New IPO News: Gammon Infrastructure

Gammon Infrastructure is priced aggressively with unreasonable valuations. This IPO is only for risk taking investors. The promoters valued it 3 times more than infrastructure giant Larsen and Toubro. These promoters have not learnt lessons from Reliance Power IPO.

My rating: 3/5. Stay away from Gammon Infrastructure IPO.
IPO Grade: 4/5 by CARE. About Gammon Infrastructure IPO:

Price band: Rs 167-200.
IPO duration: March 10 – March 13.
Total Number of shares: 16.55 lakh shares.
Face value: 10.

About IPO application:

1. Retail investors need to pay only Rs 50 per share per application. 30% of issue is allotted to retail investors.

2. NRIs need to pay full amount.

3. QIBs need to pay only 10% of the amount.

Strong points:

1. It is the infrastructure filed which has good growth prospects.

Negative points:

1. Company’s management reputation is not good.
2. Very high valuations.
3. Bad market sentiment.

Gammon fundamentals:

Net profit: Rs 29.85 crore.
Total Income: Rs 158.8 crore.

Stay away from Gammon Infrastructure IPO.

Please share your opinion.

Stock advice: stay away from IT stocks

IT stocks saw heavy buying for the last 2 days on account of cheap valuations. Unless you are an ultra-short term investor (<1week), it is better to stay away from IT stocks.

Why should you not buy IT stocks?

1. IT companies still have not experienced the real impact of America recession.

2. Fall in IT stock prices was due fall in dollar value which will further fall after another rate cut in March.

3. They will experience the real impact of downfall in American economy in the coming quarters when American companies reduce their IT spending.

4. IT companies are not taking any concrete steps to face American economy recession. They should reduce the salaries by 20-30% and trim their employee strength.

5. If IT companies will not prepare for recession, they will face another 2000-01.

Which is the best IT stock?
Satyam computers. Satyam is in better position to face dollar appreciation and American economy crisis. My opinion: 2008-09 financial year will become worst performance year for IT companies. Medium and long term investors should stay away IT stocks.

Banking and Infrastructure companies will outperform other sectors in the coming quarters.

When will investors stop behaving like fools?

Even after facing rude shocks in recent sessions, most of the investors are once again repeating same mistakes by investing in stocks like RNRL, Neyveli Lignite and Essar oil etc.

Why don’t they invest in good companies with strong fundaments which are trading at reasonable valuations?

Why don’t they do basic research on companies before putting their hard earned money?

Why do they think stock markets as speculation centres?

Investors will continue to lose money in stock markets as long as they want to make big money in small time period without basic knowledge on companies.
Popular theory: Indian economy will less likely be affected by American economic crisis. So our stock markets are safe heavens for investments. Is it really correct?

My opinion: As they are saying, our economy is less dependent on American economy unlike Japan (Except sectors like IT and Pharma). But our stock markets are no longer representing our economy. They are the “bubbles” created due to irrational investments by foreign and domestic institutions. So they will be definitely affected by American financial crisis. Don’t believe in “decoupling theory”. If you believe in it, you will face the similar fate of BJP in 2004 elections (India Shining campaign).

Severity of American crisis:

1. US Federal is aiding in increasing American crisis as it did in 2001 by cutting interest rates. Instead of taking long term measures, it is opting for stop gap measures like rate cut which will further aggravate crisis.

2. When a company like “Apple” after announcing superb results gave cautious growth signs. It is a clear sign of future growth problems.

3. When a company like “Google” shed 30% of its stock price (good fundamentals, growth opportunities etc.), we should understand the severity of the problem.

4. Soros: "World is facing worst ever economic crisis after world war 2". When an experienced expert gave that statement, we should understand the problem.

5. United States housing sales fell first time in 25 years and prices are declined for the first time since 1929 great American depression.

Note: Stock Markets will see ups and downs until President George Bush comes with great relief package. These are more testing times for world stock markets due to lack of confidence in investors.

