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Nifty touches 5,350; metals, auto, banks gain

Posted by sandhyaravii on August 8, 2012

MUMBAI: The Nifty opened on a positive note, in line with Asian peers, led by gains in Tata Motors, Jaiprakash Associates, Jindal Steel and Mahindra & Mahindra. The market momentum looks bullish at the moment and dips should be used to add long positions, According to analysts.

At 09:16 a.m., the 50-share NSE Nifty was at 5,346.80, up 10.10 points or 0.19 per cent. It has touched a high of 5,350.60 and a low of 5,339.70 in early trade.

The Sensex was at 17,628.80, up 27.02 points or 0.15 per cent. It has touched a high of 17,660.46 and a low of 17,609.24 in early trade.

“A break-out happened at about 5,250 and further confirmed after closing above 5,300. The market is in an upward mode and all declines towards 5,300 should be bought unless we close below 5,280,” Ashwani Gujral, Fund Manager at ashwanigujral com, said.

The Nifty is likely to face intermediate resistance around 5,363 and support at 5,294, he added.

The BSE Midcap Index was up 0.47 per cent and the BSE Smallcap Index moved 0.40 per cent higher.

Among sectoral indices, the BSE Auto Index was up 0.80 per cent, the BSE Bankex moved 0.42 per cent higher and the BSE Metal Index gained 1.36 per cent. The BSE FMCG Index was down 0.08 per cent.

E FMCG Index was down 0.08 per cent.




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Infosys Discussion

Posted by sandhyaravii on July 12, 2012

Whts happening in Infosys.

Current Trading price : 2219-2280

rs 5% up

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FII flows into Indian mkt likely by July: Asit C Mehta

Posted by sandhyaravii on June 22, 2012

Given the rupee weakness, Prakash Diwan, Head – Institutional Clients Group, Asit C Mehta Investment believes that there will be a scramble for safety with investors opting for defensive plays such as pharmaceuticals and FMCG counters.

However, he feels that once the local and global issues come to rest by July, there could be a lot of money coming to emerging markets and particularly the Indian market.

Below is an edited transcript of his interview. Also watch the accompanying video.

Q: Cement stocks have already lost anywhere between 3-5%. Do you expect further weakness in the likes of a JP Associates, ACC, Ambuja Cements and what would you do with these?

A: What we have seen with the cement stocks is the initial kneejerk reaction of the downward sentiment thanks to yesterday’s outcome. But once the cement companies get in a position to challenge this particular order and start looking at it from a different angle, the Supreme Court and Appellate Tribunal will definitely take some time to give their final verdict on this.

Meanwhile, there could be some value buying that could step in; cement, after all, is not such a bad sector. In fact, it’s difficult to figure out in terms of what could be the outcome post this order in terms of the pricing and realizations. But given the demand supply gap, it doesn’t seem to be very attractive from a valuation perspective. But I think lower levels that we are seeing now after this order could probably make some sort of nibbling happen at some juncture.

Q: Where are valuations and prospects attractive at this point in time? Do you stick with the defensives, consumers or would you now start looking at oil refiners or autos because of the obvious commodity advantage?

A: Given the sudden weakness that the rupee has attracted for itself, there will be a scramble for some sort of safety, some sort of defensive element in the portfolio. So I think very clearly, it will be back to the pharmaceuticals and well run FMCGs. But again, from a valuation perspective, is it the right time to pay that kind of huge premium? My answer to that is probably not because the moment the government starts getting into some sort of an action, there will be enough – last time also, I mentioned there is enough on the infrastructure side, enough on the aviation and retail side, the power sector side that could be done within its means.

So if that would happen now, this is a level which is so attractive for foreign investors to actually come in. Let the dust settle in the US, let them get their act together and I am sure come July, there could be a lot of money coming to emerging markets and particularly our markets. So I won’t pay too much of a premium getting into the FMCGs. I would separately look at these low value stocks, which have been oversold specially from the cap goods, retail, engineering side. So that’s a huge opportunity that exists –very stock specific at this point in time.

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Fall in rupee: An opportunity for investors?

