Market Outlook 6th Aug 2009

 

 

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

Bharat Fo,GT OFFshore,Tata Motors,Aban OFFshore,Jindal Saw,Shree Renuka,Hindalco,Polaris Softwar,Unitech Ltd and DCHL.

And this is list of 10 Weak futures:

Divi'S Lab,Abb Ltd,TV18,Suzlon,Crompton Greaves,Patel Engineering,Union Bank Of India,Sun Pharma,BHARTI AIRTEL and Titan.
Nifty is in Up Trend. 

 

INTRADAY calls for 6th Aug 2009
+ve Scripts : IT, Heliosmath
Buy ONGC-1194 @ 1170 for a target 1190-1213 stop loss 1155
Buy Moserbaer-95 for a target 105 stop loss 91
Buy Harrmalaya-85 for a target 95 stop loss 81

Positional Calls
Buy ABirlanuvo-955 @ 935 for a target 1090-1113 stop loss 910
Buy Glenmark-269 @ 260 for a target 353 stop loss 250

Investment Calls
Buy Dishman-203 for a target 253 stop loss 195
Buy Megasoft-25 for a target 33-35 stop loss 22
Buy NMDC-386 for a target 475 stop loss 370

 

NIFTY FUTURES (F & O):  
Below 4687 level, expect profit booking up to 4648-4650 zone and thereafter slide may continue up to 4623-4625 zone by non-stop.

Hurdles at 4715 & 4732 levels. Above these levels, rally may continue up to 4744-4746 zone and thereafter expect a jump up to 4769-4771 zone by non-stop.

Sell if touches 4782-4784 zone. Stop Loss at 4806-4808 zone.

On Negative Side, break below 4610-4612 zone can create panic up to 4585-4587 zone. If breaks & sustains this zone then downtrend may continue.
 
Short-Term Investors:  
Bullish Trend. 3 closes above 4473 level, it can zoom up to 4988 level by non-stop. 

BSE SENSEX:  
Lower opening expected. Recovery expected. 
Short-Term Investors:
 
Short-Term trend is Bullish and target at around 16861 level on upper side.
Maintain a Stop Loss at 15065 level for your long positions too.
 

INVESTMENT BUY:
Buy KOTAK MAHINDRA BANK (NSE Cash) 
Uptrend to continue.

Mild sell-off up to 730 level can be used to buy. If uptrend continues, then it may continue up to 764 level for time being. 

If crosses & sustains at above 784 level then uptrend may continue.

Keep a Stop Loss at 711 level for your long positions too.
 
Buy ACC LTD (NSE Cash) 
Uptrend to continue.

Mild sell-off up to 917 level can be used to buy. If uptrend continues, then it may continue up to 937 level for time being. 

If crosses & sustains at above 949 level then uptrend may continue.

Keep a Stop Loss at 905 level for your long positions too.
 

 

 

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	05-Aug-2009	1857.12	2547.65	-690.53

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	05-Aug-2009	1083.12	1107.02	-23.9

 

NIFTY SPOT LEVELS

	4694.15	( 0.29 %)	13.65
		1	2	3
Resistance		4730.95	4767.75	4818.30
Support		4643.60	4593.05	4556.25

	15903.83		( 0.46 %)	72.85
			1	2	3
Resistance			16019.58	16135.34	16297.57
Support			15741.59	15579.36	15463.60

 

Global Cues & Rupee  
The Dow Jones Industrial Average closed at 9,280.97. Down by 39.22 points.
The Broader S&P 500 closed at 1,002.72. Down by 2.93 points.

The Nasdaq Composite Index closed at 1,993.05. Down by 18.26 points.

The partially convertible rupee ended at Rs47.52/53 per dollar on yesterday, stronger than Rs47.73/74 at it's previous close.
 
 Interesting findings on web:
Stocks slipped Wednesday as investors shied away from big moves ahead of the government's monthly reading on job losses and the unemployment rate, which comes out before the start of trading on Friday. The caution in Wednesday's trading followed a disappointing report on the service industry.