My advice: Indian stock markets (BSE SENSEX) will move between 14,500-18,500 points with extreme volatility. It is difficult for ordinary investors to plan their investments in such an extreme volatile situation.

If you are a long term investor, invest in good companies which are less dependent on United States like Reliance Communications, Tata Motors, L&T, and Reliance Industries etc.

Stay away from penny stocks and overvalued stocks like RNRL, Ispat, and Essar Oil etc.

Save your money for upcoming wonderful IPOs like ATPL.

Long term investors should continue to accumulate good stocks and forget about them for 1-2 years. Speculators will bite the dust in these unpredictable times. Conservative investors should stay away from markets until “recession” fears are cleared.

Please share your opinion on Indian share markets.

Google trends on Stock Markets

Google trends are revealing interesting statistics about rise in stock Market phenomenon among Indians. See the graph below how searches on stock markets are rising in India. India is the number one country for stock market related queries in 2007. Top 3 slots are occupied by Indian cities for searches on stock markets. Gujaratis are the toppers for stock market related queries in 2007.
Google trends on Stock Markets in 2007:

Top 5 countries in the stock market related searches in 2007 on Google:

1. India.
2. Singapore.
3. Malaysia.
4. United States.
5. Australia.

Top 5 cities in stock market related searches in 2007 on Google:

1. Mumbai
2. Delhi
3. Chennai
4. Singapore.
5. New York.

Top states in stock market related searches in 2007:

1. Gujarat.
2. Madhya Pradesh.
3. Maharashtra.
4. West Bengal.
5. Delhi.
6. Andhra Pradesh.
7. Tamilnadu.
8. Karnataka.
9. Kerala

Reliance power effect:

See the graph below to know about the rise in Reliance power related searches in the last one month.

These trends are revealing the “Stock Market phenomenon” that is sweeping across India. Indians are searching more to know about the stock markets. Southern states may overcome western states within 2-3 years due to rise in income levels and increase in awareness on stock markets.

Note: According to latest grey market reports, Reliance Power may list in the Rs 750-800 range. It may vary according the market sentiment on the listing date.

Please share your opinion on this steep rise in awareness among Indians on Stock Markets.

Why Indian stocks will crash in October?

Most of the investors and analysts are unable to cope with this unbelievable rise in Indian stocks especially capital goods and power stocks. Foreign investors and big financial institutions invested heavily in these stocks when markets were crashed in August but many retail investors missed to capitalize this rally. FIIs discounted all the negative news and poured money into Indian stocks after Fed rate cut in September. But will this euphoria last forever?

Why Indian stock markets will crash in October?

1. Political Instability: This is the single most major reason for stock market crash. Investors especially FIIs never like political instability and they will book profits and go to another country. Even though political turmoil will have no significant impact on the growth of companies, stock markets always negatively respond to political instability.

2. RBI decision: Don’t expect positive news from RBI. Don’t be fooled by inflation data which is released on every Friday. You will know real inflation in the routine life. No government will allow raising inflation by cutting interest rate cut just before elections. RBI will definitely raise CRR and is major negative news for markets.

3. Negative news: When markets rose too high within a short span, single negative news will create havoc in stock markets. Markets discounted negative news like Crude rise, rupee appreciation, inflation concerns in U.S after fed rate cut and slow down in economic growth etc. How long investors will discount all these negative news?

4. Government policies: If mid-term polls are inevitable, Government prefers people over companies. Popular policies will slow down momentum which will negatively impact investors sentiment towards India.

5. Foreign Investors (FIIs): FIIs were major culprits for August crash and are going to be responsible for October crash. Just see and learn how they are cashing money from every rise?

6. Economic growth: There is a slow down in economic growth if you see the data but markets already discounted 2008-09 earnings especially for high growth sectors like power and capital goods.

7. Profit booking: Shrewd investor always book profits just before every crash whether it is in 2000 or 2006. Greedy investors always lose money in every crash. Decide yourself whether you are greedy or not?

