Market Outlook 17th Nov 2009

INTRADAY calls for 17th Nov 2009

+ve Sector, Scripts : Steel, Suzlon

Buy Hindzinc-958 for 984+ with sl 950

Buy LITL-553 for 566-578+ with sl 545

Buy IRB-273 for 283-292+ with sl 267

Buy Aban-1291 for 1330-1347 with sl 1279

 

Positional

Buy Unitech-86 for 100+ with sl 81

Buy TATASteel-536 for 563-570+ with sl 530

 

Expected Breakout

Buy Rpower-151 above 153 for 163-168+ with sl 150

 

Breakout

Buy Maruthi-1558 for 1613-1624+ with sl 1545

Buy ZeeL-269 for 278-284+ with sl 265

 

NIFTY FUTURE LEVELS
RESISTANCE
5081
5100
5117
SUPPORT
5050
5032
5015
4965
4948

 

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

Recltd, Sesa Goa, Ashok Ley, Jindal Saw Steel, McDowell-N, Zeel, Finance Tech, M&M, Renuka & Neyveli Lignite.

And this is list of 10 Weak futures:

RCom, Tata Comm, GTL Infra, Idea, India Cement, GMR Infra, Bharti Airtel, EKC, Sterling Biotech & Unitech.
Nifty is in Down trend  
 

NIFTY FUTURES (F & O):  
Rally may continue up to 5081 level for time being.

Support at 5050 & 5052 levels. Below these levels, expect profit booking up to 5032-5034 zone and thereafter slide may continue up to 5015-5017 zone by non-stop.

Buy if touches 4965-4967 zone. Stop Loss at 4948-4950 zone.

On Positive Side, cross above 5098-5100 zone can take it up to 5115-5117 zone by non-stop. If crosses & sustains this zone then uptrend may continue.
 
Short-Term Investors:  
1 Week: Bullish with a SL of 5024.00. Target at 5516.45
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.
 
Today's Expectation:
SGX Nifty is trading at 5074.50. (08.51 AM IST).

This trend is on expected lines.

If rally continues then it can continue up to 1 (or) 2 days, 1 Week, (or) even 1 Month.

If profit booking starts then it can last for 1 day. If start trades & remain below 5062.45 (NF) then 1 day profit booking is possible.
 
BSE SENSEX: 
 Buy with a SL of 16666.70. Target at 17083.20. 

Short-Term Investors:  
1 Week: Bullish with a SL of 16909.74. Target at 18488.92.
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

JAIN STUDIOS (BSE Cash & BSE Code: 532033) 
Buy with a Stop Loss of 10.80. Above 17.18, 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.

 
Buy KAILASH FICOM (BSE Cash & BSE Code: 530955) 
Buy with a Stop Loss of 36.50. Above 42.70, it will zoom.
 

Today: May hold on gains.

1 Week: Bearish, surprisingly going up.

1 Month: Bearish, surprisingly going up.

3 Months: Bullish, as per current market conditions.

1 Year: Bullish, surprisingly going down.
 

SPOT INDEX LEVELS

	5058.05	( 1.18 %)	59.10
		1	2	3
Resistance		5089.50	5120.95	5168.70
Support		5010.30	4962.55	4931.10

	17032.51		( 1.09 %)	183.68
			1	2	3
Resistance			17112.77	17193.03	17302.86
Support			16922.68	16812.85	16732.59

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	16-Nov-2009	2446.31	1901.67	544.64

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	16-Nov-2009	843.31	1137.95	-294.64

Interesting findings on web:
U.S. stocks rallied, sending benchmark indexes to 13-month highs, and commodities gained as retail sales rebounded and Asian government leaders pledged to maintain economic stimulus spending. The dollar fell to a 15- month low and Treasury two-year yields touched the lowest level since January.

U.S. stocks rose broadly on Monday, sending indexes to fresh 13-month closing highs, after Federal Reserve Chairman Ben Bernanke reinforced expectations that interest rates would stay low to spur growth.

In the last hour of trading stocks briefly pared gains as Meredith Whitney, a prominent analyst, said in a CNBC television interview the stock market run-up was not supported by fundamentals.

The Dow Jones industrial average .DJI gained 136.49 points, or 1.33 percent, to 10,406.96. The Standard & Poor's 500 Index .SPX shot up 15.82 points, or 1.45 percent, to 1,109.30 -- its first close above the psychologically important 1,100 level for the first time since October 2008.

The Nasdaq Composite Index .IXIC jumped 29.97 points, or 1.38 percent, to 2,197.85.

With the Dow holding firmly above the psychologically important 10,000 level, investors are now turning their attention to another key high-water mark. Analysts say a sustained push above 1,100 points on the S&P 500 could pave the way for further gains in the weeks ahead.

"The big news today was the S&P closing above 1,100," said David Levy, a portfolio manager at Kenjol Capital Management. "From a short-term perspective, that's very bullish for the market."

After failing to close above 1,100 on three separate occasions over the last few months, the push above that key level suggests that the market is becoming more convinced that an economic recovery is under way, he said.

"We see the market going higher into year end," Levy said.

Retail sales jumped 1.4% in October from the prior month, according to the Census Bureau, exceeding the increase of 0.9% expected by a consensus of economists surveyed by Briefing.com. Excluding automobiles, sales rose 0.2%, falling short of the 0.4% gain forecast by Briefing.com consensus.

That's compared to an overall decline of 1.5%, or an increase of 0.5% without auto sales, the prior month.

A report from the New York Federal Reserve Bank showed manufacturing activity in New York State slowed in November. The Empire State index fell to 23.51 in early November from 34.57 in October, which was a five-year high.