The service sector is a crucial component for the recovery, representing 80 percent of economic activity.

The Institute for Supply Management said its service index, a measure of the health of retail, financial services, transportation and health care companies, fell to 46.4 in July from 47 in June. It was the 10th straight monthly slide. Any readings below 50 indicate contraction.

This marks the first decrease in the index since March, according to Wells Fargo.

The report dampens expectations that economic activity will pick up significantly in second half of the year, said Brian Bethune, chief U.S. financial economist for IHS Global Insight. "The bottom line here is that the path from recession to recovery should not be expected to be smooth, and occasional setbacks should not be a surprise," he said.

Factory orders in June were up 0.4 percent to $349 billion. Analysts had expected orders to decline.

The Dow Jones industrial average fell 39.22, or 0.4 percent, to 9,280.97.

The Standard & Poor's 500 index fell 2.93, or 0.3 percent, to 1,002.72.

The Nasdaq composite index fell 18.26, or 0.9 percent, to 1,993.05.

U.S. stocks were under pressure Wednesday as investors focused on the job market as the biggest piece of the economic puzzle that still needs to fall into place for a sustained recovery.

A disappointing result from Procter & Gamble, the world's largest consumer goods company, dragged the blue chip Dow index down, ending a four-day winning streak on Wall Street.

P&G shares dropped 3% reporting an 18% decline in earnings and projected further declines in sales in the current quarter.

Whole Foods Market rose nearly 21% after its increased its earnings forecast.

Bank of America's stock had the biggest gains on the Dow, climbing $1.02, or 6.5 percent, to $16.66. Citigroup rose 33 cents, or 10.2 percent, to $3.54. JPMorgan [JPM  41.78    1.57  (+3.9%)   ] was one of the biggest gainer on the Dow.

Trading in Citi was heavy today as the bank recently completed an exchange of its preferred stock for common stock; the S&P will be rebalanced at the close today to reflect Citi's increased weighting in the index.

Ford [F  8.44    0.14  (+1.69%)   ] advanced 1.7 percent after Toyota's chairman said the US auto market will recover and be stronger than ever.

General Motors' [MTLQQ  0.517    0.0109  (+2.15%)   ] chairman said the board told management this week to roll out new vehicles faster.

A Senate vote on extending the "Cash for Clunkers" program could happen this week, though party bickering may push it to Saturday, Sen. Maj. Leader Harry Reid said.

Senators have reached a deal on saving the dwindling "cash for clunkers" program, agreeing to vote Thursday on adding $2 billion to the popular rebate plan.

Senate Majority Leader Harry Reid announced the vote after lengthy negotiations between Democratic and Republican lawmakers on Wednesday. Reid has said Democrats have enough votes to pass the bill, meaning consumers could take advantage of the rebates of up to $4,500 until Labor Day.

Speaking on the Senate floor late on Wednesday, Reid said the accord provides for votes on a half dozen amendments, all of which aides said are expected to be defeated.

The Senate would then give final approval to the measure, previously passed by the House of Representatives, and send it to President Barack Obama to sign into law.

The government says more than $775 million of the existing $1 billion fund has been spent. President Obama says the program will go broke by Friday if it's not refilled by Congress.

The Senate departs for a month-long recess at the end of the week.

Meanwhile, Japanese electronics maker Sony [SNE  28.06    0.06  (+0.21%)   ] is about to take on Amazon [AMZN  84.212    -1.588  (-1.85%)   ], offering a cheaper digital-book reader, which will sell for $199 and $299, with the difference being the size of the screen. Amazon's Kindles sell for $299 and $489. The Sony reader will be available through Wal-Mart and Best Buy. Amazon shares dropped 1.8 percent.

Kraft Foods [KFT  28.33    -0.01  (-0.04%)   ] ended flat after the mac-and-cheese maker beat earnings estimates after the bell Tuesday but sales disappointed.

