Market Outlook 11th Nov 2009

INTRADAY calls for 11th Nov 2009
Buy TTKPrestige-328 for 348-360+ with sl 320
Buy Hexaware-86 for 91-93+ with sl 83

Buy Mothersumi-113 for 117-121+ with sl 110
Buy Cipla-300 for 310-317+ with sl 296

 

NIFTY FUTURE LEVELS
RESISTANCE
4909
4947
4984
4996
5033
SUPPORT
4875
4864
4838
4826
4789

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

Ashok Ley, Yes Bank, McDowell-N, Lic house, Crompton Greaves, Allahabad Bank, DCHL, Mphasis, Sesa Goa & M&M. 

And this is list of 10 Weak futures:

Punj Lloyd, ICSA, MLL, Bharti Airtel, TTML, Aban Off shore, Idea, Tata Comm, Suzlon & RCom.
Nifty is in Down trend  
 

NIFTY FUTURES (F & O):  
Hurdle at 4909 level. Above this level, rally may continue up to 4945-4947 zone and thereafter expect a jump up to 4982-4984 zone by non-stop.

Support at 4875 level. Below these levels, expect profit booking up to 4864 & 4865 levels and thereafter slide may continue up to 4838-4840 zone by non-stop.

Buy if touches 4826-4828 zone. Stop Loss at 4789-4791 zone.

On Positive Side, cross above 4994-4996 zone can take it up to 5031-5033 zone by non-stop. If crosses & sustains this zone then uptrend may continue.
 
Short-Term Investors:  
1 Week: Bullish with a SL of 4671.20. Target at 4918.10.
1 Month: Bullish with a SL of 4620.00. Target at 6289.00.

3 Months: Bearish with a SL of 5080.00. Target at 2951.00.

1 Year: Bullish with a SL of 2575.00. Target at 6201.65.
 
BSE SENSEX:  
Sell with a SL of 16583.56. Target at 15957.06. 

Short-Term Investors:  
1 Week: Bullish with a SL of 15720.73. Target at 16606.95.
1 Month: Bullish with a SL of 14937.03. Target at 18381.96.

3 Months: Bearish with a SL of 17361.47. Target at 12425.52.

1 Year: Bullish with a SL of 15197.60. Target at 18289.88.
 

POSITIONAL BUY:
Buy BRAWN PHARMACEUT (BSE Cash & BSE Code: 530207) 
Buy with a Stop Loss of 18.80. Above 22.90, it will zoom.
 

Today: May hold on gains.

1 Week: Bearish, surprisingly going up.

1 Month: Bullish, as per current market conditions.

3 Months: Bullish, as per current market conditions.

1 Year: Bullish, as per current market conditions.
 
Buy SCOOTERS (I) (BSE Cash & BSE Code:505141) 
Buy with a Stop Loss of 27.45. Above 31.35, it will zoom.
 

Today: May hold on gains.

1 Week: Bullish, as per current market conditions.

1 Month: Bullish, as per current market conditions.

3 Months: Bullish, as per current market conditions.

1 Year: Bullish, as per current market conditions.
 

 

FUNDS DATA

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	10-Nov-2009	2995.19	2736.02	259.17

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	10-Nov-2009	1757.15	1574.89	182.26

 

SPOT INDEX LEVELS

	4881.70	( -0.34 %)	-16.70
		1	2	3
Resistance		4932.90	4984.10	5020.50
Support		4845.30	4808.90	4757.70

	16440.56		( -0.35 %)	-58.16
			1	2	3
Resistance			16621.51	16802.45	16927.38
Support			16315.64	16190.71	16009.77

 

Interesting findings on web:
Most U.S. stocks fell following six straight gains for the Standard & Poor's 500 Index as earnings disappointed investors at companies from MBIA Inc. and Fluor Corp. to Electronic Arts Inc.

U.S. stocks closed mostly lower on Tuesday as differing views on whether the market can build on recent gains stalled the S&P 500's six-day winning streak.

The Dow industrials eked out a small gain to set a fresh 13-month high as cautious statements on the economic outlook from several Fed officials underscored the belief that easy monetary policy will remain intact well into next year.

"There's a lot of conflicting signals as to whether we get a sharp year-end rally with money pouring in, or whether we start to see profit-taking as investors look ahead to a potential jobless recovery in 2010," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

The Dow Jones industrial average .DJI gained 20.03 points, or 0.20 percent, to end at 10,246.97. The Standard & Poor's 500 Index .SPX shed 0.07 of a point, or 0.01 percent, to 1,093.01. The Nasdaq Composite Index .IXIC dropped 2.98 points, or 0.14 percent, to close at 2,151.08.

RUSSELL586.93-5.38-0.91%

TRAN3916.91-3.76-0.1%

UTIL377.20.92+0.24%

S&P 100507.270.56+0.11%

S&P 400696.75-1.02-0.15%

NYSE7126.42-8.91-0.12%

NAS 1001773.174.77+0.27%

The Dow Jones Industrial Average scratched out a fifth straight gain Tuesday as American Express, Kraft Foods, and Bank of America all rose after upbeat announcements.

The S&P 500 climbed as much as 0.3 percent in the first hour of trading today, bringing the gauge within 1.5 points of its one-year high on Oct. 19. The index hasn't advanced for seven straight days since 2006. The S&P 500 is down 30 percent from its 2007 peak even after rebounding 62 percent from a 12- year low in March.

