Market Outlook 18th Nov 2009

 

NIFTY FUTURES LEVELS
RESISTANCE
5084
5111
5137
SUPPORT
5053
5047
5019
4994

 

 stocks that are in news today:
-Pfizer, Wockhardt brass may meet by month-end on acquisition: Mint ((Pfizer interested in buying part of Wockhardt's biz))
-L&T sells petroleum dispensing business to US-based Gilbarco for Rs 200 crore
-FIPB refers Jet's fund raising proposal to CCEA ((Company looking to raise $400 million via QIP))
-Jet-Sahara case to come up for directions in Bombay HC today
-Tata Motors raises Rs 264 crore in new FD scheme – BS
-BSNL, Vavasi talks to buy Zain fall through, Vavasi to announce new partner in 1-2 weeks – BS
-Valecha Engineering bags orders worth Rs 110 crore

The government approved 17 foreign direct investment proposals worth Rs. 11.58 bn. Among the major proposals which were approved today are the FDI applications of the world s largest steel maker ArcelorMittal and ductile iron pipe maker Electrosteel Castings, a government statement said. (BS)

The UK inflation rate rose more than economists forecast in October, climbing for the first time in eight months as fuel costs and air fares climbed. Consumer prices gained 1.5% from a year

RIL bonus share issue record date November 27

 

 Strong & Weak  futures

This is list of 10 strong futures:  

Sesa Goa, Renuka , Jindal Saw Steel, Mphasis, Recltd, Ashok Ley, Crompton Greaves, Hind Zinc, Zeel & FSL.  

And this is list of 10 Weak futures:

Tata Comm, Idea, GTL Infra, India Cement, EKC, Bharti Airtel, GMR Infra, TTML, Sterling Biotech & Punj Lloyd.

Nifty is in Down trend  

 

NIFTY FUTURES (F & O):  
Rally may continue up to 5084 level for time being.

Support at 5053 level. Below this level, expect profit booking up to 5047 level by

non-stop.

Buy if touches 5019-5021 zone. Stop Loss at 4994-4996 zone.

On Positive Side, cross above 5109-5111 zone can take it up to 5135-5137 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 5085.00. (08.32 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 5063.40 (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:
Buy VANTAGE CORPORATE SERVICES LTD (BSE Cash & BSE Code: 530109) Chart for the above said scrip was not available in our software. Inconvenience is regretted. 
Buy MARAL OVERSEAS (BSE Cash & BSE Code:521018) 
Buy with a Stop Loss of 12.25. Above 13.90, 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	17-Nov-2009	2376.47	1913.05	463.42

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	17-Nov-2009	931.18	1166.72	-235.54

 

SPOT INDEX LEVELS

	5062.25	( 0.08 %)	4.20
		1	2	3
Resistance		5087.45	5112.65	5151.30
Support		5023.60	4984.95	4959.75

	17050.65		( 0.11 %)	18.14
			1	2	3
Resistance			17126.22	17201.79	17323.41
Support			16929.03	16807.41	16731.84

 Interesting findings on web:
U.S. stocks gained for a third day as a rebound in metal prices boosted commodity producers, overshadowing a smaller-than-forecast increase in industrial production. The Dollar Index rose for the first time in three days and Treasury 30-year bonds climbed for a fourth.

Stocks recovered from early losses Tuesday, closing at 13-month highs for the second day in a row, as strength in commodity-linked shares offset weakness in the retail sector.

U.S. stocks rose to fresh 13-month highs on Tuesday as upbeat broker views on improving prospects for two Dow components offset disappointing holiday spending outlooks from Target and Home Depot.

Even so, the underlying tone was negative as investors fretted about the strength of the recovery and the recent rally, and more stocks fell than rose.

Weak outlooks for the key holiday season weighed on investor psychology since consumer spending accounts for about two-thirds of U.S. economic activity and is a key factor in corporate profits.

"The news from retailers wasn't particularly good," said Eric Kuby, chief investment officer at NorthStar Investment Management Corp in Chicago. "It seems to me the major flavor for today is once again, the market participants questioning the strength of the recovery."

The Dow Jones industrial average .DJI rose 30.46 points, or 0.29 percent, to close at 10,437.42. The Standard & Poor's 500 Index .SPX edged up 1.02 points, or 0.09 percent, to 1,110.32. The Nasdaq Composite Index .IXIC added 5.93 points, or 0.27 percent, to 2,203.78.

RUSSELL602.34-0.53-0.09%

TRAN4049.63.10+0.08%

UTIL377.08-1.24-0.33%

S&P 100516.091.08+0.21%

S&P 400709.35-1.22-0.17%

NYSE7234.06-3.04-0.04%

NAS 1001812.214.65+0.26%

All three indexes are at their highest levels since October 2008.

