Thursday, December 3, 2009

Market Outlook for 3rd Dec 2009

 
INTRADAY calls for 03rd Dec 2009
Buy MundraPort - 569 for 588-594+ with sl 560
Buy Uniphos - 161 for 168-171+ with sl 157
Buy IFCI - 54 for 57.65-58.5 with sl 51.50
Buy IndusindBank - 133 for 139-141+ with sl 129
Buy IDBI - 132 for 145+ with sl 129 [positional]
Buy SyndicateBnk-98 above 101 for 112+ with sl 98 [positional]
 
 
stocks that are in news today:
-ABG Shipyard, Bharati Shipyard's open offers for Great Offshore open today
-Ashok Leyland November total sales at 4,695 units versus 2,307 units (YoY)
-REC sources say DHRP for REC FPO to be filed on December 4, FPO to hit markets between January 21– January 27
-Genus Power board meet on December 4 to approve convertible warrants to promoters (stock up 20%)
-Uninor to announce launch of operations; initially in 8 circles; Alert: Uninor is a JV between Telenor & Unitech Wireless
-Infosys CEO: To use part of $2.8 billion cash reserve for acquisitions 
-Still in NSE F&O curb: Kingfisher
-1.66 crore QIP shares of Welspun Gujarat hit the market today
-21.31 crore QIP shares of Hindalco available for trading today
-Long wait for NANO leads to cancellations
 
NIFTY FUTURE LEVELS
SUPPORT
5111
5106
5092
5085
5067
RESISTANCE
5129
5139
5160
5179
5185
5204
 
Strong & Weak  futures  
This is list of 10 strong futures:
Dena Bank, Tata Motors, Ranbaxy, Jindal Saw,  Orchid Chem, Canara Bank, Sail Ltd, Recltd, Hind Zinc & McDowell-N.
And this is list of 10 Weak futures:
Rel Infra, EKC, Punj Lloyd, Mphasis, Siemens, India Info, RCom, Great Offshore, MRPL & OFSS.
 Nifty is in Up trend  
 
NIFTY FUTURES (F & O): 
 Below 5111-5113 zone, selling may continue up to 5106 level and thereafter slide may continue up to 5092-5094 zone by non-stop.
Hurdles at 5129 & 5139 levels. Above these levels, expect short covering up to 5158-5160 zone and thereafter expect a jump up to 5177-5179 zone by non-stop.

Cross above 5183-5185 zone, can take it up to 5202-5204 zone by non-stop. Supply expected at around this zone and have caution.

On Negative Side, rebound expected at around 5085-5087 zone. Stop Loss at 5067-5069 zone.
 
Short-Term Investors: 
 Bullish Trend. Stop Loss at 4801.00.
Up Side Target at 5477.00.
 
Today's Expectation:
SGX NIFTY is trading at 5134.00 (08.41 AM IST).
This trend is on expected lines.
If this uptrend continues, then uptrend may continue for 1 (or) 2 Days, 1 Week, 1 Month, 3 Months (or) Even 1 Year.
If Profit Booking starts, then it may continue for 1 Day.
 
POSITIONAL BUY:
Buy TATA MOTORS (NSE Cash) 
If crosses & sustains above 744 level, then rally may continue up to 770 level by non-stop. Unbelievable too.
Support is too far at down side and at around 707 level. Below 707 level, selling may continue up to 696 level.
 
Buy DLF (NSE Cash) 
If crosses & sustains above 388 & 390 levels, then rally may continue up to 400 level and thereafter it can touch 403-405 zone.
Support is too far at down side and at around 375 level. Below 375 level, selling may continue up to 373 level.
 
Buy INDIABULLS REAL ESTATE (NSE Cash) 
If crosses & sustains above 227 level, then rally may continue up to 233 level by non-stop. 
Support is too far at down side and at around 220 level. Below 220 level, selling may continue up to 214 level.
 
Buy APTECH LTD (NSE Cash) 
If crosses & sustains above 196 level, then rally may continue up to 219 level by non-stop. Unbelievable too.
Support is too far at down side and at around 170 level. Below 170 level, selling may continue up to 169 level.
 
STOCK OPTIONS (NSE):
Buy ICICIBANK CALL OPTION (900 Strike Price).
Above 31 level, it can zoom up to 40 level by non-stop. Unbelievable too.

Support is too far on down side & at around 19 level. Below 19 level, expect unwinding up to 17 level.
 