Electronic Arts [ERTS  20.41    -1.48  (-6.76%)   ] shares really took a hit, sliding 6.8 percent, after the videogame maker reported a smaller-than-expected loss but said revenue tumbled 20 percent.

The S&P 500 pulled lower by losses in economically sensitive sectors such as industrials, consumer-discretionary stocks and technology. But its financial sector was up more than 3%.

AIG rose more than 69% to trade above $US22 a share ahead of its earnings report on Friday. CIT Group was up 48%. Shares of Fannie Mae and Freddie Mac each gained about 30%.

Cisco Systems, a component of all three major indexes, was down 1.1% ahead of its earnings report.

Cisco Wary on Recovery, but Earnings Beat Forecasts

Cisco Systems Chief Executive John Chambers said it was too soon to call a recovery and forecast another drop in quarterly revenue, sending its shares 3 percent lower.

The outlook from the world's largest network equipment maker overshadowed stronger-than-expected quarterly results.

While the revenue outlook was within estimates, the downbeat comments from the CEO came amid growing expectations that the global economic slowdown may be on the mend, and that companies will again invest in technology equipment.

Cisco, which makes routers and other network equipment, said it expects fiscal first-quarter revenue to fall by 15 to 17 percent from a year earlier. That was in line with expectations for a drop of about 16 percent, according to Reuters Estimates.

Tighter credit and a focus on expenses have made it harder for Cisco customers to invest in big-ticket technology equipment. Cisco's high-end router, CRS-1, for example, can cost as much as $1 million each.

Cisco is also one of the first large-cap technology companies to report results that include sales from most of July, making it an early indicator of trends in technology spending.

The U.S. company reported an 18 percent fall in fiscal fourth-quarter revenue as customers held back spending on network equipment.

Chambers told analysts on a conference call that it was too soon to call a recovery, despite "positive signs" in the economy and Cisco's orders.

Comments More Cautious

Revenue in the fiscal fourth quarter ended July 25 fell to $8.5 billion from $10.4 billion in the year-earlier period.

That was in line with Wall Street's average forecast, according to Reuters Estimates. The company had forecast a fall of around 17 percent to 20 percent.

Its profit was marginally better than expected. Quarterly net profit fell to $1.1 billion, or 19 cents a share, from $2.0 billion, or 33 cents a share, a year ago. Earnings excluding items were 31 cents, above the average analyst forecast of 29 cents, according to Reuters Estimates.

Chambers was once seen as one of Silicon Valley's most enthusiastic cheerleaders, but his recent comments have been somewhat cautious. He said a year ago that most customers expected a turnaround by the end of 2008, and that Cisco was setting its budget accordingly. But on Wednesday, he said he saw positive trends in orders but it was too early to declare a recovery.

Cisco shares [CSCO  22.17    -0.27  (-1.2%)   ] were down about 2 percent in extended trading after rising earlier in the late session. They closed Wednesday at $22.17, down 1.2 percent. Get after-hour quotes for Cisco Systems here.

After Chambers' comments on the call, the stock backpedaled and turned negative.

Chambers said the company was done restructuring and was now shifting its focus to growth. He said the company's headcount reduction slightly exceeded its previously announced target of about 1,500 to 2,000 jobs.

Data from the consulting firm Automatic Data Processing and Macroeconomic Advisors showed a slowing but still-brisk pace of private-sector job losses. The private sector shed 371,000 jobs last month, more than the 350,000 economists expected but less than the number of jobs eliminated in previous months. The report is a precursor to the government's monthly jobs report, due Friday.

A report on U.S. service-sector was also weaker than expected. The Institute for Supply Management said its monthly index of non-manufacturing activity was 46.4 in July, down from 47.0 in June, indicating a quickening contraction in activity.

Some were investors are still taking a breather after the market's summer rally. Major indexes came into Wednesday's action at their highest levels since the fall, when the financial and economic crises were in their early stages.

