Sunday, October 24, 2010

Weekly Market Update 25-30th Oct 2010

Strong & Weak Stocks for 25th Oct 2010
This is list of 10 strong stocks: 
ABG Ship, Orchid Chem, Canara Bank, Vijaya Bank, Federal Bank, Biocon, Bhushan Steel, United Phosphoro, PTC & Petronet. 
And this is list of 10 Weak stocks: 
GMR Infra, Finan Tech, Apollo Tyre, TV-18, IVRCL Infra, Praj Ind, Welcorp, Ispat Ind, JSW Steel & Orbit Corp.
The daily trend of nifty is in Downtrend 

  • Supp / Resis SPOT/CASH LEVELS for intraday 25th Oct
Indices Supp/Resis1 23
Nifty Resistance 6110.986155.92 6190.73
Support 6031.235996.42 5951.48
Sensex Resistance 20315.51 20465.16 20578.58
Support 20052.44 19939.02 19789.37

Technical Analysis

Nifty is likely to move between 5,950 to 6,180 level

Nifty witnessed a high volatility this week. It initially moved lower, breached the strong technical and psychological support mark of 6,000. It moved down further to mark week low of 5966.75. Ultimately it found strong buying support there moved higher to test 6,120 levels on the back of selective buying by fund houses and retail investors. But Nifty could not manage to sustain it ongoing upside momentum and retrace back below 6100 on Friday 22, Oct 2010 of this week. It finally managed to close above 6050, gained 0.06% (3.4 points) from the last week close. On daily chart Nifty exhibiting "ascending triangle" which is bullish breakout pattern if upper trend line breaks. Price is now near to upper trend line, and moving with in triangle. Nifty breached the psychological mark of 6,100 decisively on Friday (October 22, 2010) week, but could not manage to sustain above that, currently facing stiff resistance at 6,100-6,120. If this level breaches decisively then we could see rally up to 6,180 mark. On the flip side immediate strong support seems at 6,000. If this level breaches then could see fall up to its strong support of 5,960 mark. Technical momentum indicators are currently showing mix signals. Stochastic is currently moving in neutral zone, showing positive crossover, indicating upside. Another momentum indicator RSI is currently trading in neutral territory at 55 on the brink of showing positive crossover, indicting cautious upside. On last day of the week ended (October 18-22, 2010) Nifty has just managed to close above 8 Day and 34 day EMA. Till the time it manages to trade above 8 Day and 34 day EMA not expecting any major correction in coming week. However expecting Nifty to retrace initially up to mark of 6020 but overall expecting it trade with positive bias and likely to move in between 5950-6,180

Technical Picks

 
ABG SHIPYARD (BUY)

Particulars Rs.
CMP

360.40

Target Price

364/370/375

Stop Loss

352

Support-Resistance

336/380

Comment

  • RSI is at 81 overbought territory showing positive crossover indicating uptrend.
  • Stochastic is hovering in overbought showing positive crossover suggesting downside.
  • Stock already crossed 34 Day EWMA and expecting to rise further.
  • MACD showing positive divergence.




TCS (BUY)

Particulars Rs.
CMP

1040.20

Target Price

1050/1065/1080

Stop Loss

1020

Support-Resistance

995/1100



Comment
  • RSI is at 69 moving into overbought territory showing positive crossover indicating uptrend.
  • Stochastic is hovering in overbought showing positive crossover suggesting upside.
  • Today stock has also broken its 52 week high supported with volume indicating further upside.
  • Stock next resistance level seems at 1100 if its break then stock could rise up to 1130.


PIPAVAV SHIPYARD (BUY)

Particulars Rs.
CMP

93.10

Target Price

94/96/100

Stop Loss

90

Support-Resistance

  85/100



Comment
  • RSI is in the neutral zone at 55 levels, likely to show an uptrend.
  • Stochastic is moving in overbought territory showing positive crossover also indicating upside.
  • Stock is trading above 08 day EWMA and not showing any correction.
  • MACD showing positive divergence.

 


AJMERA  REALTY (SELL)

Particulars Rs.
CMP

258.50

Target Price

256/252/248

Stop Loss

262

Support-Resistance

245/265



Comment.
  • RSI is in profit booking phase.
  • Stochastic is moving in neutral territory showing negative crossover also indicating downside.
  • Stock next support level seems at 432 if its break then stock could fall up to 417
  • Wide correction is expected.
TRADING CALLS 3-5 DAYS (TRADE ONLY ABOVE OR BELOW THE GIVEN LEVELS WITH STRICT SL)
BUY NIFTY ABOVE 6105 T 6138 6188 6234 SL 6095 & SELL BELOW 6080 T 6050 6010 5959 SL 6090 
SELL ABAN BELOW 828 T 820 812 816 SL 832 
SELL ABB BELOW 895 T 885 875 865 SL 900 
SELL ABGSHIP BELOW 350 T 345 340 335 SL 352 
SELL ACC BELOW 986 T 980 974 968 SL 990 
SELL AXISBANK BELOW 1450 T 1425 1400 1375 SL 1460 
SELL BOB BELOW 980 T 970 960 950 SL 985 
SELL BHEL BELOW 2510 T 2490 2470 2450 SL 2520 
SELL BOIBANK BELOW 530 T 525 520 515 SL 532 
SELL CANABNK BELOW 715 T 705 695 685 SL 720 
SELL BPCL BELOW 715 T 705 695 685 SL 720 
SELL HPCL BELOW 510 T 500 490 480 SL 512 
SELL GREATOFF BELOW 392 T 388 384 380 SL 394 
SELL IOC BELOW 428 T 422 416 410 SL 430 
SELL DLF BELOW 362 T 356 350 344 SL 364 
SELL HDIL BELOW 266 T 260 254 248 SL 268 
SELL HDFC BELOW 688 T 682 676 668 SL 692 
SELL HDFCBANK BELOW 2310 T 2290 2270 2250 SL 2320 
SELL HCLTECH BELOW 410 T 400 390 380 SL 415 
SELL IBREAL BELOW 209 T 205 201 196 SL 212 
SELL HINDZINC BELOW 1220 T 1200 1180 1160 DL 1230 
SELL JSWSTEEL BELOW 1250 T 1230 1210 1190 SL 1260

