defty lost 4.8 per cent as the rupee lost significant ground.

The bearishness intensified towards the weekend with the market crashing on Friday. The Nifty hit an intra-day low of 4,692 points before closing at 4,718.35 on February 5 for a week-on-week loss of 3.35 per cent. The Sensex was down 3.46 per cent at 15,790.93. The Defty lost 4.05 per cent as the rupee dropped. (We have ignored the token trading on Saturday with less than Rs 2,000 crore of activity.)

Domestic institutions bought in moderate quantities, while FIIs sold heavily. Every index lost ground. Breadth was poor. Volumes were low but rose on Friday when the selling pressure increased. The BSE 500 was down 3.2 per cent while the Junior lost 1.6 per cent and the Midcaps 2.35 per cent. Declines were several multiples of advances.

Outlook: The market’s likely to show a negative bias with high volatility. There could be a sharp, temporary pull-back due to short-covering. The critical support level is around 4,650. On the upside, a bounce triggered by short-covering would run into resistance above 4,830.

Rationale: The 4,650 level is where the 200 Day Moving Average (DMA) is placed. If the 200 DMA breaks, there is cause to fear a new long-term bear market. If the market closes below 4,600, it is likely to slide till 4,525. If the 4,650 support holds, there’s a chance of a rebound to levels between 4,800-4,850. A new intermediate uptrend would be suggested only by a climb above 4,950, which breaks the current pattern of lower peaks.

Counter-view: The past few weeks have seen global events driving Indian equity values. As Budget expectations mount, the focus on domestic factors increases. There’s been Rs 9,500 crore of net FII sales in 2010. That may have flushed out “hot money”. If Budget expectations are “well-managed”, the market could rebound. Traditionally, February is a month of high volatility and positive bias. Support in the 4,600-4,650 zone and a rebound above 4,950 would be very positive signals.

Bulls & bears: Every major sector was down. Banking, realty, IT and metals all lost a lot of ground. The Bank Nifty dropped 4.95 per cent while the CNXIT lost 2.6 per cent. Several key index stocks including Reliance Industries saw their respective 200 DMAs broken, which is a bad signal. Pivotals such as Infosys, Tata Steel, DLF, SBI, all look set to lose some more ground before they reverse direction. High beta scrips in these sectors like Axis, Polaris, IBRE and HDIL look almost as weak.

Any northwards trend must start either with short-covering, or buybacks from sellers against delivery. It could happen next week. The rise, as and when it comes, will be sharp and sudden. In these circumstances, experienced traders will pick the most liquid stocks, set disciplined stops and keep excess margin to cope with volatility.

Among counters that look oversold, Hind Lever, Gail, Lupin and Maruti are “possibles” for fast recovery. Sugar is another sector, which has seen a significant trend reversal. It may be hitting support. Titan and Spice have bucked the trend for specific reasons but both scrips are likely to run into profit-taking.

MICRO TECHNICALS

SHREE RENUKA SUGARS
Current Price: Rs 180.5
Target Price: Rs 200

---

The stock has dropped from around the Rs 245 level where it peaked in early January. It is hitting excellent support between Rs 175- Rs 180. Most likely it will range trade between Rs 175- Rs 205 in the next few sessions. Keep a stop at Rs 175 and go long. Book profits above Rs 200.

RELIANCE INDUSTRIES
Current Price: Rs 981.7
Target Price: Rs 960

---

The stock has hit reasonably strong support after a downside breakout below the 200 DMA. The pattern suggests that a fall till Rs 960 is probable however, especially since there’s been volume expansion on breakout. Keep a stop at Rs 990 and go short. Cover below Rs 960.

POLARIS
Current Price: Rs 155
Target Price: Rs 165

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The stock has hit strong support after a steep fall from Rs 200-plus. It has the potential to bounce from here, at least temporarily. Keep a stop at Rs 152 and go long. Book profits between Rs 165-170 because Polaris will hit strong resistance around that level.

DLF
Current Price: Rs 308.7
Target Price: NA

---

A key support was broken on high volumes. It has some support at Rs 300, at Rs 290, and again, at Rs 275. Set a trailing stop at Rs 315 and short. Book 33 per cent profit at Rs 300 and reset the stop to Rs 305. At Rs 290, book another 33 per cent profit and reset the stop at Rs 295.

HINDALCO
Current Price: Rs 138
Target Price: Rs 128

---

The stock has slid 14 per cent in the past three sessions on strong volumes. There’s strong indication that the long-term trend has gone bearish. It has a minimum downside till around Rs 128. Keep a stop at Rs 142 and go short.

(The target price and projected movements given above are in terms of the next five trading sessions unless otherwise stated.)

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The alpha tracker 08-FEB-10 Alpha, the net performance of a component against the benchmark is an overlooked tool.

Expensive package 08-FEB-10 While an under-penetrated market coupled with robust expansion plans could churn better growth rates for Hathway, the IPO pricing is stiff.

