 Corporate News Headline | |
| • | Dr Reddys Laboratories Ltd has posted 62% rise in net profit at Rs. 2.53 bn for the quarter ended March 31, 2010 as compared to Rs. 1.56 bn in the corresponding quarter of the previous year. Total income of the company has increased from Rs. 11.66 bn to Rs. 12.84 bn in Q4'10. (BS) |
| • | Tata Communications Ltd partners with Infinity Africa, a licensed Data Services Provider in Tanzania, expanding the reach of Tata Communications' IP network further into East Africa. (BS) |
| • | JSL Ltd signed an MoU with the Orissa government for setting up a 1320 MW capacity thermal power plant at an investment of Rs. 73.75 bn. The plant would be located at Luni in Dhenkanal district. (BS) |
 | |
| Economic and Political Headline | |
| • | India's food inflation slowed for the second straight week as prospects of higher rainfall and improving grain output help contain prices. An Index measuring wholesale prices of agricultural products including lentils, rice and vegetables compiled by the commerce ministry rose 16.04% in the week ended April 24 from a year earlier. It gained 16.61% the previous week, according to a statement in New Delhi. (Bloomberg) |
| • | The number of Americans filing claims for jobless benefits last week dropped to the lowest level in a month. Initial jobless claims fell by 7,000 to 444,000 in the week ended May 1, marking the third consecutive decrease, Labor Department figures showed in Washington. (Bloomberg) |
| • | German factory orders surged more than economists forecast in March on demand for investment and consumer goods at home and abroad. Orders, adjusted for seasonal swings and inflation, rose 5% from February, when they stagnated, the Economy Ministry in Berlin said. From a year earlier, orders gained 26.1%. (Bloomberg) Today Market Update on http://www.indiabulls.com/securities/mailermis/morning-brief/morning-brief-07May2010.htm Derivatives EOD Report on http://www.indiabulls.com/securities/mailermis/derivative-strategy/derivative-EOD-06-May-2010.htm SPOT/ CASH INDEX LEVELS TODAY |
 | 5090.85 | ( -0.66 %) | -34.05 |  |
| 1 | 2 | 3 | ||
| Resistance | 5131.25 | 5171.65 | 5218.40 | |
| Support | 5044.10 | 4997.35 | 4956.95 | |
 | 16987.53 | ( -0.59 %) | -100.43 | | |
| 1 | 2 | 3 | |||
| Resistance | 17104.33 | 17221.14 | 17361.80 | ||
| Support | 16846.86 | 16706.20 | 16589.39 | ||
Strong & Weak Stocks
This is list of 10 strong Stocks
Pir Health, Ashok Ley, ICSA, DCB, UCO Bank, Indian Bank, Andhra Bank, Vijaya Bank, Uniphos & EKC.
And this is list of 10 Weak Stocks
ABB, Balrampur Chini, Aditya Birla, Aban Off shore, Sesa Goa, HDIL, Tech Mahindra, Renuka, JP Associates & Tata Steel.
The daily trend of nifty is in downtrend
NIFTY FUTURES (F & O):
Below 5069-5071 zone, selling may continue up to 5060 level and thereafter slide may continue up to 5035-5037 zone by non-stop.
Hurdles at 5097 & 5102 levels. Above these levels, expect short covering up to 5136-5138 zone and thereafter expect a jump up to 5169-5171 zone by non-stop.
Sell if touches 5180-5182 zone. Stop Loss at 5214-5216 zone.
On Negative Side, break below 5024-5026 zone, can create panic up to 4991-4993 zone by non-stop. If breaks & sustains this zone then downtrend may continue and have caution.
Short-Term Investors:
Bearish Trend.
Down Side Target at 4812.00.
Stop Loss at 5238.00.
STOCK FUTURES (NSE):
SUZLON FUTURES
Suzlon Energy shot up after ET NOW reported that India's largest wind turbine supplier may soon bag orders worth $3 billion from the UK. The company is likely to enter a pact with UK's Caparo Group, ET NOW reported citing sources.
Technicals: SUZLON FUTURES
Yesterday's rally was a surprise & Real Buying too.
Bull's eyeing a Target of 76.95 level on upper side. Look at Negative Global Cues & this target looks over ambitious too.
On Negative Side, if Profit Booking Starts then expect a slide up to 67.55 level and have caution.
ASHOKLEY FUTURES (5 Trading Day's Holding)
Ashok Leyland Ltd reported a robust 271.4% y-o-y growth in total volumes, led by strong
sales in the trucks segment, which rose 357.1% y-o-y primarily due to the low base effect
and recovery in the domestic industrial production. Exports have also been recovering since the last few months.
Technicals: ASHOKLEY FUTURES (5 Trading Day's Holding)
It went up in last 5 Trading Days. Real Buying too.
Bull's eyeing a Target of 66.45 level on upper side. Technically shocking & it looks that
limited up side from current levels and have caution.
On Negative Side, if Profit Booking Starts, then expect a slide up to 56.25 level and have
caution. Look at Negative Global Cues and this target may be possible & huge risk too.
OPTIONS (NSE):
NIFTY 5000 PUT OPTION
It went up on yesterday & in line with the expectations. Do not get excited & Bulls rigged.
Bull's eyeing a Target of 111.60 level on upper side. Look at Negative Global Cues & this target may be possible too.
On Negative Side, if Profit Booking Starts then expect a slide up to 26.20 level and have caution.
