 | 2973.00 | ( 2.78 %) | 80.35 |  |
| 1 | 2 | 3 | ||
| Resistance | 3035.30 | 3097.60 | 3185.20 | |
| Support | 2885.40 | 2797.80 | 2735.50 | |
 | 9964.29 | ( 2.36 %) | 230.07 | | |
| 1 | 2 | 3 | |||
| Resistance | 10142.58 | 10320.86 | 10576.36 | ||
| Support | 9708.80 | 9453.30 | 9275.02 | ||
Hindalco Industries borrowed USD 982 mn from a group of 11 international banks to refinance debt it raised for the purchase of Novelis Inc. (BS)
United Spirits is planning to invest around Rs. 500 mn in West Bengal for expanding the capacity of its Asansol distillery. (BS)
JSW Steel decided to cut total steel production by 20% from November "as per the current market conditions". (BS)
Infrastructure sector output grew 5.1% in September from a year earlier, well above 2.3% annual growth in August, 2008. (ET)
India´s growth is likely to slow down to 6.3% in 2009 with the IMF forecasting growth contraction in advanced economies and an appreciably slower growth in emerging economies. (ET)
China announced a USD 586 bn stimulus package in its biggest move to stop the global financial crisis from hitting the world´s fourth-largest economy. (Bloomberg)
10 STRONG futures
RajeshExpo ,LITL, UnionBk, CanBk, HindujaVen, GTL, IDFC, DivisLab, Bhushan Stl &, HCC
10 WEAK Futures
NDTV, Tisco, Ivr Prime, National Alum, Unitech, Telco, Auro Pharma, Purva, J Stainless, &Uni Phos
Nifty is in Down Trend until closes above 3070
NIFTY FUTURES (F & O)
Above 3001 level, rally may continue up to 3037-3039 zone and thereafter expect a jump up to 3055-3057 zone by non-stop.
Support at 2945 & 2976 levels. Below these levels, expect profit booking up to 2889-2891 zone and thereafter slide may continue up to 2835-2837 zone.
Below 2781-2873 zone, expect panic up to 2727-2729 zone and should not be allowed to break at any cost.
On Positive Side, Supply expected at around 3109-3111 zone and this supply should get absorbed too.
Short-Term Investors:
Short-Term trend is bearish and target at around 2546 level on down side.
On Positive Side, rallies up to 3085 level can be used to exit. Maintain a Stop Loss at 3265 level for your short positions too.
BSE SENSEX
Excellent work by bulls. Looks like forced short covering and technically profit booking should happen.
Short-Term Investors:
Trend is Bullish & Technical target at around 10898 level on upper side. Corrections up to 8498 level can be used to buy. SL at 7697 level.
FII DATAFII
07/11: -19.27 Cr. (Prov)
DII
07/11: -147.08 Cr. (Prov)
Even as the world raised a toast to United States of America that voted for a new order in which racial hierarchy ceases to matter, stock markets reversed downwards. It was probably President-elect, Barack Obama's grim reminder about the "worst financial crisis in a century" that brought the six-day-old party in equity markets to an abrupt end.
Indian markets moved in tandem with the rest of the global markets, rallying merrily up to Tuesday and reversing sharply lower on Wednesday. Volumes were high in the first half of the week but it petered off towards the weekend. Light open interest in the derivative segment implies that trades are unwilling to take bets on the market's next move, given the high volatility.
Sensex declined 63 per cent from its January peak when it hit the low at 7697 on October 27. This fall exceeds the other declines witnessed in the Indian stock markets over the last three decades. The decline following the dot-com bubble was 57 per cent from the peak while that in 1992-93 was 56 per cent. The correction in 1986-88 was a milder 40 per cent. As per Elliott wave analysis, corrections can be deemed complete if they fulfil either the time or the price criteria. This decline has already met the price criteria and deep corrections generally consume lesser time.
Can we then infer that the market has formed a long-term bottom at 7697? The answer is, no. This decline is akin to nothing that we have seen before and the rule-books of technical analysis would have to be rewritten once this down-trend is through. It is therefore best not to jump to premature conclusions and to let the market show us the way forward.
The 10-day rate of change oscillator is moving in to the positive zone and the 14-day relative strength index too has moved up from over-sold area and is placed at 43. The implication is that the short-term outlook is mildly positive. There are however no buy signals yet in the weekly oscillator charts. A spinning top candlestick pattern was formed in the weekly chart denoting indecision; that is, a move in either direction is possible next week.
