Thursday, February 4, 2010

BOR: Market Outlook: Indian equities may open flat tp negative tracking mixed cues from global counters.

Market Outlook: Indian equities may open flat up negative tracking mixed cues from global counters. However, we feel that the current trend is positive and one should look to buy at every dip. Nifty has support at 4800-4830 and resistance at 4950-5000.

Get set to pay more for petrol, diesel: After food items, it is the turn of motor fuels to burn a bigger hole in pockest. An increase of at least Rs 3 a litre in petrol Oil and Re 1 in diesel prices appears very likely around the budget as the government nears the end of its capacity to extend a financial lifeline to state-run oilmarketers.

Global Events to watch for today

  • Chain Store Sales
  • Employment Index
  • Jobless Claims

Global indices Update @ 8:

Dow Jones : 10270 (- 26.30)

Nasdaq : 2190 (+00.85)

Nikkei 225 : 10353 (- 50.82)

Hang seng : 20456 (- 265.2)

SGX CNX Nifty : 4892 (- 29.50)

INR / 1 USD : 46.04

On the global counter: US mkts snap 2-day winning streak; copper slips 4% while Asian mkts trades lower on profit booking. The US markets snapped a two-day winning streak after tepid reports on employment and the services sector. The indices closed flat. Pfizer, one of the prior session's best performers, was the biggest drag on Dow after the drug maker's earnings and outlook fell short of expectations. In economic news, the ISM Non-Manufacturing index rose to 50.5 in January from 49.8 in December, but fell short of expectations. On the jobs front, ADP reported that 22,000 jobs were lost from private payrolls in January.

Stock in action for the day: NTPC, Grasim, Guj Ambuja, Inox

Investors smell a profit, sell NTPC futures, apply in FPO: Open interest in NTPC February futures shot up 10 per cent on Wednesday to 2.57 crore shares, as high net worth individuals (HNIs) and retail investors attempt to pocket risk-free gains by going short on the futures and hedging that position by applying for an equivalent amount of shares in the ongoing follow-on public offering (FPO) of the utility company.

FIs lap up Bharati Shipyard on open offer: hopes Institutional investors have turned active in Bharati Shipyard shares amid speculation that the company may eventually go for a second open offer, after hiking its stake to nearly 46 per cent in oil and gas drilling services firm Great Offshore through the recently-completed open offer and subsequent secondary market acquisitions.

Birlas line up Rs 7k cr to ramp up cement play: India’s two largest cement groupings are fighting it out for the top slot. The Aditya Birla group, which is in the process of merging the cement business of two of its companies, Grasim and another firm called UltraTech to create the country’s largest cement maker, has firmed up investment plans to take on arch rival, Holcim.

Hemendra Kothari buys Guj Ambuja's 12% in ING Vysya Life: Hemendra Kothari, the owner of financial services company DSP, has purchased Gujarat Ambuja’s 12% stake in ING Vysya Life Insurance Company. The purchase is not a strategic one and is an investment by Mr Kothari in his personal capacity.

Fame takeover to increase Inox's debt burden: Inox Leisure’s acquisition of a 43 per cent stake in Fame India has triggered speculation regarding an impending consolidation in the multiplex industry. he speculation has been fuelled by the fact that most exhibitors continue to bleed cash even after a decade in the business. For most multiplex owners, the recurring expenditure on capex and working capital is more than the cash profit, leaving virtually nothing on the table for for shareholders.

Inox buys 43% stake in Fame, open offer soon: nox Leisure, a company owned by Gujarat Fluorochemicals Ltd (GFL), on Wednesday, announced that it had acquired the 43.28% promoters’ stake in Fame India for Rs 66.48 crore in an all cash transaction. The deal which values Fame at Rs 153.6 crore, will mark the exit of the Shroff family from the multiplex business. The transaction, which was executed through a block deal at Rs 44 per share, will now make the Inox-Fame entity the second largest player in the Indian multiplex industry in terms of number of screens.

Titan Industries: Volume game likely to bring in rewards: Titan Industries’ stock has been buzzing at the Dalal Street ahead of its December quarter results. In fact, it is only in the past one month that the stock has beaten the Sensex because over the long term it remained a laggard. Titan Industries, which grossed Rs 1,334 crore in the third quarter of FY10 in revenue, sells watches, jewellery, eyewear and precision engineering accessories. This was a 30% year-on-year (y-o-y) growth, aided by a 33% and 25% growth in jewellery and watches segments. The combined effect of reduced volatility in gold prices and festive demand pushed up jewellery sales. Going forward, the company expects to grow its Sonata brand in the watches segment, as it is a high-volume game. At Rs 1,665 and an annualised EPS of Rs 63.5 for FY10, the stock is valued at 20.2x its earnings and it has a potential for further upside for investors holding the stock.


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