Posted by sandhyaravii on June 22, 2012

The Indian market delivered a show of resilience despite global pressure. After trading for most of the day with deep cuts, the Nifty closed with just a 19 points loss at 5,146. The Sensex lost 60 points to close at 16,792.

Even for the week, the market closed with gains of 0.2%. This is the third straight week of gains for the market.

With the slippage in crude prices, Dipan Mehta, member, BSE and NSE says, India could become a better investment opportunity for the rest of the year. “Oil has been the biggest problem for India over the past two-three years or so. With oil prices correcting, automatically the macros of the Indian economy start to look up,” he adds.

According to him, the only major problem remains the rupee. Today, the rupee fell further and tested 57 to the dollar mark on strong dollar demand from oil importers and concerns over the global economic slowdown.

However, Mehta says, fall in rupee is certainly an opportunity for the investors. “With the rupee being at these levels, the entire export oriented sector comes into play. Typically software, pharmaceuticals, auto ancillaries, textiles look quite interesting. Investors should be positioning their portfolio such that they are overweight in some of the export oriented sectors. Investors can go for some of the tech companies or the large and mid size pharma companies,” he suggests.

Also read: Nirmal Jain Says it is good time to buy ; bets 3 sectors

Below is the edited transcript of his interview on CNBC-TV18. Also watch the accompanying videos.

Q: A lot of global brokerages and global experts are pointing out that because of the slippage in crude, emerging markets like India could become a better investment opportunity for the rest of the year. Would you concur with that?

A: Yes, absolutely. I think it’s a no-brainer. Oil has been the biggest problem for India over the past two-three years or so. With oil prices correcting, automatically the macros of the Indian economy start to look up. If the oil remains at these levels then it will make the task of the government as well as the RBI much easier, given that it has an effect on inflation, interest rates, fiscal deficit and a lot of other interrelated variables.

I think the main reason for the outperformance today for the market is the fact that Brent crude has also corrected. Also, the gap between WPI and Brent has  come down from about USD 15 per barrel, where it was about couple of weeks ago, to about USD 10-11 per barrel or so. So, these are very important positives for the country. The market is gradually reflecting it.

At this point of time, the only major problem remains the rupee. Despite the correction in oil prices, which will have a favorable effect on trade deficit, the rupee continues to drift lower and it’s again touched an all time low. That’s the only problem area for the market at this point of time.

Q: How ill investors approach India from a flow point of view? While relatively India might look better from a crude point of view, but the rupee is taking away all the benefits of that. How do you expect the flows to pan out from foreign institutional investors (FIIs)?

A: Crude and rupee are countering each other where crude is correcting, but rupee is depreciating. Although FIIs observe that the fundamentals are improving because of declining crude prices, but then their dollar returns are getting impacted because of depreciation of the rupee.

I think the real trigger for the market could be when the new finance minister takes over and what exactly the policies that he/she is going to follow and what the approach is going to be towards the managing the subsidies. Now that the task has been made a little bit easier, maybe it’s the right time to decontrol diesel prices. These are important cues which the market is looking forward to.

My sense is that if we see stable to sideways movement in the global markets, some amount of expectation will start getting built up as to who is going to be of the new FM and speculations start over there. There is a pretty good chance that the street will start expecting some kind of reforms be it on the pension side or even FDI into retail or for that matter the entire subsidy mechanism.

Q: With the way the crude is moving and with the way the rupee has moved, what kind of stocks would you be wary of right now either on the upside or on the downside?

A: With the rupee being at these levels, the entire export oriented sector comes into play. Typically software, pharmaceuticals, auto ancillaries, textiles look quite interesting, given that they would benefit from higher realisations or even if they have to pass on the rupee depreciation then they would gain by way of higher market share. The companies, which are to be negatively impacted, would be the ones who have very high borrowings in foreign currency or for that matter have huge imports. So, those names are also pretty much clear.

From an investor point of view, I think this is certainly an opportunity. Investors should be positioning their portfolio such that they are overweight in some of the export oriented sectors. Fortunately, there are a lot of good quality stocks with good managements, high levels of corporate governance standards, low capital requirement, and very little scope for equity dilution. So, this particular trend of rupee depreciation is certainly an opportunity that investors can take advantage of and go for some of the tech companies or the large and mid size pharma companies.


