Black days will continue for Global stock markets

Global markets are continuing their correction due to credit crisis concerns. US and Asian markets are falling with 2-6% correction in the last 2 days. Indian share markets will trade according to global trends for some more time due to FII selling. No one is giving exact guidance over the severity of this crisis. Subprime crisis added fuel to the already overvalued global markets. Watch from sidelines how this crisis will influence world markets and learn lessons for future investments.

Global Stock markets:

Courtesy: Bloomberg.

Global markets fell on second consecutive day. Dow Jones lost 167 points after the volatility in the initial trading session. Asian Stocks are near their 3-month low and Indian markets will follow their global peers. Uncertainty over the magnitude of subprime crisis is the major factor behind this melt down. Will more pain is on the cards? Wait for some more time.

Market Movements:

1. BSE Sensex: Sensex may lose 400-500 points in the initial session.
CMP: 15016.
Target: 14850 and lower.

2. NSE Nifty: Nifty may lose 150-200 points in the initial session.
CMP: 4375.
Target: 4310 and lower.

Positive Stock Market News:

1. DLF will buy DCM Shriram land for 1,600 crore.
2. Punj Lloyd sold 11% stake to private investors for 814 crore.
3. Bharti Airtel will launch 2G and 3G services in Sri Lanka.
4. Demerger of ICI India is on the cards due to acquisition of ICI by Akzo.
5. 2009 is the year of consolidation in banking sector.
6. Vedanta sold Sterlite gold for 320 crore.
7. Idea Cellular is the front runner for ICC sponsorship.
8. Bharti Airtel hiked local call rates along with SMS charges.

Negative Stock Market News:

1. Clear slowdown in consumer spending in US due to credit concerns – Wal-Mart.
2. Govt. Allowed cement imports to curb rising cement prices.
3. Expansion plans of India Inc will slow down – Morgan Stanley.
4. Government may move court on Reliance Gas price – Hindustan Times.
5. United Spirits debt rose due to W&M buy.
6. Tata Steel’s Titanium project is in trouble due to land acquisition problems.
7. Global markets will correct by 30-40% - Mark Faber.

Stock Market Analysis:

1. IPTV is set to boom. IOL Broadband is the biggest beneficiary.
2. Foreign Investors are real culprits behind this abnormal rise and fall of Indian Stocks.
3. According to my view, BSE Sensex will touch 14,000 mark in August and Share markets will bounce back after this subprime market crisis is over.
4. Enter into growth stocks like Punj Lloyd, Moser Baer, Bharti Airtel, Reliance Companies, L&T, BHEL, and ABB after the correction. Believe in the long term growth story of India.
5. Short term investors may suffer heavy losses in the coming days. Don’t take highly leveraged positions in these volatile times.
6. Mic Electronics is the best stock for long term investors.
7. Don’t do bottom fishing in sugar sector. More pain will come in the coming quarters.
8. Bharat Forge, Bajaj Hindustan, Tata Motors, Mastek, Tata Tea, TCS, Cipla are some contra buys for long term investors with 18-24 month horizon.
9. Sanjay Dutt arrest may spell doom for some distribution companies in the short term.
10. Fortis Healthcare is my favourite stock for long term investment. I have holding in this stock.
11. Takeover targets like Spice Tele, Spicejet may bring value to investors in the coming quarters.
12. Tata Tele and Essar Oil are my favourite turn around stories. I am also betting big on Ispat for long term.
13. Conservative investors should stay away from share markets for some more time.

Best Stocks for Day Traders:

1. DCM Shriram Consolidated.
CMP: 87.
Target: 90.

2. 90% of Index stocks will fall due to global melt down. Risk takers may bet on IT stocks to recover if rupee depreciates against dollar.

Stocks in NSE F&O ban: Nagarjuna Fertilisers and Omaxe.

Subprime Market crisis will continue to disrupt world markets

French Company BNP Paribas announcement sent shivers throughout the world markets. Indian stocks suffered heavy selling pressure in the mid and late sessions after this announcement. Indian markets will continue to fall due to more than expected concerns over US subprime market crisis. Foreign investors are selling heavily in the last 7 trading sessions. Prudent investors can use this correction to enter into sound stocks for long term investment. Global Markets: US markets tumbled on Thursday amid concerns of Subprime crisis and BNP Paribas scare. Dow Jones lost 387 points while NASDAQ lost 56 points. Asian markets lost heavily by following global markets.

Market Movements: Indian markets follow their global peers. Inflation data is also crucial.

1. BSE Sensex:
CMP: 15100.
Target: 14760- 14800.

2. NSE Nifty:
CMP: 4403.
Target: 4215- 4305.

Source: Bloomberg.

Significant News:

1. Inflation will be around 4.4% - small rise over the past week.
2. RBI may rise CRR once again in 2007 – Centurion bank.
3. Hyderabad Stock exchange may merge with Bombay stock exchange.
4. BSE may buy 5% stake in Calcutta Stock Exchange.
5. Puravankara fixed issue price at Rs 400.
6. Global volatility will raise further – Citi group.
7. Motilal Oswal priced IPO band between 725-825.

Positive Stock Market News:

1. Bajaj Auto will launch Exceed with DTS-Si in September.
2. Government will give more sops to regional Airlines.
3. Car sales up 11% in July while bike sales down 17%.
4. Praj Industries announced inauguration of manufacturing plant in Kandla SEZ
5. Government may allow PFC to tap the domestic and foreign private equity.
6. Bharti Airtel added 2 million subscribers in July while Idea added 0.8 million subscribers.
7. 20% increase in hotel room rates is on the horizon.
8. Infosys opens BPO centre in Mexico.
9. BHEL, Gayatri Projects and Aban Offshore bagged big orders.