SELL LICHUS BELOW 1350 T 1335 1320 1305 SL 1356 
SELL HINDALCO BELOW 210 T 205 200 195 SL 212 
SELL JETAIR BELOW 782 T 772 762 752 SL 786 
SELL M&M BELOW 695 T 685 675 665 SL 700 
SELL YESBANK BELOW 360 T 350 340 330 SL 364 
SELL WIPRO BELOW 445 T 440 435 430 SL 448 
SELL TITAN BELOW 3180 T 3150 3120 3090 SL 3190 
SELL TELCO BELOW 1160 T 1140 1120 1100 SL 1170 
SELL TISCO BELOW 610 T 600 590 580 SL 615 
SELL TCS BELOW 1040 T 1020 1000 980 SL 1045 
SELL SUNTV BELOW 510 T 500 490 480 SL 515 
SELL RELCAP BELOW 810 T 800 790 780 SL 815 
SELL RELINFRA BELOW 1040 T 1020 1000 980 SL 1045 
SELL SIMENS BELOW 820 T 810 800 790 SL 825
SELL SAIL BELOW 218 T 214 210 206 SL 220 
SELL RELIANCE BELOW 1070 T 1050 1030 1010 SL 1080 
SELL INFOSYS BELOW 3030 T 3000 2970 2940 SL 3040 

 

  

 

















 

Indian Equity Market


The Week Gone By

Indian markets wrapped the week on a flat note. The indices belled the week on positive note onthe back of better than expected Q2 results of L&T and housing finance major HDFC's . However, thereafter markets tumbled due to shifting of funds by investors towards the primary market to subscribe IPO of Coal India. Later in the week, higher volatility was seen ahead of the expiry of the October 2010 contracts.

Looking Forward

Industrial output in August grew at the slowest pace in 15 months at 5.6%, nearly half of last year is a cause for concern. We expect In Q2FY11 the overall margins of corporates are expected to be under pressure due to higher input & interest cost as in the June quarter. Among the sectors, Banking, Metals & Consumer Durables could positively surprise, while FMCG, IT, Cement & Autos are expected to deliver results in line with the expectations. Overall corporate earnings growth is unlikely to match the pace of rise in the stock prices in the near term. So it undergo a correction before the next upmove begins. Further, Inflows into secondary equity markets could be hit in the immediate short term due to diversion of funds to the mega Rs 15000-crore Coal India IPO. The issue was subscribed more than 15 times. Pressure on fund outflows will ease in late October 2010 or early November 2010 as Coal India begins to refund excess subscriptions received towards its initial public offering. Any correction, if it takes place, is expected to be short lived in near term & a dip of 5-7% from current levels should be considered as a buying opportunity. Investor's will eye on Q2 earnings of Heavy weights like BHEL, Maruti Suzuki, Union Bank, SAIL, ONGC and PNB which are due next week. However, Global cues and fund flows will remain key for the market.


Nifty Top Gainers

Company % Weekly Return

TCS

5.49 

Cipla

2.98 

Suzlon

2.23 


Nifty Top Loser

Company % Weekly Return

Sterlite

(7.68)

Axis Bank

(6.39)

Unitech

(6.04)

 

 

 

 


Daily Movement of Nifty 


Daily Movement of Sensex, Net FIIs & MF investment


Source for FII & MF: Sebi

Weekly return on BSE Sectoral Indices

Fundamental Picks

 
Nesco Ltd. (Buy)

Particulars Rs.
CMP

586

Target Price

670

Upside (%)

14.33

52 Week H/L

777.45/330.50

Market Cap

825



Allahabad Bank (Buy)

Particulars Rs.
CMP

251.50

Target Price

275.00

Upside (%)

9.34

52 Week H/L

254.95/111.05

Market Cap

11,234


Weekly Price Movement of GDR

Security Name

Price (USD)
as on 21-10-10

% change
from 14-10-10

L&T

46.31

1.00

RIL

48.73

1.46

SBI

143.80

(3.88)




Nesco Ltd has a monopoly in trade exhibition business. Bombay Exhibition Centre (BEC) is the largest exhibition centre in Mumbai, which is part of the 70-acre land bank on Western Express Highway at Goregaon, near Mumbai airport and has become a permanent venue for conventions, Nesco is developing an IT park, for the purpose of leasing and we expect this development to act as a major growth driver. The total area under construction will be 35 lacs. sq. Further, company is enjoying higher OPM and NPM more than 50% and 35% respectively from last couple of years. We expect Between FY10 & FY12, Revenues and Net profit of the company would grow by CAGR of 25%.



On the back of hefty growth in advances and expansion in NIM, Allahabad bank posted stellar results for the Q2 F11 with 60.7% yoy surge in the Net Interest income to Rs 9.69 billion. Bank witnessed sharp 37.1% yoy (8.4% qoq) rise in advances to Rs 820.9 billion largely due to better performance in SME and corporate sector. NIM of the bank also expanded by 73 bps yoy (16 bps qoq) to 3.3% as credit deposit ratio swelled by close to 370 bps yoy to 72.2%. Although bank's advances grew sharply, its CASA ratio expanded 48 bps qoq to 34.7%. The capital adequacy ratio of the bank was comfortable at 13.5% with tier I CAR of 8.4%. Bank has added 48 new branches during the quarter and 78 during the half year taking the total no of braches to 2,364.

Weekly Price Movement of ADR

Security Name Price (USD)
as on 21-10-10
% change
from 14-10-10
ICICI bank

51.63

(0.04)

Infosys

67.42

(5.06)

MTNL

3.06

3.38

Rediff

4.12

(17.27)

Sify

1.98

(15.02)

Top
Economy

Indicators Latest Previous Change
Investment Deposit Ratio (%)

30.82 (Oct 08)

31.28 (Sep 24)

Credit Deposit Ratio (%)

72.45 (Oct 08)

72.70 (Sep 24)

Money Supply (%)

15.20 (Oct 08)

14.70 (Sep 24)

Bank Credit (%)

20.10 (Oct 08)

19.00 (Sep 24)

Aggregate Deposits (%)

15.00 (Oct 08)

14.30 (Sep 24)

Forex Reserves USD bn

296.43 (Oct 15)

295.79 (Oct 08)


Global Equity Markets

US stocks higher during the week (till Thursday) as Federal Reserve reported that it has seen modest signs of growth in the economy while a series of strong corporate earnings added to gains. The Federal Reserve's monthly Beige Book provided further evidence the economy is growing, although slowly, but unlike in September, the Fed did not characterize the economy as decelerating. Also, Fed indicated that it may keep interest rates low for longer than markets expectation. Further, better than expected earnings from Citigroup, Boeing, Wells Fargo, Morgan Stanley,United Parcel Service, AT&T, McDonald's, Caterpillar and insurance firm Travelers. On economic front, investors were presented with encouraging economic data, which was fuelled the positive sentiments in the market. Moreover, US retail sales rose by 0.6% in September compared to upwardly revised 0.7% growth in August. Looking ahead to next week, any commentary from the G20 meeting of finance ministers in South Korea may attract market attention.