Buy SBIN CALL OPTION (2310 Strike Price).
Above 84 level, it can zoom up to 100 & 104 levels by non-stop and thereafter expect a jump up to 120-122 zone. Unbelievable too.

Support is too far on down side & at around 64 level. Below 64 level, expect unwinding up to 60 level.
 
STOCK FUTURES (NSE):
Sell RELIANCE FUTURES:
Below 1093 level, selling may continue up to 1085 level by non-stop. If breaks 1070 level, then expect further panic up to 1066-1068 zone by non-stop.

Hurdle at 1110 level. Above this level, expect short covering up to 1118 level by non-stop.

Buy JSWSTEEL FUTURES:
Above 1035 level, it can zoom up to 1056 & 1075 levels by non-stop and thereafter expect a jump up to 1085-1087 zone. Unbelievable too.

Support is too far on down side & at around 1006 level. Below 1006 level, expect unwinding up to 985 level.
 
FII DATA
FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category Date Buy Value Sell Value Net Value
FII 02-Dec-2009 3535.72 2650.07 885.65
DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category Date Buy Value Sell Value Net Value
DII 02-Dec-2009 1560.79 1774.43 -213.64
 
SPOT INDEX LEVELS
NSE Nifty Index   5123.25 ( 0.02 %) 1.25       
  1 2 3
Resistance 5152.75 5182.25   5202.75  
Support 5102.75 5082.25 5052.75

BSE Sensex  17169.91 ( -0.16 %) -28.36     
  1 2 3
Resistance 17285.61 17401.30 17472.93
Support 17098.29 17026.66 16910.97
Interesting findings on web: 
      Source: Bloomberg
India's stocks fell, snapping a two- day 3.4 percent rally. Wipro Ltd. led software exporters lower after the rupee gained against the dollar for a third day, crimping the value of their exports in the local currency.
Wipro, the nation's third-largest software developer, fell 0.8 percent. Tata Motors Ltd. rose 4.3 percent as sales increased last month.
The Bombay Stock Exchange's Sensitive Index, or Sensex, slid 28.36, or 0.2 percent, to 17,169.91. The S&P CNX Nifty Index on the National Stock Exchange added 1.25, or less than 0.1 percent, to 5,123.25. The BSE 200 Index advanced 0.2 percent to 2,146.69. The Sensex has gained 78 percent this year, set for its best annual performance since 1991, as Asia's third-largest economy recovers at a faster pace than the U.S., Europe and Japan.
Wipro fell 0.8 percent to 633 rupees. Tata Consultancy Services Ltd., India's largest software developer, slid 0.2 percent to 684.30 rupees. India's rupee climbed to the highest level in a week gaining 0.2 percent to 46.2450 a dollar. Indian software developers get more than half their sales from the U.S., their largest export market.
Tata Motors rose 4.3 percent to 733 rupees. Sales of trucks and buses in the local market grew 81 percent in November to 29,408 units, the company said in a statement yesterday after the stock market closed. Sales of passenger vehicles added 55 percent.
Maruti, Bajaj Auto
Maruti Suzuki India Ltd., India's largest carmaker, increased 1.6 percent to 1,612.95 rupees after sales climbed 67 percent in November while Bajaj Auto Ltd. gained 3.2 percent to 1,690 rupees after sales last month surged 73 percent to 276,759 vehicles. 

"Auto sales came in slightly ahead of expectations," Ashwin Patil, an analyst at HDFC Securities Ltd. said in a note to clients. "We believe the recovery story remains intact, led by lower interest rates, steady rural incomes and a continuing interest in new models."
Ranbaxy Laboratories Ltd., the nation's largest drugmaker by sales, gained 3.3 percent to 484.65 rupees after its stock rating was raised to "buy" from "sell" at Citigroup Inc. as the company won approval for the sale of a generic version of the Valtrex drug in the U.S.
ABG Shipyard Ltd., India's biggest non-state yard, climbed after it sold its entire stake in Great Offshore Ltd., withdrawing from a bidding war after its rival Bharati Shipyard Ltd. raised its offer price. ABG surged 9 percent to 205.70 rupees. Bharati Shipyard soared 11 percent to 177.80 while Great Offshore sank 6 percent to 513.05 rupees.
Tata Elxsi Ltd., a software developer that's part of the Tata Group, jumped 20 percent to 203.65 rupees, its steepest climb in 12 years. Sales may reach $400 million within three years, the Economic Times reported, citing managing director Madhukar Dev. 