Negative Stock Market News:

1. Foreign Institutional Investors sold shares worth Rs 6,127 crore in the last 9 trading sessions since July 27.
2. Tamilnadu Government will soon enter into cable TV business. This is another blow to Sun TV.
3. SEBI expressed reservations over the transparency in transactions in the margin accounts of brokers.
4. Government changed sugar subsidy structure which is another shock to this battered sector.
5. Tata Steel will have to pay $ 1 billion more due to loan crisis in US subprime market.
6. Nifty August futures discount increased to 48 points.
7. Brokers with more than 1 crore IT turnover will face IT raids.

Stock Market Analysis:

1. US Subprime market is crisis is worse than the expectations of many investors. As I said in my earlier columns, FIIs will withdraw more money from global markets. This will impact the Indian Markets in the short term. Use this opportunity to enter into good stocks and earn good money when FIIs return back to invest in Indian markets.

2. Profit booking along with US subprime market crisis were the major factors for the over correction in the markets yesterday.

3. Accumulate IFCI at around Rs 59-60 levels to make quick gains in the next week as bidding process will start on Monday. I have holding in this stock.

4. Tata power, Reliance Energy and Areva along with NTPC will benefit due to changes in Government nuclear policy.

5. Accumulate stocks like Reliance Communications, SBI, BHEL, Biocon etc. on declines.

Best Stocks for Day trading:

1. Sell Sun TV: Tamilnadu government entry into cable TV business.
CMP: 368.
Today Target: 342. It may touch 310-315 in the short term.

2. Sell Tata Steel:
CMP: 652.
Today Target: 630. Short term target is 615.

3. Sell Hero Honda:
CMP: 679.
Target: 671 and 668.

4. Buy Maruti Udyog for short term. Impressive performance in the troubled times.

5. 90% major stocks will face selling pressure in the opening session.

6. Sell Geojit Financial services.

Stocks in the F&O ban: IFCI and Omaxe.

Please share your opinion on my stock market analysis.

IT stocks will hog limelight

It is a golden day for Export Companies but dooms day for many companies. FII selling pressure will gradually impact market in the short term. Will mutual funds and domestic buyers save the market? Markets are at crucial stage and I will closely watch the FII inflow and out flow. Rupee appreciation will be halted against dollar. Major boost for export companies like IT, Textile etc.

Global markets: US Markets ended on positive note after the intra-day volatility. But FIIs will spoil Indian Markets by moving funds from Indian markets to US markets due to dollar appreciation. Lack of liquidity is a concern. Falling crude oil price is the positive cue from global markets.

Market movements: If investors immediately understand the impact of ECB tightening, it will be a sharp fall. If investors temporarily buoyed by IT stocks rise, markets may sustain for some more time.


Sector of the day: IT Sector. 5-10% gains may be possible for these battered stocks.

Stock of the Day: Infosys.

Significant News:

1. No change in fed interest rates. Inflation is a real concern.
2. Fresh restrictions on External Commercial borrowings (ECB). Maximum limit is $ 20 million for rupee.
3. More sops for exporters by this month end. Accumulate these laggards.

Positive Stock news:

1. City Union Bank announced stock split in 1:10 ratio.
2. TTML, Bharti Airtel and R-Com are in race for 51% stake in Kenya Telkom.
3. Telecom companies will get tax benefits due to tower sharing.
4. Take Solutions IPO oversubscribed 59.4% times but retail portion got 23% over subscription.
5. Great Offshore will buy a Scandinavian company for $ 500 million.
6. ICICI Bank cuts deposit rates by 25-50 bps.
7. Punj Lloyd will place a QIP for $ 400 million.
8. India is now the 5th largest crude steel producer.

Negative Stock News:

1. Left Parties blocked Indo-US Nuclear deal.
2. Due to tightening of ECB norms, Companies will have to pay extra money for loans.
3. Falling crude is a positive sign while dollar appreciation is a negative signal for oil marketing companies.

Stock Recommendations for Day Traders:

1. City Union Bank:
CMP: 237.
Target: 242.

2. Infosys:
CMP: 1878.
Target: 1930.

3. Satyam:
CMP: 463.
Target: 478.

4. TCS:
CMP: 1109.
Target: 1140.

5. IFCI: If it breaks 68 resistance.

Please share your views and stock recommendations.

Black Monday for Indian Stocks

Indian stocks will suffer heavy selling due to weak global markets especially US and Japan. Volatility and range bound sessions will continue in this week. Investors should closely watch the movements of sound stocks like SBI, R-Com, DLF, REL and GMR-Infra Etc to accumulate at attractive price. IFCI, ITC and Hindustan Lever are some stocks that are looking strong with some risk in these volatile markets.

Conservative investors should stay away from Indian share markets for some more time. Traders may have money making chances in these range bound sessions. Indian markets will follow global markets especially US, Japan and China.

Indian Stock Market Movements:

Indian stocks will lose heavily due to weak sentiment in global markets. They will range bound tomorrow if US markets will end on positive note on Monday evening. Risk taking investors may buy in the late session for quick returns on Tuesday. Markets will continue its volatile run. Don’t take long term calls in major stocks and stay away from futures and options.

1. BSE:
CMP: 15138.
Target: 14885.

2. NSE:
CMP: 4401.
Target: 4294.

Courtesy: Bloomberg.

Significant Views:

1. India will be among the top 3 global powers by 2050 – World Economy study.
2. India is the fifth most preferred business destination – World Economy study.

Significant event: Us federal bank meeting on Tuesday.

