Tuesday, October 11, 2011

Stocks in action for the day: SUNTV, Unity Infraprojects, UTV Software, Pipavav Defence, SBI, UB Holdings, KS Oils.

Market Outlook: Indian markets are expected to open with a positive note on the back of constructive sentiments seen on the global markets. We are in the result season as IT bellwether Infosys declares Q2 earnings on Wednesday which will direct market sentiments. Over all the month will be a crucial time for capital market as we have 2 major events to drive market sentiments one is the IIP data due on Oct 12th and the half-yearly monetary policy on October 25. Till now RBI has raised rates 12 times since March 2010. We expect growth number to remain subdued as a dozen interest rate hikes and a wobbly world meant purchase orders were tapering off.

Results Today: Goa Carbon, CMC, Aanjaneya Lifecare

On the global space: The US markets surged in the final minutes of trading to close at session highs amid optimism that France and Germany's pledge would help resolve the euro zone debt crisis. The Dow has rallied over 1,000 points from last Tuesday's intraday low of 10404, while the S&P 500 rallied more than 3% for its best one-day jump since August. The CBOE volatility has finished near 33.

The European union has postponed a debt- crisis summit until Oct 23 because leaders need more time to finalize a plan to fight a worsening debt crisis, insulating the Spanish and Italian markets, and shielding banks from the fallout.

Asian markets trading higher; Hang Seng gains 3.5%

Back to Indian Markets are following global cues, so we continue to hold a cautious outlook with support 4910 and resistance at 5050.

Global events to watch for today:

Þ NFIB Small Business Optimism Index

Þ 4-Week Bill Announcement

Global indices Update @ 8:

Dow Jones : 11433 (+330.0)

NASDAQ : 2566 (+86.70)

Nikkei 225 : 8776 (+170.5)

Hang seng : 18339 (+628.4)

SGX CNX Nifty : 5039 (+39.50)

Gold (USD/t oz.) : 1685.6 (+14.80)

Nymex Crude (F) : 85.54 (+00.13)

INR / 1 USD : 49.07

TECHOUTLOOK : Support for the Nifty is at 4910 and resistance at 5050.

Call for the day:

Buy Phillips Carbon SL 130 Target 165. (Positional Call)

Buy Tata Steel Sl 425 Target 455/60.

Stocks in action for the day: SUNTV, Unity Infraprojects, UTV Software, Pipavav Defence, SBI, UB Holdings, KS Oils.

CBI books Maran brothers, Malaysian billionaire for 2G scam: The CBI has registered a case against former telecom minister Dayanidhi Maran, his brother and Sun TV managing director Kalanithi Maran, Malaysian billionaire and promoter of Maxis Communications T Ananda Krishnan and senior executive of Maxis Ralph Marshal, besides three companies - Sun Direct TV, Maxis Communications and Astro All Asia.

Telcos like Airtel, Vodafone and others may take $400 mn hit on free roaming: The telecom industry awaits a $400 million hit after the new telecom policy draft talked about scrapping of the roaming charges, said analysts tracking the sector. This customer friendly move along with single tariff regime - removing differential local and STD call rates -may dent the operating margins of the leading service providers in high single-digits when implemented. GSM operators like Airtel and Vodafone garner almost 8% revenue from roaming charges, while it accounts for roughly 5% in the case of CDMA players. There is going to be a negative impact (on telecom operators) as far as implementing a free roaming regime goes but it will undoubtedly good for consumers. The overall domestic roaming business for mobile operators amounts to about $600 million annually. The international roaming charges account for as much as $1.2 billion and will remain intact for the operators.

Tata Coffee gained momentum after reports that it is entering into a joint venture with Starbucks.

TTK Prestige reported net profit of Rs 33.71 crore for quarter ended September 2011 against Rs 21.80 crore in the same quarter a year ago. Net sales were at Rs 303.48 crore as compared to Rs 199.86 crore in the same period a year ago.