Stocks opened lower and struggled for most of the day as the dollar regained ground against rival currencies, reflecting a decreased appetite for risky assets.

The tone improved in the last few hours of trading as oil and gold prices reversed direction. Oil closed above $79 a barrel, while gold edged up to settle at a fresh all-time high.

The rebound in commodity prices boosted shares of energy and materials companies. But gains were limited by weakness in the retail sector after Home Depot and Target offered cautious earnings outlooks.

Tuesday's economic news was mixed. Government data showed inflation at the wholesale level remains subdued, while industrial production was weaker than expected in October.

The government reported that the Producer Price Index, the key measure of inflation for manufacturers, edged up 0.3% in October. Core PPI, which excludes volatile food and energy prices, fell 0.6%.

The PPI was expected to have risen 0.5% for the month, according to a consensus of economist opinion from Briefing.com. The core was expected to have edged up 0.1% in October.

Before the start of market trading, the government also reported that industrial production rose 0.1% last month versus a forecasted 0.4% increase. In September, production rose 0.7%. Capacity utilization rose by 0.2 percentage point to 70.7%, a rate slightly below economists' expectations for 70.8%.

"This industrial production number is pointing to weak manufacturing in the United States as well as weak demand," said Chad Morganlander, a money manager in Florham Park, New Jersey, at Stifel Nicolaus & Co., which oversees about $98 billion in client assets. "This could put a wet blanket on the optimists for a day or two."

Ryan Larson, senior equity trader at Voyager Asset Management, said the stock market continues to look to the dollar for direction.

"The main story has been the dollar trade," he said. "When the dollar is weak, investors take on more risk. If it's strong, they take the risk off."

"The economy is growing, but shows a loss of momentum given the recent round of economic and corporate data," said Nick Kalivas, vice president of financial research at MF Global.

Today's advance brought the S&P 500 within 1 percent of recouping half the plunge that followed its October 2007 record. Passing the so-called 50 percent retracement level would send a signal to some technical analysts that the steepest rally since the 1930s will continue. The index has jumped 64 percent from a 12-year low in March as a four-quarter contraction in the world's largest economy ended.

The S&P 500 still needs to rise 13 percent to surpass its level on Sept. 12, 2008, the last trading session before Lehman Brothers Holdings Inc. filed the world's largest bankruptcy and deepened the worst financial crisis since the Great Depression.

"We feel like this market still has some room to move higher," said Burt White, chief investment officer at LPL Financial in Boston, which oversees $259 billion. "We're still at levels that are lower than we were before Lehman Brothers. We are vastly better off than we were then."

"Earnings season has come in the best that it has in a very long time," said David Katz, who oversees $1.2 billion at Matrix Asset Advisors in New York. "You are getting a very significant pickup in earnings with cost-cutting and management. The economy that was in freefall a year ago is definitely on the mend."

About 80 percent of S&P 500 companies that have reported third-quarter results beat analysts' predictions. That exceeds the record pace of 72.3 percent for the period ended in June, data compiled by Bloomberg show.

The Federal Reserve said it will reduce the maximum maturity on discount-window loans to 28 days from 90 days as it moves to unwind some of the emergency measures introduced to fight the credit crisis. The discount window, used for direct loans to banks, was one of the first tools that Fed Chairman Ben S. Bernanke deployed to thaw credit markets as the crisis began to unfold in August 2007.

"This is one of the many measures that the Fed put in place last year and this is one of the pipes where they were able to pump liquidity to the banks," said Michael Cheah, who manages $2 billion in bonds at SunAmerica Asset Management in Jersey City, New Jersey. "The Federal Reserve is dismantling a lot of the emergency measures they put in place. The bottom line is they're taking liquidity away from this market."

Wal-Mart Stores Inc. and Exxon Mobil Corp. gained at least 0.8 percent after Warren Buffett disclosed buying their shares. Sprint Nextel Corp. rallied for a second day after saying it paid down $1 billion in debt. Caterpillar Inc. and ITT Corp. declined as the Federal Reserve said industrial output was restrained in October by less auto manufacturing and demand for business equipment.

Walmart, the world's largest retailer, added 0.9 percent to $53.66. Exxon Mobil, the biggest oil company, increased 0.8 percent to $75.03.

Buffett's Berkshire Hathaway Inc. held about 1.28 million Exxon shares at the end of the third quarter, the Omaha, Nebraska-based company said in a regulatory filing yesterday. The stake in Exxon was worth about $95 million, based on yesterday's stock price. Berkshire raised its stake in Walmart by 90 percent, now owning $2 billion worth of the stock, according to the same filing.