"To get further rallies from here, we'll have to see continuation of gradual improvements with respect to growth, business activity and hopefully a continuing slowdown in the pace of layoffs," said Christopher Sullivan, who oversees $1.4 billion as chief investment officer at United Nations Federal Credit Union in New York.

David Babbs, head of trading at MF Global in London, said the lack of news this week means the market is "going to go sideways and wait for its next cue."

The market will likely remain in a tight band until the next Federal Reserve policy-setting meeting Dec. 16, said Don Humphreys, president of Voyager Wealth Management.

"After a rally like Monday's, there's always a chance for a pullback, but I think we'll tread water," Humphreys said. "Overall, the trend continues to be higher."

Tuesday could not sustain momentum from the rally Monday, which came after the Group of 20 said over the weekend that it would keep economic stimulus in place.

"We see that stimulus is still needed," said Peter Cardillo, chief market economist at Avalon Partners. "And as long as money is cheap, people will continue to invest."

A falling dollar boosted prices for gold, oil and other commodities, and Cardillo said investors will focus on those markets in absence of major reports -- as well as corporate news including earnings from Applied Materials (AMAT, Fortune 500), Wal-Mart (WMT, Fortune 500) and Walt Disney (DIS, Fortune 500).

Analysts and investors alike have struggled to determine whether the recent rally is justified. Voyager Wealth's Humphreys says it depends on the timeline.

"Maybe the fundamentals aren't there for a quick kill, but that's a short-term basis," Humphreys said. "I think for longer-term investors, the fundamentals are there -- we are out of the worst of this recession."

Barring a change in federal interest rate policy, Humphreys said he expects a "flat to higher trend" in the market for the remainder of 2009 with the Dow ending the year above 10,000.

There is some disagreement about whether the rally that pushed the Dow up more than 200 points Monday can be sustained. "We're very leery about the economy and what kind of recovery we're going to have, but we're much more bullish on the equity markets," said mutual-fund manager Ryan Jacob, of Jacob Asset Management.

By contrast, strategist Bill King, of M. Ramsey King Securities in Burr Ridge, Ill. said his firm has sat out the current rally. "We're waiting for gold to pull back a little here so we can maybe buy a little more. But that's about it."

A number of market watchers still believe the recent surge in stocks has been overdone given the weaknesses that remain in the economy, such as the large amounts of souring loans on banks' balance sheets.

Still, some analysts said the market's ability to hold its gains is a welcome sign.

Ryan Detrick, senior technical strategist at Schaeffer's Investment Research, said it is encouraging that the market is holding its gains and isn't as volatile as last month when big advances would be followed by big drops. He said a day of modest moves is a healthful sign of a market consolidating its gains.

"It's kind of what you call a coffee day," he said, referring to the market's small moves. "We expect that we'll continue to stair-step higher to the end of the year."

The S&P 500 is now trading at about 17 times its members' estimated earnings, according to Bloomberg data, compared with an average ratio of 14.9 since the data starts in 2006. Jeremy Grantham, the chief investment strategist at Boston-based Grantham Mayo Van Otterloo & Co., wrote last month that the "fair value" for the S&P 500 is around 860, or about 21 percent below today's close.

Billionaire investor Kenneth Fisher said the S&P 500 will probably exceed 1,300 as early as February because the economy continues to rebound from the worst recession since the 1930s.

The index will add up to 25 percent from last week's close in the next three months, said Fisher, 58, who oversees $35 billion as chairman of Woodside, California-based Fisher Investments Inc.

"It's just a reversal of excessive pessimism," Fisher, ranked by Forbes magazine as the 289th-richest person in the U.S., said in an interview yesterday. "We still have a lot more bull market to go because we had such a huge bear market."

Of 430 companies in the S&P 500 that reported quarterly earnings since Oct. 7, 83 percent exceeded estimates, according to data compiled by Bloomberg. Average earnings per share slumped 15 percent in the period, a ninth-straight quarter of declining profits. Retailers Macy's Inc., Wal-Mart Stores Inc. and J.C. Penney Co. are among companies scheduled to release results this week.

MBIA, the world's largest bond guarantor, tumbled 27 percent after posting a $727.8 million loss on insured credit derivatives. Fluor sank 7.6 percent as the engineering firm cut its full-year profit forecast, while Electronic Arts sank 6.4 percent following its 11th straight quarterly loss. The Dow Jones Industrial Average climbed to a 13-month high for a second day as American Express Co. and Bank of America Corp. rallied.

"The market seems to go back and forth daily based on who reports earnings and what they report, and today you had a couple of modestly disappointing earnings repots," said Dean Gulis, part of a group that manages $2.5 billion for Loomis Sayles & Co. in Bloomfield Hills, Michigan. "To some extent you're having a reaction to a pretty strong day yesterday."

MBIA slid 27 percent to $3.52, its steepest loss since April 2008. The insurer reported a net loss of $727.8 million, or $3.50 a share, in the third quarter on a drop in the value of securities the company backs through the credit derivatives market. The average estimate of three analysts surveyed by Bloomberg was for a loss of $1.09 a share.

Fluor declined 7.6 percent to $44.38 for its biggest tumble since March. The largest publicly traded U.S. engineering firm lowered its full-year earnings forecast after posting third- quarter profit of 89 cents a share. Analysts surveyed by Bloomberg estimated earnings of 90 cents on average.