Strategist Phil Guarco, of J.P. Morgan Private Bank, said his firm has been putting more of its clients' cash to work in both debt and stocks lately, including a more aggressive push into small-capitalization stocks that have lagged the recent rally.

While Guarco said he believes a broader global recovery is underway, he's also still on guard against the lingering effects of the recession's final stages, including weakness in the employment sector.

"It's a tactical trade," he said of the increased small-cap holdings. "If we get the gains we're looking for in three to six months, we'll back out."

For the week:

The Dow is up 109.36, or 1.2 percent.

The S&P is up 15.24, or 1.5 percent.

The Nasdaq is up 14.55, or 0.7 percent.

For the year:

The Dow is up 504.58, or 5.8 percent.

The S&P is up 99.47, or 11.0 percent.

The Nasdaq is up 416.02, or 26.4 percent.

Treasury prices:

Treasury prices were lower but off their lowest levels of the morning after the ADP report. The benchmark 10-year note was off 14/32 to yield 3.74%, while the 30-year bond slid 1 2/32 to yield 4.53%. The dollar rose against the yen and the euro.

Oil & Dollar:

Crude-oil prices were slightly lower ahead of a weekly report on inventories of fuel in the U.S. Traders expect to see an increase in stockpiles. The front-month crude-oil futures contract traded near $71.30 a barrel, losing a little ground after the weaker-than-expected employment report.

Dubai crude oil futures continued their ascent Thursday morning, surpassing the previous year-to-date high. The Asian benchmark's October delivery contract rose 55 cents to 73.30 dollars per barrel.

The dollar was mixed. One euro cost $1.4379, down from $1.4398 late Tuesday. One dollar fetched 95.17 Japanese yen, down from 95.27 yen.

What to expect:

THURSDAY: Chain-store sales; weekly jobless claims; Earnings from Sirius XM, Unilever.

FRIDAY: July jobs report; consumer credit; Earnings from Liberty Media.

Asia:

The benchmark Nikkei average rose 1.1 percent and the broader TOPIX added 0.8 percent on Thursday.

Shares in Mitsui & Co. (8031) traded heavily for the second straight day Thursday, making the firm one of the top issues by trading value on the first section of the Tokyo Stock Exchange's first section. On Wednesday, the Mitsui topped the list, rising 2%.

NTT Corp. (9432) shares continued their ascent Thursday morning, as its group operating profit for the April-June quarter, announced Wednesday, shrank by less than expected. 

Hong Kong shares advanced early Thursday after opening lower, ignoring a weak finish on Wall Street and a sharp decline in Shanghai. Shares of market heavyweight HSBC Holdings /quotes/comstock/22h!e:5 (HK:5 83.80, +1.35, +1.64%) /quotes/comstock/13*!hbc/quotes/nls/hbc (HBC 54.24, -0.21, -0.39%) jumped 2.7% on an improved outlook after its first-half results earlier in the week, with property stocks also higher. The Hang Seng Index rose 0.6% to 20,615.63, while the Hang Seng China Enterprises Index was flat at 11,965.12. China's Shanghai Composite Index slumped 2.2% to 3,352.26 amid concerns regulators there might fine-tune moderately loose monetary policies. Most banks declined, and steelmakers extended losses in Shanghai, with Bank of China losing 1.8%, while Baoshan Iron & Steel sunk 4.3%.

Hong Kong stocks fell on Thursday morning, with the benchmark Hang Seng Index opening 10 points lower at 20,484.

The Hang Seng China Enterprise Index, which tracks the overall performance of 43 mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, opened 47 points lower at 11,921.

China CITIC Bank Co Ltd<601998><0998> decreased 2.39% from the previous closing to HK$4.9. Hang Seng Bank<0011> fell 0.77% and opened at HK$115.9.

HSI 20469.08 -25.69 -0.13%. (08.26 AM IST).

After a weak start and a subsequent rally, the Korean market has drifted down into the red on Thursday with investors choosing to take some profits after recent strong gains.

