Market Outlook for 8th July 2009

 

stocks that are in news today:
Sun Pharma gets US FDA nod for generic Casodex tablets
Essar Steel close to acquiring Shree Precoated Steel for Rs 800 crore – DNA ((demerged steel business not listed yet))
SI Group accepts discovered price of Rs 70 a share for delisting
Excel Infoway IPO opens on July 14, closes July 17; price band Rs 80-85/share
Lanco Infratech bags Rs 52.3 crore order in Tamil Nadu
TRF to buy 51% stake in Sri Lankan company for $8.7 million
Bajaj Hindusthan still in NSE F&O curb
3.69 crore Shree Renuka Sugars shares to hit the market today ((QIP issue))

 

NIFTY FUTURES LEVELS
SUPPORT
4176
4145
4117
4107
4079
RESISTANCE
4201
4208
4215
4236
4246
4274

Strong & Weak  futures  
This is list of 10 strong futures:

Patel Eng, Colpal, Edu Comp, Gail, GT Off Shore, IVRCL Infra, Dabur, ITC, Dr. Reddy & Tulip.

And this is list of 10 Weak futures:

Orchid Chem, Adlabs Film, BRFL, H Dil, Essar Oil, Aban, Bharat Forge, Tata Motors, Bhushan Steel & RCOM.
 Nifty is in Down Trend.

 

NIFTY FUTURES (F & O):  
Below 4176 level, expect profit booking up to 4145-4147 zone and thereafter it can slide up to 4117-4119 zone by non-stop.

Hurdle at 4201 level. Above this level, rally may continue up to 4206-4208 zone and thereafter expect a jump up to 4215 level by non-stop.

Multiple resistance zones at 4234-4236 zone & 4244-4246 zone. Above these zones, it can zoom up to 4272-4274 zone. Supply expected at around this zone and have caution.

On Negative Side, rebound expected at around 4107-4109 zone. Stop Loss at 4079-4081 zone.
 
Short-Term Investors: 
 Bullish Trend. 3 closes above 4270 level, it can zoom up to 4830 level by non-stop.
Already SL triggered. 3 closes below 4270 level, it can tumble up to 3990 level by non-stop.
 
BSE SENSEX:  
Weak opening expected. Recovery should start. 
Short-Term Investors:
 
Short-Term trend is Bearish and target at around 12478 level on down side.
Maintain a Stop Loss at 14931 level for your short positions too.

Already SL triggered.
 
POSITIONAL BUY:
Buy GAS AUTHORITY (I) (NSE Cash) 
Uptrend to continue.

Mild sell-off up to 313 level can be used to buy. If uptrend continues, then it may continue up to 328 level for time being. 

If crosses & sustains at above 340 level then uptrend may continue.

Keep a Stop Loss at 302 level for your long positions too.
 
Buy HIND UNILEVER (NSE Cash) 
Recovery should start.

Mild sell-off up to 266 level can be used to buy. If recovery starts, then it may continue up to 279 level for time being. 

If crosses & sustains at above 287 level then uptrend may continue.

Keep a Stop Loss at 259 level for your long positions too.

 

Global Cues & Rupee 
 The Dow Jones Industrial Average closed at 8,163.60. Down by 161.27 points.
The Broader S&P 500 closed at 881.03. Down by 17.69 points.

The Nasdaq Composite Index closed at 1,746.17. Down by 41.23 points.

The partially convertible rupee closed at Rs48.45/46 per dollar on yesterday, stronger than its previous close of Rs48.56/59.
 

Interesting findings in the web:
Morgan Stanley on Tuesday raised its target for the benchmark stock index to 18,000 by next April from an earlier forecast of 15,000, citing higher earnings potential.

Wall Street's Dow Jones Industrial average of 30 key stocks fell to its lowest level since May.

Crude oil prices fell for the fifth consecutive day in the US owing to worries about last week's unemployment numbers from both the US and Europe, and a Commodity Futures Trading Commission probe.

Japanese core machinery orders fell to their lowest level on record in May, dropping a surprising 3.0% from a month earlier, the government said Wednesday, fueling concerns that firms may be putting their business investment plans on hold.

Recession fears slammed stocks in U S.

"This is a very tough recession," said Scott Armiger, portfolio manager at Christiana Bank & Trust Company. "It's not going to be short and shallow like in 2001. We're more than 18 months into it and there doesn't seem to be a catalyst to turn things around."

Rising credit card defaults and lower energy prices weigh on market. Credit card companies also felt the sting of recession Tuesday after a report showed the delinquency rate on consumer loans reached a fresh record in the first quarter. The American Bankers Association said 3.23% of loans went delinquent in the January-March period, mostly due to late payments on credit cards and home equity loans.

Asian stocks fell for a sixth day, led by finance and mining companies, as worse-than-expected Japanese machinery orders fanned concern a global economic recovery will falter. The MSCI Asia Pacific Index dropped 1.3 percent to 100.48 at 10:32 a.m. in Tokyo, taking its six-day drop to 2.6 percent.

The yen strengthened to a six-week high against the euro as Asian stocks fell and Japanese machinery orders unexpectedly declined, adding to signs the global recession is far from over. 
 
FII DATA

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	07-Jul-2009	2258.29	3179.68	-921.39

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	07-Jul-2009	2021.53	1231.37	790.16

 

SPOT LEVELS TODAY

	4202.15	( 0.88 %)	36.45
		1	2	3
Resistance		4237.47	4272.78	4313.77
Support		4161.17	4120.18	4084.87

	14170.45		( 0.90 %)	127.05
			1	2	3
Resistance			14281.33	14392.20	14532.53
Support			14030.13	13889.80	13778.93

DELIVERY BUY
Sujana Towers:Towering Ahead...
BSE 532887; CMP Rs 25.80 
 
Sujana is putting behind issues that affected its performance in FY09, with insiders quietly estimating an EPS of Rs 10 for FY10. The dedicated supply line for Bhel, set up near Chennai has gone operational, reduced interest rates, easier access to capital and large orders from Power Grid Corporation mean Revenue growth will be strong in FY10, with after tax profits expected in the range of Rs 25 crore on a turnover of Rs 800 crore.  

As against the above financials, Sujana fetches a market cap of Rs 60 crore, which assumes that the entity is all but insolvent. So one thing is clear, the current valuations reflect the worst case scenario and accordingly almost all FIIs have sold off the stock to as low as Rs 7. 

 

Highlights 

Expansion plans: Sujana Towers is looking to expand capacity from 128,000 tpa now to 228,000 tpa this financial year.   

Growth plans: By FY10 it would have a net operating cash-flow of Rs 1,043 mn. With such cash generation, it seeks to expand capacity and explore further growth opportunities. 

Bidding power: The enhanced scale of operations would enable it to bid for larger contracts. This would enhance its ability to more effectively take on the unregulated sector.

 

Economies of scale: Such economies would raise the EBITDA margin to 16%. Sujana would also benefit from the assured supply of structural and billets from its parent company. 

 

Buoyant power and telecom sectors: Telecom-tower demand is rising as service providers enter new areas. India faces a shortage of 8% in Power. With the economy growing at over 9%, increase in power generation is an imperative.

(Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.)

--
Arvind Parekh
+ 91 98432 32381