Electronic Arts lost 6.4 percent to $18.29. The second- largest video-game publisher reported its second-quarter loss widened to $391 million, or $1.21 a share. Excluding some items, per-share profit of 6 cents missed the 10-cent average estimate of analysts in a survey.

Exxon Mobil Corp., the largest U.S. energy company, slipped 0.3 percent to $72.61. Crude-oil futures fell 38 cents to $79.05 a barrel in New York as Tropical Depression Ida weakened, allowing workers to return to offshore platforms in the Gulf of Mexico. 

American International Group Inc. climbed 3.9 percent to $37.59. The insurer bailed out by the U.S. will be able to repay its Federal Reserve credit line and "much or all" of the Treasury Department's investment if financial markets stabilize, Moody's Investors Service said. AIG owed more than $44 billion on the credit line as of last week and has tapped more than $40 billion from Treasury facilities.

Bank of America gained 1.7 percent to $16.03. Chief Executive Officer Kenneth D. Lewis said the largest U.S. lender by assets expects to achieve 45 percent of its $7 billion in cost savings from acquiring Merrill this year, ahead of the 25 percent anticipated when the transaction was completed.

Shares of Dow component American Express Co (AXP.N) rose 1.6 percent to $39.68 after the company said credit card spending increased in October from September in another sign that the worst of the financial crisis may be over for the largest U.S. credit-card company.

Health-care stocks in the S&P 500 climbed 0.5 percent as a group, the most among 10 industries. Senate Majority Leader Harry Reid told reporters he expects to bring legislation to overhaul the U.S. health-care system up for debate next week. He believes the Senate can pass the measure by the end of the year.

Johnson & Johnson, Pfizer Inc. and Abbott Laboratories added at least 0.8 percent.

Bristol-Myers Squibb Co. gained 1.3 percent to $23.34. The drugmaker agreed to license Alder Biopharmaceuticals Inc.'s rheumatoid arthritis treatment in a deal that may be worth more than $1 billion.

FedEx Corp. added 1.1 percent to $82.13. The second- largest U.S. package-delivery company projected it will handle about 8 percent more shipments on its busiest day before the Christmas holiday amid "positive signs" for the economy. Monsanto Co. climbed 5.2 percent to $73.66, the most since July, after reconfirming its plan to double 2007 gross profit in 2012. The world's largest seed producer increased its expectation for 2010 sales of two seeds by at least 14 percent and said it will advance nine biotech seeds in the pipeline by January.

Beazer Homes USA Inc. rose 8.7 percent to $5.10 after posting its first quarterly profit in three years. The homebuilder said revenue for the fiscal fourth quarter fell to $376.3 million from $649.8 million a year earlier, beating the $334.7 million average analyst estimate.

Priceline.com Inc. added 18 percent to $204.22 for the stock's steepest advance since February 2008 and the biggest gain in the S&P 500. The online travel agency reported third- quarter sales and profit that topped analysts' estimates, buoyed by the summer travel season.

Shares of U.S. companies with the most overseas sales are doing best this year on speculation the dollar's slide is boosting earnings.

Home builders' shares took a hit, with the Dow Jones home construction index .DJUSHB down 2 percent after data from the National Association of Realtors showed home prices fell in the third quarter from year-ago levels in about 80 percent of U.S. cities.

Most U.S. cities saw gains in the median price of single-family homes sold last quarter, said a report from the National Association of Realtors. The national median home price was $177,900 in the third quarter, up $7,000 from the previous quarter.

In other housing news, the Treasury Department said 650,000 troubled borrowers have been put into trial loan modifications under the Obama administration's foreclosure rescue plan.

DR Horton Inc (DHI.N) fell 3.6 percent to $11.69 and KB Home (KBH.N) dropped 3.3 percent to $14.68.

Regional bank Zions Bancorp (ZION.O) tumbled 7.6 percent to $13.26 and the KBW bank index fell 1.4 percent.

On the upside, Monsanto Co (MON.N) shares rose 5.2 percent to $73.66 after the company said it had raised expectations for accelerated launches of new products.

Shares of online travel agency Priceline.com (PCLN.O) jumped 17.6 percent to $204.22 a day after the company reported earnings that beat forecasts.

Kraft rose 1% after the food giant said it would ask shareholders to approve the issuance of new stock for its proposed Cadbury deal through a special meeting, and that the terms of its offer for the U.K. confectioner are subject to change. Although additional stock would dilute existing shareholders, traders generally are eager to see the deal go through.

Fluor Corp. fell $3.63, or 7.6 percent, to $44.38 after the engineering and construction company posted an 11 percent drop in its third-quarter profit as revenue fell at its oil and gas and power divisions.

JPMorgan [JPM  44.15    -0.20  (-0.45%)   ] slipped 0.4 percent after the brokerage announced plans to reinstate its 401(k) matching — starting with 2009 — and said they plan to hire 1,200 mortgage officers.

And Yahoo [YHOO  16.04    0.02  (+0.12%)   ] is back in expansion mode — CEO Carol Bartz said they're hiring again. Its shares ticked up 0.1 percent.

Oracle [ORCL  21.80    -0.03  (-0.14%)   ] and Sun Microsystems  [JAVA  8.15    -0.09  (-1.09%)   ] skidded. The U.S. Justice Department weighed in on regulatory concerns about Oracle's purchase of Sun in Europe, saying it does not agree with the EU's objections to the deal.