Positive Stock News:

1. Anant Raj Industries is going for stock split.
2. IFCI board approved 26% stake sale.
3. Reliance has big plans on semiconductor space. It will also invest $ 14 bn in the oil business.
4. Sun TV will launch Sports and Documentary channels. Accumulate this media heavy weight in the 430-450 range for long term benefits.
5. Reliance Communications will launch money transfer scheme through its mobile retail outlets.
Negative Stock News:

1. Oracle will not delist I-Flex Solutions until its price falls below Rs 2,100. CMP: 2,169.
2. Real estate builders with more than 5 crore turnover are under IT scanner.
3. Puravankara IPO revised price band due to poor subscription from 500-525 to 400-450.
4. Reliance Fresh will sell Diageo wine brands through Reliance Fresh. It is taking all the wrong steps in these days. Can any woman go to retail store that is selling wine?

Best Stock picks for Day Traders:

1. Buy IFCI: Heavy interest for IFCI stake.
CMP: 60.7
Target: 63.9

2. Sell SBI.
CMP: 1635.
Target: 1595.

3. Sell Reliance.

4. Sell GMR Infra.
CMP: 832.
Target: 760.

5. Sell DLF.

6. Sell Reliance Communications.
CMP: 547.
Target: 534.

7. Sell L&T and BHEL.

8. Sell I-Flex Solutions – Oracle will not delist I-Flex.

9. Buy Hindustan Lever and ITC in the late session.

Stock in the F&O ban period: Nagarjuna Fertilisers.

My views:

1. Sorry for not posting regularly in the last week. I will post regularly in the coming days.

2. An NRI reader from United States sent me his Portfolio for analysis. He has selected very good stocks like L&T, RPL, RNRL, Tata Investment Corporation, Praj Industries, and First Source etc with long term view. This indicates the growing knowledge about stocks among the retail investors and also among busy persons who have little spare time for research. Long term investors with good portfolios always become millionaires irrespective of short term fluctuations in the markets. Just imagine the benefits of L&T investors after the demerger of its businesses in 2009-10.

3. My sectors for long term investors – Power, Logistics, Shipping, Finance and Banking, Capital Goods and Infrastructure. One should allot 60-70% of their portfolio to these sunrise sectors.

4. I recommend 5-10% allotment to wild cards (future stars) like Wire and Wireless, Dish TV, Fortis Healthcare, Meghamani Organics, Celestial Labs, Ispat etc. They will give tremendous returns in the long term.

5. Invest 5-10% of your money in Government finance companies like TFCI, IFCI, IDBI, IDFC and PTC and PFC. Value unlocking and growing sentiment in these companies will help investors.

6. I recommend 5% allotment to cyclical stocks like Auto and Sugar for long term investors.

7. This is the worst results season in the last 2 years. IT and export stocks are the real culprits. Media, Construction and power sectors are saviours.

8. I don’t comment much on IFCI stake sale and its effects due to my large holding. This is my principle.

Stocks for long term investors:

MRPL and some bank stocks are my dark horses. Rolta and Northgate Technologies are my favourite IT stocks while Dr Reddys is a safe bet for 2011. PFC and IDFC are safe finance stocks along with Reliance Capital. Indo Tech transformer may follow Voltamp in the coming days. Closely watch Dhanalaxmi bank and accumulate on declines. Accumulate Maruti on declines. Reliance Communication is the safest blue chip for medium term investors.

Note: 25% of my holdings in IFCI at an average price of Rs 51. I also have holdings in L&T, RPL, ISPAT, Wire and Wireless, Dish TV, Fortis, Reliance Communications, PFC, RNRL and Praj Industries. 90% of my investments are for long term and 10% is for short term and day trading. I believe in the long term potential of India’s economic growth.

Please share your views on my stock picks and views.

Black Friday for Indian share markets

Black Friday arrived for stock market investors. I gave red signals in the last column about unliquidated derivatives, unsustainable valuations, drop in earnings and euphoria among new investors. All these are clear signals for a heavy correction. FIIs are the most dangerous people for the Indian markets. Unlike mutual funds, they don’t sit on their investments in difficult times. They just sell their shares and go to another country for better options. But this correction is good for fresh investments and real investors.
Courtesy: NASDAQ.

Index Movements:


1. NSE Nifty:
CMP: 4619.
Target: 4560 and lower. Nifty will lose around 80 points and follow their global markets.

2. BSE Sensex:
CMP: 15776.
Target: 15530 and lower. Today we will see bloodbath in the market due to heavy selling from panic investors.


Advice for Investors:



This is the day everyone is waiting for. We will get wonderful opportunities for entering into good stocks. This selling is mainly due to withdrawal of funds by FIIs and new investors who invested heavily in the recent days by giving a damn to the valuations. Investors who invested in value stocks should not sell their holdings. If you read the balance sheets of Real estate companies like DLF and Unitech, you will know the underlying seriousness and the danger in their accounting practises. SEBI should monitor these companies and the value of their land banks. I can’t understand the rationality behind investments in high valued stocks like DLF, TV 18, Divis Labs, ABB, GMR Infra, Kotak Mahindra Bank etc. Even though these are good stocks, valuations are unreasonable and unsustainable.

Global markets:


Heavy selling was seen in all the global markets with 2-5% loss in various indices. Recent rise in the global markets is due to high liquidity and entering of new investors who lack basic knowledge about stock markets.


Stock of the day: Shree Renuka Sugars with high risk.

Sector of the day:

1. Sugar Companies – Exports relief. Be careful before taking exposure as market sentiment may spoil the moment.

2. Oil Refining Companies - Declining crude prices, Rupee appreciation, Petrol-diesel price hike rumours make BPCL and HPCL as hot stocks but with risk.


Significant views:


1. If Inflation data is lower than expected, late buying will be seen in Banking stocks and vice versa.


Positive stock news:


1. Subex Azure announced wonderful results. 381% rise in net profit.
2. Teledata posted wonderful results.
3. ABB announced wonderful results with 51% rise in net profit. Use today’s correction to take fresh exposure.
4. 500% rise in Q3 net profit of MRF while Dena Bank net profit rose by 201%.
5. Tata Motors is the front runner for Rover and Jaguar.
6. Maruti announced better than expected results with 35% surge in net profit.
7. Bharti Airtel Q1 net profit rose by 100% while Tata Power announced 51% rise in net profit.
8. Ranbaxy regained number one slot after the recent quarterly results.