Asian markets traded lower during the week. Japan's Nikkei 225 lower after the yen regained strength against the dollar and department store sales fell 5.2% to 446.3 billion yen in September, posting the 31st straight y/y drop. Moreover, chairman of the Japanese Bankers Association said that the Japanese economy is slowing down and is about to come to a standstill due to the diminishing effect of government stimulus measures. Hang Seng ended in the red as bank and property shares continued to face pressure after China unexpectedly raised interest rates. However, SSE Composite managed to close in positive territory on the expectations that the tensions between US and China pertaining to the currency rate could be abating slightly ahead of the upcoming G20. Also, China hiked its one-year benchmark deposit rate to 2.50% from 2.25% and the one-year lending rate to 5.56% from 5.31%. The interest-rate hike seemed as a necessary step to control inflation and prevent an asset-price bubble.

European markets gained during the week. Better-than-forecast quarterly profit from Citigroup uplifted sentiments at the start of the week. Banks were among the biggest gainers. Further, oil majors provided support to the markets as rise in crude oil prices and week-old strikes at French refineries lifted refined product futures. Though, China's interest rate raising step created some pressure, but some better earning results helped European shares to surge and as miners rebounded on a weak dollar. Looking ahead, markets are likely to extend gains on the back of some better economic numbers and earning results. Next week in EU, economic confidence data for October is due, while consumer confidence will be released in the UK. However, some profit booking may came into force after recent gains.

Weekly return on major Global Indices

Data of US and European markets taken from Oct 14 to Oct 21, 2010
Data of Asian markets taken from Oct 15 to Oct 22, 2010 

Weekly Change in the Composites of S&P 500
Industry

Adj. Mkt. Cap 
as on

21-10-10

Adj. Mkt. Capas on
14-10-10


Change

Energy

11,89,077 

11,90,194 

(0.09)

Materials

3,86,800 

3,85,561 

0.32 

Industrials

11,54,941 

1,157,691 

(0.24)

Cons Disc

11,21,099 

11,10,819 

0.93 

Cons Staples

11,94,419 

11,89,246 

0.44 

Health Care

12,32,384 

12,24,358 

0.66 

Financials

16,55,085 

16,53,418 

0.10 

Info Tech

20,44,279 

20,10,585 

1.68 

Telecom Services

3,34,515 

3,35,003 

(0.15)

Utilities

3,85,004 

3,81,644 

0.88 

Top
Key Events

Global Key Events

  • US new claims for jobless benefits fell to 4,52,000 in the week ending October 16, a decrease of 23,000 from the previous week's revised figure of 4,75,000.

  • US privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 5,39,000, 5.6% below the revised August rate of 5,71,000 and is 10.9% below the September 2009 estimate of 6,05,000.

  • US Industrial production slipped 0.2% in September following an unrevised 0.2% gain in August. The drop in September was below market expectations for a 0.2% increase. The dip in industrial production in September marks the first decline in the series in 15 months after hitting a recession low in June of 2009.

  • US housing starts rose 0.3% in September to a seasonally adjusted annual rate of 6,10,000 units. Compared to September last year, housing starts were up 4.1%. August starts were revised up to a 6,08,000-unit pace from the initially reported rate of 5,98,000 units.

  • The Conference Board Leading Economic Index for the U.S. increased 0.3% in September, following a downwardly revised 0.1% increase in August, and a 0.2% increase in July.

  • The eurozone's private sector growth continued to decelerate in October led by the service sector. The Markit eurozone composite purchasing managers' index, fell to 53.4 from 54.1 in September, hitting the lowest level in a year.

  • UK retail sales fell for a second month in September suggesting that consumers started to restrain their spending amid government's massive fiscal squeeze. Although the retail sales volume including automotive fuel decreased 0.2% in September from August, it was smaller than last month's revised 0.7% fall. Year-on-year, retail sales growth eased to 0.5% in September from 0.8%.

  • China's economic growth slowed between July and September as the government rolled back stimulus measures and tightened policy. The Chinese economy expanded 9.6% in the September quarter compared with the same period a year ago followed by a 10.3% rise in the June quarter.

Domestic Key Events

  • Direct tax collections rose 19% in the six months to September , increasing the chances of the government raising the budgeted Rs 4,30,000 crore for the entire fiscal year and ending with a lower-than-budgeted fiscal deficit. The government managed to raise Rs 1,81,758 crore during the period, up from Rs 1,52,625 crore in the year-ago period.  

  • Food inflation eased marginally for the week ended October 9, indicating that supply constraints may have eased and the arrival of winter crop could see a sharper drop. Food prices rose 15.53% from a year ago, marginally below 16.37% in the week before, as fruits and vegetables and select pulses became cheaper.

  • Inflationary pressures and slackening consumer demand have lowered corporate India's business confidence for the current quarter ending December. India Inc's business confidence has shrunk 1.4 points to 66.2 compared with 67.6 indicating better outlook for their businesses for April-September 2010 period.
  • The finance ministry has shot down a proposal to levy 20% duty on imported power equipment, saying domestic capacity was far short of demand and the proposed move have made electricity more costly.

  • The Communist Party of India-Marxist (CPI-M) asked the central government to scrap deregulation in petrol pricing, after public sector oil companies increased prices. The price of petrol rose by 70 to 72 paise per litre. This follows an increase of 27 paise per litre in September. The CPI-M said the rise in petrol prices will further add to inflation.

  • The appreciation of the rupee against the USD has hit India's textile exporters. Following heavy rush of foreign institutional investors (FIIs) to India, the rupee has appreciated by 6.3% in the last two months. The rupee was ruling around 47 per dollar two months ago and it breached below 44 and closed at 44 levels.

  • The World Bank has approved a credit worth USD 13 million in additional financing for the Mizoram State Roads Project to continue revitalizing and modernising the state's highway system. 
  • The project will help improve the management and carrying capacity of the core state road network in order to lower transportation bottlenecks and costs, and stimulate economic activity in the northeast Indian state.
Top
Derivatives

 

  • Nifty ended the week on a flat note at 6,066.05 mark. The Nifty October future ended at 6,086.05 with premium of 20 points. If we look at the derivatives data we can see that Nifty future prices ended in the positive territory along with decline in open interest, this is indicating that closure of long position. For the coming week, Nifty may continue to face resistance at higher levels of 6,130-6,180 whereas on the downside support is seen at 5,950-5,985 levels. if Nifty continue to sustain decisively below the 5,950 levels then selling pressure may continue and in that case the next supports are at 5,775-5,780 levels. 


  • During the week, there was significant short accumulation of open interest in OTM Call options. most of the open interest accretion witnessed in the range of 5,700 to 6,000 put, while, on the flip side, highest open interest was build up in the range of 6,100 and 6,300 Calls.