There were no major releases on the calendar for a second consecutive day, a streak that will be continued Wednesday as many offices and the bond market will be closed in observance of the Veterans' Day holiday.

Filling the void, there were a parade of Fed speakers today: Atlanta Fed President Dennis Lockhart, San Francisco Fed President Janet Yellen, Fed Governor Daniel Tarullo and Dallas Fed President Richard Fisher.

VIX22.84-0.31-1.34%.

Oil,Gold & Currencies:

The price of U.S. crude oil fell 38 cents to settle at $79.05 a barrel.

December gold rose $1.10 to settle at a record $1,102.50 an ounce.

The dollar rose off 15-month lows, jumping slightly against the euro and the British pound. The greenback inched up on the Japanese yen.

Bonds:

Bond prices mostly rose, sending yields down, after an auction of 10-year notes drew decent demand. The 10-year yield fell to 3.48 percent from 3.49 percent late Monday.

What to expect:

WEDNESDAY: Veterans' Day (offices, bond market closed); Bill Gates speaks; Forbes most powerful people list; weekly mortgage applications; Earnings from Macy's, Applied Materials

THURSDAY: FDA meeting on Internet advertising starts; Buffett/Gates/CNBC Town Hall meeting; Geithner at APEC meeting in Singapore; weekly jobless claims; weekly crude inventories; Treasury budget; Earnings from Wal-Mart, Disney

FRIDAY: NY Fed conference on financial intermediation; international trade; import/export prices; consumer sentiment; Nicholas Cosmo court appearance; Fed's Evans speaks; Earnings from JCPenney, Abercrombie

Other Headlines:

Bear Stearns Managers Cioffi, Tannin Not Guilty in Biggest Subprime Case

Dodd's Pay Plan Called `Toothless Tiger' as Wall Street Bonuses Set Record

Fed's Fisher Says U.S. Economic Growth Likely to Be `Suboptimal' Into 2011

Japanese Machinery Orders Rise 10.5%, More Than Twice as Much as Estimated

Taiwan Bans Foreign Investors From Time Deposits to Attack Hot Money Flows

Obama Pays Tribute to Fort Hood Victims, Says No Faith Justifies Shootings

United Air Pilot Charged in London After Failing Breath Test for Alcohol

Bill Clinton rallies Senate Democrats on healthcare

Zucker to head new NBCU-Comcast venture: sources

Dodd's super bank cop faces tough battle

Apple tops phone chart as Nokia, Samsung step up

Former NASA astronaut avoids jail for attack

Obama weighs four options in Afghanistan: White House

Sen Dodd seeks more muscle in US financial reforms  

Kerry, U.N.'s Ban upbeat on climate prospects

DHL, Renault, Walmart Bet on India to Fill Potholed Roads, Develop Ports

SingTel Profit Rises 10% to Highest in Six Quarters

China's Industrial Production, Retail Sales Accelerate, Cementing Recovery

Fed's Lacker: US in a 'Good Place' With Inflation

The United States is in a "good place" with inflation, but it is too soon to say when the Federal Reserve will raise interest rates, a top Fed official said on Tuesday.

Richmond Federal Reserve President Jeffrey Lacker told CNBC that the risk of deflation had diminished substantially, but cautioned that the nation could see a growing risk of inflation over the next few years.

"I think we're in a good place with inflation right now. The risk of deflation, pronounced fall in (the) inflation rate, has diminished substantially since the beginning of the year," Lacker said. "As the economy proceeds, maybe not next year, we could see a growing risk of significant increases in inflation."

Lacker also said that the U.S. Federal Reserve has the tools to withdraw the support it is giving the economy and can reduce the size of its balance sheet even before it begins to raise rates on reserves.

He said that the economy should continue to gradually stengthen, and that he believed the decline in consumer spending had bottomed and not because of government stimulus.

Asia:

Asian stocks rose, driving the MSCI Asia Pacific Index higher for a fourth day, after Japan's machinery orders increased more than economists expected and shipping rates climbed.

Mori Seiki Co., a maker of precision lathes, advanced 1.9 percent as orders for Japanese machinery climbed 10.5 percent in September. STX Pan Ocean Co., South Korea's biggest bulk carrier, climbed 3.2 percent in Seoul as the Baltic Dry Index posted its steepest jump in a month. Newcrest Mining Ltd., Australia's largest gold producer, gained 0.7 percent as bullion advanced. Daikin Industries Ltd., the world's No. 2 air conditioner maker, jumped 3.2 percent after lifting its annual profit forecast.

The MSCI Asia Pacific Index advanced 0.7 percent to 118.83 as of 9:54 a.m. in Tokyo, extending its four-day increase to 3.6 percent. South Korea's Kospi climbed 0.5 percent, while Australia's S&P/ASX 200 Index gained 0.6 percent.

Japan's Nikkei 225 Stock Average added 0.7 percent to 9,922.12. The 10.5 percent increase in September for machinery orders, an indicator of business investment in three to six months, beat economist predictions for a 4.1 percent increase.

Asian investors are also awaiting data on industrial production, inflation and investments from China later this morning.

