Friday, March 25, 2011

Positive note on the back of constructive global support

Market Outlook: Indian markets are expected to open in a positive note on the back of constructive global support while higher crude price could keep pressure on rallies. Wall Street ends higher on expectation of positive earnings and Asian markets trading higher; Hang Seng, Nikkei up. Overall outlook for the markets today is that of cautious optimism with 5480 levels as a major support.

Global events to watch


Þ Corporate Profits

Þ Consumer Sentiment

Global indices Update @ 8:

Dow Jones : 12170 (+84.54)

NASDAQ : 2736 (+38.12)

Nikkei 225 : 9529 (+94.13)

Hang seng : 23105 (+190.1)

SGX CNX Nifty : 5581 (+30.00)

INR / 1 USD : 44.77

Technical Outlook: Sensex ended the day on positive note on third consecutive day. After opening with upward gap at 18286.42, Sensex maintained the gap throughout the day and closed higher at the end of day. Sensex closed with the gain of 144 points and Nifty closed with gain of 42 points.

The formation of “ stalled pattern” in daily chart followed by huge bullish candle is indicative of hesitation between bulls and bears. In this kind of scenario, as we stated in previous note, 18250 on lower side and 18470-500 on upper side remains important levels to watch as trend decider levels. Any trade below or above these levels will decide the direction of the market i.e. above 18470-500 will lead 18700-900 and below 18250 will lead 17900.

In intraday, 18500 in Sensex, 5565 in Nifty will act as strong resistance levels for the day. If indices fails to holds these levels, they will creates the possibility of at least intraday fall below 18250.

Resistance levels

Sensex ( last close 18350) 1) 18470 2) 18680

Nifty ( 5522) 1) 5560 2) 5600

Nifty Fut. ( 5550) 1) 5590 2) 5630

Bank Nifty ( 11134) 1) 11200 2)11330

Support levels

Sensex 1) 18250 2) 18120

Nifty 1) 5490 2) 5460

Nifty ( Fut) 1) 5520 2) 5490

Bank Nifty 1) 11060 2) 10900

Stocks in Action for the day: Reliance Power, Godrej Consumer, M&M, Pipavav Shipyard

Shares of Unitech moved higher after JPMorgan upgraded the stock to "overweight." There are also reports that the company has sold properties worth Rs 200 crores in Gurgaon.

Shares of Ispat Industries gained momentum after JSW Steel increased the open offer price to Rs 22.25 from Rs 20.54 per share. The offer will be for the acquisition of 64,72,38,458 fully paid up equity shares of the face value of Rs 10 each.

Rain Cements, a wholly owned subsidiary of Rain Commodities, has commenced operations of its fly ash handling and cement packing unit at Bellary, Karnataka with effect from March 24, 2011. The total production capacity of Rain Cements will increase from 3.1 million to 3.50 million metric tons of cement per annum with improved fly ash blend ratio.

Crest Animation Studios’ first CGI animated 3D stereoscopic film, titled "Alpha & Omega" has made business of more than $50 millions and is yet to be released in few other territories.

A consortium of BHEL and ABB has bagged an order from Power Grid Corporation of India for Ultra High Voltage Multi-Terminal DC Transmission link with a built in capacity of up to 8,000 MW.

NMDC has moved closer in its bid to acquire a coal mine in the US. The company is in talks with the promoters of midsized coking coal mines in Pittsburg and Alabama to do due diligence prior to making an offer.

Godrej Consumer Products has commenced commercial production of personal care products at its factory at plot no 52, Brahmaputra Industrial Park, Guwahati on March 23, 2011. NTPC’s unit no 6 of 500 MW of Farakka Super Thermal Power Station has been commissioned on March 23, 2011. With this, the total capacity of NTPC group has become 33,694 MW. The total installed capacity of Farakka Super Thermal Power Station has become 2,100 MW.

Dr Reddys Laboratories has approved allotment of 1,015,516,392 unsecured redeemable non-convertible debentures of Rs 5 each carrying a coupon of 9.25 per cent per annum. The debentures will be distributed as bonus, to shareholders in the ratio of 6 bonus debentures of Rs. 5/- each for every equity share of Rs 5 each.

Mahindra and Mahindra will open a new tractor plant in Zaheerabad, Andhra Pradesh with an installed capacity of 1,00,000 tractors. The production is likely to commence from 2012. The company will invest Rs 300 crores in the new facility.

Sara Lee Corporation has terminated Godrej Household Products’, a subsidiary of Godrej Consumer Products, license for Kiwi (shore care) and Kiwi Kleen brands in India and Sri Lanka with effect from April 3, 2011. Godrej Household Products will get Rs 177 crores for the termination of the license.

Reliance Power is in advance stage of tying up debt of Rs 7000 crore for financing its 2,400 MW gas-based power project at Samalkot in Andhra Pradesh.

Pipavav Shipyard has received license to build warships for Indian Navy. It has also received clearance from foreign investment promotion board, ministry of finance, Government of India which permits foreign direct equity investment. The clearance will help the company to bid warship projects like frigates, destroyers, aircraft carriers, LPDs, submarine, corvettes etc. of Indian Navy.


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