Indian share Markets are in bearish phase

Bears will dominate Indian stock markets in the coming sessions due to weak global markets and profit booking. There will be a clear slow down in the growth of most sectors and fail to justify their very high valuations. This is a very opportunistic period for new investors who want to enter into good stocks. High growth stocks like R-Com, Reliance Energy, PFC, IFCI, IDBI, Praj Industries, ABB, L&T, JP Associates Etc. will be available at good valuations after this moderate correction. This is also a transition period in some sectors like IT and Telecom where TCS is looking strong over Infosys and R-Com over Bharti Airtel. Pharma is a safe bet in these volatile times.

Global cues: Global markets are looking weak with Asian Markets are down due to profit booking.

1. Dow Zones touch 14,000 during intraday and NASDAQ was at 6 year high. Profit booking was seen in the late session like Indian Markets.

New Listing – Sun Pharma advanced research.

Stock of the day: DLF. It will post wonderful results by tomorrow.

Significant news and views:

1. HSBC downgraded Indian equities due to increased leveraged positions and high valuations. It is bearish on Indian stocks.

2. Sensex target by the end of 2007 is 13,500-14,200 – HSBC Securities. It is a real concern.

3. Rupee target by the end of March, 2009 is 37.8 against Dollar – Credit Suisse.

4. IIP Numbers were once again down indicating slow down in economy with Consumer Durables and Auto is the worst performer while Capital goods is the best performer.

5. 10% growth is possible in next financial year – Finance Minister.

6. There will be some more CRR hikes – UBS.

Positive stock news:

1. Net profit of Zee Entertainment was increased by 50%.
2. KPIT Cummins posted 22% jump in net profits despite strong rupee and rising salaries.
3. Gateway Distriparks announced good results.
4. R-COM announced massive expansion plans. This stock should be in everyone’s portfolio along with Reliance Capital and Reliance Energy. Accumulate these gems on dips.
5. ITC Foods launched organic spices in select categories.
6. Tata Motors entered into Saudi Arabian market by launching 3 car models.
7. NDTV posted a net loss of Rs 2 crore Vs net loss of Rs 10 crore in previous quarter.
8. Nectar Life sciences is a very good stock but it was overbought.

Negative news:

1. Tata Tea net profit was decreased by 49%. Buy on dips. Tata Tea will give 20% returns within 1 year.

Stock advice:

1. Value unlocking in tower business by Reliance Communications will yield good results. This stock is a safe bet for any kind of investor.

2. Jubilant Organosys announced wonderful results. Stock is ready for new highs.

3. Biocon will rise ahead of good results.

4. Gateway Distriparks will announce good results.

5. TCS will overcome Infosys in forward PE due to its less dependence on US.

6. L&T is getting orders in a big way. Accumulate this stock on correction.

7. Accumulate Bharti Shipyard if you are a long term investor.

8. Hanung Toys is a safe stock for conservative investors.

9. Mutual funds are accumulating Meghamani Organics.

10. Noida Toll Bridge is another good investment. Good growth story at least for another 2 years. Valuations are the only worry.

11. Bayer Cropscience is a good bet for risk taking medium term investors.

12. Hindalco will be benefitted by Rio Tinto acquisition of Alcan.

Stocks to watch out for:

1. Reliance Industries – Strong Momentum.
2. Dr Reddys and Lupin – Pharma is a good bet.
3. Gujarat Ambuja, ACC and Shree Cement – Cement demand.
4. L&T – may bounce back on strong orders.
5. Reliance Energy.
6. DLF is looking strong ahead of results.
7. Tamilnadu News Print.
8. Alembic.
9. RNRL – may gain by 1-2%.
10. Jubilant Organosys.
11. Gateway Distriparks.
12. Plethico Pharma.

Share your views on Indian stocks and comment on my views.