On firm ground 08-FEB-10 Huge opportunities, diversified portfolio, strong order book and good track record augur well for ARSS Infrastructure.

Fading profits 08-FEB-10 Though volume growth continues to be robust, severe pricing pressure is impinging on profitability of telecom companies.

Harvesting profits 08-FEB-10 The demand-supply imbalance in food articles provides an opportunity to invest in companies operating in the agriculture value chain.

Analysts' corner 08-FEB-10 Revenues were higher than expected and grew 76 per cent q-o-q to Rs 774.5 crore.

Markets at a glance 08-FEB-10 Concerns about the burgeoning sovereign debt of some European countries and weak US jobs data were overhangs on the broader indices.

'Mid caps across sectors are value buys' 08-FEB-10 Vinay Khattar is the head of research of the Wealth Advisory and Investment Services at Edelweiss and has been tracking markets and trends over the last ten years.

High volatility and sliding prices 08-FEB-10 February settlement will be an extremely tense one with sudden trend reversals and large intra-day swings.

Critical support at 4,650 08-FEB-10 If the 200 DMA at 4,650 breaks, there is cause to fear a new long-term bear market.

Analysts' corner 01-FEB-10 Bharti’s December 2009 quarter performance remained flat due to sequential fall in RPM (revenues per minute) by 7.8 per cent to 52 paisa.

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Top 5 picks | Techno Wrap: Signs of bear mkt

Analysts Picks: Dabur, Sterlite, PTC, Crompton Greaves

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Monnet Ispat: Buy at CMP Rs385 Fair Wealth
	Vinati Organics: Buy in the range of Rs66-71 HDFC Sec
	HT Media: Buy at CMP Rs150 KRChoksey

Daily News Roundup - Feb 8 2010

Happy start, take care!

Apollo Tyres

Weekly Newsletter - Feb 8 2010

Weekly Report - Feb 8 2010

DB Corp

Bank of Baroda

HT Media, SBI

Hindustan Unilever, Idea Cellular, LIC Housing Finance, Reliance Communications

Week Ahead - Feb 8 2010

IVRCL Infrastructure

Reliance Communications Ltd

Paper Products

Src: ET, BS, DP Blog

Nifty may slip towards 3900 in medium term

Nifty may slip towards 3900 in medium term

Emkay Global Financial Services Reliance Money Nirmal Bang

Pick your online broker wisely D-St's expectations from the Budget Top 5 picks of the day Mid-term picks of the day MUMBAI: Benchmarks indices are poised near psychological support levels following correction in the global markets in the wake of debt concerns in Europe and jobless claims in the US. Technical analysts hold bearish view on the market and expect Nifty to slip below 4000 levels in the medium term. PA Rajan, technical analyst, MF Global while speaking to ET Now said that the correction is not over and Nifty may slip to 3900 levels. “The correction is not over yet. Nifty is more volatile than other indices as its high-beta index. Nifty may find support at 4600 in the short-term but it may hit 3900 in the medium term,” Rajan added. “We are bearish on the market and see Nifty slipping to 3800-4200 in next three-six months time. Investors should book profits and stay in cash while traders should go short on the market,” said, Sarvendra Srivastava, technical strategist, Emkay Global Financial Services. “Till we don’t see consolidation around support levels of 4540, the Nifty is likely to slip lower and lower depending on the global economic situation. For positive momentum, Nifty should hold above 4960 levels,” said Bhavin Mehta, technical analyst, Reliance Money. However, Michael Pillai, technical analyst, Nirmal Bang, is not expecting a major downturn from 4710 levels. “Nifty trend is weak as the global sentiments are not in favour of the stock markets. If we look at the Indian markets, Nifty has fallen by only 11 per cent from their recent high of 5310 but technically trading near to its oversold region as the oscillator RSI is at 29 on the daily chart. In the short term we don’t see a major downtrend from this current level of 4,710 and chances are that we could bounce back from the level of 4,660 / 4,580 levels. And to the extreme the fall could extend upto 4,410 / 4,140 if any major negative news flows from the Asian or Western countries or if the Indian budget is not encouraging. In the near term strong resistance is seen around 4830 / 4950 levels and this downtrend could reverse only if Nifty holds above its 50-day moving average,” Pillai said.

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Biggest bubble in history is growing every day


Real estate, stocks, credit. China sure has its share of bubbles. Oddly, little attention is paid to the biggest one of all. China’s currency reserves grew by more than the gross domestic product of Norway in 2009. Its $2.4 trillion of reserves is a bubble all its own, one growing before our eyes with nary a peep out of those searching for the next big one. The reserve bubble is actually an Asia-wide phenomenon. And we should stop viewing this monetary arms race as a source of strength. Here are three reasons why it’s fast becoming a bigger liability than policy makers say publicly.