Source: Reuters
* Resistance emerges after 3.4 pct rally over two days * HDFC falls on concerns new product could hurt margins * Tata Motors hits 18-month-high on robust Nov sales
Indian shares ran out of steam after climbing to a near six-week high on Wednesday and shed 0.2 percent, with Housing Development Finance Corp (HDFC.BO) leading the drop. Traders said there was resistance after the market had risen 3.4 percent over two days, and with the year end coming up investors were becoming cautious.
Reliance Infrastructure (RLIN.BO) fell 1.9 percent to 1,060.55 rupees as investors took profits after the stock had jumped 4.5 percent over three sessions. Top vehicles maker Tata Motors (TAMO.BO) touched an 18-month high of 739.45 rupees, after its November sales rose 65 percent from a year earlier. [ID:nBOM421546] The stock closed up 4.1 percent at 729.75 rupees. Citigroup said in a note on Sunday Tata Motors would be a key beneficiary of a revival in the domestic investment cycle.
The 30-share BSE index .BSESN closed down 0.16 percent, or 28.36 points, at 17,169.91 after rising as much as 0.8 percent in early deals. The market had risen over the previous days on better-than-expected September quarter GDP growth and robust November auto sales. Eighteen of its components closed in the red. Foreign fund inflows of more than $15 billion have powered a rally of 78 percent in the benchmark so far this year. If the rally sustains momentum, the Sensex is poised to post its best yearly performance at least since 1991, according to data available with Thomson Reuters.
Analysts are mixed on the outlook for the new year. Rakesh Rawal, head of private wealth management at Anand Rathi Financial Services, said he expected the Sensex to gain around 15 percent in 2010. "The extent of negativities in the world markets may come off in 2010. If that happens, it could help the Sensex grow further. It can grow by ... maybe even 25 percent," he said. But Anand Shah, head of equities at Canara Robecco Mutual Fund, was skeptic. "Our market could be really choppy in 2010. Strong liquidity will keep pushing the market higher but weak global fundamentals will not support the idea. How much can printed money drive a market," he said.
Housing Development Finance dropped 1.9 percent to 2,748.80 rupees on investor worry a loan product it launched at a fixed rate of 8.25 percent a year up to March 2012 and the applicable floating rate for the remaining term would hit margins. "The dual rate product introduced by HDFC implies lower interest rates, and could pressurise its margins to an extent," said Vaibhav Agrawal, vice-president of research - banking at Angel Broking.
Leading lenders State Bank of India (SBI.BO) and ICICI Bank (ICBK.BO) climbed 0.7 percent each. "Banks look better than rest of the lot. The valuations are still reasonable. The outlook looks better, with the economy showing good growth," Shah said. India's central bank will not raise interest rates by the end of 2009, according to a new Reuters poll, and only one-third of economists surveyed predict a rate hike by the end of January despite unexpectedly strong growth during the September quarter.
Strong monthly sales also pushed Maruti Suzuki (MRTI.BO) and Bajaj Auto (BAJA.BO) up 1.5 percent and 3.3 percent respectively. Top engineering and construction firm Larsen & Toubro (LART.BO) shed 0.4 percent to 1,622.15 rupees, after the government rejected its proposed tie-up with Europe's EADS (EAD.PA) for defence equipment production. Tata Steel (TISC.BO), the world's eighth largest steel maker by output, dropped 1.1 percent to 575.40 rupees on concerns over its near-term outlook. "The short-term outlook for Tata Steel remains challenging, due to the presently lower demand in the European steel markets, subdued steel prices, and Corus' production cuts," First Global said in a note on Tuesday.
In the broader market, gainers led losers in a ratio of 1.2:1 on moderate volume of 442 million shares.  The 50-share NSE index  closed almost unchanged at 5,123.25.
STOCKS THAT MOVED * Gammon India (GAMM.BO) rose 1.7 percent to 242.90 rupees. The construction firm said it won two projects worth 4.59 billion rupees to construct two 600 MW thermal power projects in southern Tamil Nadu state.
ABG Shipyard (ABGS.BO) rose 9.4 percent to 206.50 rupees after the ship builder said it sold entire holding in offshore services firm Great Offshore (GOFS.BO) in the secondary market. The announcement came after rival Bharati Shipyard (BHAR.BO) raised the open offer price for Great Offshore to 590 rupees a share. Great Offshore fell 5.9 percent while Bharati Shipyard jumped 11.6 percent.
MAIN TOP 3 BY VOLUME * Unitech (UNTE.BO) on 17.9 million shares * Suzlon Energy (SUZL.BO) on 12 million shares * Dena Bank (DENA.BO) on 11.6 million shares
 