Futures on the Standard & Poor's 500 Index rose 0.3 percent. The gauge was little changed yesterday and the Dow Jones Industrial Average climbed to a 13-month high for a second day. Earnings from bond guarantor MBIA Inc., engineering company Fluor Corp. and the video-game publisher Electronic Arts Inc. disappointed investors, while American Express Co. and Bank of America Corp. rallied.

Mori Seiki, Komatsu

Mori Seiki gained 1.9 percent to 921 yen. Fanuc Ltd., the world's largest maker of industrial robots, climbed 1.6 percent to 7,740 yen. Komatsu Ltd., the world's second-biggest maker of construction equipment, advanced 0.9 percent to 1875 yen after the stock was raised to "neutral" from "underperform" at Merrill Lynch & Co.

"The bottom is probably behind us for capital spending," said Masamichi Adachi, a senior economist at JPMorgan Chase & Co. in Tokyo. "The retrenchment phase is over and the corporate sector as a whole should gradually pick up in a self-sustained way."

STX Pan Ocean jumped 3.2 percent to 11,350 won. Kawasaki Kisen Kaisha Ltd., Japan's third-biggest shipping line operator by sales, rose 1.5 percent to 330 yen.

The Baltic Dry Index, a measure of shipping costs for commodities, surged 3.9 percent yesterday, a ninth consecutive gain and the steepest rally since Oct. 8.

Gold Futures

Newcrest added 0.7 percent to A$35.41. Gold futures in New York increased for an eighth-straight session today in after- hours trading, rising 0.5 percent to $1,107.60 an ounce.

The MSCI Asia Pacific Index has climbed 68 percent from a more than five-year low on March 9, outpacing gains by the S&P 500 and Europe's Dow Jones Stoxx 600 Index. Stocks in the benchmark are valued at 22 times estimated earnings, compared with 17 times for the S&P 500 and 15 times for the Stoxx.

Daikin rose 3.2 percent to 3,270 yen after raising its full-year forecast for net income, saying it sees signs of recovery in demand in China.

Nikkei 225 9,892.29     +21.56 ( +0.22%). (08.07 AM IST)

HSI 22434.09 +165.93 +0.75%. (08.08 AM IST)

  SSE Composite  3175.77   -0.09. (08.09 AM IST)

Rupee:

The partially convertible rupee INR=IN ended at 46.50/51 per dollar on yesterday, weaker than 46.46/47 at close on Monday.

INDIA:

India's stocks fell for the first time in five days after Finance Minister Pranab Mukherjee raised concern that domestic demand is still needed to support the economy when he said fiscal stimulus measures will be withdrawn.

Maruti Suzuki India Ltd., the maker of half the cars sold in India, slid 2.6 percent after Mukherjee said the government will take "corrective" steps and pull back fiscal stimuli once economic recovery takes hold, stressing the need to cut the budget deficit. Hindalco Industries Ltd., the biggest aluminum producer, fell 2.3 percent on a slide in the price of the metal on the London Metal Exchange.

"The finance minister's comment shows that domestic demand is not as robust as it was earlier thought," said R.K. Gupta, who helps oversee the equivalent of $387 million at Taurus Asset Management Ltd. in New Delhi. "The biggest concern is the rising prices of essential commodities, which is suppressing domestic demand."

The Bombay Stock Exchange's Sensitive Index, or Sensex, dropped 58.16, or 0.4 percent, to 16,440.56. The gauge had risen 7.1 percent in the previous four trading sessions.

The S&P CNX Nifty Index on the National Stock Exchange declined 0.3 percent to 4,881.70. The BSE 200 Index fell 0.2 percent to 2,050.39.

Maruti fell 2.6 percent to 1,445.55 rupees. New Delhi-based Maruti Suzuki, whose profit almost doubled last quarter, is among consumer companies that have benefited from the injection of 5.85 trillion rupees ($124 billion) of cash since September 2008 to sustain credit to companies and households.

Withrawing Stimulus

"Fiscal consolidation is imperative," Mukherjee told the India Economic Summit organized by the World Economic Forum in New Delhi today. He said fiscal stimulus will be withdrawn in "due course," two days after Prime Minister Manmohan Singh said it will be done next year.

Hindalco fell 2.3 percent to 126.5 rupees. Aluminum fell 0.4 percent to $1,945 a ton on the London Metal Exchange.

Stocks in the South Asian nation are trading at about 17 times estimated earnings, the higher end of its historical range, Rahul Chadha, Mirae Asset Global Investment's head of Indian equities, said in an interview with Bloomberg Television in Hong Kong said. Further gains of between 10 percent and 15 percent could leave shares "vulnerable to correction" in the near term, he added.

'Priced for Perfection'

"We're priced for perfection," Chadha said. "We have inflation, which will be in high single digits probably by March next year. We have government withdrawing part of the stimulus in February in the union budget. That may just act as some dampener for markets."

India's government may start withdrawing some of the excise duty cuts introduced early next year, Chadha said. Prime Minister Manmohan Singh said on Nov. 8 that he sees clear signs of an "upturn" in the economy and that the government plans to "take appropriate action next year" to wind down the stimulus measures.

Separately, Moody's Investors Service said India's sovereign rating won't be raised unless the government works toward reducing its budget deficit and debt.

Higher borrowing by the government is expected to widen the budget deficit to a 16-year high of 6.8 percent of gross domestic product in the 12 months to March 2010, according to the finance ministry.