Freeport-McMoRan Copper & Gold Inc. added 1 percent to $85.36 as copper rose on speculation demand will remain robust in China. Producers of raw materials climbed 0.9 percent as a group for the steepest gain among 10 industries in the S&P 500. Gold prices rose on bets that central banks and investors will increase demand for the precious metal as an alternative asset.

Sprint Nextel rose 5.7 percent to $3.70. The third-largest U.S. mobile-phone carrier added to a 13 percent gain yesterday, when it said it paid off $1 billion of debt, cleaning up its balance sheet as revenue declines.

Assured Guaranty Ltd. soared 20 percent to $25.53. The municipal-bond insurer backed by Wilbur Ross reported third- quarter operating earnings of 44 cents a share, 16 percent better than the average analyst estimate in a Bloomberg survey.

MBIA Inc., the world's largest bond insurer, also gained, rising 6.1 percent to $3.47 for the second-biggest advance in the S&P 500.

Massey Energy Co. advanced 5.7 percent to $40.39. The fifth-largest U.S. coal producer said it acquired metallurgical and steam coal reserves from the now-bankrupt Appalachian Fuels LLC and its affiliates.

Caterpillar, the largest maker of earthmoving equipment, dropped 0.9 percent to $59.88 after the Fed said industrial production increased 0.1 percent in October. Economists forecast a 0.4 percent rise, according to the median estimate in a Bloomberg survey. ITT, which makes water pumps and military systems, lost 1.3 percent to $53.06.

Target Corp. dropped 3 percent to $48.77, the biggest slide since July. The second-largest U.S. discount chain said average transaction sizes shrank in November and it's planning for a decrease in fourth-quarter comparable-store sales.

"The consumer is a bit restrained. We're still in a very tough economy, with a 26-year high in unemployment and consumer credit being reduced. So retailers have to work really hard to get through this holiday season in a profitable fashion," added Kuby at NorthStar.

Home Depot Inc. fell 2.4 percent to $26.99. The biggest U.S. home-improvement retailer posted third-quarter profit that fell 8.9 percent as customers spent less and made fewer purchases. The average transaction dropped 7.1 percent to $51.89 from $55.86.

Lowe's Cos., the Home Depot competitor that cut its full- year profit forecast yesterday, lost 1.2 percent to $21.48.

Companies that make or sell consumer products that are purchased with discretionary income dropped the most of 10 industry groups in the S&P 500, losing 0.7 percent.

Jacobs Engineering Group Inc. lost 15 percent to $38.88 for the biggest drop in the S&P 500. The construction and engineering company forecast fiscal 2010 profit that lagged analysts' estimates.

Smith International Inc. fell 13 percent to $26.86 for the second-biggest decline in the S&P 500. The oilfield contractor said it will sell 28 million shares to repay debt and fund potential acquisitions. The creation of additional stock may dilute earnings for existing shareholders.

SunPower Corp. slid 19 percent to $22.19. The manufacturer of solar power modules reported that a review of some accounting entries appeared to contain errors that understated production costs. Its ratings were cut by Piper Jaffray Cos., FBR Capital Markets Corp., Caris & Co. and Merriman Curhan Ford.

TJX (TJX, Fortune 500), which owns the T.J. Maxx and Marshalls chains, reported a larger-than-expected quarterly profit on increased consumer demand for discount products. The company said it expects profit from continuing operations of 65 cents to 71 cents per share in the fourth quarter. Analysts surveyed by Thomson Reuters are forecasting a profit of 71 cents per share in the fourth-quarter.

On the higher end, Saks (SKS) reported a quarterly profit, surprising analysts who were expecting the company to report a loss. However, the results were driven mostly by cost-cutting, and the company offered a cautious outlook.

In Nasdaq trading, shares of software maker Microsoft Corp (MSFT.O) gained 2 percent to $30 -- an 18-month closing high -- after Morgan Stanley raised its price target on the stock and said it was upbeat on the prospects for Windows 7 and the company's holiday season.

UBS analyst Brent Thill on Monday slapped a "buy" rating and $34 price target on Microsoft stock, which is currently just shy of $30.

Shares of Exxon Mobil rose 0.8 percent to $75.03 after Barclays raised its recommendation on the stock to "overweight" from "equal-weight." Both Microsoft and Exxon are components of the 30-stock Dow Jones industrial average.

Thill also has a "buy" on Adobe [ADBE  36.89    0.08  (+0.22%)   ] and Oracle [ORCL  22.80    -0.03  (-0.13%)   ], with price targets of $43 and $27, respectively.

