Wednesday, October 5, 2011

Stocks in action for the day: SBI, NMDC, Carborundum, Prime Focus, Kernex

Market Outlook: Indian markets are expected to open in a flat note and trade in the range of 4750-4820 on the back mixes sentiment seen on world markets. All eyes are now on Monday's IIP (Oct 12th) and Wednesday's inflation numbers. We expect growth number to remain subdued as a dozen interest rate hikes and a wobbly world meant purchase orders were tapering off.

On the global space: The US markets rebounded sharply in the last hour of trading following a report that European Union finance ministers are examining possible ways to recapitalize banks and after the Fed Chairman Ben Bernanke said he is prepared to help the economy while European stock markets remained lower for the third consecutive day on Tuesday, amid ongoing concerns over the impact of a potential Greek default on global economic growth.

Back to Indian Markets are following global cues, so we continue to hold a cautious outlook with support 4750 and resistance at 4820.

Global events to watch for today:

Þ ISM Non-Mfg Index

Þ Challenger Job-Cut Report

Þ ADP Employment Report

Global indices Update @ 8:

Dow Jones : 10808 (+153.4)

NASDAQ : 2404 (+68.99)

Nikkei 225 : 8385 (- 70.41)

Hang seng : 16250 (-571.8)

SGX CNX Nifty : 4776 (-03.00)

Gold (USD/t oz.) : 1638 (+12.10)

Nymex Crude (F) : 77.68 (-00.82)

INR / 1 USD : 49.22

TECHOUTLOOK : Support for the Nifty is at 4750 and resistance at 4820.

Call for the day:

SELL TCS SL 1069 Target 1022

BUY SBI SL 1730 Target 1895

Stocks in action for the day: SBI, NMDC, Carborundum, Prime Focus, Kernex

Brokerages on SBI -CLSA - Maintain Underperformer, target: Rs 1930/share -Goldman - Maintain neutral and 12 months target price of Rs 2650 -RBS - Buy, target Rs 2852 -Merrill – Buy, target Rs 2700

SBI Chairman on Moody’s downgrade -Moody's downgrade not a downgrade per se -Downgrade of small segment of bank's debt -SBI's overall rating still a notch above sovereign rating -Financing cost to go up due to global environment not rating -Rating downgrade will not make material change -Govt has asked SBI to give report on reason for downgrade -Rights issue will restore SBI's rating -To get capital from govt by December 2011 or at March 2012 -Expect SBI's capital adequacy to be above 9% by March 2012 -Govt being major shareholder gives comfort to ratings -Holding company structure will not alter capital requirement -Have to learn to make efficient use of capital -SBI may not have been careful with using capital in the past -Likelihood of ballooning of NPA unlikely -Indian banks have never seen 12% NPAs in their history -Expect India's growth rate close to 7.8%

FDI in aviation -DIPP bats for easing FDI norms in aviation DIPP Secretary says -Allow foreign carriers to pick up stake in domestic airlines -Denying foreign capital can cause collapse of domestic airlines -Private airlines in dire need of funds -Even national carrier facing dearth of funds -DIPP secretary wrote to aviation secretary on September 20

IPO Corner - Swajas Air Charters IPO with a price range of Rs 84-90/sh close today -QIBs: Nil, NIIs: 0.01 times (x), RIIs: 0.04x, Overall: 0.41x

M&B SwitchGears IPO of 50 lakh shares with a price range of Rs 180-186/sh close today QIBs: Nil, NIIs: 0.77x, RIIs: 0.31x, Overall: 0.71x

Flexituff International IPO of 67.5 lakh shares with a price range of Rs 145-155/sh close today
QIBs: 0.51x, NIIs: 1.44x, RIIs: 1.06x, Overall: 0.84x

Indo Thai Securities IPO of 40 lakh shares with a price range of Rs 70-84/sh close today
QIBs: nil, NIIs: nil, RIIs: 0.49x, Overall: 0.17x

Ashok Leyland bags order for 723 vehicles for Tanzania worth USD 36 million

Prime Focus increases its stake by 5.4% in its subsidiary Prime Focus London

Kernex Microsystems receives work order of Rs 16.765 crore from Konkan railway corp

Stock Split: Carborundum from Rs 2/sh to Re 1/sh

Monsanto India : Bonus Issue 1:1

Nalco signs MoU for plant in Indonesia for setting up half mtpa aluminium smelter and a 1250 MW

Coal based power plant at an investment of USD 4.5 billion

NMDC on the verge of acquiring 50% stake in Australia Legacy Iron and is also eyeing 3 other foreign buys

ONGC aims to raise crude output by 15% in 2 years

F&O ban: Gitanjali Gems


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