ARSS Infrastructure Projects has been won work orders aggregating up to Rs 36.82 crores.1

Tecpro Systems has received an order worth Rs 405.4 crore for supply of extended coal handling plant package from NTPC.

L&T is in discussions with Japanese conglomerates to sell stake in its fully owned subsidiary, L&T Infotech. The firm is in discussions with firms such as Hitachi, Mitsubishi and Fujitsu.

DLF has today moved the Competition Appellate Tribunal or Compat against the Rs 630 crore fine imposed on the company by the Competition Commission of India in mid August.

Unitech to set to move the Company Law Board against JV partner Telenor citing gross mismanagement by the company.

There are reports that USA-based ADM may buy four plants of KS Oils .

Coal India is another PSU in news. The union workers went on a strike yesterday. Newspapers report that the company might incur losses up to Rs 138 crore apart from production loss of 13 lakh tonnes. The could possibly come under some pressure intra-day today.

In the banking space, SBI has slashed its rights issue size to Rs 5000 crore. The long-pending issue is likely by December.

Myiris.com: How to trade in Pipavav Defence, Unity Infra & UTV now?

In an interview with myiris.com, Prashanth Tapse, AVP Research, Mehta Equities gave views on three stocks which were buzzing on Monday. The same is as follows:

Pipavav Defence and Offshore Engineering Company: Pipavav was in front news from last couple of weeks on the Mazagaon JV which was on hold. Media sources states that JV likely to take off only when the ministry puts in place new rules for JVs. Pipavav, which according to its website has the largest shipyard in India, is able to execute a chunk of Mazagon`s USD 21 billion order book, through the joint venture. The firm has an order book of about USD 1.5 billion, including about USD 660 million from the Indian Navy, and has strategic tie-ups with foreign partners including SAAB Dynamics, Northrop Grumman and UK`s Babcock Group for defence production. We believe the deal is about to be in the companies favour and now with the news coming in that the defence ministry has approved the Mazgoan Dock deal that is seen as positive for the stock. On overall basis we are positive on the business prospects. Technically 77.5 act as strong support and stock can test 88-90 on the back of above rationale. Hence, we advice to hold on the counter.

Shares of the company gained Rs 3.7, or 4.66%, to settle at Rs 83.15. The total volume of shares traded was 2,401,875 at the BSE.

Unity Infraprojects: Leading engineering and construction unity infra was in action on the back of awarding orders worth Rs 4,028 million. The first order was for Rs.1,352.8 million for construction (construction of third line between Goelkera-Posoita (15.9 Km)), The second order was for Rs 479.4 million for development (`Marvel Edge` Project at Virman Nagar Pune), The third order was for Rs 838.1 million for constructing distributaries (Botad Brnach Canal ch. 22.605 to 59.152 km) and the last order was for Rs.1,357.7 million for construction of buildings(buildings for various schools bulk services at Central University at Karnataka at Gulbarga by RITES). Technically the stock is been one of the weaker stocks on charts and hence we avoid to take a call on this counter and 45-47 act as strong resistance which if sustains the stock will perform.. Overall the stock is under pressure discounting the above news.

Shares of the company declined Rs 0.05, or 0.12%, to settle at Rs 41.25. The total volume of shares traded was 147,757 at the BSE.

UTV Software: An integrated media and entertainment company UTV is outperforming market performance. The counter was in action in last couple of day on the back of media news stating that Reliance Industries, India`s largest listed firm is set to sign a deal with the Indian unit of Walt Disney, to acquire content for its telecom operations. The deal by Reliance with UTV Software, in which Disney controls 50.44%, is expected to be completed in the coming weeks. The deal is expected to give Reliance access to games, entertainment and children`s content for their telecom operations. We are positive on the media and entertainment business. Technically the stock consolidates at the current level before taking fresh moves on either side.

Shares of the company gained Rs 9.7, or 1.03%, to settle at Rs 953. The total volume of shares traded was 7,981 at the BSE.


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