And Pacific Sunwear [PSUN  3.88    -1.13  (-22.55%)   ] droped 23 percent as the teen chain reported its loss for the latest quarter widened and warned its loss for the holiday quarter would be much more than Wall Street expects.

Telecoms were one of the best performers, with gains across the smartphone sector: Palm [PALM  12.53    0.68  (+5.74%)   ] jumped 5.8 percent, while Leap Wireless [LEAP  12.67    0.42  (+3.43%)   ] advanced 3.4 percent Motorola [MOT  8.84    0.14  (+1.61%)   ] and Garmin [GRMN  32.33    0.53  (+1.67%)   ] gained nearly 2 percent.

Citigroup [C  4.24    0.06  (+1.44%)   ] rose 1.4 percent after the lumbering financial giant gave its CFO and global markets co-head a pay increase. CEO Vikram Pandit's salary was unchanged.

Wall Street firms bailed out by the government, like Citigroup, have been struggling with how to retain top talent — and get them to perform.

Ford [F  8.97    0.26  (+2.99%)   ] rose 3.1 percent and touched a two-year high as the Ford Focus was named Motor Trend's 2010 car of the year.

If you're following the billionaires next door, Warren Buffet's Berkshire Hathaway and the Bill and Melinda Gates Foundation have both increased their stakes in a number of companies, according to their latest quarterly filings. 

Berkshire has increased its stake in Wal-Mart, [WMT  53.65    0.49  (+0.92%)   ] while lowering its holdings in ConocoPhillips [COP  53.61    -0.23  (-0.43%)   ] and NRG Energy [NRG  24.39    0.10  (+0.41%)   ].

It's also reported news takes in Nestle, [NSRGY  47.55    0.04  (+0.08%)   ] Republic Services, [RSG  28.24    0.27  (+0.97%)   ] and Travelers [TRV  53.12    0.18  (+0.34%)   ]. 

The Gates Foundation has boosted its holdings in Coca-Cola, [KO  56.86    0.12  (+0.21%)   ] McDonald's, [MCD  63.55    -0.98  (-1.52%)   ] and Waste Management [WM  33.08    0.29  (+0.88%)   ].

Investors will digest reports on consumer prices and initial construction of new homes Wednesday morning. Later in the week, the government will report on the number of Americans filing first-time claims for unemployment benefits.

VIX22.41-0.48-2.1%

Oil,Gold & Currencies:

Oil prices rose 24 cents to settle at $79.14 barrel in New York.

The price of gold closed at an all-time high of $1,139.40 an ounce, up 20 cents from Monday's record close of $1,139.80.

The weak dollar recovered a little Tuesday. The dollar index, which measures the U.S. currency against a basket of rivals, was up 0.7% to 75.38 from 74.92.

Bonds:

Treasury prices rose, with the yield on the 10-year note falling to 3.33%.

What to expect:

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

Asia:

Nikkei 225 9,716.35     -13.58 ( - 0.14%). (08.08 AM IST).

HSI 23062.61 +148.46 +0.65%. (08.09 AM IST).

SSE Composite 3282.89 3310.81 3310.81 3274.21 + 0.85. (08.10 AM IST).

Asian mining stocks rose on gains in commodity prices, overshadowing concern that share sales will reduce the value of equity investments in Japan.

BHP Billiton Ltd., the world's No. 1 mining company, added 1.2 percent in Sydney after oil and metal prices advanced. STX Pan Ocean Co., South Korea's biggest bulk carrier, increased 2.4 percent in Singapore after shipping rates climbed for a 14th day. Property developer Tokyo Tatemono Co. sank 19 percent on plans to sell 45.6 billion yen ($511 million) in shares.

The MSCI Asia Pacific Index added 0.2 percent to 118.86 as of 11:31 a.m. in Tokyo. The gauge has climbed 68 percent from a more than five-year low on signs of a global economic revival.

"The economic data is saying we're past the worst," said Stephen Halmarick, Sydney-based head of investment-markets research at Colonial First State, which holds about $135 billion. "Continued recovery in the global economy and more balanced global growth should increase demand for commodities. But the recovery process is still going to be painful and grinding."

Japan's Topix Index sank 0.9 percent, while the Nikkei 225 Stock Average fell 0.1 percent. Australia's S&P/ASX 200 Index rose 0.6 percent and South Korea's Kospi Index climbed 0.8 percent.

Futures on the Standard & Poor's 500 Index gained 0.1 percent. The gauge rose 0.1 percent yesterday, buoyed by commodity companies as gold and copper climbed, and crude oil rose for a second day to $79.14 a barrel. In London, the Baltic Dry Index, a measure of shipping rates for commodities, advanced for a 14th day to the highest since September 2008.

