Tuesday, August 3, 2010

Market Outlook 3rd Aug 2010

Strong Stocks
This is list of 10 Strong Stocks: 
Orient Bank, Bank Of India, Allahabad Bank, UCO Bank, Vijaya Bank, Idea, Petronet, HCC, Bajaj Auto & Purva.
Weak Stocks
This is the list of 10 Weak Stocks:
 RNRL, TV-18, Patni, Maruti, EKC, Polaris, Hero Honda, FSL, ABB & JP Associates.
Nifty is in Uptrend.

  • Supp / Resis SPOT/ CASH LEVELS FOR INTRADAY TRADING
Indices Supp/Resis1 23
Nifty Resistance 5463.235494.82 5550.78
Support 5375.685319.72 5288.13
Sensex Resistance 18153.20 18225.18 18346.13
Support 17960.27 17839.32 17767.34

SPOT / CASH LEVELS FOR INTRADAY TRADING SUPPORT/ RESISTANCE
Company Name  Exchange LTP* R1 #1 S1 @1 R2 #2 S2 @2 R3 #3 S3 @3
ABB Ltd. NSE 803.30 814.82 793.97 826.33 784.63 835.67 773.12
Allahabad Bank NSE 197.85 199.87 194.42 201.88 190.98 205.32 188.97
Bajaj Auto Ltd. NSE 2725.50 2750.27 2700.37 2775.03 2675.23 2800.17 2650.47
Bajaj Electricals Ltd. NSE 249.70 253.40 247.00 257.10 244.30 259.80 240.60
Bajaj Hindustan Ltd. NSE 116.45 117.27 115.37 118.08 114.28 119.17 113.47
Bank of Baroda NSE 763.20 768.73 755.83 774.27 748.47 781.63 742.93
Bank of India NSE 439.40 448.27 423.17 457.13 406.93 473.37 398.07
Banking Index Benchmark Exchange Traded Scheme (Bank BeES) NSE 1050.41 1111.92 1011.97 1173.44 973.54 1211.87 912.02
Firstsource Solutions Ltd. NSE 25.45 25.58 25.28 25.72 25.12 25.88 24.98
Hero Honda Motors Ltd. NSE 1825.15 1839.43 1815.43 1853.72 1805.72 1863.43 1791.43
Idea Cellular Ltd. NSE 71.75 72.65 70.20 73.55 68.65 75.10 67.75
Maruti Suzuki India Ltd. NSE 1209.90 1218.20 1201.90 1226.50 1193.90 1234.50 1185.60
NSE Index NSE 5431.65 5463.23 5375.68 5494.82 5319.72 5550.78 5288.13
Oriental Bank of Commerce NSE 412.50 419.47 400.77 426.43 389.03 438.17 382.07
Patni Computer Systems Ltd. NSE 463.65 481.80 438.70 499.95 413.75 524.90 395.60
Petronet LNG Ltd. NSE 92.30 93.97 90.57 95.63 88.83 97.37 87.17
Polaris Software Lab Ltd. NSE 172.30 176.37 169.87 180.43 167.43 182.87 163.37
Reliance Capital Ltd. NSE 790.75 796.17 785.17 801.58 779.58 807.17 774.17
Reliance Communications Ltd. NSE 178.55 180.62 177.27 182.68 175.98 183.97 173.92
Reliance Industries Ltd. NSE 1014.55 1020.43 1010.03 1026.32 1005.52 1030.83 999.63
Reliance Natural Resources Ltd. NSE 40.90 41.67 40.37 42.43 39.83 42.97 39.07
Reliance Power Ltd. NSE 162.40 165.00 160.50 167.60 158.60 169.50 156.00
UCO Bank NSE 96.55 97.67 94.77 98.78 92.98 100.57 91.87
Vijaya Bank NSE 74.75 75.45 73.60 76.15 72.45 77.30 71.75
   *LTP stands for Last Traded Price as on Monday, August 02, 2010 4:04:48 PM
    #1R1   stands for Resistance level 1                         @1S1   stands for Support level 1
    #2R2   stands for Resistance level 2                         @2S2   stands for Support level 2
    #3R3   stands for Resistance level 3                         @3S3   stands for Support level 3
    
    The levels given above are with respect to previous closing price on the NSE / BSE. 