Federal Reserve Chairman Ben S. Bernanke said economic "headwinds" of reduced bank lending and a weak labor market will probably restrain the pace of the U.S. economic recovery, warranting continued low borrowing costs.

"Significant economic challenges remain," Bernanke said in a speech to the Economic Club of New York. "The flow of credit remains constrained, economic activity weak and unemployment much too high. Future setbacks are possible."

Bernanke repeated that the Fed was likely to keep interest rates exceptionally low for "an extended period," a pledge that weighed on the U.S. dollar and drove investors to snap up shares of natural resource companies as prices of global commodities -- from gold to wheat -- shot higher.

In a speech before the Economic Club of New York, Bernanke said the recovery would not be as robust as previously hoped, and rising unemployment and tight bank lending were significant headwinds.

"The overriding message from Bernanke is that interest rates will stay low and remain low for the near to medium term. It seems that the market likes that," said Dennis Cajigas, senior market strategist at Lind-Waldock, a retail brokerage firm in Chicago.

"Investors essentially are borrowing against low rates in the dollar and putting that money in areas that they feel will react well against inflation, such as crude oil, energy, gold, commodities (and) stocks because the expected return should be higher over time."

"You have a world of policy leaders that think it's too early to withdraw monetary stimulus," said Craig Peckham, equity trading strategist at Jefferies & Co. in New York.

"Low interest rates have been encouraging speculators to use the dollar for a 'carry trade,' where they borrow the currency for next to nothing to invest in higher-yielding assets from other countries," Wantrobski wrote in a note. "If this is accurate, then the demand for dollars to fuel this carry trade is keeping the Dollar Index higher than it should be."

Even though Bernanke made a rare statement on foreign exchange markets, saying the Fed was watching the U.S. dollar closely, the greenback found very little reprieve.

The United States and China failed to reach an agreement over currencies at a summit of the Asia Pacific Economic Cooperation forum in Singapore.

Bernanke, commenting on the dollar's decline, said the Fed is attentive to changes in the U.S. currency, and the Fed's mandate will help ensure the greenback remains strong.

"If you take away stimulus, this economy falls apart. He knows it. He's boxed in here, he can't raise rates. It's impossible," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey. "So what do we do? We continue to buy equities because that's what the trade is."

Art Hogan, chief market analyst at Jefferies & Co., said the market is focused on the anemic dollar. "As the dollar weakens, commodity prices go up," he said. "It's nothing new, but there's really nothing else driving the market right now."

Stocks have soared over the past two weeks as investors have gained confidence in the pace of the economic recovery. The market has also been supported by signs that policy makers around the world will keep economic stimulus efforts in place for a prolonged period of time.

Monday's rally reflects the "continuing resiliency of the market," said Richard Sparks, senior equities analyst at Schaeffer's Investment Research. He said stocks could continue higher as the market overcomes key technical levels and more investors are drawn in from the sidelines.

The stock market has often moved in the opposite direction of the dollar lately, with traders apt to unload hoarded cash and increase their exposure to riskier assets such as stocks and commodities when there is confidence in the Fed's commitment to keep borrowing costs low.

Whitney, in an interview with CNBC just after 3pm ET, said she was disappointed that Bernanke didn't spell out how the Fed planned to exit "the biggest Fed program to date, which is the mortgage-backed purchase program."

"I haven't been this bearish in a year," Whitney said. "I look at the board and every single stock from Tiffany to Bank of America to Caterpillar is up. But there is no fundamental rooting as to why these stocks are up—particularly in the consumer space."

Whitney, if you recall, was one of the first analysts to call the bubble in financial stocks.

Home improvement retailer Lowe's (LOW, Fortune 500) reported a 30% drop in quarterly profit, but offered an optimistic outlook for fourth-quarter earnings.

General Motors (GM, Fortune 500), releasing its first financial results since emerging from bankruptcy in July, said it lost $1.2 billion in the third quarter. It also said it would begin repaying government loans in December. The U.S. government would receive $1 billion, with nearly $200 million going to the governments of Canada and Ontario.

Twenty-six of 30 Dow components finished higher. The decliners were: Bank of America [BAC  15.86    -0.12  (-0.75%)   ], Travelers [TRV  52.87    -0.41  (-0.77%)   ] Microsoft [MSFT  29.54    -0.09  (-0.3%)   ] and Wal-Mart [WMT  53.17    -0.03  (-0.06%)   ].

Alcoa [AA  13.61    0.43  (+3.26%)   ] and ExxonMobil [XOM  74.41    1.94  (+2.68%)   ] were among the leaders on the Dow as the dollar retreated following the Asia Pacific Economic Cooperation summit, where no currency agreement was reached with China.

The S&P materials .GSPM and energy .GSPE indexes each climbed more than 2.3 percent. Individual stock standouts included Exxon Mobil Corp (XOM.N), up 2.7 percent to $74.43 amid higher crude oil prices, and Caterpillar Inc (CAT.N) up 2.8 percent.

Caterpillar, whose fortunes are closely tied to the commodities industries, was one of the biggest boosts to the Dow, along with Boeing Co (BA.N), up 3.6 percent to $52.48.

Exxon Mobil Corp. led gains in 39 of 40 energy producers in the S&P 500 as the price of oil climbed the most in six weeks. Target Corp. and Sears Holdings Corp. rose as the U.S. government said retail sales grew 1.4 percent in October after slumping the most in nine months in September. American Express Co. surged 2.7 percent after loan defaults decreased for a sixth straight month.

"The retail sales news seems to be overriding any of the other market news today," said Joseph Veranth, chief investment officer at Dana Investment Advisors in Brookfield, Wisconsin, which manages $2.8 billion. "Retail sales being up is going to help most of the market and most of the companies. People are just going to perceive that revenues are going to be stronger."