Source: India Infoline
Indian markets ended flat amid high volatility on Wednesday as bulls ran out of steam after a two day rally. Strong overnight cues from the US and the Asian markets aided the Nifty inch closer to the 5182 levels (52-week high). However, key indices were unable to hold on as traders and investors preferred to book some profits at higher levels.
The shipping sector was in demand given the takeover Saga between Bharati Shipyard and ABG Shipyard. However, shares of Great Offshore ended with losses.
The Auto and the Realty stocks also were among the top gainers however, the FMCG, select IT and Power stocks were among the major losers.
The BSE Sensex slipped 28 points at 17,169 after touching a high of 17,329 and a low of 17,142. The index opened at 17,254. The NSE Nifty ended flat to shut shop at 5,123.
In Asia, the Nikkei in Japan was up 0.4%, while Australia's S&P/ASX ended higher by 1%. Shanghai SE Composite in China gained 1% and Hang Seng index in Hong Kong was up 0.8%.
In Europe, stocks were mixed. The FTSE in the UK was down 0.2%, The DAX in Germany was flat and the CAC 40 index in France was up 0.2%.
Among the 30-components of Sensex, 19 stocks ended in the red and 11 ended in the positive terrain. HDFC, BHEL, ONGC, ITC and HUL ended in the negative terrain. Among the major gainers were Tata Motors, ICICI Bank, HDFC Bank, DLF and SBI.
Shares of Sun Pharma erased early gains and ended lower by 3% to end at Rs1497. The stock hit intra-day high of Rs1638 after the company announced that it received the support of Templeton Asset Management to acquire Israeli drugmaker Taro Pharmaceutical, Templeton Chairman Mark Mobius was quoted as saying.
He added, Supreme Court in Israel should pass a decision quickly so that Sun can take control of Taro. Templeton owns a 10% equity stake in Taro.
The scrip opened at Rs1564 it hit an intra-day low of Rs1486 and recorded volumes of over 0.46mn shares on NSE.
Shares of Tata Elxsi were locked at 20% upper circuit to end at Rs203.65 after reports stated that the company's sales may reach US$400mn within three years. The scrip opened at Rs172 it touched an intra-day high of Rs203 and a low of Rs172 and recorded volumes of over 2mn shares on NSE. The stock had hit its 52-week low of Rs75 on March 06, 2009.
ABG Shipyard and Eleventh Land Developers Pvt. Ltd. (ELDPL) (a wholly owned subsidiary of ABG), announced the sale of 3.078mn shares of Great Offshore (being approximately 8.27% of current paid up shareholding of Great Offshore Ltd.) through a stock market sale. Consequent to this Transaction, the cumulative shareholding of ABG and ELDPL in Great Offshore Ltd. is Rs571 shares.
Bharati Shipyard announced that the Board of Directors decided to revise the open offer price of equity shareholders of Great Offshore to Rs590 per share.
Thus, the offer price per equity share stands revised at Rs590 per share for the open offer for 78,26,788 equity share representing 20% of the emerging voting capital of Great Offshore Ltd.
Shares of ABG Shipyard shot up by over 9% to end at Rs205 and Bharti Shipyard also surged over 11% to end at Rs177.
Shares of LML have advanced by 4.4% to Rs9.55 after the company announced that it started legal proceedings against Piaggio & C. SpA, Italy for breach of Settlement & Clean Break Agreement dated November 15, 1999 by invoking arbitration under the Singapore International Arbitration Centre (SIAC), Arbitration Rules, Singapore.
The scrip opened at Rs9.25 it touched an intra-day high  of Rs10.50 and a low of Rs9.15 and has recorded volumes of over shares 2.3nm on NSE. 