Overseas funds bought a net 6.96 billion rupees ($148.17 million) of Indian stocks Nov. 6, the Securities and Exchange Board of India said on its Web site. The funds have bought 691.1 billion rupees of Indian stocks this year to date, compared with record net sales of 530 billion rupees for the whole of 2008.

The following were among the most active on the exchange:

Reliance Industries Ltd. (RIL IN), India's most valuable company, gained 1.5 percent to 2,054.5 rupees after it found oil in a block in the Cambay basin in the western state of Gujarat.

The shares also climbed after the Daily News & Analysis reported the billionaire Ambani brothers met in Mumbai to discuss their disagreement over gas supplies. Manoj Warrier, a spokesman for Reliance Industries, declined to comment, while Reliance Natural Resources said rumors of an out-of-court settlement are "completely baseless and speculative." Reliance Natural Resources Ltd., owned by Anil Ambani, advanced 1.7 percent to 73.4 rupees.

NMDC Ltd. (NMDC IN), the nation's largest iron-ore producer, jumped 20 percent to 432.2 rupees after the steel ministry said it will initiate next month a plan to sell a stake in the company.

The government, which owns 98.38 percent of NMDC, aims to sell an 8.38 percent stake as part of a plan to cut holdings in its profitable companies to 90 percent. The stake sale in Hyderabad-based NMDC will fetch as much as 130 billion rupees at current prices, the steel ministry said in its statement yesterday.

ICICI Bank (ICICIBC IN), the country's second-biggest lender, added 0.9 percent to 896.55 rupees after its rating was upgraded to "outperform" at Reliance Equities International Pvt., which said the company may report annual profit growth of 18 percent from fiscal 2009 through 2011.

LIC Housing Finance Ltd. (LICHF IN), the mortgage lender controlled by India's biggest life insurer, fell 1.5 percent to 879.05 rupees after it was rated "sell" in new coverage at Citigroup Inc., which said investors should "lock in gains" given a possible peak in growth, profitability and valuations. The stock gained 10 percent to 892.3 rupees.

Main index drops 0.35 pct after rising 7.1 pct over 4 days  Telecom stocks fall as bleak outlook weighs  State Bank, ICICI Bank gain on recovery hopes Indian shares snapped a four-daywinning streak and fell 0.35 percent on Tuesday, weighed down by telecom stocks that dropped on a bleak out for the sector due to growing competition and a price war. The market had initially rallied more than 1 percent,adding to gains of 7.1 percent in the past four days, but met with resistance on concerns the rise was too fast against uncertainties about outlook.

Reliance Industries (RELI.BO: Quote, Profile, Research) rallied as much as 3.7 percent after the energy major announced its first oil find in a western Indian block, boosting hopes the firm's oil and gas exploration business will help offset some of the weakness in the refining sector.The stock, with the most weight in the main index, ended up 1.4 percent at 2,052.60.

Bharti Airtel (BRTI.BO: Quote, Profile, Research), the country's leading mobile operator, fell 4.5 percent to 293.75 rupees, while rival Reliance Communications (RLCM.BO: Quote, Profile, Research) shed 2.9 percent to 169.05 rupees. JPMorgan cut its earnings estimates and share price targets for the sector companies and said it did not see a bottom yet. "We believe that the fundamental issue for the sector remains overcompetition and high capital expenditure over last 2-3 years leading to empty network for several players," it said in a note.

The 30-share BSE index .BSESN closed down 58.16 points at 16,440.56 after rising as high as 16,677.53 in the morning.

Twenty-two of its components declined.  The 50-share NSE index .NSEI closed 0.2 percent lower at 4,881.70. Gupta said he expected the Nifty to trade in a range of 4,550-4,950 over the next 3-4 months.

Leading lenders such as State Bank of India (SBI.BO: Quote, Profile, Research) and ICICI Bank (ICBK.BO: Quote, Profile, Research) firmed on positive long-term outlook expectations, analysts said.

State Bank firmed 2.1 percent to 2,368.10 rupees and ICICI climbed 0.7 percent to 894.65 rupees. India will focus on driving domestic demand until key developed markets recover and will not exit fiscal stimulus measures until necessary, Finance Minister Pranab Mukherjee said on Tuesday.

In the broader market, losers outpaced gainers in the ratio of 1.1:1 on relatively better volume of 403 million shares.

State-run explorer Oil & Natural Gas Corp (ONGC.BO: Quote, Profile, Research) fell 2.5 percent to 1,137.85 rupees on profit taking after it rose 4.3 percent in four previous sessions.

Alstom Projects India (ABBP.BO: Quote, Profile, Research) rose 1.5 percent to 529.45 rupees after the power generation services provider said it won contracts worth 3.65 billion rupees from Hindalco Industries (HALC.BO: Quote, Profile, Research) for supply and installation of four gas treatment plants.

Unichem Laboratories (UNLB.BO: Quote, Profile, Research) closed nearly 3 percent up at 260.10 rupees after the drugmaker said it had received approval from the U.S. Food and Drug Administration for its bulk drug facilities in Madhya Pradesh and Maharashtra. The stock rose as much as 10.8 percent in early deals.

Among the 30-components of Sensex, 22 stocks ended in the red and 8 ended in the positive terrain. Bharti Airtel, DLF, RCom, Hero Honda and Maruti were among the top losers.

On the other hand, among the major gainers were Tata Motors, SBI, Reliance Industries, Sterlite and ICICI Bank.