Negative stock news:


1. Indian companies are announcing worst results among the last 5 quarters. Rupee appreciation saved some companies by increasing other income.
2. Punjab Tractors posted decline in net profit by 81%.
3. Bisleri selling is not true.


Best stocks for Day Traders:


1. Sell Reliance.
CMP: 1941.
Target: 1892.

2. Sell Infosys, Wipro TCS and Satyam.
3. Sell DLF and Unitech.
4. Sell Divis Labs.
5. Sell GMR Infra.
6. Sell SBI.
7. Sell HDIL.
8. Buy HPCL and BPCL with risk.


Please share your views on Indian stocks and my analysis.

Heavy selling in the initial session

Indian stocks will see heavy selling in the initial session due to fall down in global markets. If late buying is not seen in the late session, today will become black Wednesday. Capital goods will see heavy selling due to vertical rise in the recent days. This correction is good for markets and real investors who are waiting in the sidelines for fresh investments. New inexperienced investors should stay away from markets until RBI announced credit policy. Weakness in global markets, rising rupee, drop in earnings, derivative expiry, crude price will make the stock markets a dangerous territory in the coming days. I am always against CNBC analysts who change their words according to market moments. Long term investors need not worry about these short term fluctuations. Invest in good stocks with strong growth prospects.

Market sentiment: Bears will finally dominate. Indian markets will follow their global peers. Late buying may be seen in some stocks.

Global cues: All markets suffered heavy losses. Indian ADRs are in red with Sterlite lost 5%.

Stocks of the day:

Allied Digital - Will list around Rs 250 and may touch Rs 320. Bear market may spoil sentiment.

1. PNB and Reliance Capital– Results. With risk.
2. Reliance Energy – Lanco loss, Reliance gain.
3. JSW Steel – Wonderful results. With risk.

Rumours of the day:

1. NDTV may sell 26% stake to NBC.

Positive News:

1. BILT – Stock split from Rs 10 to Rs 2. Buyback of 40% equity after split at Rs 25.
2. RIL will setup 4,000 MW power plants for 10,000 crore.
3. Aditya Birla will raise stake in Hindalco to 40% from 31.4%.

Negative News:

1. Lanco bid for Sasan project is invalid. Investors are thinking that the project will be awarded to Reliance Energy. Government is yet to take the decision.
2. Cement companies under MRTPC lens.
3. Textile exports will fall short by 36% due to rupee appreciation in Q1.
4. Hero Honda posted unimpressive results. Future is bleak for this company. Management lacks the vision.
5. Novartis and Dr Reddys are in legal battle over Lotrel patent.

Results:

1. Hindustan Zinc announced 36% rise in net profit.
2. Britannia net profit increased by 19%.
3. Kotak Mahindra bank net profit rose by 99%.
4. Idea announced 540% rise in net profits.

Stock advice:

1. Accumulate Reliance Communications on declines. It will rebound at anytime.
2. Buy Hindustan Lever for short term gains. 15-20% returns within one week.
3. Accumulate Praj Industries in 150-180 range for long term investment. Praj is the back bone for Bio-Fuel industry equipment and Technologies.
4. Investors will book profits in BHEL, L&T, GMR Infra and DLF at any time. Keep strict trailing stop losses.
5. Long term investors should start accumulating fundamentally good stocks like Bharat Forge.
6. Companies sitting on land banks may surprise with their results in the coming quarters due to selling of land banks. Ex. VST Tillers, DCM Shriram, Atlas Cycles, Zandu Pharma, RPG Cables. RPG cables is the best stock for any patient investor. It will give 300% returns in 2 years. Low valuations, high growth, turnaround story, land bank make this a safe stock.
7. IFCI may not sell stake in the coming days. It is trying to create good business model to unlock its real value. It is a bad news for short term investors and very good news for real long term investors. It will give 200% returns within 12-15 months.
8. Raymond and Cipla are contrarian buys with limited downside but results are disappointing.

Stocks for day traders:

1. Sell ACC.
2. Sell BHEL.
3. Sell L&T.
4. Sell Lanco.
5. Sell Hero Honda.
6. Buy these stocks if sharp fall is seen – Reliance Communications, Reliance Energy and PNB.

Please share your views on Indian stocks.

Welcome to volatile week

With derivative expiry and RBI credit policy are around the corner, Indian share markets will trade in extreme volatility in the coming sessions. Indian stocks are in “unclear” zone with Mutual funds and big domestic investors are waiting for correction, NRIs and FIIs are pumping money. My advice- does not take long positions and book profits immediately in high growth stocks. Correction is eminent but when will it happen?

Global markets: US markets suffered heavy losses on Friday due to poor results by Google. Emerging markets suffered heavy losses along with Japan market. China is the only exception.

Stocks of the day:

1. Hindustan Lever: Future rise will depend on offer price. Dividend and Buyback offer make this stock of the week. My Target is Rs 250-280. HUL board will officially announce offer price on July 29 board meeting.

2. Dr Reddys – Results.

Rumours of the day:

1. NTPC will announce Bonus shares and good preferential allotment to existing investors in its FPO.

2. Chevron may buy stake in Petronet LNG.

Significant events:

1. Derivative expiry on July 27. Expect volatile trading in between.

2. Watch out for RBI’s credit policy on July 31st. What will happen to Interest rates? May be no change.

Significant News:

1. Current interest rates are at reasonable value – Finance Minister.

2. We are waiting for softening of interest rates – ICICI Bank.

3. Crude will cross $ 75 and may touch $ 90– Analysts.

Positive Stock news:

1. Nitin fire net profit rose by 109%.
2. Lead prices are rising. Watch out for Hindustan Zinc.
3. Karur Vysya bank net profit rose by 25% while Indian bank posted 29% rise in net profit. Bank stocks already factored these good results.
4. Mahindra and Mahindra will acquire Lokesh machines.
5. FICCI recommended 10 year tax holiday to health care infrastructure builders and soft loans.
6. UB Holdings is planning to sell stake in Deccan Aviation.