  Corporate News Headline
Ambuja Cements said that its production in July declined to 14.07 lakh tonnes against 14.39 lakh tonnes in the year-ago period. Its despatches also fell to 14.20 lakh tonnes in July this year, against 14.38 lakh tonnes in the year-ago period. (BS)
Larsen and Toubro has secured a Rs. 65 bn order from Jaiprakash Power Ventures Ltd - a Jaiprakash group company - for a 1,980-MW power plant in Uttar Pradesh. (BS)
Maruti Suzuki India Limited reported a 29.2% increase in sales in July 2010, when it sold a total of 1,00,857 vehicles in July 2010. This included exports of 10,743 cars during the month. (BS)
  Economic and Political Headline
Mineral production in May rose 8.69% compared to the corresponding period last year on account of a steady rise in demand from user industries, the Mines Ministry said today. "Mineral production in May 2010, was higher by 8.69% as compared to that of the corresponding month of the previous year," the ministry said in a statement. In value terms, mineral production (excluding atomic and minor minerals) in the country during May stood at Rs. 107.46 bn. (BS)
Manufacturing in the US expanded in July at the slowest pace this year, signaling the world's largest economy is cooling at the start of the second half. The Institute for Supply Management's manufacturing gauge dropped to 55.5 last month from 56.2 in June. (Bloomberg)
Growth in Europe's manufacturing industry accelerated more than previously estimated in July, indicating an export-led recovery maintained its momentum. A gauge of manufacturing in the 16-nation euro region increased to 56.7 from 55.6 in the previous month, London-based Markit Economics said. (Bloomberg)

Bajaj Corp Limited  (Bajaj Corp) is one of India's leading FMCG companies with major brands in Hair care category. The company is entering in the capital markets with an initial public offering (IPO) of up to 4,500,000 equity shares of Rs. 5 each at a price band of Rs. 630 – 660 to raise up to Rs. 2.97 bn. The issue, which will be through a 100% book building process, will constitute 15.3% of the post-issue paid-up equity capital of the company.

 

Valuation and recommendation:    Click here to view IPO Report. http://www.indiabulls.com/securities/mailermis/special-reports/IPONote-BajajCorpLtd.htm

 

We value Bajaj Corp's stock at Rs. 708, by using the DCF method (WACC: 13.1% and Terminal Growth 5%), which offers an upside of 12.4% over the lower end of the price band and 7.3% over the upper end of the price band.Additionally, the Company is expected to propose an EV/EBITDA of 14.9x for FY11E which is lower than the peer set's average EV/EBITDA 20.2x. Thus, we recommend the investors to subscribe to the issue.

 

The Issue opens on 2nd August 2010 and closes on 4th August 2010 for QIBs and on 5th August 2010 for Retail and Non-Institutional Bidders.


Headlines : 3 August 2010
  US and European markets
Index Latest 1D Chg YTD
Nasdaq 1898.99 1.88% 2.08%
DJIA 10674.38 1.99% 2.36%
S&P 500 1125.86 2.20% 0.96%
US stocks rallied, sending the Standard & Poor's 500 to the highest close in 10 weeks, after better-than-estimated earnings at companies from Humana Inc. to Allergan Inc. and manufacturing data that topped forecasts. The NASDAQ. Dow Jones and S&P 500 surged 1.88% and 1.99% and 2.20%, respectively. Alcoa Inc. rose 4.8 percent, the most in the Dow Jones Industrial Average, to help lead gains in commodity shares. Humana, the biggest provider of US-backed health benefits, and Allergan, rallied at least 3.6%. Intel Corp. gained 2.7% as a trade group said global chip sales were "robust."
Index Latest 1D Chg YTD
FTSE 100 5397.11 2.65% (0.29)%
CAC 40 3752.03 2.99% (4.68)%
UK stocks surged to the highest level in two and a half months as HSBC Holdings Plc reported profit that beat analysts' estimates and basic-resources companies tracked metals prices higher. The FTSE 100 rallied 139.09 points or 2.65% at 5,397.11. HSBC led a rally in bank shares after posting pretax profit of USD 11.1 bn. BHP Billiton Ltd. rose 4.3% as copper climbed to a three-month high. Intertek Group Plc, Tullett Prebon Plc and Senior Plc rose more than 5% after reporting higher sales.

Buy / Sell (Aug 02, 2010)
 BuySell Net
FII2639.351911.21 + 728.14
DII810.51983.31 - 172.80

*Disclosure: I don't have any positions in the above said scrips & NIFTY FUTURES.
Disclaimer: "I do not make any warranties, express or implied, as to results to be obtained from using the information in this e-letter.  Investors should obtain individual financial advice based on their own particular circumstances before making any investment decisions based upon information in this report.
--
Arvind Parekh
+ 91 98432 32381