  • The Volatility Index (VIX) declined marginally and closed to 21.61%. Market participants should be watchful at current levels as any up move in volatility may trigger downsides in the markets. Volatility has a strong inverse correlation with markets.


  • The put-call ratio of open interest inclined during the week, finally closing high at 1.01 levels. The options open interest remained mixed as the week progressed. The options concentration has shifted to the 5,800 to 6,000-strike put option. 


  • The CNX IT index ended the week at 6,777.10 marks gaining 0.70%. The CNX IT Futures prices inclined along with incline in the open interest with incline in cost of carry, this is an indication of long position is being built up at lower level. For the coming week, immediate support for the Index is seen in the range of 6,500-6,550 mark, whereas on the upside resistance is seen at 6,850- 6,900 levels.


  • During the week the Bank Nifty Index ended on a positive note and rose by 0.31% to 12,384.80. If we look at the derivatives desk we can see that the bank Nifty futures prices increased along with decline in open interest with decline in cost of carry, this is an indication of closure of long position and fresh short position is being built up at higher level. For the coming week Bank Nifty support is seen in the range of 12,000-11,800 levels whereas on the upside stiff resistance would be faced at 12,500-12,550 levels.


  • FIIs were net buyer in index futures to the tune of Rs. 522.82 crore while in stock future they were net seller of 2,110.32 crore, indicating mixed trend in markets. Further, in the index options FII were net buyer of 2,445.29 crore.


  • The Nifty is expected to remain in the range of 5,925-6,225 levels and only a breach below this range will push the index to lower levels. The move may remain mixed, with selling pressure near 6,130-6180 levels. The index may find intermediate support around 6,015 levels, and a round of short covering from that level cannot be ruled out. Any instability on the global front will bring about heavy selling pressure from current levels. A breach of 6,015 levels will take the Nifty down towards 5,850-5,925 levels.
 Open Interest in Nifty Future vis-à-vis Nifty 



Most Active Contracts


Put-Call Ratio


Volatility Index

FIIs Cumulative trailing 5 day's data
Particulars Buy Sell Net
Index Futures9,979.14  9,456.32 522.82 
Index Options 35,255.72 32,810.43  2,445.29 
Stock Futures12,968.22  15,078.54 (2,110.32)
Stock Options 2,081.84 2,156.93  (75.08)
From October 15 to till October 21 (Source: NSE)
Top
Debt
  • Call money rates hardened during the week as cash conditions in the market remained tight after a stellar response to Coal India's equity offering and SBI's bond issue. Banks are in deep money-deficit as evidenced by huge volumes under RBI's repo window.

 

 

  • For the second consecutive week, FIIs turned net seller in the debt market. FIIs net sold securities worth Rs 1,898.1 crore in the Indian debt market compared to Rs 218.1 crore selling in the previous week. Meanwhile, MFs too turned net seller in the debt market, with Rs 5,805.3 crore (4 days) selling compared to Rs 5,495.4 crore of buying in the previous week.






  • Tighter liquidity situation in the system weighed on bond prices as ten year benchmark government bond ended lower, pushing bond yields above 25 months high. Prices fell at the beginning of the week after higher-than-expected inflation data for September raised concerns of monetary tightening by RBI. Investors also trimmed position on concerns that paper may not remain liquid in future as its outstanding in the market is already high at Rs 520 billion. However, tightening of liquidity in the system was the major cause for the weaker prices. During the week, state run company Coal India came out with India's largest ever IPO worth Rs 150 billion. The IPO got whopping response and got bids for 15.28 times, translating into total amount of Rs 2,292 billion. At the same times India's largest commercial bank, State Bank of India came out with public bond issue worth Rs 10 billion which has already got bids more than 17 times the issue size. Further, with onset of festive season depositors stepped up withdrawals from banks while government spending is also remaining weak.
  • Bonds are likely to remain week in the near term as cash conditions in the system is expected to stay weak. With onset of festive season, liquidity in the system may remain tight as festive season usually increases demand for cash for festive season buying. Further, the two recent public offerings also drained out huge amount from the system and it will take some time for that money to return to market. However, some respite will come from government as no borrowing is schedule next week.

  • During the week, reverse repo transaction under RBI's Liquidity Adjustment Facility (LAF) remained at Rs 19,015 crore while Repo transaction stood at Rs 3,88,015 crore. On October 15, 2010, Government of India auctioned 7.17% CG2015 worth Rs 4,000 crore, 7.80% CG2020 worth Rs 4,000 crore and 8.26% CG2027 worth Rs 3,000 crore. On October 18, 2010, Government of India announced auction of 7.99% CG2017 worth Rs 4,000 crore, 8.08% CG2022 worth Rs 5,000 crore and 8.30% CG2040 worth Rs 2,000 crore to be held on October 22, 2010.  On October 20, 2010, RBI auctioned 91-day Treasury Bills worth Rs 4,000 crore and 364-day Treasury Bills worth Rs 2,000 crore. On October 21, 2010, ten state governments announced auction of State development loans 2020 worth Rs 7,726.80 crore to be held on October 26, 2010.
  • In the financial year 2010-11, Government of India (GOI) has planned to borrow as much as Rs. 4,57,143 crore. Till October 15, 2010, the government has completed 73.61% of the gross borrowing target for the current year. The government has not scheduled any borrowing in the next week.

 

 Call Rates
Date Rate (%)

15-Oct

5.36

18-Oct

6.50

19-Oct

6.59

20-Oct

6.66

21-Oct

6.43


FIIs & MFs investment in Debt Market

Period
FIIs
Net Investment
(Rs. Crore)
MFs
Net Investment
(Rs. Crore)

15-Oct

179.1

(1,504.7)

18-Oct

(685.4)

(1,627.0)

19-Oct

(337.4)

(1,267.5)

20-Oct

(441.9)

(1,406.1)

21-Oct

(612.5)

 

This week

(1,898.1)

(5,805.3)

This Month

(1,097.4)

13,885.9

                        (Source: SEBI)

Bond Yield (7.80% CG 2020)
Date LTP (Rs.) YTM (%)

15-Oct

98.30

8.0546

18-Oct

98.01

8.0976

19-Oct

98.03

8.1090

20-Oct

97.80

8.1152

21-Oct

97.75

8.1473

 
Spread


Liquidity Adjustment Facility
Date Reverse Repo
(Rs. Crore)
Repo
(Rs. Crore)

15-Oct

0

88,570

18-Oct

0

89,455

19-Oct

0

58,370

20-Oct

11,005

78,675

21-Oct

8,010

72,945

This week

19,015

3,88,015

This Month

20,210

7,81,290


 GoI borrowing Program - 2010-11
Particulars
(Rs. Cr.)