Energy shares in the S&P 500 advanced 2.5 percent as a group for the top gain among 10 industries, all of which advanced. Crude oil for December delivery added 3.3 percent to $78.90 a barrel in New York, rebounding from two days of losses.

Devon Energy Corp. rose 4.7 percent to $70.99. The biggest independent U.S. oil and gas producer plans to sell its Gulf of Mexico and overseas assets to raise as much as $7.5 billion to cut debt and fund onshore developments. Smith International Inc. and Peabody Energy Corp gained at least 4.4 percent each.

Barrick Gold Corp., the world's largest producer of the precious metal, gained 2.6 percent to $43.99. Gold climbed to a record $1,144.20 an ounce on demand for a store of value amid speculation that the dollar will extend its decline.

Newmont Mining Corp. advanced 2.8 percent to $52.39. The largest U.S. gold producer said the sale of a 10 percent stake in its Indonesian venture will be completed today.

The rally in gold currently has "pretty positive" implications, Mark Bronzo, a money manager at Security Global Investors, which oversees $21 billion, said in an interview with Bloomberg Radio.

"It's all part of this commodity trade versus a weaker dollar, which seems to be positive for the stock market for the time being," he said. "I think it lasts as long as the stimulus remains in effect."

U.S. Steel Corp. and AK Steel Holding Corp jumped at least 4.8 percent. The steelmakers were added to JPMorgan Chase & Co.'s "Focus List" on prospects for rising prices as demand increases.

Titanium Metals Corp. rallied 10 percent to $10.25, its steepest advance since March. The maker of specialty metals for jet planes said it entered a new supply agreement with Boeing Co. that takes effect when the current agreement expires at the end of next year. The new agreement expires at the end of 2015.

Retailers rallied on the increase in October sales, which followed a 2.3 percent drop in September. Sales at automobile dealerships and parts stores jumped 7.4 percent after a 14 percent plunge the prior month that was larger than previously estimated.

"Any good news on the U.S. consumer will be taken very positively," said Kevin Divney, chief investment officer at Beaconcrest Capital Management in Boston. "There's more and more focus on it this time of year leading up to the holiday season. So I think any positive consumption there will be taken very, very seriously."

Target, the second largest discount chain, jumped 2.7 percent and Sears Holdings Corp. added 4.1 percent.

Nordstrom Inc. gained 3.1 percent to $35.05. The U.S. department-store chain with more than 100 namesake locations was raised to "buy" from "neutral" at Goldman Sachs, which said the company "is a key beneficiary of a recovering high end consumer."

American Express rallied 2.7 percent to $41.44. The biggest U.S. credit-card issuer by purchases said write-offs for loans deemed uncollectible decreased to 7.8 percent last month on an annualized basis, compared with 8.4 percent in September, the New York-based lender said today in a regulatory filing.

S&P financial shares rallied as much as 2.4 percent before paring the gains and ending the day up 1.2 percent after banking analyst Meredith Whitney told CNBC that she expects a so-called double-dip recession in the U.S. and that she hasn't been so bearish in a year.

Shares of Motors Liquidation Co., formed to sell the assets of General Motors during its bankruptcy reorganization, jumped 14 percent to 64 cents. General Motors Co. signaled confidence in its recovery from bankruptcy after it said it generated $3.3 billion in cash in the third quarter and plans to start repaying government loans early.

A measure of automobile-related companies rose 3.3 percent for the top gain among 24 groups in the S&P 500.

Dell rose 3.6 percent to $15.96. The personal-computer maker expanding into mobile phones was restarted "buy" at Goldman Sachs, which said the company will be a "key beneficiary of the PC upgrade cycle."

Sprint Nextel Corp. jumped 13 percent to $3.50 for the biggest gain in the S&P 500. The third-largest U.S. mobile-phone carrier said it paid off $1 billion in debt, meaning it no longer has an outstanding balance on its $4.5 billion revolving credit facility.

The S&P 500 Real Estate Index of 15 companies jumped 2.4 percent to its highest value since Sept. 22, led by ProLogis.

ProLogis, the world's biggest warehouse owner, rose 5.1 percent to $14.29 after Cohen & Steers Inc. acquired about 14 million shares of the company for about $190.3 million, according to a Nov. 13 filing.

Apartment Investment & Management Co. and Ventas Inc. jumped at least 3.7 percent. Deutsche Bank AG purchased about 4 million shares of Apartment Investment for $53.5 million, according to a Nov. 13 regulatory filing. Ventas was raised to "buy" from "hold" by Stifel Nicolaus & Co., which said health-care real-estate investment trusts will post "modest revenue growth" on existing portfolios in 2010 even as revenues are expected to decline in most other property sectors.

Merck & Co. rose 2.2 percent to $33.81. The drugmaker's Global Human Health President Kenneth Frazier told CNBC that the company won't pull cholesterol pills Vytorin and Zetia off the market after a study that found they didn't reopen clogged arteries as well as Abbott Laboratories' Niaspan.

On Nasdaq, Intel Corp (INTC.O) shares rose 2.2 percent to $20.25 after the chipmaker raised its quarterly dividend by more than 12.5 percent. The semiconductor index .SOXX climbed 2 percent.

Citigroup [C  4.19    0.14  (+3.46%)   ] jumped on word that hedge-fund operator Paulson & Co. has taken a 300 million share stake in the bank, according to an SEC filing.

NBC Universal and CNBC parent General Electric [GE  16.01    0.35  (+2.23%)   ] rose as today represents the opening of the annual window for Vivendi to sell its stake in NBCU—with a deal between GE and Comcast [CMCSA  15.85    0.42  (+2.72%)   ] for control of NBCU said to be close.