Negative Stock News:

1. ADRs of Indian IT stocks suffered heavy losses along with MTNL.
2. McKinsey sued Reliance and Reliance Communications over dues.
3. Increase in gross NPAs of ICICI Bank is worrying news.
4. UTI Bank priced its GDT at 1.7% discount.
5. NDTV and Arvind Mills are in F&O ban.
6. 50% of the penny and loss making companies are trading near all time highs. Stay away from such stocks.

Stock advice:

1. Ispat industries will announce results on July 24. Will it surprise CNBC analysts?
2. Zee News fundamentals does not justify the steep rise.
3. Voltas is looking very good and Meghamani Organics is a safe one for long term investors.
4. Raymond is a contrarian bet for long term investors.
5. Tayo Rolls is a safe bet for long term investors. Corus supply will propel this stock.
6. Dr Reddys is ready for sound results despite rupee appreciation.
7. Don’t take fresh long positions in Real estate stocks. You will get better price later.
8. Adlabs may move upwards at any time. Good results will be a trigger.
9. Business Standard published very good article on Gujarat NRE Coke. Must read.
10. If RBI will not change interest rates, Bank and real estate stocks will rule the markets along with Maruti. Crude oil price is a real concern.

IPO views:

1. Central Bank of India will list around Rs 130-140. 25-40% gains on the listing day itself. Invest in this IPO.
2. Omaxe may list with 40% gains. Good return if you will get allotment.
3. I don’t have positive opinion on IVR Prime. Stay away from this IPO.

Hot stocks for day traders and investors:

1. Hindustan Zinc – Rise in lead prices.
2. Hindustan Lever – Buyback offer.
3. Nitin Fire – wonderful results.
4. Voltas – Positive momentum on the back of good results.
5. Sell UTI Bank – GDR low pricing.
6. Dr Reddys – will post wonderful results.
7. ICICI Bank – good results.
8. Deccan Aviation – Stake sale and open offer.
9. Prajay Engineers syndicate – Medium term stock.
10. EID Parry – Technically strong.
11. Sun TV – Bonus, Dividend and Stock split.

Please share your views on Indian Stock markets and my stock recommendations.

Action will confine to select stocks

Stock markets successfully sustained yesterday’s melt down and bounce back with the help of FII buying in some stocks. Irrespective of market moments, these stocks will continue to gain today. Inflation will be around 4%. If inflation falls below 4%, banking stocks will rally in the afternoon session. IT stocks will fare badly on account of poor results and Infosys guidance.

Positive triggers:

1. FIIs started buying in select stock. So you have to follow stock specific trading/investing.
2. Tyre industry may surprise analysts with their results even though auto sector is down. Closely watch Ceat and Apollo tyres.

Stock of the day:

IFCI. It will open around 63 and may touch Rs 65-66.

Positive stock news:

1. Mastek ranked among the top 50 global outsourcing firms.
2. Indoco Remedies got approval from Brazilian FDA approval for its Goa plant.
3. Aptech and NIIT are in expansion mood in Vietnam.
4. Wipro consumer care bought Unza.
5. Nestle India is in acquisition mood.
6. Sony tie-up with Balaji Tele for content.
7. Bajaj auto set up 5 strategic units.

Negative stock news:

1. NPAs of ICICI Bank rose to 118% in retail segment. This is a real worry ahead of listing.
2. Bank of England hiked interest rates to 5.75%. ECB unchanged interest rates.

Stock advice:

1. Stay away from IT stocks for another 1 month. Bad results and rising rupee and salaries will cripple this sector in the coming days. Satyam may be the lone winner in Q1. Rolta India is a good long term bet.

2. Book profits partially in textile sectors. Government sops may not save this industry from collapse.

3. Khaitan electrical and Asian electronics announced wonderful results. Closely follow them.

4. Lupin may bounce back today on the acquisition talk.

Stock picks for day traders:

1. IFCI: Results and stake sale.
2. Bajaj Auto-Restructuring.
3. Balaji Tele- Sony ties up.
4. Mastek-World ranking.
5. ICICI Bank FPO may face pressure.
6. L&T may continue to march.

Note: I have 30% of my holdings in IFCI. I bought them at an average price of Rs 52.

Are you ready for consolidation?

Indian stock markets will consolidate in the coming days due to profit booking and negative triggers. Inflation will rise due to rising crude prices and IT giants will post unimpressive results. Too much rise in realty stocks is a real concern. There will be heavy selling in these stocks in the coming sessions. Don’t forget, it is consolidation but not crash.

Global cues: US markets once again ended on positive note. Tata motors ADR and VSNL ADR are significant gainers.

Stock of the day: Vishal Retail. I recommended this IPO for exceptional earnings. Investors who got allotment will get 100-150% returns on the listing day. Vishal will list around Rs 550-600 and may even touch Rs 650-700 within one week.

Significant news:

1. RBI is optimistic on economic growth.

Positive stock news:

1. IOC may acquire stake in Petkim of Turkey.
2. Reliance and Bharti short listed for Qatar mobile license.
3. Temasek will buy 5% stake in Bharti Airtel.
4. Eicher motor announced good sales overcoming bad sentiment.
5. Prism cement may continue to gain.
6. Ashok Leyland signed JV with Finland Company.
7. Bombay rayon bought Leela laces.
8. India Foils stake sale.