The MSCI Asia Pacific Index has climbed 32 percent this year, on course for its steepest annual increase since 2003. It has outpaced gains of 23 percent by the S&P 500 and 26 percent for Europe's Dow Jones Stoxx 600 Index. Stocks in the Asian index are valued at 22 times estimated earnings, compared with 18 times for the S&P and 16 times for the Stoxx 600.

Rupee:

The partially convertible rupee INR=IN ended at 46.30/31 per dollar on yesterday, weaker than Monday's close of 46.20/21.

INDIA:

India's benchmark stock index rose for a third day. Software exporters gained as retail sales rebounded in the U.S., their largest export market.

Infosys Technologies Ltd., the second-largest software services provider, rose 2 percent while its larger rival Tata Consultancy Services Ltd. gained 3.7 percent. Oil & Natural Gas Corp., the largest state-owned oil explorer, fell 2.5 percent as oil declined.

"There is a sharp increase in deal pipeline," Sandeep Muthangi, an analyst at IIFL Ltd. said in a note to clients. "Initial indications point to healthy information technology budgets for the fiscal year ending March 2011."

The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 18.14, or 0.1 percent, to 17,050.65. The S&P CNX Nifty Index on the National Stock Exchange gained 0.1 percent to 5,062.25. The BSE 200 Index advanced 0.1 percent to 2,117.89.

U.S. retail sales grew 1.4 percent in October after slumping the most in nine months in September, a government report yesterday showed.

Infosys gained 2 percent to 2,398.30 rupees. Tata Consultancy Services Ltd., the largest software services exporter, rose 3.7 percent to 690.45 rupees. Wipro Ltd., the third-biggest software services provider, rose 0.8 percent to 642.50 rupees. India's software exporters derive at least 40 percent of their earnings from the U.S.

Amtek Gains

Oil & Natural Gas fell 2.2 percent to 1,173.10 rupees. Crude oil for December delivery fell as much 0.6 percent to $78.40 a barrel in electronic trading on the New York Mercantile Exchange.

Amtek Auto Ltd., an Indian maker of automotive parts, rose 3.3 percent to 200.10 rupees. The company said yesterday after the market closed that it had bought back and canceled $9.5 million of bonds.

Overseas funds purchased a net 6.72 billion rupees ($145 million) of Indian stocks on Nov. 13, taking their total investments in equities this year to $15 billion, the Securities and Exchange Board of India said on its Web site. The funds have bought 720 billion rupees of stocks since Jan. 1 after recording net sales of 530 billion rupees for the whole of 2008.

BSE index gains 0.1 pct; extends rise to 3rd day

Spent most of the day down on subdued world markets

Reliance drops as no major announcement at AGM

Banks supported by improving economic activity

Outsourcer Infosys Technologies (INFY.BO: Quote, Profile, Research) and private sector lender HDFC Bank (HDBK.BO: Quote, Profile, Research) helped Indian shares stretch a winning run into a third day on Tuesday, after the market spent most of the day in negative territory. Investors took profits in many stocks following a more than 7 percent rally this month in tandem with world markets that retreated from the previous day's 2009 highs. U.S. stock futures indicated a lower opening on Wall Street.

Infosys, the country's second-largest software services firm, climbed 2 percent to 2,396.75 rupees on improving prospects. ICICI Securities said the current utilisation rate at 67 percent and composition of employees with less than three years experience at an historic low of around 53 percent, earnings visibility for Infosys was likely to remain superior versus peers. The brokerage maintained a buy rating on the stock and raised its target price to 2,515 rupees.

Sector leader Tata Consultancy (TCS.BO: Quote, Profile, Research) climbed 3.7 percent to 690.45 rupees while rival Wipro closed nearly 1 percent higher at 642.30 rupees.

Reliance Industries (RELI.BO: Quote, Profile, Research) shed 0.7 percent to 2,133.75 rupees, as the energy major did not make any major announcement at its annual general meeting. "Most people were expecting a big announcement in terms of an acquisition or a discovery. That didn't happen and the excitement came off," said Jigar Shah, senior vice-president of Kim Eng Securities. Reliance said it plans an aggressive exploration campaign, investments in petrochemicals and overseas acquisitions, but did not elaborate on any particular plan.

The main 30-share BSE index .BSESN closed up 0.1 percent, or 18.14 points, at 17,050.65 points, with half of its components rising. It had fallen as much as 0.9 percent during trade. "Our market is just reacting to what is happening globally," said Shah. Foreign funds have been a key driver for the market, pouring in $15 billion so far this year and helping the benchmark jump  more than three-quarters in 2009. The BSE index has risen 7.3 percent this month, erasing its losses in October.