The optimism was muted somewhat as Lowe's [LOW  21.73    -0.12  (-0.55%)   ], the No. 2 home retailer, reported a 30 percent decline in quarterly profit to 23 cents a share, just a penny below estimates. Larger rival Home Depot [HD  27.63    0.29  (+1.06%)   ] reports Tuesday.

Wall Street's major averages are coming off two straight weekly gains. Economic data and retail earnings are likely to present either the biggest barrier to further gains—or the biggest influence. 

Google [GOOG  576.28    4.23  (+0.74%)   ] has filed a revised settlement proposal for its litigation with authors and publishers over digital book rights. The original agreement was rejected by a judge following objections from the Justice Department.

Cisco [CSCO  23.87    0.16  (+0.67%)   ] has increased its offer for Norwegian videoconferencing-gear maker Tandberg by 10.7 percent, and says this new offer is its "final price."

Bristol Myers Squibb [BMY  24.34    1.16  (+5%)   ] is planning to split off its nutrition unit Mead Johnson [MJN  43.23    -2.02  (-4.46%)   ] into a separate company.

And a new study finds the Abbott Labs [ABT  53.65    0.70  (+1.32%)   ] cholesterol treatment Niaspan more effective and safer than Merck's [MRK  33.86    0.76  (+2.3%)   ] Zetia.

Per-share earnings have topped estimates at 80 percent of S&P 500 companies that have released third-quarter results, a record in Bloomberg data going back to 1993, even as profits slumped for a record ninth straight quarter. Companies including Home Depot Inc., Target Corp. and Dell Inc. are scheduled to report earnings this week.

After the markets closed, troubled auto and mortgage lender GMAC shook up its executive suite, naming former Citigroup (C, Fortune 500) executive Michael Carpenter CEO.

Oil, Gold & Currencies:

Oil for December delivery jumped $2.55 to close at $78.90 a barrel.

And gold prices, which have been on a tear this month, surged $22.50 to end at a new record of $1,139.20 a troy ounce.

The dollar was lower versus major international currencies. The dollar index (DXY), which measures the U.S. currency's value against a basket of rivals, was down 0.3% to 74.94.

Bonds:

Long-dated Treasury prices posted solid gains in recent action. The 10-year note was up 21/32 to yield 3.345%. The 30-year bond was up 1-6/32 to yield 4.289%.

What to expect:

TUESDAY: PPI; industrial production; Fed's Lacker, Pianalto speak; Geithner speaks; NAHB housing index; Earnings from Home Depot, Target and TJX

WEDNESDAY: Weekly mortgage applications; CPI; housing starts; weekly crude inventories; Earnings from BJ's, Limited

THURSDAY: EU chooses new president; Fed's Plosser, Fisher speak; Ghosn, Rattner speak; weekly jobless claims; leading indicators; Philly Fed; Geithner speaks; Earnings from Sears, Dell, Gap

FRIDAY: Fed's Plosser speaks; state-by-state jobs report

Other Headlines:

Bernanke Says It Is `Not Obvious' Prices of Assets in U.S. Are Misaligned

Dollar Trades at Almost 15-Month Low After Fed's Bernanke Pledges Support

Australia's Central Bank Says Pace of Rate Gains Remains `Open Question'

Taiwan, China Sign Agreement to Expand Financial Cooperation as Ties Warm

Microsoft Co-Founder Paul Allen Being Treated for Lymphoma, Spokesman Says

Costco Stops Restocking Coca-Cola Products in Competitive Pricing Dispute

Obama, Hu to Take Up Trade, Climate Change in `Meeting of Minds' in China

China's First Anti-Ship Missile May Create a `No-Go Zone' for U.S. Fleet

Fed eyes dollar drop, but hews to low-rate pledge

Obama in China grapples with economic strains 

GMAC CEO resigns, Carpenter steps in

BofA ex-counsel says "stunned" by firing

One in seven Americans short of food

NASA launches shuttle Atlantis to space station 

Just one heart attack leads to 725 X-rays

GM posts loss, vows to repay U.S. early

NY Fed failed to negotiate AIG concessions: audit

Fed's Kohn sees no asset bubbles building in U.S.

Coca-Cola aims to double system revenue by 2020

CIT has $1.07 billion loss before bankruptcy

U.S. business group eyes cost in healthcare reform

Prime broking draws smaller players as big ones rebuild

CIT default swap auction to be held on November 20

Retail sales surge on autos, manufacturing slows 

CreditKarma raises $2.5 million to provide credit scores

IAEA sees risk Iran hiding more nuclear activity

Obama says al Qaeda still greatest threat to U.S.

Afghanistan to form anti-graft unit as pressure grows

Buffett's Berkshire Hathaway Boosts Stake in Wal-Mart

Time Warner to Spin Off AOL on December 9

Gates Boosts Waste Management, Coca Cola Stakes

Citi Shares, A Strange Indicator Of Unemployment?

Samsung retakes top spot in U.S. LCD TV market

Microsoft co-founder Allen diagnosed with cancer

Nomura Extends Lead in Managing Asian Share Sales With Hitachi, MUFG Deals

ICBC, Bank of China Seek Taiwan Branches After Agreement for Wider Access

Japan's Deflation Concern Mounts Even as Economy Expands Most in Two Years

CapitaLand Said to Raise $1.79 Billion Selling Shares in CapitaMalls Unit

Rupee:

The partially convertible rupee INR=IN ended at 46.20/21 per dollar on yesterday, stronger than Friday's close of 46.31/32.

Asia:

Asian stocks rose, led by technology and mining companies, after a report showed retail sales rebounded in the U.S. and commodity prices climbed.