The KOSPI, which had surged to 1,572 earlier in the day after opening modestly lower at 1,556, is now down by 3 points or 0.19% at 1,556.

The index had finished lower by 6.9 points or 0.4% at 1,559.47 on Wednesday, as gains among financial stocks were wiped out by selling pressure among technology shares and automobile producers.

Technology stocks are mostly trading lower. Hynix Semiconductor and LG Electronics are down by 1.6% and 1.5%, respectively, while LG Display LCD and heavyweight Samsung Electronics are down by about 0.6% each.

Steel stocks are trading mixed with Hyundai Steel drifting lower by 1% and POSCO recording a modest 0.8% gain. Oil stocks SK Holdings and S-Oil are up by 2.7% and 1%, respectively. KEPCO is up by 1.2%.

Among bank stocks, Korea Exchange Bank is up by 4%, while Woori Finance, Shinhan Financial and KB Financial are trading up by 1.4% - 1.6%.

In the automobile space, Ssangyong Motor is up nearly 10%. Kia Motor is up 0.7% and Hyundai Motor is trading 1.3% down. Among shipbuilders, Hyundai Heavy Industries and Daewoo Shipbuilding are trading modestly higher, while Samsung Heavy Industries is exhibiting weakness. STX Pan Ocean is up by 1.3%.

Chinese stocks fell more than 3 percent on Thursday, led by large cap shares on worries about adjustments to monetary policy that might impact market liquidity.

The Shanghai Composite Index .SSEC slipped as far as 3,309. 606 points, down 3.47 percent.

The market fell for a second day after a four-day rally stalled near the psychologically key mark of 3,500 points.

China's central bank said late on Wednesday in its monetary policy report for the second quarter that it would deploy a variety of tools to tweak monetary policy. [ID:nPEK368445] ($1=6.83 Yuan)

Government may unwind Fannie, Freddie: reports

The Obama administration is considering a variety of options to overhaul mortgage giants Fannie Mae and Freddie Mac, including folding the companies into a new federal government entity, according to reports late Wednesday.

As part of an effort launched this week to reconfigure Fannie /quotes/comstock/13*!fnm/quotes/nls/fnm (FNM 0.78, +0.04, +5.41%) and Freddie /quotes/comstock/13*!fre/quotes/nls/fre (FRE 0.84, +0.04, +4.96%) , the government is considering splitting the companies and putting their troubled assets in a new federally backed corporation, the Washington Post reported.

Other options being considered include keeping the companies private, winding down their operations, and merging them directly into a federal agency, according to the Associated Press.

Word of the possible plans followed separate reports that Federal Housing Finance Agency Director James Lockhart, Fannie and Freddie's regulator, would resign by the end of the month.

Lockhart confirmed that the administration is discussing the "good bank / bad bank" model, the Washington Post said, referring to the idea of concentrating toxic assets in a single entity.

The administration is expected to unveil its plans for Fannie and Freddie next year, the AP reported.

News Corp. swings to loss on charges

Chairman Murdoch says news sites will charge for content.

News Corp. said Wednesday it swung to a quarterly loss on $680 million in impairment, restructuring and other charges, most of them in their Fox Interactive Media unit, as the struggling worldwide economy held a firm grip on the media conglomerate.

China:

China's power output increased 4.21% year on year to 348.50 billion kilowatt hours in July, the Shanghai Securities News reported on Wednesday.

The July figure reflects growth for the second consecutive month this year. The July growth rate was 0.62 percentage points higher than that of June.

In early July, China produced 11 billion kilowatt hours of power, up 3.02% from a year earlier. In mid-July, the country's power generation grew 7.91% year on year to 11.57 billion kilowatt hours. However, the power output only climbed 1.97% to 11.16 billion kilowatt hours in late July due to drops in temperature.