HDFC Bank (HDBK.BO: Quote, Profile, Research) climbed 1.5 percent to 1,747.35 rupees as investors bet recovering economic activity would boost earnings. "Besides being a geared play on the economic cycle, banks trade at a 22 percent valuation discount to the broader market, which makes them an attractive buy," HSBC Bank said in a report and added HDFC Bank was its top pick from the sector. Top lender State Bank of India (SBI.BO: Quote, Profile, Research) closed 0.3 percent higher while rival ICICI Bank (ICBK.BO: Quote, Profile, Research) ended little changed. Energy explorer Oil & Natural Gas Corp (ONGC.BO: Quote, Profile, Research) fell 2.3 percent to 1,172.20 rupees as investors booked profits after it rose 4.5 percent in the past two sessions. In the broader market, gainers almost matched the number of losers on relatively low volume of 340 million shares.

The 50-share NSE index .NSEI closed up 0.1 percent at 5,062.25.

STOCKS THAT MOVED

Engineering and construction firm Larsen & Toubro (LART.BO: Quote, Profile, Research) rose 0.3 percent to 1,656.20, after sources said its power unit had emerged the lowest bidder for a project in north India.

Steel Authority of India Ltd (SAIL.BO: Quote, Profile, Research) rose 1.8 percent to 187 rupees after its chairman said the state firm was looking at acquiring licenses for coking coal mines abroad to protect itself from fluctuating raw material prices.

MAIN TOP 3 BY VOLUME

* Suzlon Energy (SUZL.BO: Quote, Profile, Research) on 14.6 million shares

* Mahindra Satyam (SATY.BO: Quote, Profile, Research) on 11.3 million shares

* Unitech (UNTE.BO: Quote, Profile, Research) on 7.3 million shares 

It was an absolute Tuesday twister for the Indian markets. After starting off with a negative bias and staying in the red till the last trading hour, a sudden bout of buying in the IT, Banking, Capital Goods and the Metals stocks aided the benchmark indices to end with mild gains.

NSE Nifty recovered nearly 50 points to close above 5,050 and the BSE Sensex recouped 170 points to shut above the 17,000 mark.

IT stocks were in limelight throughout the day, stocks like Infosys, TCS and Wipro were among the star performers, even the mid-cap IT stocks like Polaris, Mphasis and MindTree were in demand.

The index heavyweight Reliance Industries which held its Annual General Meeting today put on a disappointing show, the stock ended in the red, down by 0.7% at Rs2133. 

Finally, the BSE Sensex rose 18 points to end at 17,050 after touching a high of 17,080 and a low of 16,882. The index opened at 16,052 against the previous close of 17,032. The NSE Nifty ended flat at 5,062.

Coming back to India, among the BSE sectoral indices, the IT index was the top gainer, adding 2%, followed by the Teck index that was up 1% and the BSE Consumer Durables index was up 0.6%.

Major losers were BSE Realty index down 1.2% and BSE Oil & Gas index down 0.8%.

The BSE Mid-Cap index ended flat while the BSE Small-Cap index was marginally up by 0.2%.

Among the 30-components of Sensex, 15 stocks ended in the green and 15 ended in the negative terrain. TCS, Hero Honda, Infosys and Reliance Infra were among the top gainers.

On the other hand, among the major losers were ONGC, ACC, DLF, Bharti Airtel and RCom. 

Outside the frontline indices, the big gainers in the broader market were Spice Tele, Glenmark Pharma, GMDC, Sintex Industries and Aban Offshore. On the other hand, losers included Hindustan Copper, United Phos, Mundra Port and RCF.

Shares of the Aviation firms' crash landed after media reports flashed that the ministry said that it sees no reason to raise the existing FDI limit. 

Shares of Kingfisher Airlines fell over 5% to Rs52.9, Jet Airways slipped by 2.3% to Rs445 and SpiceJet fell 3.5% to Rs46.2.

Shares of HDFC ended flat at Rs2754. The company along with Standard Life, UK plans to infuse Rs3bn in its life insurance venture HDFC Standard Life in H2FY10.

In the previous week, HDFC also diversified into education loans. It acquired a 41% stake in Credila Financial Services, a company that specialises in education loans, for Rs100mn. HDFC has acquired the stake from Merrill Lynch, which was an initial investor in the company.

Shares of Bharat Forge advanced by 2% to Rs274 after reports stated that the company is planning to foray into the power sector with an investment of up to Rs500bn with a targeted generation capacity of up to 10,000MW, over the next 10 years.