Canon Inc. advanced 2.4 percent in Tokyo, after the company agreed to buy Oce NV, the world's largest maker of wide-format printers. Those of Mitsubishi Corp., Japan's biggest commodities trader, gained 1.8 percent after oil and metal prices climbed. Alumina Ltd., an aluminum producer, added 3.4 percent in Sydney.

"Consumption has been solid," said Kazuhiro Takahashi, a general manager at Daiwa Securities SMBC Co. in Tokyo. "This will prompt hopes for the Christmas sales season."

The MSCI Asia Pacific Index added 0.2 percent to 119.50 as of 9:50 a.m. in Tokyo. The gauge has climbed 69 percent from a more than five-year low on March 9. Japan's Nikkei 225 Stock Average rose 0.3 percent. Australia's S&P/ASX 200 Index added 0.2 percent. South Korea's Kospi Index gained 0.2 percent.

Futures on the Standard & Poor's 500 Index were little changed. The gauge rose 1.5 percent yesterday after government figures showed retail sales increased 1.4 percent in October after a 2.3 percent drop in September. The gain beat an estimate of a 0.9 percent gain by economists in a Bloomberg News survey.

Crude oil for December delivery jumped 3.3 percent to $78.90 a barrel in New York yesterday, the largest increase since Sept. 30. The London Metals Index, a measure of six metals including copper and zinc, climbed 4.7 percent yesterday, the biggest gain since Aug. 3.

The MSCI Asia Pacific Index's rally since March outpaced gains of 64 percent for the S&P 500 and 59 percent for Europe's Dow Jones Stoxx 600 Index. Stocks in the MSCI gauge are valued at 22 times estimated earnings, compared with 18 times for the S&P and 16 times for the Stoxx. 

Nikkei 225 9,777.42     -13.76 ( - 0.14%). (08.19 AM IST)

HSI 22944.49 +0.51 +0%. (08.19 AM IST)

SSE Composite 3275.05 3297.41 3298.38 3280.64 + 0.68. (08.21 AM IST)

   INDIA:

India's benchmark stock index gained, led by steel and car makers, after the government said sales of the alloy to auto manufacturers rose in the first seven months of the fiscal year.

Maruti Suzuki India Ltd., the maker of half the cars sold in India, advanced 5.4 percent after Steel Secretary Atul Chaturvedi said Nov. 14 that the nation's steel demand grew 7 percent from April to October, underscoring an economic revival. Tata Steel Ltd., the country's biggest producer of the alloy, rose 3 percent.

"There is a strong demand for auto and infrastructure," said P. Phani Sekhar, who manages funds for wealthy individuals at Angel Broking Ltd. in Mumbai. "This shows the economic recovery is very strong."

The Bombay Stock Exchange's Sensitive Index, or Sensex, added 183.68, or 1.1 percent, to 17,032.51. The S&P CNX Nifty Index on the National Stock Exchange gained 1.2 percent to 5,058.05. The BSE 200 Index climbed 1.2 percent to 2,115.25.

Maruti Suzuki advanced 5.4 percent to 1,558.35 rupees. Hero Honda Motors Ltd., India's biggest motorcycle maker, increased 4.3 percent to 1,647.1 rupees. Mahindra & Mahindra Ltd., the largest maker of sport-utility vehicles and tractors, advanced 1.9 percent to 1,048.9 rupees.

Increasing demand for automobiles, refrigerators and air conditioners and rising farm incomes are boosting steel sales in India, the world's second fastest-growing major economy. The nation's industrial production in September rose 9.1 percent from a year earlier, according to Nov. 12 government data.

'Better Numbers'

"With every passing month and quarter the numbers are better than what we saw," said Krish Shanbhag, the head of research at Antique Stock Broking Ltd. in Mumbai. "All data is pointing that we are well on our way to economic recovery."

Tata Steel Ltd., the biggest producer of the alloy, gained 3 percent to 536.55 rupees. Hindalco Industries Ltd., the biggest aluminum producer, rose 2.7 percent to 134.4 rupees.

The Dollar Index, a six-currency gauge of the greenback's performance, dropped as much as 0.6 percent, down for a second consecutive trading session. That makes dollar-denominated metals cheaper for holders of other currencies. Japan, the fourth-largest copper consumer, said its economy expanded at the fastest pace in two years.

Copper for three-month delivery added $175, or 2.7 percent, to $6,695 a metric ton on the London Metal Exchange. Aluminum gained 1.8 percent to $1,980 a ton.

Sterlite

Sterlite Industries (India) Ltd., the No. 1 copper and zinc producer, rose 3.6 percent to 866.95 rupees after a judge in Texas ruled that Grupo Mexico SAB can regain control of its bankrupt U.S. copper miner, Asarco LLC, rejecting a competing offer from Sterlite.

"The rejection of Sterlite's bid for Asarco is seen as a positive by the market in the short term," said Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd. in Kochi. "In the long run, the deal may have been good for the company."

UltraTech Cement Ltd. gained 1.2 percent to 738.65 rupees after saying it will merge with Samruddhi Cement Ltd. to create the country's biggest and the world's 10th-largest maker of the building material.

Tata Motors Ltd., India's biggest truckmaker and owner of Jaguar Land Rover Ltd., rose 2.4 percent to 634.85 rupees. General Electric Co.'s GE Capital division agreed to provide a five-year working-capital facility of as much as 170 million pounds to Tata Motors's Jaguar Land Rover unit in the U.K., the financing company said today in a statement.

Suzlon

Suzlon Energy Ltd., the nation's No. 1 maker of wind- turbine generators, soared 8.2 percent to 72.15 rupees after a unit got an order for wind turbines to generate 21 megawatts of power. The order for the community-based Grant County Wind Farm in southwestern Minnesota will produce power for 7,000 homes in the area, Suzlon said in an e-mailed statement today.