TATASTEEL 560 PUT OPTION
Yesterday's Selling was a surprise. Do not worry about this fall & Bears manipulated.
Bears eyeing a Target of 4.10 level. It looks over ambitious, if you look at Negative
Global Cues.
On Positive Side, if Start Recovers then expect a jump up to 25.90 level by non-stop.
Equity:
RELIANCE (NSE Cash)
RIL-RNRL judgment likely at 10.30 AM
Technicals: RELIANCE (NSE Cash)
It went down on yesterday & in line with the expectations. Do not worry about this fall &
Bears manipulated.
Bears eyeing a Target of 982.70 level on down side. Look at Negative Global Cues & This Target may be possible too.
On Positive Side, if Start Recovers, then expect a jump up to 1023.30 level on upper side and have caution.
SBIN (NSE Cash)
The State Bank of India yesterday said it has reduced interest rates on new crop and minor irrigation loans and the special concession would be valid for both kharif as well as rabi seasons (end of March 2011).
Interest rates on new minor irrigation loans have been reduced from 10.50-13.25 per cent to 8.5 per cent in the first year, and 9.5 per cent in the second and third years for loans up to Rs 25 lakh, a SBI statement said.
Similarly, interest rates on crop loans between Rs 3 lakh and Rs 25 lakh have been reduced from 11.75-12.75 per cent to 10 per cent per annum for one year, it said.
Both are on the fixed rate basis.
"Last year, after the weak monsoon, we had devised this scheme to help farmers and give a fillip to the agriculture sector.
Technicals: SBIN (NSE Cash)
Yesterday's rally was a surprise. Do not get excited & Bulls rigged.
Bull's eyeing a Target of 2379.70 level on upper side. Look at Negative Global Cues & this target may be over ambitious too.
On Negative Side, if Profit Booking Starts then expect a slide up to 2262.30 level and have caution.
INVESTMENT VIEW
Granules India-Multibagger
BSE 532482
Granules India a vertically integrated formulations manufacturer has posted Consolidated Revenues of Rs 461 crore and after tax profits of Rs 30 crore for the FY ended March 2010. The basic EPS works out to Rs 15.
Over the course of FY10 Granules took several steps to strengthen it's long term growth trajectory. The corporate has signed several contracts with leading MNCs that will constitute a majority of it's formulation block capacity when production for the orders commences later this year.
Granules also expects to receive approval for several ANDA's during FY11, which too shall be promoted to MNC clientele, in order to build core reputation as a reliable source of quality production of pharmaceuticals.
Granules is a vertically integrated formulation manufacturer of finished dosages, pharmaceutical formulation intermediates and active pharmaceutical ingredients which are distributed in over 50 countries. The company operations and logistics expertise along with it's selling strength allows high quality produce across the pharmaceutical manufacturing value chain at a cost-effective price.
(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.)
INVESTMENT VIEW
Morgan Stanley: Why Are FII+DIIs Overweight Financials?
Key Debate
Does institutional ownership drive stock/sector performance?
Conclusion: We have worked with over 2,000 data points on ownership and forward stock returns. The conclusion is quite clear: On its own, ownership has very little to do with prospective stock returns. Indeed, the relationship both for short-term and long-term returns is random (see charts on page 3). The results do not change whether we define ownership relative to an index or as an absolute number (which is FII stake in a company).
Summary of Shareholding Changes for the QE March 2010: Domestic institutions (including insurance companies and mutual funds) have been net buyers (up 50bp QoQ) for 12 consecutive quarters, and their ownership ended the quarter at a seven-year high.
During the quarter, FII remained buyers of Indian stocks for the fifth consecutive quarter (up 40bp QoQ) for our sample of 75 large cap companies. The FII ownership for the sample is now at 19.5%, an eight-quarter high. Shareholding of controlling stakeholders, on the other hand, declined to its lowest level since Jun-06 (down 1.2% QoQ).
Households remained marginal buyers.
FII stake in the broad market (1,200 NSE listed stocks) went up marginally and touched a six-quarter high (at 17.1%) while controlling stake holders sold for the third successive quarter and brought down their average stake to a 16-quarter low at the end of the quarter.
Key Sector Positions of Institutional Investors:
Institutions, on an aggregate, sold Materials, Consumer Discretionary, Industrials, Telecom, Technology and Healthcare, and bought Financials, Utilities, Energy and Consumer Staples (all in that order). Institutions at the end of the quarter appear most overweight (versus the MSCI India sector weights) on Financials, Telecoms, Staples and Industrials, whereas are most underweight on Technology, Energy and Materials.
The largest change in sector position for domestic institutions (including insurance companies and mutual funds) was Utilities, with a 131bp increase in its overweight position, followed by Materials, for which underweight position increased by 92bp.
The three largest overweight positions are Industrials, Consumer Staples and Utilities, whereas the biggest underweight sectors are Technology, Financials and Energy.
FIIs appear to be overweight in three out of the 10 MSCI sectors with Financials in the lead position in their portfolios followed by Telecoms and Consumer Discretionary, and biggest underweight positions are in Energy, Materials and Industrials. FIIs sold Industrials and Materials while purchasing Financials and Energy during the quarter ended March 2010.
(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.)
| FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| FII | 06-May-2010 | 1908.88 | 2846.63 | -937.75 |
| DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| DII | 06-May-2010 | 1339.27 | 959.31 | 379.96 |
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."
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Arvind Parekh
+ 91 98432 32381
Arvind Parekh
+ 91 98432 32381