Reports stated that the company plans to set up power plants in Gujarat, Maharashtra, coastal Andhra Pradesh and Tamil Nadu.

Shares of Glenmark gained by 5.5% to Rs242 after reports stated that the company has settled patent litigation with Medicis Pharmaceutical Corporation and has entered into a co-development arrangement on its specialty drug to treat acne.

The stock opened at Rs229 and made an intra-day high of Rs244 and a low of Rs229. Total traded volumes stood at 0.7mn shares.

Among the Sensex pack 15 stocks closed in green while 15 ended in red. The market breadth indicating the overall health of the market remained weak as 1,389 stocks closed in negative while 1,329 stocks closed in positive while 90 stocks remained unchanged in BSE.

The BSE Sensex closed with marginal gains of 18.14 points or (0.11%) at 17,050.65 and NSE Nifty closed up by 4.20 points or (0.08%) at 5,062.25. The BSE Mid Caps closed lower by 5.34 points at 6,486.46 while BSE Small Caps closed up by 16.80 points at 7,516.63. The BSE Sensex touched intraday high of 17,080.17 and intraday low of 16,882.98.

Gainers from the BSE Sensex pack are TCS (3.67%), Hero Honda (2.41%), Infosys (1.96%), Reliance Infra (1.89%), HDFC bank (1.47%), Wipro (0.96%), HUL (0.69%) and Hindalco (0.60%).

Losers from the BSE Sensex pack are ONGC (2.29%), ACC (2%), DLF (1.95%), Bharti Airtel (1.75%), Reliance Communication (1.73%), Sun Pharma (1.40%) and M&M (1.38%).

On the global markets front, the Asian markets that opened before the Indian market, closed mixed. Shanghai Composite, Jakarta Composite closed up by 0.24% and 0.21% at 3,282.89 and 2,473.79 respectively while Taiwan Weighted, Strait Times, Nikkei and Hang Seng indices closed lower by 0.76%, 0.68%, 0.63% and 0.13% at 7,733.21, 2,764.95, 9,729.93 and 22,914.15 respectively.

European markets, which opened after the Indian market, are trading in negative. In London FTSE 100 is down by 0.41% at 5,360.66 and in Frankfurt DAX index is trading lower by 0.28% at 5,788.79 and in Paris the CAC 40 is lower by 0.28% at 3,852.47.

BSE IT index was at 4,826.40 up by 95.48 points or by (2.02%) The main gainers were Tcs Ltd up by (3.67%) at Rs.690.45, Mphasis Ltd up by (2.32%) at Rs.779.25, Infosys Technologies Ltd.-Ordi up by (1.96%) at Rs.2396.75, Rolta Ind up by (1.84%) at Rs.177, Tech Mah up by (1.37%) at Rs.1019.8.

BSE TECk index was at 3,062.78 up by 30.74 points or by (1.01%) The main gainers were Tcs Ltd up by (3.67%) at Rs.690.45, Dish Tv up by (3.39%) at Rs.41.15, Mphasis Ltd up by (2.32%) at Rs.779.25, Infosys Technologies Ltd.-Ordi up by (1.96%) at Rs.2396.75, Rolta Ind up by (1.84%) at Rs.177.

BSE REALTY index was at 3,977.02 down by 47.83 points or by (1.19%) The main losers were Housing Dev down by (3.08%) at Rs.357, Ansal Infras down by (3.01%) at Rs.69.2, Anant Raj In down by (2.19%) at Rs.138.75, Phoenix Mill down by (2.01%) at Rs.185, Dlf Ltd down by (1.95%) at Rs.377.8.

BSE METAL index was at 15,973.36 up by 58.45 points or by (0.37%) The main gainers were Gujara Nre C up by (3.49%) at Rs.68.2, Hind.Zinc up by (3.44%) at Rs.991.8, Jindal Saw up by (2.01%) at Rs.820.75, Steel Author up by (1.82%) at Rs.187, Sesa Goa Ltd up by (0.76%) at Rs.359.35.

BSE BANKEX index was at 10,337.08 up by 35.37 points or by (0.34%) The main gainers were Hdfc Bank Lt up by (1.47%) at Rs.1747.35, Bank Of India up by (1.11%) at Rs.383.95, Allahabad Bk up by (1.01%) at Rs.135.1, Federal Bank up by (0.83%) at Rs.238, Kotak Bank up by (0.8%) at Rs.829.5.