Source: Kotak Securities
Markets closed the today's volatile session on a flat note after showing gains during the early session on the back of far end profit booking across the selective indices. Stocks managed to gain ground during opening and touched highest level in more than a month, on some buying sentiment. Bank and Auto stocks were positive contributors. However, market pared most of its gains along with slide in European markets after positive opening. Investors selected to tread a cautious path due to lack of prominent triggers. The BSE Sensex ended below17,200 level and NSE Nifty closed above 5,100 mark.
The market today extended its yesterday's gains and opened on positive note on the back of favorable cues from the global markets. The Asian markets were up today and the US markets closed significantly higher on Tuesday on sustained buying led by economic data that reinforced hopes for a sustainable recovery. A weak dollar advanced natural resource companies' shares. The Dollar Index returned to 52-week lows before paring losses to end with a 0.5% loss. Besides, sentiment also got a boost, as concerns retreated about the impact of Dubai's debt trouble after news that Dubai World planned to restructure about $26 billion in debt. Further, Indian benchmark indices suddenly turned volatile and shed most of gains as investors decided to book some profits after a sharp rally in the previous few sessions. Going ahead, stocks continued to swing up and down on continuous bouts of buying and selling. Finally, market closed on flat note on selling pressure emerged during afternoon. From the sectoral front, Power, FMCG, Capital Goods, Consumer Durable, Oil & Gas and Metal stocks witnessed most of the selling from these baskets. However, Realty, Auto and Bank stocks gained favour from the market. BSE Midcap and Smallcap stocks also gained favour during the trading.
Among the Sensex pack 19 stocks ended in red territory and 11 in green. The market breadth indicating the overall health of the market remained positive as 1518 stocks closed in green while 1214 stocks closed in red and 112 stocks remained unchanged in BSE.
The BSE Sensex closed marginally lower by 28.36 points at 17,169.91, whereas NSE Nifty ended slightly up by 1.25 points 5,123.25. BSE Midcap and Smallcap closed with gains of 58.92 and 66.89 points at 6,587.68 and 7,751.85 respectively. The BSE Sensex touched intraday high of 17,329.68 and intraday low of 17,142.36.
Indian government has drawn up 25 state firms for stake sales which include Nuclear Power Corporation of India, National Bank for Agriculture and Rural Development. It also includes Exim Bank of India, Punjab & Sind Bank, Indian Railways Finance Corporation and National Housing Bank.
Losers from the BSE Sensex pack are Sun Pharma (2.82%), HDFC (1.90%), Rel Infra (1.87%), HUL (1.39%), BHEL (1.37%), Tata steel (1.13%), M&M Ltd (1.09%), ACC Ltd (1.09%), RCom (1.07%), ONGC Ltd (1.02%) and Herohonda Motors (0.91%).
Gainers from the BSE Sensex pack are Tata Motors (4.14%), DLF Ltd (3.69%), Maruti Suzuki (1.54%), HDFC Bank (0.92%), JP Associates (0.70%) and ICICI Bank (0.58%).
On the global markets front, the Asian markets that opened before the Indian market, ended higher. Shanghai Composite, Hang Seng, Nikkei 225, Singapore's Straits Times and Seoul Composite ended up by 34.39, 176.42, 36.74, 25.39 and 21.91 points at 3,269.75, 22,289.57, 9,608.94, 2,796.34 and 1,591.63 respectively.
European markets, which opened after the Indian market, are trading mostly down after positive opening. In Paris the CAC 40 is trading with marginal gain of 7.17 points at 3,782.91. Whereas, in Frankfurt DAX index is trading down by 4.25 points at 5,772.36 and in London FTSE 100 is down by 3.66 points at 5,308.51.
The BSE Power index was at 2,992.74 down by 16.85 points or by (0.56%). The main losers were Rel Infra down by (1.87%) at Rs.1,060.55, Siemens down by (1.63%) at Rs.527.60, BHEL by (1.37%) at Rs.2,199.65, ABB by (0.93%) at Rs.736.55 and Tata Power by (0.90%) at Rs.1,347.25.
The BSE FMCG index was at 2,856.65 down by 15.60 points or by (0.54%). The main losers were Godrej Cons down by (2.35%) at Rs.282.6, HUL by (1.39%) at Rs.275.8, Dabur India by (1.32%) at Rs.164.05, Tata Tea by (0.98%) at Rs.894.90 and Ruchi Soya by (0.75%) at Rs.86.20.
The BSE Capital Goods index was at 13,391.83 lower by 47.48 points or by (0.35%). The main losers were Areva T&D down by (3.19%) at Rs.290, AIA Engineering by (2.41%) at Rs.354.3, Siemens down by (1.63%) at Rs.527.60, Havells India by (1.6%) at Rs.394.25 and BHEL by (1.37%) at Rs.2,199.65.
The BSE Realty index was at 3,959.18 up by 72.73 points or by (21.87%). The main gainers were Indiabull Real up by (4.52%) at Rs.223.15, DLF Ltd up by (3.69%) at Rs.384.50, Parsvnath up by (2.01%) at Rs.111.4, Ackruti City up by (1.36%) at Rs.545.2 and Ansal Prop up by (1.05%) at Rs.67.65.
The BSE Auto index was at 7,316.17 up by 95.93 points or by (1.33%). The main gainers were Amtek Auto up by (6.18%) at Rs.197.45, Tata Motors up by (4.14%) at Rs.729.75, Exide Indus up by (3.92%) at Rs.114, Bajaj Auto up by (3.25%) at Rs.16,90.80 and Ashok Leyland up by (2.83%) at Rs.54.45.
Shree Cements gained 0.43%, after the cement shipments grew 15.28% to 7.09 lakh tonnes in November 2009 (YoY).
Tata Motors jumped higher by 4.14% in the light of impressive November sales, which increased by 65% at 54,108 units (YoY). The company's ADR also leaped over 11%, which lend a hand to the stocks to rise.