Outside the frontline indices, the big losers in the broader market were Educomp, Indiabulls Real Estate, Central Bank, Aban and Sintex Ind. On the other hand, gainers included NMDC, Jai Corp, Exide Ind, Hind Copper and Cummins India.

RNRL announced that the rumors of an imminent out-of-court settlement with RIL on the gas supply dispute are completely baseless and speculative. In addition, Reliance Industries also clarified saying that the out-of-court settlement was untrue and baseless. Reliance Industries also announced that it found oil in a block in the western state of Gujarat and was assessing the commercial viability of the discovery. 

Shares of RNRL gained by 2% to Rs73.45. The stock opened at Rs73.2 and made an intra-day high of Rs76.5 and a low of Rs73.1. Total traded volumes stood at 1.15mn shares.

While, shares of Reliance Industries advanced by 1.4% to end at Rs2052. The stock opened at Rs2035 and made an intra-day high of Rs2100 and a low of Rs2007. Total traded volumes stood at 1.3mn shares.

Shares of Alstom Projects gained by 1.5% to Rs529.45 after the Company announced that it won contracts worth Rs3.65bn from Hindalco Industries for supply & installation of four gas treatment plants in India.

Shares of NMDC were locked at 20% upper circuit to end at Rs433.7 after the steel ministry said it will initiate next month a plan to sell a stake in the company.

The government, which owns 98.38% of the company, aims to sell an 8.38% stake as part of a plan to cut holdings in its profitable companies to 90%. The government may raise Rs256bn from its divestment program, according to reports.

Siemens announced that its energy sector has received an order for Rs6.08bn from Qatar General Electricity & Water Corporation (Kahramaa), Doha, Qatar for the complete supply, design, erection, testing and commissioning of 132kV & 66kV High Voltage Cables. This Order is required to be completed over a period of 2 years.

Shares of NTPC edged higher by 0.5% to end at Rs211.8 after the company announced that it signed MoU with Government of Madhya Pradesh for setting up of 4x660 MW coal based thermal power project in Narsingpur District, Madhya Pradesh.

The stock opened at Rs214 and made an intra-day high of Rs214 and a low of Rs210. Total traded volumes stood at 0.4mn shares.

Nagarjuna Construction said it secured five orders worth Rs7.22bn from Bangalore Water Supply and Sewerage Board and Water Resources Department, Bihar for construction of Bituminous Road.

The stock opened at Rs171 and made an intra-day high of Rs171.5 and a low of Rs163. Total traded volumes stood at 0.44mn shares.

In the domestic arena, the market regulator, Sebi allowed existing stock exchanges to set up a separate trading platform and relaxed the criteria for their listings, in order to encourage small and medium firms to come out with public issues. The firms coming out with issues to be traded on these platforms, they have to have at the most Rs 25 crore of paid-up capital. Moreover, to allow pure auctions for qualified institutional investors (QIBs) in follow-on public offerings to start with, Sebi has also amended the Issue of Capital and Disclosure Requirements Regulations (ICDR). The method may be later extended to initial public offerings. As per the new method, the bidders will be free to bid at any price above the floor price. Besides this, Finance Minister Pranab Mukherjee said that corrective measures on stimulus have to be taken by India in due course and the fiscal consolidation is absolutely imperative.

Among the Sensex pack 22 stocks ended in positive territory while 8 stocks in negative territory. The market breadth indicating the overall health of the market remained weak as 1,463 stocks closed in red while 1,290 stocks closed in green and 56 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 58.16 points or (0.35%) at 16,440.56 and NSE Nifty closed down by 16.70 points or (0.34%) at 4,881.70. The BSE Mid Caps and Small Caps closed lower by 27.42 points and 27.72 points at 6,349.94 and 7,297.91 respectively. The BSE Sensex touched intraday high of 16,677.53 and intraday low of 16,371.66.

Losers from the BSE Sensex pack are Bharti Airtel (4.47%), Hero Honda (3.27%), DLF (3.17%), Reliance Communication (2.90%) and Maruti Suzuki (2.73%), ONGC (2.49%), HUL (2.32%) and Hindalco Inds (2.01%).

Gainers from the BSE Sensex pack are Tata Motors (2.26%), SBI (2.14%), Reliance Inds (1.39%), ICICI Bank (0.66%), Sterlite Inds (0.65%), Tata Power (0.54%), NTPC (0.31%) and TCS (0.28%).

On the global markets front, the Asian markets that opened before the Indian market, closed in green. Taiwan Weighted, Nikkei, Strait Times, Seoul Composite and Hang Seng closed higher by 0.75%, 0.63%, 0.53%, 0.35% and 0.27% at 7,593.49, 9,870.73, 2,707.60, 1,582.3 and 22,268.16 respectively.

European markets, which opened after the Indian market, are trading in positive. In London FTSE 100 is higher by 0.33% at 5,252.64 while in Paris the CAC 40 is up by 0.22% at 3,793.74 and in Frankfurt DAX index is trading higher by 0.41% at 5,642.95.

BSE REALTY index was at 3,968.34 down by 113.2 points or by (2.77%) The main losers were Indbul Real down by (4.8%) at Rs.238.85, Sobha Dev down by (3.94%) at Rs.232.9, Dlf Ltd down by (3.17%) at Rs.377.75, Unitech Ltd down by (2.71%) at Rs.86.25, Anant Raj In down by (1.99%) at Rs.135.25.