Q: How would you approach Reliance now? Some brokerages like Merrill Lynch have downgraded the stock. There have been worries with respect to Niko cutting down its gas reserve targets etc. Do you foresee more downsides for Reliance?

A: It could be a market performer at best. I think there are better stocks to invest at this point of time. With so much of uncertainty surrounding the stock, I think investors are best slightly underweight or atleast just about equal market weight on the stock. Maybe the triggers for Reliance would come when there is more clarity or when there is a scaling up of gas production.

Depending on how the rupee has impacted the performance, one would like to wait before making a more informed call on Reliance at this point of time. So, I would say that investors could avoid the stock at this point of time and focus on some of the clear beneficiaries of the rupee depreciation or devaluation as one would say so.

Q: How would you approach the cement stocks after the 3-5% cut that we have seen today?

A: It’s a bit difficult to call cement at this point of time. Fundamentally, certainly these stocks are quite attractive. There has been fantastic transition in the cement industry where they have been able to manage their costs better. They have been able to manage their bottom-line better. If you see all their various capital ratios in terms of return on capital employed, return on net worth, all of them have improved significantly over the past two-three years. They have become consistent performers as we have seen over the past few quarters or so.

The order of the CCI certainly soured the sentiment in the sector. I would just like to put the entire sector on hold for the time being and look for buying into these stocks only if there is a further 10-12% kind of a correction and there is greater clarification or atleast some further progress on the appeal. The fines are quite stiff and certainly they would affect the financials. Going forward, with this set back, how the industry will operate also needs to be seen. So, I would say that just wait and watch and look for buying into cement shares only if there is a further decline from these levels.

Q: How worried would you be about the monsoon situation? Today, the IMD cut its forecast just a tad bit. How much of a sentiment dampener do you think that could be, if the monsoon doesn’t play out as expected for the market?

A: We have had a decent monsoon last year. So, to that extent, I think the damage caused by slightly deficient monsoon may not be as much. In any case, as far as food grains are concerned, I think the granaries are over flowing. So that will act as counter pressure and would reduce the effect on atleast food grain prices. But it affects the sentiment in the rural areas. as far as consumption is concerned, the rural economy has been driving over the past couple of years. So, I would say that investors could factor in that aspect, when they look at the consumer oriented stocks which have benefited from rising demand from the rural sector.

By and large, I think that even a slightly deficient monsoon, the market would take it in its stride. Our sense is that it could be worse than 96%. The street also is expecting that it would be rather a deficient monsoon, much more than what IMD is predicting at this point of time, unless we see major revival in the rains over the next few weeks or so. So, I would say that it’s something which needs to be watched quite closely, but the damage may not be as much. I think, to an extent, it’s already got discounted in the market.


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Sensex rises 100 pts; banks, capital goods, FMCG lead

Posted by sandhyaravii on June 21, 2012

Indian equity benchmarks bounces back led by further buying interest in banks, capital goods and FMCG stocks, even after weak global cues. The Indian rupee too recovered from record low of 56.53 a dollar to 56.37, down 22 paise over previous close.

The BSE benchmark rose 98.33 points to 16,994.96 and the NSE benchmark moved up 31.70 points to 5,152.25.

The Bank Nifty gained 1.5% as country’s largest private sector lender ICICI Bank rallied 2.2% while its rivals State Bank of India and HDFC Bank climbed 1.4% each.

Engineering and construction major by sales Larsen & Toubro too extended upmove, rising over 2% and state-owned power equipment manufacturer BHEL was up more than 3%.

Housing finance company HDFC, state-owned oil & gas producer ONGC and top commercial vehicle maker Tata Motors jumped 1% each.

Even the market breadth improved; advancing shares outnumbered declining by 829 to 532 on the National Stock Exchange.


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Best Buy and Target (Recommendation)

Posted by sandhyaravii on June 21, 2012

LT – Larsen and Tourbo- Market is moving towards 5200. If it reaches then LT Target is 1380. If you are a short term buyer right time.