Budgeted Borrowings 

457,143

Gross Borrowing Completed

336,482

Dated Securities 

317,000

364 Day T-Bills 

19,482

% Completed

73.61

Net Borrowing till date

232,376

Government borrowing calendar (Next four auctions)
Period Maturity 5-9 yrs Maturity 10-14 yrs Maturity 15-19 yrs 20 yrs and  above Total

Nov. 1-Nov. 5

Rs 40-50 bn

Rs 40-50 bn

Rs 20-30 bn

-

Rs 110 bn

Nov. 8-Nov. 12

Rs 40-50 bn

Rs 40-50 bn

-

Rs 20-30 bn

Rs 110 bn

Nov. 15-Nov. 19

Rs 40-50 bn

Rs 40-50 bn

Rs 20-30 bn

-

Rs 110 bn

Nov. 29-Dec. 03

Rs 30-40 bn

Rs 40-50 bn

-

Rs 20-30 bn

Rs 110 bn

Top
Commodity
Crude oil prices started the week on a substantially higher note. An ongoing strike at French refineries, coupled with a pullback in the dollar index, helped prices to edge upwards. But, immediately after the crude oil prices began to slip on the report that a surprise rate increase in China would dent demand for commodities. Moreover, US dollar also rallied sharply. The week remained volatile in terms of movement in crude oil prices and the prices again began to climb towards the end of the week. Prices rose following a weak dollar and also after energy department's weekly inventory report showing a rise of 0.7 mn barrels in the crude inventory, which was much less than expected. Finally, a fall was again seen in the crude oil prices after dollar strengthened. Moreover, better than expected batch of economic and earning reports pushed momentum towards equities and therefore leaving commodities a bit behind. The crude oil prices saw a significant decline of 2.81% in the international markets and 2.90% in the domestic market on w-o-w basis. The crude oil prices might trim certain losses in the coming week. The prices are likely to move upwards on the speculation that a recovery in the US economy, the world's biggest crude consumer, will stoke fuel demand.

Gold prices started the week on a modestly higher note. The prices were mostly steady initially, as the precious metal went for a little correction after its recent rally. Gold prices witnessed a massive collapse following across the board sell off in commodities as the US Dollar recorded massive gains and a surprise rate hike from China caught investors off guard. The yellow metal began to pick up towards the end of the week as dollar dropped drastically. Finally, gold shed the glaze on account of better than expected batch of economic and earnings data, which led the investors to shift towards riskier assets. The domestic gold prices also followed the international trends and remained volatile during the week. Finally, the international markets saw a decline of 2.17% in the gold prices whereas domestic gold prices fell 2.11% on w-o-w basis. The gold prices are likely to stay flattish with a negative bias in the coming week. The sell off is likely to continue in the precious metal and therefore it might witness consolidation mode. The pick up in economic recovery will lead the investors towards riskier assets, therefore curbing demand for gold.

 
Weekly change in Crude prices per Barrel
  21-Oct 14-Oct Change (%)
Intl Crude Oil Prices (USD)

81.83

84.20

(2.81)

Domestic Price (Rs)

3,608.58

3,716.45

(2.90)



Inventories(Weekly Change)
Week ended Change Total Inventory

15-Oct-10

0.7 mn barrels

361.2 mn barrels





Weekly change in Gold prices in Rs/10gms

  21-Oct 14-Oct Change (%)
London pm fix(USD/troyoz)

1,343.50

1,373.25

(2.17)

Mumbai (Rs/10gms)

19,465.00

19,885.00

(2.11)

Top
Forex

Indian Rupee ended the week on lower note as fresh dollar demand from corporate & oil importers and overall strength in greenback against major currencies weighed. US dollar rose against basket of major currencies after a surprise rate hike by China spurred the market to lower risk exposure. Further, rupee fell as investors increased demand for the greenback on expectation that the domestic currency might weaken in future once the unsuccessful foreign bidders at Coal India IPO take their money back out of India. Persistent dollar demand from oil importers also impacted Rupee. There was also speculation in the market that RBI might have bought dollars through state-run banks.

INR/ 22-Oct 15-Oct %Change
USD

44.46

44.03

(0.98)

EURO

62.07

61.95

(0.19)

YEN

54.84

54.24

(1.11)


INR vs. USD and Euro


Upcoming Results

Companies

Date

Companies

Date

Adani Power

25 Oct

Cairn India

28 Oct

Idea Cellular

25 Oct

Colgate Palmolive

28 Oct

Madras Cements

25 Oct

Glaxosmithkl Phar

28 Oct

Mundra Port

25 Oct

IDBI Bank

28 Oct

Petronet LNG

25 Oct

NHPC

28 Oct

Rolta India

25 Oct

NMDC

28 Oct

Tata Teleservices

25 Oct

ONGC

28 Oct

Ultratech Cem

25 Oct

PNB

28 Oct

Bosch

26 Oct

SAIL

28 Oct

Dena Bank

26 Oct

Tata Comm

28 Oct

Jindal Steel

26 Oct

Zee Entert

28 Oct

JSW Steel

26 Oct

ABB

29 Oct

NTPC

26 Oct

Bharat Elect

29 Oct

Tech Mahindra

26 Oct

BHEL

29 Oct

United Phos

26 Oct

BPCL

29 Oct

Asian Paints

27 Oct

Federal Bank

29 Oct

Cummins India

27 Oct

Hero Honda

29 Oct

Glenmark Pharma

27 Oct

Hindustan Const

29 Oct

Hindustan Copp

27 Oct

ICICI Bank

29 Oct

HPCL

27 Oct

IOB

29 Oct

IFCI

27 Oct

Mahindra & Mahindra

29 Oct

India Infoline

27 Oct

Shipping Corp

29 Oct

Indian Hotels

27 Oct

Uco Bank

29 Oct

Max India

27 Oct

Aditya Birla Nuv

30 Oct

Patni Computer

27 Oct

Areva T&D

30 Oct

Thermax

27 Oct

Chambal Fert

30 Oct

Torrent Power

27 Oct

GVK Power

30 Oct

Union Bank

27 Oct

Maruti Suzuki

30 Oct

United Spirits

27 Oct

National Alum

30 Oct

Adani Enter

28 Oct

Sun Pharma

30 Oct

Andhra Bank

28 Oct

Suzlon Energy

30 Oct


Results Declared

Companies

Total Income (Rs. Crore)

Net Profit (Rs. Crore)

Qtr ending Sep '10

Y-o-Y  %Change

Qtr ending Sep '10

Y-o-Y %Change

Bajaj Finserv

48.52

29.21 

23.88

77.02 

Essar Oil

10,964.00

14.17 

130

(238.30)