In the past two months, power consumption in secondary industry has grown rapidly. The power consumption of heavy industry, especially the steel and cement sectors, continued to increase quickly, while that of manufacturing industries such as the garment and food industries has also grown substantially.

A Chinese delegation of tire producers warned Wednesday that the proposed U.S. tariffs on Chinese tire export will hurt the American consumers and cause job loss as well. 

BOJ:

The Bank of Japan will probably forecast that declines in consumer prices will extend into 2011 even as the economy recovers, according to people familiar with the matter.

The estimate would be included in policy makers' first economic projections for the financial year ending March 2012, scheduled for release in October, said the people, who declined to be identified ahead of the report. Central bankers have already predicted prices will fall 1.3 percent in the current year and 1 percent in fiscal 2010.

Prospects for a third year of deflation make it likely Bank of Japan Governor Masaaki Shirakawa and his colleagues will keep interest rates near zero through next year, analysts said. It would also erode profits at companies such as Aeon Co., Japan's second-largest retailer, which has been forced to offer discounts to attract consumers whose wages are tumbling.

"The Bank of Japan will hold the key rate at 0.1 percent at least through March 2011 to stop deflation from becoming deeply entrenched," said Jun Ishii, chief fixed-income strategist at Mitsubishi UFJ Securities Co. in Tokyo. "The central bank will probably consider further policy-easing action" should the risk of spiraling deflation mount, he also said.

Worst Recession

Japan is beginning to emerge from its worst postwar recession as exports improve and manufacturers boost production to replenish inventories. The revival has yet to spread to consumers, who are facing record declines in paychecks and an unemployment rate that economists say will reach an unprecedented 5.8 percent early next year.

Deflation may escalate as households, whose spending accounts for more than half of the nation's gross domestic product, delay purchases on the expectation that goods will get cheaper, restraining a recovery in the world's second-largest economy.

The central bank cut the key overnight rate to 0.1 percent in December, and has since begun buying corporate debt from lenders and offering them unlimited loans backed by collateral to channel funds to companies. The policy board last month extended the credit steps by three months to Dec. 31; some analysts said they'll need to extend them again.

"With little room left to trim the key rate, the Bank of Japan will have no choice but to keep the current extraordinary policy measures, including the credit-easing programs, for a long time," said Akio Makabe, an economics professor at Shinshu University in Matsumoto, central Japan.

   
 
MARKET BUZZ:
 
(May not be useful for day-traders.)

Torrent Power-Massive Growth Plans

 
 
 
After having successfully commissioned the 1147.5 MW Sugen gas based power plant at Surat, Torrent Power has announced it's long term strategic plan which will take power gen capacity from roughly 1700 MW to over 9000 MW.
 

The expansion plan includes raising the Sugen plant capacity to 4147.5 MW by adding two units of 1500 MW classified as Sugen II and Sugen III.

 

Dahej

Torrent has been named as co-developer for Dahej SEZ and would be putting up a 1500 MW gas based power plant in a joint venture with Ongc named as Torrent Energy Limited. The first phase plant will have a 400 MW unit, preliminary work on the project has started.

 

Pipavav

Torrent will set up a 2000 MW Coal based Thermal Power project in Pipavav, Amreli District of Gujarat. Torrent Pipavav Generation Limited has been incorporated as a subsidiary of Torrent Power. The land for the project is being provided by the Gujarat Power Corporation Limited and Coal linkage has been provided from the Baitarni Coal Block, Talcher, Orissa.

 

Morga

Torrent's bid to supply power to GMDC on the basis of coal to be supplied by GMDC from Morga Coal Block II Chattisgarh has been accepted. A 1000 MW coal based Thermal Power Plant will be set up in Chattisgarh.

 

All put together Torrent Power's total power gen capacity shall rise from the present 1747.5 MW to 9247.5 MW making it amongst the top 3-4 power gen corporations in the country with a collective asset block worth Rs 40000 crore or roughly $ 8 bn.

(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

 

--
Arvind Parekh
+ 91 98432 32381