8. US markets: US fed rate cut created euphoria among investors but this will actually show negative impact on the long term on credit crisis. It treated chronic disease in acute manner. Instead of curing root causes of credit concerns, it went in superficial manner which will cause inflation pressure in America and severely impact economy.

Stock markets will continue to surprise us as they no longer represent a country’s economy. Markets are in the grip of few investors who can manipulate stock prices according to their will. Why Reliance rose above 2,400, can anyone explain me? Can anyone explain me the changes in Indian economy from August to September?

Closely watch Q2 results and movements of political parties and take a quick decision. This exceptional rise is no way responsible to economy and next crash will not be due to economy. It is better for retail investors to book profits and watch the unfolding scenes to enter the next rally. But I still believe in long term Indian story but not Foreign investors.

Please share your opinion on my views.

Stocks rebound temporarily

Indian stocks will see sharp temporary rebound on the account of strong global cues. Sustainability of this rise will depend on future course of global markets.

Market movements: Dow Jones gained 286 points after initial volatility and Asian markets are rising from global cues. Indian markets will follow their global peers. Global markets are in a precarious situation. It is not an ideal time for retail investors to take short positions in markets. Stay away from futures and options. BSE Sensex may settle around 14,300-14,500 and Nifty at 4,100-4,200 in the near term. Take positions in over corrected stocks.

1. BSE Sensex:
CMP: 14903.
Target: 15060.

2. NSE Nifty:
CMP: 4339.
Target: 4403.

Positive Stock News:

1. Hindustan Unilever will announce winners of bids for real estate projects in Bengaluru and Mumbai on next Tuesday.
2. Wal-Mart and Bharti enterprises announced 50-50 joint venture for retail.
3. Bharti Airtel received LOI for DTH service and will launch its DTH services by March 2008.
4. Hindalco and Tata Power will jointly develop a coal block in Jharkhand.
5. Government should approve gas price before marketing – Cabinet secretary.
6. GVK Power announced financial closure for its Uttarakhand project.
7. Strides Arcolab acquired Italian company.

Negative Stock News:

1. Novartis lost Glivec case and will not appeal.
2. Surge in International crude oil price is a real concern.
3. Volumes are declining gradually in the last three days.
4. Sales of Ashok Leyland were down by 19% in July.
5. DCM Shriram announced massive loss in its Q1 results.

My Stock views:

1. FIIs are selling in a big way while Domestic institutions are using this opportunity to accumulate. Mutual funds are waiting in the sidelines.
2. Don’t underestimate the impact of US Subprime market. Global markets are closely interlinked in these days. FIIs will spoil in Indian party in the coming days but long term story is intact. Accumulate good stocks on every dip.
3. Sugar stocks will temporarily rise in this week due to disruption of supply (heavy rains).
4. Indian Real estate stocks are the most expensive ones. Accumulate DLF in the 500-530 range for long term investment.
5. Oil refining companies will announce surprise results in the next quarter due to earning s from oil bonds. Accumulate these companies.
6. I think stocks like Suzlon and Sterlite are over corrected due to weak earnings but its long term prospects are good.
7. Acquisition of Infocrossing by Wipro will benefit it in the next financial year.
8. If rupee stabilizes due to weak markets and RBI measures, IT stocks will see some contra buying.
9. Accumulate Sesa Goa and Mount Everest as promoters will announce open offers in the coming days.

Best Stocks for Day Traders:

1. Bharti Airtel: Wal-Mart, DTH, Google tie-up news.
CMP: 866.
Target: 878 and 889.

2. IFCI: If it breaks 64 (strong resistance).
CMP: 63.7
Target: 65.7 and 67.6

3. Reliance Communications.
CMP: 531.5
Target: 538 and 546.

4. GVK Power.
5. DLF, HDIL and GMR Infra may bounce back.
6. Hindustan Unilever.

Please share your views on my stock views.

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.

Are you ready for profit booking?