HDFC

2,970.22

4.21 

807.54

21.63 

Bajaj Auto

4,425.53

52.12 

682.08

69.32 

Bajaj Holdings

608.15

97.52 

590.3

97.48 

Cadila Health

762.71

16.43 

181.6

45.98 

HDFC Bank

5,770.70

15.43 

912.14

32.68 

Ashok Leyland

2,718.77

71.72 

167.06

88.53 

Bombay Dyeing

425.87

13.95 

-30.62

177.10 

HCL Tech

1,540.34

18.93 

194.88

(35.20)

Kotak Mah Bank

1,154.05

30.52 

194.7

54.63 

Power Grid Corp

2,222.97

21.90 

651.4

41.62 

TCS

7,370.67

28.88 

1,812.65

34.51 

Yes Bank

1,084.79

59.88 

176.26

57.78 

ACC

1,718.09

(14.95)

100.05

(77.03)

Allahabad bank

2,981.67

21.63 

402.57

20.68 



Buy / Sell (Oct 22, 2010)
 BuySell Net
FII3166.202582.19 +584.01
DII1715.121388.06 +327.06

Index Outlook: Market entering a bumpy stretch


Sensex (20,165.8)

Progress of the Coal India's public issue dominated last week's trading. The mood in the 5market swung from trepidation to exultation as the issue romped home with oversubscription in every category. Those who have been reiterating that investors flush with cash are waiting for the apt opportunity to plough it in to India equity market, now stand vindicated by this triumph.

The Sensex plunged to the intra-week low of 19,822 as fears of liquidity getting drained by the mega IPO and global jitters on China hiking interest rates pulled stocks lower. But the index ricocheted higher on Thursday, regaining lost ground. FIIs once again turned buyers in the secondary market in the last two days of the week. Average daily volume in the derivative segment reached a new record last week at Rs 1,40,000 crore. Open interest is nearing Rs 2 lakh crore.

Index could make unexpected moves in either direction next week as the very heavy October series rolls in to expiry on Thursday. Earnings announcements and prognostications on Central Bank action to manage exchange rate and inflation will liven up the proceeding further.

Oscillators in the daily chart reversed higher mid-week but the 10-day rate of change oscillator is poised just below the zero line and the 14-day relative strength index is also in the neutral zone denoting ambivalence from a near-term perspective. Weekly oscillators continue in the overbought region though they are reversing lower implying that medium term trend continues to be up.

That sums up our view for the index as well. The short-term trend reversed lower from the peak at 20,854 and the index can continue to move in a band between 19,600 and 20,854 in the days ahead. The medium-term trend is however up and the index has the potential to take a shy at the new high after consolidation in the afore-mentioned band.

If the Sensex holds above 19,600 in the week ahead, the medium term targets for the index would be 20,940, 21,630 and 22,450. In other words it can move slightly above the previous peak before halting. The positive medium term view will be slightly marred on a close below 19,600 and the decline can then exacerbate to 19,260 or 18,920.

The going is expected to be choppy in the week ahead. Weak start to the week can take the Sensex down to 19,822, 19,714 or 19,603. There is a strong support band for the index in the zone between 19,600 and 19,800 and short-term investors can buy on reversal from this zone.

Target on breach of 19,600 is 19,320. Resistances for the week would be at 20,450 and 20,854. Subsequent targets are 20,940 and 21,207.

Nifty (6,066)


The Nifty declined to the intra-week trough of 5,967 before ending with minor gain.

Short-term trend in the index continues to be down. The test for the index will be seen if it moves above 6,163 early next week. Failure to do so will drag the index lower to 5,967, 5,925 or 5,890 in the days ahead.

The index will get strong support in the band between 5,890 and 5,960 and short-term traders can initiate fresh longs on an upward reversal from this region.

Fall below 5,890 will drag the index to 5,804 or even 5,609.

Rally beyond 6,163 in the days ahead can take the index to the previous peak at 6,284 where it will face considerable resistance. It is quite likely that the index reverses lower from here again and spends a few more weeks in the zone between 5,880 and 6,300. Target above 6,300 is 6,357 and 6,539.

Conversely a close below 5,890 can take the stock to 5,785 or 5,682.

Global cues

Global indices moved sideways as earnings season rolled out in most countries. European indices such as the DAX, CAC and FTSE closed higher. Since this has been the under-performing region thus far this year, it could now play catch up. CBOE Volatility index recorded the intra-week high of 21.3 before retreating to end the week at 18.7 implying that investor sentiment remains optimistic.

It was a volatile week of the Dow as it crashed below 11,000 on Tuesday following China's policy rate hike. The losses were, however, recouped in the subsequent sessions and the index closed the week with marginal gains. The Dow is now heading towards its 2010 peak of 11,258 and the next target at 11,463.

It, however, needs to be borne in mind that the area around 11,250 is a key long-term resistance since it occurs at 61.8 per cent retracement of the previous down move from October 2007 peak

--Lokeshwarri S.K.

Stock Strategy: Consider going short on Unitech, Tata Motors

K.S. Badri Narayanan

Unitech (Rs 89): The stock, after witnessing sharp gains last month, failed to sustain the momentum and has now turned weak. It finds an immediate support at Rs 82 and resistance at Rs 90. A close below Rs 82 could weaken the stock to Rs 78.5. On the other hand, if it breaches past Rs 92 convincingly it can reach Rs 105-107. We expect the stock to move in a narrow range of Rs 80-90 in the short-term.

F&O pointers: The Unitech futures (market lot: 4,000 units) accumulated fresh short position last week. It closed at a premium with respect to the spot. Option trading suggests that Unitech could face a strong resistance at Rs 90, as calls at that strike price added heavy open interest position.

Strategy: Traders could consider shorting Unitech futures, keeping a tight stop-loss at Rs 90. Shift the stop loss to Rs 88, if the stock opens on a negative note. High-risk appetite traders can also consider writing 90 call, which closed on Friday at Rs 1.20. While the potential for loss in this strategy is unlimited, the maximum possible profit is limited to the premium collected. You may also have to eke out some extra sum for meeting margin requirements.

Bank of India (Rs 536): The stock turned weak on Friday, despite good financial performance. The overall outlook remains positive for the stock as long as it stays above Rs 445. However, the immediate outlook looks weak. It finds a resistance at Rs 556 and an immediate support at Rs 523. A close below Rs 523 could weaken the stock to Rs 496. A close above the resistance could set the stock to fresh all-time, surpassing the current peak of Rs 589.

F&O pointers: The Bank of India futures (market lot 1,000 units) added fresh short position on Friday. It, however, ended at a premium at Rs 539.25 over the spot price close of Rs 535.5. Accumulations of open interest at 560, 540 calls and unwinding in 540 put indicates negative bias for Bank of India.