Sun Pharmaceutical Industries Ltd lost 2.82%. There was a reports suggesting that Templeton Asset Management Ltd, an important investor in Israel's Taro Pharmaceutical Industries Ltd, doesn't have any objection to the Indian company buying Taro.
Flawless Diamond India Ltd moved down by 3.76% despite of bagging its first Gold Jewellery order worth Rs. 18 crore from Sidhh Jewellers, Dubai.
ACC Ltd fell 1.09% after cement shipments fell 4.04% to 1.66 million tonnes in November 2009 from 1.73 tonnes in November 2008.
Asahi Infrastructure and projects Ltd. moved up by 1% after the company received work order from Central and State Government for construction of Housing and Infrastructure (Scheme) worth Rs. 7.75 crore, for construction of 327 houses.
Fedders Lloyd Corporation Ltd zoomed 4.99%, after securing a contract of approx. Rs. 120 crore for the supply, installation, testing, commissioning and maintenance of High Voltage Distribution Systems (HVDS) in various districts of Madhya Pradesh, along with its JV partner.
RUPEE:
The partially convertible rupee INR=IN ended at 46.3450/3550 per dollar, slightly weaker than Tuesday's close of 46.31/32. In early deals it rose to 46.1375, its strongest since Nov. 26. (Source: Reuters)
Asia:
Source: Bloomberg
Asian Stocks Rise on Yen, U.S. Economy Optimism; Honda Gains
Asian stocks rose, sending the MSCI Asia Pacific Index toward its biggest weekly gain since May, as a weaker yen boosted Japanese makers of cars and electronics and the Federal Reserve said the U.S. economy improved.
Sony Corp., which gets 23 percent of its sales in the U.S., surged 4.9 percent in Tokyo, and Honda Motor Co. added 4 percent. James Hardie Industries NV, the top seller of home siding in the U.S., gained 2.7 percent in Sydney as the Fed's Beige Book showed the economy expanded or improved "modestly" across the U.S. from October to mid-November. Kawasaki Kisen Kaisha Ltd., Japan's third-largest shipping line, advanced 5.3 percent after freight rates snapped an eight-day streak of losses.
"Things are normalizing," said Prasad Patkar, who helps manage about $1.7 billion at Platypus Asset Management in Sydney. "The U.S. recovery might be more subdued than elsewhere, but it's still a recovery. As long as there are no systemic shocks, there is no underlying, fundamental reason for things to start going backwards."
The MSCI Asia Pacific Index rose 1 percent to 121.05 as of 11:05 a.m. in Tokyo. It has gained 6.3 percent this week, headed for its steepest weekly increase since the five days ended May 8. The gauge has climbed 71 percent from its lowest in more than five years on March 9 on signs government stimulus measures are reviving global growth.
Japan's Nikkei 225 Stock Average climbed 2.3 percent, today's biggest advance in the Asia-Pacific region. Mitsubishi Motors Corp. soared 18 percent on speculation PSA Peugeot Citroen may buy a stake in the carmaker.
S&P, MSCI Valuations
Australia's S&P/ASX 200 Index rose 0.3 percent, while South Korea's Kospi Index climbed 0.7 percent. Futures on the U.S. Standard & Poor's 500 Index added 0.2 percent. The gauge increased for a third day yesterday after the Fed's comments.
The MSCI Asia Pacific Index's rally from its March low has outpaced gains of 64 percent by the S&P 500 and 56 percent for Europe's Dow Jones Stoxx 600 Index. Stocks in the MSCI benchmark are valued at 22 times estimated earnings, compared with 18 times for the S&P and 16 times for the Stoxx 600.
Sony, an electronics maker, gained 4.9 percent to 2,450 yen. Pioneer Corp., a maker of car-navigation systems and audio equipment, added 4.7 percent to 265 yen. Honda, which is Japan's second-biggest carmaker and gets 42 percent of its revenue from North America, climbed 4 percent to 2,980 yen. Nissan Motor Co., a smaller rival, rose 5.6 percent to 698 yen.
Yen Gains
The yen weakened against all 16 of its major counterparts and traded as low as 87.78 against the dollar today, the lowest level since Nov. 25. Against the euro, it retreated for a third day to the weakest rate since Nov. 25. That boosts the value of overseas earnings at Japanese companies when converted into their home currency.
The yen climbed to a 14-year high against the dollar last week and has averaged 93.89 this year, the strongest since currencies began trading freely in 1971. That has weighed on the Topix, making its 2.4 percent gain in 2009 the lowest return among the world's 40 largest stock markets.
James Hardie gained 2.7 percent to A$8.46 in Sydney. In Seoul, LG Electronics Inc., Asia's second-largest handset maker and which gets the bulk of its revenue from North America, rose 4.3 percent to 108,500 won.
"The Beige Book confirmed that the economy is on an upward trend, spreading a sense of security," said Mitsushige Akino, who oversees the equivalent of $450 million in assets in Tokyo at Ichiyoshi Investment Management Co. "People are expecting fundamentals to improve."
Kawasaki Kisen, Japan's third-largest shipping line, advanced 5.3 percent to 260 yen. The Baltic Dry Index, a measure of rates for shipping commodities, rose 2.1 percent yesterday, its first gain in nine sessions. Nippon Yusen K.K., Japan's largest shipping line, added 1.6 percent to 258 yen. Mitsui O.S.K. Lines Ltd. gained 3.6 percent to 494 yen.
Mitsubishi Motors jumped 18 percent to 140 yen after a trading halt was lifted, the steepest increase in the Nikkei 225. The Nikkei newspaper reported, without saying where it obtained the information, that Paris-based Peugeot is negotiating to buy a stake of as much as 50 percent. 