BSE METAL index was at 15,056.80 up by 203.90 points or by (1.37%) The main gainers were Nmdc Ltd up by (19.99%) at Rs.433.7, Jai Corp Lim up by (10.77%) at Rs.240.1, Jsw Sl up by (4.19%) at Rs.847.05, Sesa Goa Ltd up by (3.74%) at Rs.329.95, Jindal Saw up by (2%) at Rs.789.35.

BSE BANKEX index was at 10,184.00 up by 28.33 points or by (0.28%) The main gainers were State Bank Of India up by (2.14%) at Rs.2368.1, Yes Bank up by (1.14%) at Rs.269.85, Icici Bank L up by (0.66%) at Rs.894.65, Allahabad Bk up by (0.3%) at Rs.134.8, Indus Ind Bk up by (0.04%) at Rs.134.2.

BSE PSU index was at 9,158.61 up by 176.54 points or by (1.97%) The main gainers were Nmdc Ltd up by (19.99%) at Rs.433.7, St Trad Corp up by (8.69%) at Rs.376.3, Engineers In up by (8.23%) at Rs.1395.95, Hind.Copper up by (5.79%) at Rs.280.6, M M T C Ltd. up by (4.63%) at Rs.38019.6.

BSE TECk index was at 2,873.71 down by 40.62 points or by (1.39%) The main losers were Bharti Artl down by (4.47%) at Rs.293.75, Tech Mah down by (3.11%) at Rs.997.25, Tel Eighteen down by (3.05%) at Rs.77.85, Sun Tvnet down by (3.05%) at Rs.318.25, Rolta Ind down by (3.03%) at Rs.169.45.

Reliance Industries Limited surged 1.39% to close at Rs. 2,052.60. The company announced the first oil discovery in the onland exploratory block CB-QNN-2003/1 (CB 10 A&B) awarded under the NELP-V round of exploration bidding.

Subhash Projects & Marketing Ltd closed up by 1.75% at Rs. 136.60. The company has received Two Nos. of Orders for amounts aggregating to Rs 277.71 Crs.

EdServ closed with gains of 6.29% at Rs. 244.15. The company has launched VIDHYADHANA, an Academy of Excellence in K-12 for schools that encompasses fun-filled learning for primary-secondary education.

Alstom Projects India Ltd (APIL) closed higher by 1.51% at Rs. 529.45. The company has been awarded Contracts worth Rs. 365 crores by Hindalco Industries Ltd for supply & installation of four gas treatment plants in India.

Other Headlines:

Govt proposes 2-level GST

Govt will meet GST deadline: BMR

Gas Opera: RIL, RNRL deny deal talks

Govt to continue stimulus: Pranab

Sebi bars Saimira from mkts for 7yrs

AI board meets tomorrow

TVS Capital picks up over 35% stake

IEA cuts 2030 oil demand forecast on eco

Healthcare, education to grow: Deloitte

Sony India targets 20% of notebook mkt

Mahindra Satyam to reposition itself

Yum! Restaurant to invest up to $150m

India to renegotiate tax treaties

ArcelorMittal offer for Galva delayed

We should convince the investor: Shourie

Tropical Cyclone Strengthens Near India, May Hit Coast Tomorrow 
 

INVESTMENT VIEW
Hindustan Dorr-Oliver-Solidity In Numbers

BSE 509627

 

Hindustan Dorr-Oliver, a IVRCL Infra owned entity reported spectacular Q2 FY09 financials. QoQ Revenues rose 75 per cent to Rs 206 crore and after tax profits rose 96 per cent to Rs 15.64 crore. At an annualised forecast EPS of Rs 16, HDO is perhaps the most under-valued infrastructure stock in the country. A fair price target for the scrip would be Rs 240 in a year's time from now.

 

As per Mr. SC Sekaran, Executive Director of HDO, "the corporate continued with success in its core engineering vertical. Apart from the growth in existing lines of business, HDO plans to diversify into Bulk Material Handling especially catering to Power, Cement, Iron & Steel, Nuclear Energy, Coal washeries and Hydro-carbons. With over 4 decades of experience in the Engineering EPC segment, HDO is well positioned to enhance its portfolio of services as well as scalability. The corporate intends to transform into a company that provides end to end services in the Engineering EPC business and across verticals.

 

Order Book 

As of September 30th, 2009, HDO's order book stood at Rs 1398 crore. Also important tie-ups have been concluded with global technology players in the Minerals and Material Handling Equipment segment. In addition to which HDO's manufacturing facilities have been upgraded to meet demand from the Hydrocarbon sector pressure vessels and heat exchangers.

 

Background 

HDO is a leading in the Engineering EPC space in India with core competence and/or strategic alliances in the metallic minerals processing industries, environment, fertilizers, pulp and paper with an esteemed clientele.

 

HDO has three business verticals-design engineering, manufacturing and EPC with a national presence. HDO is currently executing the process plant for Uranium Corporation of India in the State of AP. Entailing an outlay of Rs 660 crore, this is one of the most prestigious projects bagged by the company and one that would have a sizeable national importance. Other major contracts won by HDO include processing units for Utkal aluminium, Vedanta Group and Reliance Infra.

(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.)
 
 

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Arvind Parekh
+ 91 98432 32381