Strategy: Traders could consider shorting Bank of India, keeping a strict stop loss at Rs 556. If the counter opens on a negative note, shift the stop loss to Rs 539 and aim for an initial target of Rs 496.

Pivotals: Reliance Industries (Rs 1,081.4)

Reliance Industries surged 3.8 per cent last week, decisively breaching its significant resistance level of Rs 1,050. It is trading well above its 50 and 200-day moving averages. Since its September trough of Rs 885, the stock has been on a medium-term uptrend. And short-term trend is also up. However, the stock is currently testing resistance at Rs 1,090.

Short-term traders can initiate long position once the stock moves above this resistance with stop-loss at Rs 1,074. Short-term target for the stock is Rs 1,120. Key supports for the stock are at Rs 1,050 and Rs 1,020. Investors with medium-term horizon can prolong their holdings with stop-loss at Rs 1,030. The stock can head to Rs 1,150 , which is a key long-term resistance.


State Bank of India (Rs 3,201.1)

Following an initial decline to intra-week low to Rs 3,077, the stock bounced up and finished the week with Rs 36 gain. The stock is moving sideways in the range between Rs 3,070 and Rs 3,300. Therefore, short-term traders should tread with cautiousness. A fall below Rs 3,070 will pull the stock down to Rs 3,000 or further down to Rs 2,900 in the near-term.

The stock has been in a medium-term uptrend since this July. Investors can stay invested with stop-loss at Rs 2,750 levels. Weekly close above Rs 3,300 will lift the stock higher to Rs 3,350 or Rs 3,370.

Tata Steel (Rs 617.4)

The stock declined 3 per cent in the previous week, resuming its short-term downtrend that started from its October 6 peak of Rs 683. The stock encountered resistance around Rs 650 and began to decline; it breached its 21-day moving average. Traders can sell the stock while maintaining stop-loss at Rs 636, below which the target is Rs 600 or Rs 595. Strong fall below Rs 595 can accelerate the stock's movement downward to Rs 573.

Significant resistance above Rs 650 is pegged at Rs 680.

Infosys Technologies (Rs 3,053.2)


Infosys witnessed choppy trading sessions last week and ended the week, dropping Rs 22. As long as the stock hovers above the support at Rs 3,000, the stock can move sideways with upward bias. However, conclusive dive below this support will drag the stock down to Rs 2,950 and then to Rs 2,900 in the near-term. Hence, traders should be alert with the stock and tread cautiously.

The medium-term trend continues to be up for the stock and investors can stay invested with stop at Rs 2,750. The stock achieved our medium-term target of Rs 3,200 on October 15, by recording an all-time high of Rs 3,249 levels. — Yoganand D.

SUPPORT/ RESISTANCE LEVELS IN CASH MARKET FOR INTRADAY TRADING ON 25TH OCT 2010

Company Name  Exchange LTP* R1 #1 S1 @1 R2 #2 S2 @2 R3 #3 S3 @3
ABG Shipyard Ltd. NSE 360.40 373.27 340.27 386.13 320.13 406.27 307.27
Apollo Tyres Ltd. NSE 76.25 78.05 75.15 79.85 74.05 80.95 72.25
Bank of Baroda NSE 989.70 999.13 983.13 1008.57 976.57 1015.13 967.13
Bank of India NSE 537.45 555.90 527.00 574.35 516.55 584.80 498.10
Banking Index Benchmark Exchange Traded Scheme (Bank BeES) NSE 1252.31 1262.54 1237.54 1272.77 1222.77 1287.54 1212.54
Bhushan Steel Ltd. NSE 533.60 542.63 527.33 551.67 521.07 557.93 512.03
Biocon Ltd. NSE 444.40 451.83 439.03 459.27 433.67 464.63 426.23
Canara Bank NSE 732.00 749.25 704.50 766.50 677.00 794.00 659.75
Federal Bank Ltd. NSE 477.15 483.70 468.80 490.25 460.45 498.60 453.90
Financial Technologies (India) Ltd. NSE 1146.45 1156.62 1139.57 1166.78 1132.68 1173.67 1122.52
GMR Infrastructure Ltd. NSE 53.65 54.40 53.20 55.15 52.75 55.60 52.00
Ispat Industries Ltd. NSE 21.15 21.50 20.90 21.85 20.65 22.10 20.30
IVRCL Infrastructure & Projects Ltd. NSE 151.95 153.52 150.82 155.08 149.68 156.22 148.12
JSW Energy Ltd. NSE 122.05 123.57 121.17 125.08 120.28 125.97 118.77
JSW Steel Ltd. NSE 1255.10 1288.02 1230.17 1320.93 1205.23 1345.87 1172.32
NSE Index NSE 6066.05 6110.98 6031.23 6155.92 5996.42 6190.73 5951.48
Orbit Corporation Ltd. NSE 122.40 124.47 121.17 126.53 119.93 127.77 117.87
Orchid Chemicals & Pharmaceuticals Ltd. NSE 324.00 330.20 314.50 336.40 305.00 345.90 298.80
Petronet LNG Ltd. NSE 127.05 129.18 125.23 131.32 123.42 133.13 121.28
Praj Industries Ltd. NSE 71.75 72.47 71.02 73.18 70.28 73.92 69.57
PTC India Ltd. NSE 137.20 139.45 133.80 141.70 130.40 145.10 128.15
Television Eighteen India Ltd. NSE 84.90 85.95 84.25 87.00 83.60 87.65 82.55
United Phosphorus Ltd. NSE 210.35 212.93 207.13 215.52 203.92 218.73 201.33
United Spirits Ltd. NSE 1555.95 1587.20 1535.00 1618.45 1514.05 1639.40 1482.80
Vijaya Bank NSE 106.90 109.07 104.92 111.23 102.93 113.22 100.77
Welspun Corp Ltd. NSE 248.90 251.52 247.22 254.13 245.53 255.82 242.92
   *LTP stands for Last Traded Price as on Friday, October 22, 2010 4:05:00 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. 

Sizzling stocks: Canara Bank (Rs 731.5)

The stock advanced 3.6 per cent after the company's Q2 results announcement on October 20. In the subsequent two trading sessions, the stock zoomed to record life-time high of Rs 738 and finished the week with 13.8 per cent gains. The weekly volume was extra-ordinary. After taking support from its long-term support range between Rs 390 and Rs 400 in May 2010, the stock recommenced its long-term uptrend. This up trend got accelerated this August and the stock rallied sharply.

Both daily and weekly indicators have entered in to over-bought territory signalling caution. Inability to move above Rs 750 will drag the stock lower to Rs 650 or Rs 570 in the medium-term. Supports below Rs 570 are at Rs 536 and Rs 500. However, strong close above Rs 750 can take the stock higher to psychological resistance level of Rs 800.