Indian stock markets will see profit booking in most counters on account of weak global cues. Crude crossed $ 44 while rupee is continuing its appreciation. Markets are neglecting all these negative cues and investors are buying some stocks like Divis Labs, GMR Infra by forgetting valuations. Most of the new investors have not experienced the severity of market bubble in their equity life time. I am unable to understand their investment rationale when they are buying stocks at such a high valuations. RBI may hike interest rate at any time to keep inflation at 4%. Oil marketing firms may hike petrol and diesel prices if crude continues to appreciate. I changed my portfolio to long term stocks and low value stocks.

Global Cues: Negative. Except Dow Jones, most of the global markets are in negative zone.

Stocks of the day:

1. TCS – Sound stock for every portfolio. It surprised everyone with its stunning results and growth guidance. Satyam and TCS may gain around 15-20% within 1-2 months.
2. Reliance Industries – Gas find in Cauvery basin and upward momentum.

Sector of the day: IT Stocks.

Significant news:

1. Indian Entrepreneurs are most optimistic ones in the world.
2. Indian GDP growth will be at 9% while Inflation will be at 4% - Government advisory panel.
3. Everonn Systems fixed issue price at Rs 140.

Positive stock news:

1. TCS consolidated net profit rose by 36%.
2. IG Petro net profit rose by 88%.
3. Zee News made profit for the first time in this quarter. Profit of 6 crore against loss of 54 lakhs.
4. Petronet profit rose by 90%.
5. KS Oils got investments for its expansion plans.
6. TVS Motors started Indonesian operations by launching Neo.
7. Venus Remedies signed 10 year deal with a Chinese form to sell their Antibiotic.
8. Ashok Leyland formed JV with Siemens Automotive.
9. Tata Coffee will launch 100 retail outlets within 5 years.
10. L&T Consortium bagged orders worth Rs 1070 crore.
11. Reliance Communication is continuing its momentum by acquiring foreign firms.
12. JP Associated announced good results. Investors booked profits.
13. Idea launched “My Gang” card at attractive price.

Note: I will write about future stocks and low value stocks within 3-4 days. My stocks like Wire and Wireless, Fortis and Mastek at last got their due. Some will become multi-baggers if you are a long term investor.

Please share your views.

Concentrate on Mid caps in volatile period

Indian markets will trade in volatile zone due to exponential growth in sectors like Construction, Engineering, Telecom and Banking while weak growth in IT, Textiles, Sugar and Auto sectors. Biggest worrying point is high growth sectors are trading at high valuations while low growth sectors will feel the heat for another 2-3 months. So concentrate on Individual stocks of high growth sectors which are trading at attractive valuations. Risk taking investors can try in sound stocks like Reliance Capital, Dr Reddys, Reliance Communications, GMR Infra and Reliance Energy.

Global cues: US markets are in volatile zone due to good earnings and bad subprime market.

Sector of the day: FMCG.

Stock of the day: Reliance Industries – Court verdict on gas.

Significant News:

1. Indian stocks will fall on account of weak earnings and high valuations – HSBC.
2. BSE Sensex will touch 16,000 by the end of this year – Citi group.
3. Bombay high court will give verdict on RIL gas today.
4. Moody assigned stable rating for Indian banks.

Rumour:

1. Entegra may come with rights issue in 2-3 months.

Stock advice:

1. Stock markets will continue to fall as most of the companies will fail to justify their valuations.
2. Prajay Engineers, Dr Reddys, HCL Tech are few stocks that will beat analysts’ expectations. Satyam is the dark horse.
3. NTPC is the safe bet for short and long term investors on account of massive investments and bonus rumours. Target for short term investors is Rs 180.
4. It may be difficult to expect exceptional returns from GMR Infra at this level.
5. KS Oils is counting on its massive gains ahead of stock split.
6. Praj Industries is struggling due to F&O ban ahead of bonus issue.
7. Deccan Aviation will touch 150 within 3-4 trading sessions.
8. Even though UTI Bank will announce good results, valuation are little bit stretched.
9. Dena bank may continue its upward journey.
10. CMC is the one of the rare stocks looking good in IT space on the back of to be announced results. Profit booking will be seen after results.