Negative stock news:

1. Moody downgraded Tata Power on account of aggressive expansion.
2. No hike in fuel prices-Political decision. Stay away from HPCL and BPCL.

Stock advice:

1. Exit from RNRL and RPL. Returns are minimal from these prices.
2. IDBI and IDFC may move upwards at anytime. Closely watch these stocks.
3. Today is crucial for IFCI. If it crosses 66, it will touch 75 within 2 days.
4. Book profits in GMR Infra and enter into this on dips. Too much rise within a short period is always a concern.
5. Dena Bank and Deepak Fertilisers are safe ones in this consolidation mood.
6. Ashok Leyland may continue to gain in the short-medium term.
7. NSE barred Futures and Options in IFCI and Nagarjuna Fertilisers.
8. ONGC may move upwards at any time. Keep an eye on this stock.

Stock picks for day traders:

1. Vishal Retail.
2. India Foils.

Note: I will partially book profits in my holdings. I may enter Dena bank, PFC and Fortis in the coming days at appropriate time. I hold my IFCI holdings irrespective of short term changes.

Indian stock markets are in a precarious zone

Indian stock markets lost some points from their all time highs yesterday. In the past, Markets moved downwards from their highs due to profit booking by investors. But this time, bullish sentiment is prevailing in the sentiment. Most of the global markets are trading in the positive zone. US markets recovered from bearish zone after several flat sessions. Crude price above $71 is a real concern.

Market movements: Markets will open on positive note but may not sustain those levels. Profit booking will be seen in select counters. Stock specific trading will continue.

Significant news:

1. Exports slowed down to 18% in May compared to 23% in April.
2. CRISIL downgraded economic growth to 8.4% while NCAER predicted 8.3% economic growth. CII reduced projection for economic growth to 8.5%.

Positive stock news:

1. Leela group will sell garment business to Bombay Rayon.
2. Titan is entering into branded eyewear segment.
3. Maruti and Mahindra announced good sales.
4. Lanco Infra building world’s tallest residential complex in Hyderabad.
5. Tata Tele will hive off tower business.
6. Himatsingka Seide Acquires 80% stake in Divatex Home Fashions.

Negative stock news:

1. Steel companies reduced flat steel prices by 500-1,000 per tonne.
2. Oil companies rise ATF prices by 2.86%. Airlines will hike fuel surcharge.
3. Airlines will hike fuel surcharge by Rs 50.
4. Hero Honda June sales down by 8%.
5. Financial Technologies posted 28.33% rise in net profit.
6. Dish TV will break even by 2009.

Stock advice:

1. IT companies will announce 10% drop in their earnings in Q1 results. Long term investors should enter into IT stocks after results season. They will post better than expected Q2 earnings.
2. Satyam is only the only major IT company that will announce good results in Q1.
3. Aurobindo Pharma may regain some lost points if markets are positive.
4. Withdrawal of tax subsidy by Chinese authorities for their tyre exporters will help Indian tyre companies.
5. Gujarat Alkalies will continue its march upwards.
6. BSNL re-bidding withdrawn. Accumulate ITI shares.
7. Stay away from Pharma majors- Teva case and ban on 100 drugs.
8. Stay away from Britannia due to competitive bid from Kraft foods.

Stocks for day traders:

1. IFCI and RPL.
2. Lanco Infra.
3. Bombay Rayon- Results and Hotel Leela garment business.
4. Nicco corporation- stake sale.
5. Hotel Leela
6. Gujarat Alkalies.
7. Sell Hero Honda.
8. Subhash Projects.
9. Titan Industries.

Note: I have holdings in IFCI and Hotel Leela.

Volatility will continue in Indian stock markets

Indian stock markets will continue their volatile run with action is concentrated on few large caps and mainly in Mid caps. Inflation control is positive news while growing deficit between imports and exports is a major concern. Arrival of monsoons and GDP growth is a positive trigger while rupee appreciation is a major concern. Even though Chinese markets were crashed 2 times in the recent months, Indian markets are sustaining their high valuations.

This week will provide vital clues regarding market movements either upwards or downwards.
Market sentiment: Bullish/ Volatile. Asian markets are in positive zone while US markets are in uncertain zone.

Rumour of the week:

1. Idea cellular finalised deal to buy out Spice telecom for about Rs 25,000 crore.
2. Ban on sugar exports may lift due to decreased sugar production in European markets.

Trend setting news:

Following companies will split their stocks to increase liquidity in their counters.
Apollo Tyres, City Union Bank, Sun TV, Divis Labs, Everest Kanto, Ruchi Soya, ABB, Bharat Seats and Easun Reyrolle. Some of these stocks will gain due to this news.

Significant News:
1. Indian Pharma companies can continue to use trial data of MNC Pharma companies.
2. ZEE’s Indian Cricket League (ICL) is in copy right troubles. Zee stock may feel the heat.
3. Rupee may continue to appreciate in the coming weeks due to FII inflows in DLF IPO and ICICI Bank IPO. RBI may not intervene.
4. Tata Steel integration with Corus is faster than expected.

Stock of the Week:

1. Shree Renuka sugars.

Best Stock picks for Day Traders:

1. Rain Calcining: It acquired US based CII Carbon.
CMP: 35.5
Target: 37 and 38
Stop Loss: 34

2. Mount Everest: Open offer.

3. Cipla: Positive momentum and MOU with Malaysian company.
CMP: 223.7
Target: 226
Stop Loss: 220

4. HCL Tech: $200 million outsourcing deal rumours.
CMP: 345
Target: 349
Stop loss: 341

5. SAIL:
CMP: 138.6
Target: 141
Stop Loss: 136

6. Shree Renuka Sugars: (Risk for day and safe for week)
CMP: 639
Target: 656
Stop Loss: 604

7. Neyveli Lignite Corporation: Good results.
CMP: 65.6
Target: 67
Stop loss: 64.3

8. Tata Steel: Faster integration with Corus.

Stocks to watch out:

1. Advanta India.
2. VIP.
3. UTI bank.
4. Nocil.
5. Mahindra and Mahindra.
6. Tech Mahindra.
7. Fortis healthcare.

Markets are in consolidation stage. Trade cautiously.