Kingfisher Airlines – KLA- Current Price – 14rs. Target 25rs (3months to 6months duration)


Suzlon – Current Price – 17.50Rs. Target – 30rs (3months to 6months duration)



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Reliance Market Lens_20th June 2012

Posted by sandhyaravii on June 20, 2012

Domestic Equity Outlook – Shifting hopes onto
global monetary stimulus now…
In what could be called a reasonably volatile day of trade, the Sensex
swung wildly in a near 200 points range intra-day yesterday, to finally
end the session higher by just under 1%. The Nifty too displayed a similar
pattern. The action was largely concentrated in the large-caps as the
mid-cap and the small-cap indices ended almost flat. The
advance-decline ratio was even on the BSE with the combined traded
turnover on both the exchanges at over Rs2 lakh crore owing to the
volatility. Sectorally, the Oil & Gas stocks witnessed considerable positive
action with most of the oil stocks gaining between 2-6%. The oil marketing
companies were in particular favour on hopes of partial deregulation in
diesel prices soon. Notably, yesterday’s market performance was despite
continued weakness of the Rupee against the USD as the former slid
below the Rs56 mark, but managing a close at…

(click to read more)


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Market Lens

Posted by sandhyaravii on June 20, 2012

Domestic Equity Outlook – Negative start to
the week
Indices snapped out of five days winning streak after rating agency
Standard & Poor’s cautioned that India could lose its investment grade
status because of its worsening economic fundamentals. Up move that
started last Monday came to a sudden halt after S&P CNX NIFTY
registered an intraday high of 5,124 post strong opening at 5,097 mark
yesterday. Unfortunately, sell off in late noon trades post S&P warning
saw indices moving below previous close of 5,068 only to register a
fresh low of 5,041 mark. By end of the day, indices closed with loss of
14 points at 5,054 mark. Sectorally, except for CNX FMCG index, all the
sectoral indices closed on a weak note. CNX Pharma emerged as top
loser with sector losing 1.5% in single trading session. Market breadth
fortunately remained in favor of Bulls with 770 stocks advancing as
compared to 693 stocks declining. Both Mid-cap and Small-cap indices
outperformed the broader markets although closed on a negative note.

(Click to read more)


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FIIs not too pessimistic on Indian equities: Samir Arora

Posted by sandhyaravii on June 19, 2012

Despite all the negative news pouring in from the economy, foreign investors have not washed their hands off the Indian market yet, which leads Samir Arora of Helios Capital to believe that they may not be overly pessimistic on India.

In an exclusive interview to CNBC-TV18, Arora points out that Indian markets have not fallen drastically in 2012. “In rupee terms we have gone up 8-9% and 3-4% in dollar terms, so the fact that you haven’t lost a lot of money is being felt by investors,” he said.

He goes on to say that the world is currently in a forgiving mood because investors have not been pained much by equities.

However, he agrees that it is high time the government takes a step towards reforms and making policy decisions which will help the economy, because reasons for the market to rally are running out.

The Reserve Bank of India has indicated that the ball is now in the government’s court to help boost the economy. Rating agencies S&P and Fitch have also put out warnings. Arora says “the government in some sense is getting it from every quarter, but they are not getting it in the end themselves as to what they should do.”

For the short-term, he believes it is a make or break situation for the country and the market, but has a more optimistic view for the long term.


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Buy South Indian Bank; target Rs 30.2: Aditya Birla Money

Posted by sandhyaravii on June 18, 2012

Aditya Birla Money has retained `Buy` on South Indian Bank (SIB) with a price target of Rs 30.2 as against the current market price (CMP) of Rs 24 with upside potential 25.8% in its report dated June 13, 2012. The broking firm gave following investment rationale on the stock:

We estimate SIB to report an EPS CAGR of 19.0% over FY12-FY14E. ABV is estimated to grow at 19.3% CAGR during the same period.

The stock currently trades at 0.9x FY14E ABV and 4.8x FY14E EPS. Going forward, we expect the bank’s margins to come under slight pressure given the bank’s increased focus towards low yielding corporate segment.

We expect the bank to deliver healthy net interest income growth (CAGR 22.3% over FY12-14E) and earnings growth (CAGR 19.0% over FY12-14E) driven by strong traction in business growth and stable asset quality going forward.

We retain our Buy rating on the stock with a target price of 30.2 (1.15x FY14E ABV), thus giving an upside potential of 25.8% from current levels.


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