Nikkei 225 9,828.41     +219.47 ( +2.28%). (08.17 AM IST)
HSI 22423.67 +134.1 +0.6%. (08.18 AM IST).
SSE Composite 3269.75 3266.33 3270.37 3243.75 -0.10. (08.19 AM IST)   
 
INVESTMENT VIEW
GSPL-Growing In The Shadow Of Gail
  
Gujarat State Petronet Limited (GSPL), a subsidiary of Gujarat State Petroleum Corporation Limited (GSPC) was incorporated in December 1998 for the purpose of constructing and managing a state-wide gas transmission network in Gujarat.   
GSPL, a Pure Natural Gas Transmission Company is a pioneer in developing energy transportation infrastructure and connecting major natural gas supply sources and demand markets. GSPL is the first company in India to transport natural gas on 'open access' basis i.e. it makes the gas transmission capacity available to any shipper on a non-discriminatory basis.   

Key Positives

Strong Volume growth to drive growth going forward. 

-Strategically located in the Industrial clusters of Gujarat 

-Gas deficit to continue going forward even after the improved supply situation 

- Network expansion in Gujarat to fulfill increasing gas demand

- Expansion outside Gujarat to capture increasing demand of gas in the country   

Valuation & Recommendation   

GSPL has registered a top line CAGR growth of 22.8% from FY2006 to FY 2009. Whereas net profit witnessed a CAGR growth of 38.3% along the same period. Going forward we expect the company to witness a top line CAGR growth of 39.8% between FY 2009 to FY 2012. 
 
Whereas we expect net profit to witness a CAGR growth of 58.2% over the same period. At the current market price of Rs 102.50 per share, GSPL is currently trading at a PE of 14x FY10E and 13.2x FY11E EPS estimates, which looks quite attractive.   

We recommend a BUY rating on the stock with a long term view.

(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