Indian stocks will lose in the early session

Investors will book profits in the initial trading. Markets may recover partially in the mid and late session. Day traders may play with Idea, IFCI, RNRL and RPL in the afternoon session. Long term investors may enter into good Pharma stocks after correction. Book profits in India Infoline and Cipla.

Market sentiment: Bearish and Volatile.

Negative Triggers:

1. Expiry of derivative contracts.
2. Govermnet’s target for inflation is 4-4.5%.
3. Investors will book profits in the early session.
4. Asian markets are in the negative zone. Bad sentiment in the Chinese markets.
5. Rupee appreciation against dollar.
6. Prime minister is against gas based power projects.

Positive Triggers:

1. Indian ADRs gained significantly despite marginal gains in the US Stocks.
2. Prime Minister wants to spend Rs 25,000 crore in Agricultural sector.
3. National Stock Exchange (NSE) will introduce Futures and Options trading in CNX Nifty Junior and CNX 100 from June 1.
4. Vodafone is planning to invest Rs 8,000 crore in India.

New Listings:

Mc Dowel Holding, MIC Electronics and Insecticides India.

Stock picks for long term investors:

1. Hotel Leela and Indian hotels: These stocks will capitalize boom in the tourism sector in the coming years.
2. Tata Tele services: Good and safe bet for long term investors.
3. EID Parry: Ideal stock for high risk taking long term investors. It is near 1 year low.
4. Patni computers is the best stock if rupee weakens against dollar.

Hot stock recommendations for Day trading:

Advice: Be cautious in the early trade. Markets may lose in the early session due to bad sentiment in the Asian markets.

1. Ranbaxy:
CMP: 391
Target: 395
Stop Loss: 386
It won case against Pfizer.

2. NTPC:
CMP: 160.7
Target: 162
Stop Loss: 158.5
NTPC will take over700 MW power plant in Assam.

3. Zee:
CMP: 312.8
Target: 317.5
Stop loss: 308

4. Ansal Properties and Gayatri projects.

5. Aurobindo Pharma:
CMP: 695.7
Target: 698
Stop loss: 693
US FDA approval.

6. Bharti Airtel: (With Risk)

Stocks to watch out:

L & T, BHEL, Britannia, Tata Power, Tata Chemicals, Crompton greeves and Welspun.
Be cautious in the early session and enter into good stocks to book profits after initial correction.

Share your opinion on my stock recommendations.

Stay away from Indian stock markets

It is better for retail investors to stay away from Indian stock markets as markets are in the grip of bears and operators. Markets may see some volatility in the mid session before crashing. BSE Sensex may lose 150-200 while NSE Nifty will break 4,200 resistance. Is it necessary to trade in these circumstances?

Advice: Stay away from markets.

Market sentiment: Bearish/ Heavy crash. Inflation data may change market movement.

Why markets may crash today?

1. Weakness in US Markets and Indian ADRs suffered losses.
2. Big fall in Asian markets on US economy concerns.
3. Fall in metal prices.
4. Derivative contracts expiry.
5. CRR hike concerns.
6. Profit booking in select stocks.
7. Rupee appreciation.
Advice: Stay away from markets.

Significant news:

1. Future valuation of the land may negatively impact the real Estate companies.
2. Anil Ambani’s SEZ is in trouble. Ambani group got DTH license.
3. NSE is the third fastest growing exchange in the world.
4. 500-550 is the price band of DLF IPO.
5. Revamp of Public sector bank’s portfolio will affect their return on assets.
6. Suzlon secures REPOWER bid.

Stock picks for Day Traders: (With risk)

1. BPCL:
CMP: 371
Target: 379
Stop Loss: 364

2. HPCL:
CMP: 286.5
Target: 295
Stop Loss: 280

3. Fortis healthcare:
Fortis and Trehan may attempt out-of-court settlement.

4. City Union Bank
CMP: 195.3
Target: 202.5
Stop Loss: 192
Stake selling report.

Stocks to watch out for:

BHEL, ITC, Suzlon and IPCA Labs.

Stay away from these stocks:

1. Copper prices are down. Stay away from Hindalco and Sterlite.

Share your stock recommendations.

Analysis: Unpredictable Indian Stock Markets

Indian Share Markets are highly unpredictable as they are neither following Global Markets nor triggering news. Uncertainty may prevail until the announcement of Uttar Pradesh Election results. Volatility may continue with deep falls and range-bounds due to lack of confidence in the investors on the new highs of Indian Stock Markets. Only hope in this sad story is some good Mid-Caps are still trading at lower values.
Market Trend: May be Bullish. Inflation figure may set the trend for next week.
Stock Picks for Day Traders:

1. ONGC:
CMP: 909.35
Target: 928
Stop Loss: 890
ONGC Videsh Ltd, the overseas arm of Oil and Natural Gas Corp (ONGC), has made a big natural gas discovery in Iran with in-place reserves being estimated at around 10 trillion cubic feet.

2. GAIL:
CMP: 281.2
Target: 287
Stop Loss: 275
Gail (India) plans to invest about Rs 25,000 crore in laying new pipelines and expanding its petrochemical business during the next five years, a part of which may be raised through sale of its stake in Oil and Natural Gas Corporation (ONGC).