Our medium-term view too is ambivalent. Sensex reversed from the peak at 10945 on Wednesday. Our medium-term trend deciding level at 10,700 was breached only fleetingly on that day. This remains an important resistance level and penetration of this level will pave the way for a rally to 11630 or 12879. It is however difficult to envisage a move beyond the second target just yet.
The short-term trend in Sensex is positive. If it holds above last week's trough at 9600, there can be a surprise rally to 10945 or even 11630. Immediate supports for the index are at 9320 and 8930. The index needs to close below the second support to negate this view and re-kindle the gloom and doom scenario.
Nifty (2973)
Nifty reversed from the peak at 3240 on Wednesday and closed the week with an 87 points gain. Our medium-term resistance level was tested very fleetingly and it remains the key level to watch out for. However, the fact that the index is holding above the 2860 in the recent pull-back is a positive for the short-term and if this level holds, Nifty can rally once more to 3240 or even 3471. Support below 2860 would be at 2628. The near-term view will turn overtly negative only on a penetration of this level.
Though the short-term view is positive, the medium-term view is neutral. The zone between 3175 and 3250 will try to thwart any up-move. However, if this level is surpassed, there can be a surge to 3470 or 3740.
Global CuesGlobal markets rallied in the first half of the week but reversed sharply from Wednesday. However, most of these markets are well-above the lows recorded in the last week of October. The CBOE volatility index declined to 44 on Tuesday, but it rebounded sharply to end the week at 56. Dow Jones Industrial Average recorded an intra-week peak at 9653, below the medium-term resistance at 10,400, indicated last week. The sideways move between 8000 and 10000 appears likely to extend for a few more weeks in this index.
Asian equities put up a relatively stronger performance last week. The Shanghai Composite is the only index that is unable to make headway and is close to its October lows. Commodities gave up most of the gains recorded in the previous week. CRB index that tracks commodity prices declined 2 per cent for the week.
GVK Power has a valuable basket of assets ranging from power plants to airports and coal mines. In its pre-occupation with global factors, the market is ignoring value at hand.
GVK Power has two power plants, the 220 MW Jegurupadu-II and 464 MW Gautami plant. These are lying idle due to non availability of gas. Gas availability is expected to commence from January 2009. This should help to increase its revenues in its power division.
MIAL has been allotted around 2000 acres of land for development of the Mumbai Airport. Out of this, around 10% will be available for commercial development. With projects ranging from power, infrastructure, realty, coal mines and expected oil and gas blocks GVK Power is expected to put up a good performance in the coming year and post good numbers. More importantly, in three-four months, GVK Power will announce commercial production.
Airport assets
GVK Power & Infrastructure (GVK) has a stake in the development project of the Mumbai Airport. In the consortium, Mumbai International Airport (MIAL), GVK owns around 36% stake. According to the concession agreement, MIAL has to share 38.7% of revenues with AAI. The project entails spending Rs 6000 crore to refurbish the existing terminals and building a common terminal for both domestic and international flights by FY11E.
The capacity of the airport is to cater to 4-4.5 crore passengers. MIAL''s aeronautical revenues from FY10E will be linked to 11.6% WACC according to the concession agreement. The main source of revenue in developing private airports is the nonaeronautical revenues in which MIAL signed a three-year advertising contract. This is expected to rake in Rs 64 crore in FY08.
We also expect non-aeronautical revenues for MIAL to rise threefold in FY10E. MIAL has been allotted around 2000 acres of land for development of the Mumbai Airport. Of this, around 10% has been made available for commercial development according to the concession agreement.
Jegurupadu (Phase-I)
This project is a 217 MW mixed fuel combined cycle power plant located in Andhra Pradesh. The project is facing shortage of natural gas. It is operating at around 60-70% PLF. The supply of natural gas is likely to commence from January 2009.
Jaipur-Kishangarh Expressway (JKE)
This is a toll road project, which involves four-laning of a two-lane road in Rajasthan. Revenues from roads increased 25% to Rs 34.8 crore in Q1FY09 from Rs 30.4 crore in Q1FY08. This asset will continue to perform well.
GVK Coal (GC)
This project has equity IRR in excess of 35%. The captive coal mine in Jharkhand has reserves of around 55 million tones.
GVK Oil & Gas Exploration
GVK, together with BHP-Billiton, had bid for the exploration of seven oil and gas blocks under the government's NELP-VII programme. The consortium has been declared as the preferred bidder for all seven blocks, which are located on the west coast of India.
The corporate has a valuable basket of assets under its belt. While the market is pre-occupied with global crisis, it is ignoring the stocks underlying strength.
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Arvind Parekh
+ 91 98432 32381