Overseas funds bought a net 1.51 billion rupees ($33 million) of Indian stocks Nov. 12, the Securities and Exchange Board of India said on its Web site. The funds have bought 713.1 billion rupees of Indian stocks this year to date, compared with record net sales of 530 billion rupees for the whole of 2008.

Improving economy powers banks, investors upbeat

* Foreign fund buying nears $15 bln in 2009

Reliance Industries, State Bank, ICICI Bank lead rise

Sterlite gains as court ruling favours rival's Asarco bid

Software firms drag as rupee climbs to near month high

Indian shares climbed more thana percent on Monday to their highest close in nearly a month,with energy giant Reliance Industries (RELI.BO: Quote, Profile, Research) and banks such as State Bank of India (SBI.BO: Quote, Profile, Research) and ICICI Bank (ICBK.BO: Quote, Profile, Research) powering the rise on optimism about the economy.

Asia's third-largest economy could expand between 6 and 7 percent in the year to March 2010 despite a bad monsoon, thefinance minister said on Saturday. [ID:nLE159959] "The effort now is to bring the economy back on the growthpath of 9 percent per annum," Pranab Mukherjee said without giving a time frame. Traders said banks would be a beneficiary as demand picks up and companies begin to invest in expansion projects. An improving economy would also lower the risk of consumer defaults, they said. "We are positive on SBI and ICICI Bank as their long-term growth story is intact," said Jigar Shah, vice-president of equity sales at Motilal Oswal. State Bank, the country's largest lender, rose 2 percent to 2,344.65 rupees while rival ICICI gained 1 percent to 918.85rupees.

Reliance Industries, which has the highest weight in the main index, rose 1.5 percent to 2,147.75 rupees, ahead of its annual general meeting on Tuesday.

The 30-share BSE Index .BSESN rose 1.09 percent, or 183.68 points, to 17,032.51 points, its best close since Oct. 20. Twenty-six of its components ended in the green. "Positive global cues and asset allocation are helping our market," Shah said. "When there is a view built up that the future is better, people do not mind buying at higher valuations." The benchmark rose above 17,000 for the first time since Oct. 23 and is up more than 7 percent this month, after shedding 7.2 percent in October in its worst monthly performance in a year. Foreign funds have been a driver for the market, ploughing in nearly $15 billion so far in 2009. The inflow has lifted the index more than three-quarters in the period.

Metals producer Sterlite Industries (STRL.BO: Quote, Profile, Research) added 3.6 percent to 867 rupees after a U.S. federal judge issued a ruling supporting a bid by rival Grupo Mexico (GMEXICOB.MX: Quote, Profile, Research) for Asarco LLC. [ID:nN14494858] Morgan Stanley said the decision may remove confusion related to Asarco and bring focus back to Sterlite's more lucrative initiatives, especially in India. The development also frees up cash that can be utilized forits new projects, it said in a note. "We believe investors would also appreciate in the mediumterm, that Sterlite should be better off not having Asarco assets than having bought the same at a price higher than $2.2 billion (Sterlite's penultimate bid)," Morgan Stanley said.

Top vehicle maker Tata Motors (TAMO.BO: Quote, Profile, Research) climbed 2.3 percent to 633.90 rupees after the Financial Times said Jaguar Land Rover was expected to announce it secured a 170 million pound working capital facility from GE Capital [GECAIC.UL].[ID:nLG120998] Leading carmaker Maruti Suzuki (MRTI.BO: Quote, Profile, Research) firmed 5.5 percent to 1,560.40 rupees on robust volume outlook. "With macro environment improving, there are catalysts in form of improving product mix, lower raw material cost and higher operating leverage which would drive profitability and earnings growth for the company," Motilal Oswal said in a note. Export-focused software firms dropped as the rupee firmed to its strongest against the dollar in nearly a month.

Top software services company Tata Consultancy (TCS.BO: Quote, Profile, Research) shed 1 percent and rival Infosys Technologies (INFY.BO: Quote, Profile, Research) lost 0.3 percent. Wipro (WIPR.BO: Quote, Profile, Research) bucked the trend and closed 0.6 percent higher. In the broader market, gainers outnumbered losers in a ratio of 1.8:1 on relatively lower volume of 342 million shares. The 50-share NSE index .NSEI closed 1.2 percent higher at 5,058.05.
STOCKS THAT MOVED * UltraTech Cement (ULTC.BO: Quote, Profile, Research) ended up 1.5 percent at 740.30rupees after swinging widely in early deals. Its board approved issuing four shares for every seven held in group firm Samruddhi Cement, which it will absorb to form India's largest cement firm. [ID:nSP337897] *

Drug maker Glenmark Pharmaceuticals (GLEN.BO: Quote, Profile, Research) rose 3.5 percent to 230.05 rupees. It said its Glenmark Generics has settled all pending litigation with Medicis Pharmaceutical Corp (MRX.N: Quote, Profile, Research) relating to patent actions regarding Fluocinonide.

* Wind turbine maker Suzlon Energy (SUZL.BO: Quote, Profile, Research) rose 8.1 percent to 72.10 rupees. Its North American unit won an order to supply wind turbines with a capacity to produce 21 megawatts of electricity.

Among the BSE sectoral indices, the Realty index was the top gainer, adding 3%, followed by the Auto index that was up 2.8% and the BSE Metals index was up 2.2%.

Even the BSE Mid-Cap index gained 1% and the BSE Small-Cap index was up 1.1%.

Only the BSE IT index was on the receiving end, the index was down 0.3%.