3. Hindustan Zinc:


1. Standard and Poor reduced ratings of Tata Power.
2. Stay away from Bharti as Govt. fined for violating rules.

Volatile Stock Markets – Panic Investors

Indian Share Markets are in extreme volatile stage with panic investors are buying and selling without any specific reason. Stock Markets are moving downwards due to lack of positive triggers. Uttar Pradesh elections will provide another negative trigger for markets.

Advice for Day Traders: Book profits with modest gains. Exit from stocks with minimum losses.

Best Stock Picks for Day Traders:

1. ONGC: 918.6
Resistance – 934 and 949
Support - 906
ONGC consortium has struck 10 trillion cubic feet of natural gas and 1bn barrel of oil in Gulf.

2. Granules India: 126
Resistance – 129 and 132
Support - 123.9 and 121.7
Results and IFC stake.

3. Kotak Bank: 541.3
Resistance – 554 and 568
Support - 532
Profit increased 19%

4. Gail: 293.5
Resistance – 304 and 316
Support - 287
Q4 net profit of Dabur increased by 66%.

5. GHCL

6. Sun TV
CMP: 1603
Target: 1624

7. MTNL
CMP: 148.45
Target: 152

Murdoch plans to launch a tabloid in association with Sun group.

Significant News of the Day:
1. Ranbaxy completed the acquisition of South-African pharmaceutical company Be-Tabs.
2. Stay away from Sugar stocks.
3. Stay away from Oil refining stocks as crude rises after 1 week fall.
4. Fortis Health care IPO will be listed today.

Results Today:

Lupin, Granules India and Page Industries

Bulls may dominate Indian Share Markets on Monday

Indian share Markets may move upwards due to unexpected fall on Friday and inflation control. Asian markets rose to record new highs and US markets ended positively on Friday. Crude price is continuing its downward momentum.

Worrying Point: Rupee is at 9 year high. Stay away from IT stocks.

Significant news of the day:

1. Biotech industry may touch 5 billion dollar mark by 2010.

Stock picks for Day Traders:

1. Dr Reddys
Dr Reddy’s Laboratories announced the launch of Redituxä (rituximab) used in the treatment of Non-Hodgkin’s Lymphoma.
2. Tech Mahindra – may post wonderful results.

3. Nucleus Software
4. Nitco Tiles
5. Television 18
6. Deccan Aviation
7. Lupin will launch a new drug in US.

Stay away from following Shares:

1. Cipla received second notice from Indian Government. Government asked Cipla to pay Rs. 193 crore as penalty.
2. Stay away from Subex Azure due to losses.
3. Stay away from cement stocks as Government allowed imports without conditions.

My Stock picks for Long Term Investors:

1. Hindalco
2. Ashok Leyland

Stock Market guide for Monday- 23 April, 2007

Most of the magazines and News papers are predicting upward turn for Indian Stock markets. But, in my opinion, Markets may see downturn due to uncontrolled inflation, RBI measures in credit policy, bad news from China on rate hike. BSE Sensex may lose around 100-150 points today.

Guide for Day traders:
Stay away from initial trading as Markets may lose heavily due to selling pressure on inflation concerns.

Warning News: Reserve Bank of India may raise CRR in its annual credit policy on April 24. It will be a severe blow to Banking, Real Estate, Auto and finance stocks.

News of note:
Public sector bank’s home loan growth is slowing down.
RBI may increase rates once again to curb inflation.
Inflation again crossed 6%.

Monday Stocks for the Day Traders:
1. Ranbaxy will invest $20 million in its European subsidiary.
2. Shipyard, now under construction at Mangalore, proposed to create facility for building ships upto one lakh tonnes capacity instead of the original plan for fabricating upto 60,000 tonnes capacity ships.
3. Zee Entertainment Enterprises Limited (ZEEL) reported a 33 per cent jump in consolidated net profit at Rs 69 crore in the fourth quarter of FY 07 over the year-ago period.
4. Copper prices rose once again. Watch out Hindalco and Sterilite.
5. Praj industries are on global acquisition spree.
6. Alok industries tied up with Peacock Alley.

Negative News:
1. Stay away from auto and Banking stocks as they may lose heavily.
2. Titan Industries reported 18.5 per cent dip in net profit at Rs 30.32 crore for the fourth quarter ended March 31, as against Rs 37.21 crore for the same quarter a year ago.

Economic Times stocks of the week:
Matrix Laboratories and Cairn India, UTI Bank, ACC and Ashok Leyland.

ICICI Direct’s stock of the week:
I Gate global solutions.

My favourite sectors for future growth:
Shipping and Power
Accumulate Teledata. It may touch 200-300 within one year.
Concentrate on Mid Cap stocks.

Indian stock market guide for Investors - April 9, 2007

Indian stock markets are entering into another uncertain week ahead of Infosys results and famous forecast. But, on Monday, Indian shares gain due to positive news from International and Asian markets. Decrease in crude oil price and Rise in Asian markets are positive news. Most of the companies may declare good profits in their financial results.Infy may give less than expected growth projections which will spoil the sentiments of markets and investors.

Stocks for Day Traders:

Lupin - Selling Hypertensive drug patent.
Ranbaxy – Picks up stake in Jupiter bioscience and Profits from Africa.
Gujarat NRE Coke - Due to spectacular Q4 results.
SRF-Raising 500 Crore from Carbon credit.
Tata Power and Reliance - Got permission to hike power tariff in Mumbai.

Investors should stay away from following sectors and stocks:

1. Bank stocks and Auto stocks – I can’t understand why some investors are still buying these stocks?
2. Reliance share may lose some sheen due to Government decision to limit the size of SEZs to 5,000 acre.
3. Real estate stocks will be undervalued due to loss of investor’s interest and government’s restrictions.
4. Fears of Rupee appreciation against dollar is not a good option to enter into IT stocks.
5. NTPC -Due to lacklustre results.
6. Jet airways - Court hearing.