BSE CG index was at 13,556.87 up by 42.57 points or by (0.31%) The main gainers were Crompton Greaves Ltd. up by (3.66%) at Rs.408.95, Praj Industries Ltd. up by (3%) at Rs.92.85, Aiaengineer up by (2.45%) at Rs.321.9, Thermax Lmtd up by (2.12%) at Rs.568.3, Areva up by (0.95%) at Rs.282.75.

BSE CD index was at 3,533.96 up by 19.73 points or by (0.56%) The main gainers were Rajesh Expot up by (4.27%) at Rs.83.05, Gitanjali Ge* up by (3.28%) at Rs.119.75, Titan Ind. up by (0.51%) at Rs.1378.85, The main losers were Videocon Ind down by (0.83%) at Rs.221, Blue Star L down by (0.49%) at Rs.344.75,

BSE POWER index was at 3,053.83 up by 3.20 points or by (0.1%) The main gainers were Crompton Greaves Ltd. up by (3.66%) at Rs.408.95, Rel Infra up by (1.89%) at Rs.1188.15 and Suzlonenergy up by (0.9%) at Rs.72.75.

BSE OIL&GAS index was at 10,206.63 down by 72.9 points or by (0.71%) The main losers were Ong Corp Ltd down by (2.29%) at Rs.1172.2, Bharat Petroleum Corporation L down by (0.98%) at Rs.518 and Reliance down by (0.65%) at Rs.2133.75.

Brigade Enterprises Ltd closed flat at Rs. 134.90. The company has announced its foray into affordable homes through Brigade Value Homes, with base prices ranging from Rs. 10-26 lakh.

Wanbury surged 4.94% to closed at Rs. 65.80. The company has entered into an alliance with TAKE Solutions Ltd for installing their leading product PharmaReady SPL Solution Suite, a fully integrated web-based eDMS and eCTD Submissions Solution Suite for e-submissions.

Jaihind Projects Ltd closed flat at Rs. 137.10. The company has been awarded order of Rs. 14.05 crores from Bharat Petroleum Corporation Ltd. (BPCL) for Provision of Cross Country Pipeline Laying and Associated works for Kochi Refinery to Cochin AFS Pipeline Project.

Jet Airways (India) Ltd. (JETIN IN): India referred Jet Airways' plans to raise 20 billion rupees from foreign investors to a cabinet panel, according to a statement from the Foreign Investment Promotion Board yesterday. The shares fell 2.1 percent to 447.75 rupees.

Larsen & Toubro Ltd. (LT IN): Gilbarco Inc. agreed to acquire the fuel dispensing-pump business of Larsen & Toubro, India's largest engineering company. Larsen shares rose 0.2 percent to 1,656.3 rupees.

Reliance Industries Ltd. (RIL IN): India's most valuable company said it may become debt-free in less than two years and plans to acquire assets overseas to boost its revenue from the energy business. The shares fell 1 percent to 2,132.35 rupees.

Steel Authority of India Ltd. (SAIL IN): India's second- biggest steelmaker plans to raise about $2 billion from offering investors a 10 percent stake in the company, executive director V. K. Mehta said yesterday. The shares rose 2.1 percent to 187.5 rupees.

   
 
INVESTMENT VIEW
Unity Infraprojects-Value Buy

Unity is a leading engineering and construction company with well diversified project expertise across verticals. Some of the landmark projects done by Unity are expansion and modification at the Chhatrapati Shivaji International Airport, Mumbai, Millennium Business Park in Navi Mumbai, mass housing projects for DDA in Delhi, tsunami reconstruction project in Andaman & Nicobar Islands and Jupiter Mills for Indiabulls Real Estate.

 

Unity currently has a strong order book of Rs 4040 crore, 3.6x FY09 revenues. This provides revenue visibility over the next couple of years. Going forward, Unity, being the leading player with well diversified project execution skills is likely to be a key beneficiary of the government's thrust on infrastructure spending.

 

Strong order book

 

Unity order book of Rs 40 bn is executable over the next 33 months. The current order book is at 3.6x FY09 revenues and 3.2x on TTM revenues providing revenue visibility for

the next three years. In terms of verticals, water and irrigation accounted for 49% followed by civil construction (40%) and transportation (11%).

 

Infrastructure opportunities galore

 

In order to target a GDP growth rate of 9-10% in the X1th Five Year Plan, the government has laid greater emphasis on investment in infrastructure spending. Infrastructure spending is expected to increase at 2.3x to Rs 20.27 trillion in the X1th Plan compared to the Xth plan. This bodes well for construction player such as Unity, going forward.

 

Valuation

 

At the current market price, the stock is trading at 9.1x FY09 EPS and 1.5x FY09 P/BV. On a TTM basis, the stock is currently trading at 8.7x its earnings of Rs 50.
 

(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