Among the 30-components of Sensex, 26 stocks ended in the green and only Infosys, TCS, NTPC and HDFC Bank ended in the negative terrain. Among the major gainers were, Reliance Industries, SBI, Maruti, Sterlite and ICICI Bank.

Outside the frontline indices, the big gainers in the broader market were EKC, Pantaloon, IRC Infra, REC and Jain Irrigation. On the other hand, losers included Balramour Chini, Godrej Cons, Crompton Greaves and Mphasis.

Shares of Suzlon Energy surged by over 8% to Rs72 after the company announced that its unit received an order for wind turbines to generate 21MW of power. The order for the community-based Grant County Wind Farm in southwestern Minnesota will produce power for 7,000 homes in the area, the company added.

The stock opened at Rs67.10 and made an intra-day high of Rs72.6 and a low of Rs67.10. Total traded volumes stood at 21.1mn shares.

Shares of Aban Offshore advanced by 5% to Rs1291 after the company announced that they raised US$150mn selling shares to institutional investors, reports stated. The shares were sold at an average price of Rs1,224.3 per share, reports added. Citigroup Inc. managed the share sale for Aban Offshore.

Shares of Tata Motors advanced by 2.5% to Rs633 after reports stated that the company's Jaguar Land Rover unit will get a US$250mn loan from General Electric Capital Corp.

GE Caps has undertaken to finance all new production of JLR cars from the time the cars leave the factory for up to 90 days, while the cars are in transit to dealers.

Shares of Asian Electronics rallied by over 19% to Rs41.2 after ~490,960 equity shares or 1.7% of the company were transacted almost at an average price of Rs40.90 per shares. The stock opened at Rs35.4 and made an intra-day high of Rs41.5 and a low of Rs35. Total traded volumes stood at 4.8mn shares.

Shares of GVK Power surged by over 3.5% to Rs50.4 after reports stated that the company will complete the acquisition of a 13.5% stake of its South African partner Bidvest in Mumbai International Airport. The stock opened at Rs49.5 and made an intra-day high of Rs50.5 and a low of Rs48.8. Total traded volumes stood at 2.6mn shares.

Shares of Mahindra Lifespace surged by over 5% to Rs371 after reports stated that the company plans to construct a residential complex at its SEZ – Mahindra World City – near Chennai with an estimated cost of Rs4bn. The stock opened at Rs360 and made an intra-day high of R378 and a low of Rs352. Total traded volumes stood at 31,000 shares.

Shares of HT Media surged by over 8% to Rs143 after the company announced that it plans to sell Hindi Publications to Hindustan Media Ventures for Rs1.49bn cash. The stock opened at Rs135 and made an intra-day high of Rs153 and a low of Rs132.3. Total traded volumes stood at 0.5mn shares.

Among the Sensex pack 26 stocks closed in green while 4 ended in red. The market breadth indicating the overall health of the market remained strong as 1,758 stocks closed in positive while 1,017 stocks closed in negative while 89 stocks remained unchanged in BSE.

The BSE Sensex closed with gains of 183.68 points or (1.09%) at 17,032.51 and NSE Nifty closed up by 59.10 points or (1.18%) at 5,058.05. The BSE Mid Caps and Small Caps closed with gains of 73.15 points and 90.13 points at 6,491.80 and 7,499.83 respectively. The BSE Sensex touched intraday high of 17,083.20 and intraday low of 16,893.11.

Gainers from the BSE Sensex pack are Maruti Suzuki (5.45%), DLF (4.54%), Hero Honda (3.82%), Sterlite Industries (3.55%), Reliance Communication (3.05%), Tata Steel (2.65%), Hindalco Industries (2.60%) and Tata Motors (2.32%).

Losers from the BSE Sensex pack are TCS (0.63%), Infosys Technologies (0.34%), NTPC (0.16%), HDFC Bank (0.04%).

On the global markets front, the Asian markets that opened before the Indian market, closed on a positive note. Hang Seng, Shanghai Composite, Nikkei, Straits Times and Seoul Composite index closed up by 1.73%, 2.74%, 0.21%, 2.08% and 1.30% at 22,943.98, 3,275.04, 9,791.18, 2,783.85 and 1,592.47 respectively.

European markets, which opened after the Indian market, are trading higher. In London FTSE 100 is up by 1.57% at 5,359.16 and in Frankfurt DAX index is trading with gains of 1.12% at 5,750.79 and in Paris the CAC 40 is up by 0.98% at 3,843.20.

BSE REALTY indexwas at 4,024.85 up by 122.76 points or by (3.15%) The main gainers were Ansal Infras up by (9.01%) at Rs.71.35, Orbitco up by (7.83%) at Rs.311.3, Mahindralife up by (5.31%) at Rs.370.65, Anant Raj Ind. up by (4.96%) at Rs.141.85, Dlf Ltd up by (4.54%) at Rs.385.3.

BSE METAL index was at 15,914.91 up by 373.92 points or by (2.41%) The main gainers were Hind.Zinc up by (3.99%) at Rs.958.8, Sterlite In up by (3.55%) at Rs.867, Sesa Goa Ltd up by (3.45%) at Rs.356.65, Jsw Sl up by (3.11%) at Rs.924.4, Tata Stl up by (2.65%) at Rs.535.05.

BSE BANKEX index was at 10,301.71 up by 99.53 points or by (0.98%) The main gainers were Bank Of India up by (3.46%) at Rs.379.75, State Bank Of India up by (2.03%) at Rs.2344.65, Federal Bank up by (1.77%) at Rs.236.05, PNB up by (1.76%) at Rs.924.25, Oriental Bank up by (1.62%) at Rs.269.