Pipavav Shipyard (Rs 92.7)


The stock has been on a medium-term downtrend from its August peak of Rs 117. Nevertheless, it found support around Rs 75 last week and rebounded gaining bullish momentum. Further, on Friday the stock sky rocketed 10 per cent accompanied with unusual surge in volume and ended the week by gaining 20 per cent. The stock is currently facing key medium-term resistance at Rs 96. Failure to surpass this resistance will lead to resumption of its downtrend and the stock can retreat to Rs 84 or Rs 75 in the medium-term. On the other hand, an emphatic move above Rs 96 will lift the stock higher to Rs 102 or 108. — Yoganand D.



Nifty is likely to move between 5,950 to 6,180 level
On daily chart Nifty exhibiting "ascending triangle" which is bullish breakout pattern if upper trend line breaks. Price is now near to upper trend line, and moving with in triangle. Nifty breached the psychological mark of 6,100 decisively on Friday (October 22, 2010) week, but could not manage to sustain above that, currently facing stiff resistance at 6,100-6,120. If this level breaches decisively then we could see rally up to 6,180 mark. On the flip side immediate strong support seems at 6,000. If this level breaches then could see fall up to its strong support of 5,960 mark. Technical momentum indicators are currently showing mix signals. Stochastic is currently moving in neutral zone, showing positive crossover, indicating upside. Another momentum indicator RSI is currently trading in neutral territory at 55 on the brink of showing positive crossover, indicting cautious upside.

Technical Pick
1.ABG Shipyard: Buy
2.TCS: Buy
3.Ppavav: Buy
4.Ajmera Realty: Sell

5 to 7% correction from current levels could be a good buying opportunity
Industrial output in August grew at the slowest pace in 15 months at 5.6%, nearly half of last year is a cause for concern. We expect In Q2FY11 the overall margins of corporates are expected to be under pressure due to higher input & interest cost as in the June quarter. Among the sectors, Banking, Metals & Consumer Durables could positively surprise, while FMCG, IT, Cement & Autos are expected to deliver results in line with the expectations. Overall corporate earnings growth is unlikely to match the pace of rise in the stock prices in the near term. So it undergo a correction before the next upmove begins. Further, Inflows into secondary equity markets could be hit in the immediate short term due to diversion of funds to the mega Rs 15000-crore Coal India IPO. Pressure on fund outflows will ease in late October 2010 or early November 2010 as Coal India begins to refund excess subscriptions received. Any correction, if it takes place, is expected to be short lived in near term & a dip of 5 to 7% from current levels should be considered as a buying opportunity. Investors will eye on Q2 earnings of Heavy weights like BHEL, Maruti Suzuki, Union Bank, SAIL, ONGC and PNB which are due next week. 

Fundamental Pick
1.Allahabad Bank: Buy
2. Nesco Ltd.: Buy

Global markets is likely to hold gains, optimistic over G20 meeting and economic numbers
Global equity market continue to surge strongly as earnings season heat up. Better than expected result from some of the big players like Citigroup, Nokia uplifted markets sentiments and held the markets firm during the week. Though, Chinas surprise announcement to rise interest rates, infuse fears of a slowdown in global growth and pushing miners lower. Further, looking ahead, markets are looking strong with some positive economic numbers are expected to come. However, some profit booking may came into force after recent gains. Next week we will see existing home sales figures released in the US, while in Europe, EU industrial orders data is due. Also, Ford Motor Company, Potash Corporation of Saskatchewan, Chevron Corp and Newmont Mining Corporation are due to release their earnings results. Moreover the final outcome of the G20 meeting on Saturday will impact the early trade next week.

Bonds are likely to remain week in the near term on tight cash conditions
Bonds are likely to remain week in the near term as cash conditions in the system is expected to stay weak. With onset of festive season, liquidity in the system may remain tight as festive season usually increases demand for cash for festive season buying. Further, the two recent public offerings also drained out huge amount from the system and it will take some time for that money to return to market. However, some respite will come from government as no borrowing is schedule next week.

Crude prices likely to trim losses, sell off likely to continue in gold
The crude oil prices might trim certain losses in the coming week. The prices are likely to move upwards on the speculation that a recovery in the US economy, the world's biggest crude consumer, will stoke fuel demand. The gold prices are likely to stay flattish with a negative bias in the coming week. The sell off is likely to continue in the precious metal and therefore it might witness consolidation mode. The pick up in economic recovery will lead the investors towards riskier assets, therefore curbing demand for gold.



52-WEEK BLOCKBUSTER: FORCE MOTORS


The massive returns of the Force Motors stock can be attributed to the turnaround in the auto sector coupled with its entry into new segments. A favourable demand environment enabled the company make profits of Rs 60 crore in FY10, as against an adjusted loss of Rs 181 crore in FY 09. Sales grew by 27 per cent.

Known for its 'Traveller' and 'Trax' range of utility vehicles, Force Motors witnessed a push in LCV volumes, thanks to the introduction of the 'Trump'. Besides, this run up could have also been driven by the shift in focus from the 'functional' utility vehicles to the production of SUVs, expected to be out in mid 2011. Also, the recasting of the JV with MAN of Germany to introduce a range of trucks and bus chassis suited to the Indian market could be a reason.

Until now, the JV was primarily making engines, cabin, gear box, axles and assembling vehicle chassis for HCVs for MAN's export markets. The company will roll-out inter-city buses later this year.

Given that the stock's valuation is now at a premium to bigger peers like Mahindra and Mahindra and Ashok Leyland, further upside may be limited.

— Parvatha Vardhini C

52-WEEK FLOP: EURO MULTIVISION


The stock of Euro Multivision is down 46 per cent from the price at which its public issue was made in September, last year.

While the initial fall in stock price could be attributed to scepticism of investors over company's ability to execute Photovoltaic project on time, the falling sales from its DVD business and a six-month delay in setting up the photovoltaic plant continued to depress the price of Euro Multivision. The non-conventional energy sector did not manage to garner shareholder interest as compared with conventional stocks given the nascent stages of the sector and regulatory uncertainties.


The company's 40-MW photovoltaic cell project commenced its operations only in the last week of August 2010, while the actual time scheduled for the project's commissioning was January 2010.

The company came up with an IPO in September 2009 to raise funds only for the aforementioned project.

On the financial front too, the company has delivered a lacklustre performance. In FY-09 as well as FY-10, Euro Multivision reported fall in sales and profits with the DVD business not faring well. Going forward as the photovoltaic business gets operational, the company can be expected to give better numbers.

— M.V.S. Santosh Kumar


*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