One, it’s a massive and growing pyramid scheme. The issue has reached new levels of absurdity with traders buzzing about crisis-plagued Greece seeking a Chinese bailout. After all, if economies were for sale, China could use the $453 billion of reserves it amassed last year to buy Greece and Vietnam and have enough left over for Mongolia. Countries such as the US used to woo the Bill Gross’s of the world to buy their debt. Now, they are wooing governments. Gross, who runs the world’s biggest mutual fund at Pacific Investment Management, is still plenty important to officials in Washington. He’s just not as vital as the continued patronage of state asset managers in places like Beijing.

You have to wonder what folks at the International Monetary Fund are thinking these days. Their aid packages tend to come with messy requirements, such as ‘get your economy in order’. China’s are merely about scoring resources or geopolitical points. We have already seen China throw lifelines to Wall Street giants, including Morgan Stanley. Entire countries seem like the natural next step.

China’s huge arsenal of reserves is increasing its global influence. The trouble is, China is trapped in an arrangement of its own making. As China and other Asian nations buy more and more US treasuries, it becomes harder to unload them without causing huge capital losses. And so they keep adding to them. “This is a titanically large foreign-exchange trade,” says David Simmonds, London-based analyst at Royal Bank of Scotland Group. “It’s the biggest one history has ever seen and there’s nowhere for these reserves to go.”

Also Read

→ Google facing many risks in standoff with China

→ Citi CEO Vikram Pandit says seeks China securities JV partner: Report

→ China Q1 GDP seen growing 11.5 pc: Govt think tank

→ China hits back at Obama over currency criticism

→ China and US spar on trade as row rolls on

China aims to diversify out of US treasuries into other assets and commodities. The question that governments are grappling with is which markets are deep enough to absorb China’s riches? Gold? Oil? Euro-area debt? The Madoff family’s next Ponzi scheme?

The challenge for China alone is like trying to park an Airbus A-380 super-jumbo in a Volkswagen. Like all pyramid schemes, there’s no easy end in sight and things could end badly. If the dollar collapses, panicked selling by central banks looking to limit losses would shake global markets more than the US credit crisis has.

Two, reserves are dead money. The wisdom of currency stockpiling came from the chaos of 1997. Speculators sensed authorities in Thailand were sitting on few reserves, and they were right. Their attack on the Thai baht set the stage for an Asian meltdown. Governments spent the 2000s determined not to repeat the mistake.


Src: ET

Negative global vibes send stocks into a tizzy

Negative global vibes send stocks into a tizzy

Top 5 picks | Mid-term picks

Pre-Market: Gap-down opening likely as global weakness persists

Screen looks ugly

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Heard on the Street

Advisory fees not enough to hard sell NTPC offer What explains the less-than-enthusiastic response to the NTPC issue? If some fund managers are to be believed, the paltry fee paid to lead managers is not quite pushing them to go the extra mile that makes the difference between a successful and not-so successful issue. This is not about a particular set of lead managers, but could well turn out to be the case with the upcoming issues, managed by other investment banks as well. "In the past, power companies with ambitious plans merely on paper have been able to raise astounding sums from the market, and are still quoting at exorbitant valuations. There is no reason why a company with a solid track record like NTPC could not have been hard-sold to investors at better valuations," says a fund manager. The government may save a few crores of rupees on advisory fees, but could end up losing much by way of indifferent response from global investors, brokers say. Then again, why do investment banks agree to work for a pittance in the first place, argue some others. So much for a free market. Bulls off St, busy hosting investor conference As FIIs continue to play hide and seek, domestic institutions, which otherwise provide some succour in choppy times, are also proving to be indifferent participants. In February so far, local institutions have net-bought shares worth Rs 483.60 crore. The buzz is that the spate of investor conferences in and outside Mumbai are keeping these institutions out of action. Nomura held its investor conference in Mumbai last week. Macquarie is holding an investor conference in Mumbai and JP Morgan is hosting its event in Goa. The BoA-Merrill Lynch conference is to kick off on February 15 in Delhi. Amongst the larger domestic broking firm, India Infoline is also holding its conference in Mumbai. Equity sales and dealing teams at other broking houses are awaiting the return of their domestic clients. Durable cos seen ‘safe bet’ ahead of Budget Shares of consumer durable companies like Whirlpool, TTK Prestige and Bajaj Electricals are being viewed as ‘safe haven’ by a certain section of the trading community ahead of the Budget. The rationale being that this is one of the few sectors that is unlikely to be impacted by any withdrawal of stimuli, and neither is in the running for any exemptions. Savvy players accumulating these shares believe these companies have a smaller but more steady clientele. Of course, good cash flows, a strong demand which is reflected in the month-on-month numbers are a definite positive, say analysts. Whirlpool shares ended the day flat at Rs 135.75, TTK Prestige at Rs 433.30 (down 1%) and Bajaj Electricals at Rs 179.20 (down 2%) on BSE on Thursday in an otherwise weak market.

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Daily News Roundup - Feb 5 2010

Friday fright on the street

Onmobile Global

Hindustan Dorr-Oliver

Biggest drop for bullion metals in three months

Src: ET, DP blog and etc