Wednesday, November 23, 2011

TECHOUTLOOK : Support for Nifty is at 4740 and resistance at 4850.

Market Outlook: Indian markets are expected to open weak following to the Nervousness and fear are the new trend for global markets. Investors kept going back to the Eurozone and the US markets behaviour, before they took a call as to where to park their money.

Global Markets: US markets were off their worst levels but closed lower in a thin, volatile session with the S&P and NASDAQ logging a fifth-consecutive decline as investors remained cautious over uncertainty in the Euro zone and after a tepid GDP report. The US grew at a slightly lower pace. Its third quarter preliminary GDP came in at slightly lower at 2% versus advanced GDP of 2.5%. Consumer spending came in at 2.3% versus advanced 2.4%. Asia was off to a weak start as investors remained cautious following tepid third quarter US GDP growth and Eurozone debt concerns. Japanese markets are shut on account of Labor Thanksgiving day.

Global events to watch:

  • European Commission to issue paper on euro bond.
  • U.S. jobless claims, October personal income, October durable goods orders.

Global indices Update @ 8:

Dow Jones : 11493 (-53.59)

NASDAQ : 2521 (-01.86)

Nikkei 225 : 8314 (-33.53)

Hang Seng : 17905 (-346.0)

SGX CNX Nifty : 4760 (-43.00)

Gold (USD/t oz.) : 1707

Nymex Crude (F) : 97.00

INR / 1 USD : 52.70

TECHOUTLOOK : Support for Nifty is at 4740 and resistance at 4850.

Call for the day:

Sell ONGC SL 255 Target 242.

Buy Kamat Hotel SL 108 Target 122.

Sell SKS Micro SL 112 Target 104

Buy Pipavav SL 55 Target 62-65

Stocks in action for the day: RIL, ONGC, Sugar Stocks, Kamat Hotel. SKS Micro, GTL, Parsvnath, Kingfisher

Cess on air passengers to subsidise airlines flying select routes proposed

Federal Bank plans to infuse Rs 120-cr equity in NBFC

Govt to get tough with RIL on fall in KG-D6 gas output: The government will decide on restricting the expenditure that Reliance Industries Ltd (RIL) is allowed to recover from the investments made in the KG-D6 block in the next three-four weeks. The move has been triggered by RIL’s failure to match the projected gas output in the country’s biggest gas field.

KFA submits new flight plan to DGCA. KFA expects to restore normal operations in 4 to 5 months

The founder-chairman of SKS, India's largest micro finance institution, is likely to be asked to exit the company.

GTL lenders plan to convert debt into equity.

Kamat Hotel: Kamat Hotels (India) Ltd has informed the Bombay Stock Exchange that the company has received a conversion notice from Clearwater Capital Partners (Cyprus) Ltd, the Bondholder, through the Bank of New York, the Principal Paying and Conversion Agent, for the conversion of 6,405 FCCBs into 20,97,993 equity shares of Rs 10 each at Rs 135 per equity share in the capital of the company.

RBI to buy G-Secs worth Rs 10,000 cr under open market operations

RBI eases rules for overseas investors in infrastructure debt funds

ONGC withdraws stake sale prospectus

Ashok Leyland, US company John Deere enter into joint venture to retail construction equipment

Export of 1 mt sugar okayed, no stock cap: The Union government allowed export of a million tonnes of sugar for the 2011-2012 crop marketing year that started in October and also lifted the stock holding limit on the sweetener from November 30.

An expert group, set up by the Planning Commission, has called for an “urgent” reversal of the current position on foreign direct investment in the pharma sector. The panel wants foreign drug multinationals to bring down their stake in the Indian subsidiaries to 49 per cent.

Draft Cabinet note for 26% FDI in airlines by foreign carriers How to trade in Force Motors, Kirloskar Oil Engines & Redington?

In an interview with, Prashanth Tapse, AVP Research, Mehta Equities gave views on three stocks which were buzzing on Tuesday, November 22. The same is as follows:

Force Motors: Shares of Force Motors jumped 20% to hit the upper circuit limit after company stated that it has almost exited its joint venture with Man Truck & Bus AG by selling 5.58 lakh shares to its German partner for 150 million euros (over Rs 10.50 billion) whereas the current market cap is Rs 7.89 billion at the price of Rs 605.

The JV was made in 2006, between Force Motors and Man Truck & Bus called as-Man FORCE Trucks (MFTPL), to produce heavy commercial vehicles. At the time of formation of the JV, the Indian firm was the majority partner, with an 80% stake. The company became a 50:50 partnership in 2008.

Technically, the stock has shown recovery on charts after touching 450 levels looking at the short-term trend we can expect the stock to touch 730-780 level and if breaches can reach 900 levels.

Shares of the company gained Rs 100.85, or 20%, to trade at Rs 605.15. The total volume of shares traded was 5,209 at the BSE (2.26 p.m., Tuesday).

Kirloskar Oil Engines: After a long stagnation the stock has seen surge in volumes with a average of 4-fold surge over two-week average daily volume which has reflected in jump in the stock price. The stock has decently outperformed in the current volatile markets. Looking at the recent quarter earning the company has performed well against its peers. Topline grew on flat note at Rs 5.78 billion while operating profitable has grown well from 16.3% to 21.27% QoQ basis and PAT margins grew equally from 7.68% to 9.82%, resulting to EPS 3.90 Vs 2.98 QoQ.

Technically, one can expect 152 looking at the surprised pull back.

Shares of the company gained Rs 8.15, or 6.33%, to trade at Rs 137.00. The total volume of shares traded was 1,427,771 at the BSE (2.25 p.m., Tuesday).

Redington (India): The outlook for FY12-13 remains natural on the back of lower spending expected in India, South Asia, Middle East and Africa as overseas business has seen slow growth over a couple of quarters. Redington (India) along with its subsidiaries is in the business of end-to-end supply chain management of IT and Non-IT products.

Technically the stock is negatively biased on the ongoing sentiments from Euro zone and US markets. We expect the stock to test 73 before taking fresh movement, hence we recommend a `Sell` call.

Shares of the company declined Rs 3.6, or 4.32%, to trade at Rs 79.70. The total volume of shares traded was 468,152 at the BSE (2.27 p.m., Tuesday).


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