BSE AUTO index was at 6,974.21 up by 196.72 points or by (2.9%) The main gainers were Amtek Auto L up by (8.86%) at Rs.194.7, Marutisuzuki up by (5.45%) at Rs.1560.4, Herohonda M up by (3.82%) at Rs.1639.5, Bajaj Auto up by (3.57%) at Rs.1514, Ashok Leylnd up by (3.15%) at Rs.54.

BSE CD index was at 3,514.23 up by 40.19 points or by (1.16%) The main gainers were Videocon Ind up by (2.91%) at Rs.222.85, Rajesh Expot up by (2.51%) at Rs.79.65, Blue Star L up by (0.41%) at Rs.346.45, Gitanjali Gems up by (0.35%) at Rs.115.95, Titan Ind. up by (0.34%) at Rs.1371.85,

BSE POWER index was at 3,050.63 up by 27.92 points or by (0.92%) The main gainers were Suzlonenergy up by (8.1%) at Rs.72.1, Rpower up by (5.33%) at Rs.151.25, Lanco Infra up by (5.14%) at Rs.552.45, Gvk Powerinf up by (3.7%) at Rs.50.4, Siemens Ltd up by (2.34%) at Rs.569.9.

BSE OIL&GAS index was at 10,279.53 up by 139.14 points or by (1.37%) The main gainers were Aban Offsho up by (4.59%) at Rs.1291.45, Gail India up by (1.96%) at Rs.385.05, Reliance up by (1.47%) at Rs.2147.75, Cairn Ind up by (1.37%) at Rs.280.3, Ong Corp Ltd up by (1.36%) at Rs.1199.65.

Other Headlines:

Market strength phenomenal: Taib

Will RIL announce overseas deal?

Commodity Watch: Gold scripts fresh high

SC asks Sebi to release Jermyn funds

Surging FII inflows perk up markets

RBI note on NPA provisioning soon

Sail, NMDC stake sale may fetch Rs29K cr

Debt MF schemes give positive returns

TCS diversifying client base

Justice Kapadia recuses from ITC matter

I-T quizzes UBI chief on Koda scam

SFIO to move court against Raju, others

Auto comp exporters shift focus

Unilever R&D head sees 'Genesis' in 2010

Air pollution threatens London Olympics

US-China trade spurs prosperity for both

Iran seeks $1 bn 'advance' for LNG

FM blames price spike on inefficient mkt

Bernanke perks Wall St; Jobless suffer

GE Cap to sell 5 yr bond in first Sukuk

P/Es spur buys in France-Spain bargain

Mitsubishi UFJ to hire Nomura for FPO

Cisco raises Tandberg bid

Canada hopes to conclude India N-deal

Michelin inks MoU with Tamil Nadu govt

Bharat Forge plans power sector spend

Govt keeping close watch on sugar prices

Hari Krishnan to head LinkedIn India

UBS's debt trading is key for revival

SFIO to begin probe into Satyam soon

India, Korea may be first to lift rates: Morgan Stanley

Obama announces jobs forum date, economic tour

ICICI Bank Ltd. (ICICIBC IN): India's second-largest lender is "hoping" to raise about $700 million in bonds through its medium-term note program, the Economic Times reported, citing three sources familiar with the deal it didn't name. The stock rose 1.1 percent to 919.3 rupees.

Infosys Technologies Ltd. (INFO IN): India's second-largest software exporter by revenue expects the budgets of its customers to be unchanged or slightly lower next year, the Wall Street Journal reported, citing Chief Financial Officer V. Balakrishnan. The stock fell 0.3 percent to 2,351.95 rupees.

Jaiprakash Associates Ltd. (JPA IN): The Indian engineering company plans to sell 60 million shares in its unit Jaypee Infratech Ltd. and borrow 5 billion rupees selling commercial paper. The shares rose 1.3 percent to 234.8 rupees.

NMDC Ltd. (NMDC IN): India's largest iron-ore producer expects some increase in long-term iron ore prices in the next financial year, Chairman Rana Som said. The shares fell 0.1 percent to 435 rupees.
 

INVESTMENT VIEW
Aban Offshore: The Storm Clouds Have Passed Over! Target Rs 1760

 
Crude price has recovered from $ 30/bbl to roughly $75/bbl within a period of 8 months. The recovery has been on the back of increased estimates of crude oil demand for CY10. With Crude prices above break even level for deep water blocks, the demand for jack-up rigs is firming up. Consequently Rig utilisation rates measured by US corporation Baker Hughes have a consecutive increase for nearly all of 2009.
 

During q2FY10 Aban contracted out six vessels on long term contracts, leaving just 3 rigs un-deployed. Revenue visibility for FY10 has risen 100 per cent and another 75 per cent for FY11. By FY11 Aban should report rig utilisation of nearly 95 per cent, another massive positive for the stock to outperform.

 

During FY11, Aban has debt worth $ 410 coming up for repayment. The corporate has recently opened up a $ 150 mn QIP issue which should take care partially the debt repayment needs, in addition it will earn close to $ 500 mn in free cash flows by end FY10, both put together should be sufficient to meet the debt repayment/refinancing needs.

 

Ofcourse, there will be a 10 to 15 per cent Equity dilution, but this will go towards strengthening the Debt Equity ratio for the company while pulling down the Debt to more manageable levels.

 

All told and with all negatives priced in Aban should report FY11 EPS of Rs 316, which prices the Equity at just 4 times FY11 earnings. Given the higher debt, a 25 per cent discount to global players like Transglobal which fetch a PE of 10, should give Aban a near term target of Rs 1760...a near 36 per cent premium to the existing CMP of Rs 1291.45.

 

The stock is worth taking the risk, given odds seem stacked in its favour.
 

(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