Positive stock news:

1. Unilever may be taken over by Colgate. Watch out HUL and Colgate.
2. Dabur foods will merge with Dabur India.
3. Megasoft bought Boston Communications for $65 million.
4. Cipla became the number 1 company in domestic retail market overcoming Ranbaxy.
5. Dr Reddys launched Glimmy MP1& MP2 diabetic drugs.
6. Bajaj auto finance will enter into truck business by October, 2007.
7. Chennai petro announced good results.
8. Country club announced wonderful results.
9. Sintex Industries announced 54% rise in net profit.

Negative stock news:

1. Infosys missed its guidance first time in 14 years due to rising rupee. It failed to estimate the rupee impact in March and gave wrong guidance to investors. Infosys lowered its guidance by 5-8%.
2. 14 public sector banks will lose around Rs 930 crore due to RBI guidelines on IFCI investments.
3. Bajaj Auto will announce disappointing results today and stock may lose once again.
4. S&P lowered Tata steel’s credit rating from BB to BBB.
5. iGate solutions posted disappointing results. More such news will come in this quarter.

Best stocks for day traders and investors:

1. HUL and Colgate.
2. Dabur India.
3. Geojit Financial services – with risk.
4. Pyramid Saimira – Good results.
5. Dr Reddys Labs – Momentum is strong.
6. Chennai Petro – Good results.

Results today:

1. Bajaj Auto, UTI Bank, Technocraft India, Reliance Infrastructure, Geojit Financial services and Pyramid Saimira.
c
Please share your views and advice on Indian stocks.

Stock markets again into volatile zone

BSE Sensex crossed 15000 mark on Friday and again rising fears of correction. In my opinion, markets move sideways until Wednesday (Infosys results) before falling/rising in a big way. Don’t take long positions in blue chips especially capital goods, IT and Banking. Concentrate on few sound stocks which are trading at low valuations before making major investments from Wednesday onwards. Pharma stocks like Ranbaxy and Dr Reddys are looking attractive in these volatile times.

Risk taking investors may bet on Ispat Industries. Teledata at last moved into BSE Midcap index. Momentum will be around stocks which will post wonderful or surprise results in the coming days like Dr Reddys, Reliance Communications etc. Praj Industries is in a precarious state before bonus date while KS Oils may give good returns in the medium term due to stock split. Major factor saving the markets from fall is liquidity in the markets.

Significant News: Asian markets are in buoyant mood. Will Indian markets follow them?

Stock of the day:

1. Roman Tarmat – This stock may list around Rs 225-250 and will cross Rs 300. Book profits around Rs 280-300.
2. Reliance Communications – Qualcomm deal.
3. Closely watch IFCI and PTC – Stake sale. F&O ban in IFCI.
4. MRPL – LOT OF POSITIVE NEWS.

Rumour of the day:

1. Tata may take stake in Praj Industries.
2. Mallya may acquire Spicejet.

Positive stock news:

1. Hindustan Zinc raises zinc prices by Rs 1200 and lead prices by Rs 1000.

2. Gujarat state petroleum discovered oil block.

3. Reliance energy-Sobha consortium is the successful bidder for Rs 6,400 crore business district project in Hyderabad.

4. MTNL will acquire Suntel in Sri Lanka.

5. Reliance Communication and Qualcomm buried their differences and will continue to work in cohesion.

6. Reliance retail will sell Cipla drugs. But outlook for Cipla is bad.

7. UP government will sell all government mills to private bidders. Tremendous boost to UP private sugar mills. More consolidation is on the cards.

8. Bharti Airtel ranked third in the Business week list of top 100 companies in share holder returns.

9. Kamadhaenu Ispat posted 339% increase in net profit.

Negative stock news:

1. Telecom companies will struggle as ARPU are at Rs 200 mark.

Negative triggers:

1. Inflation rise will spoil party. Interest rate hike will haunt markets again.

Stock advice:

1. Dr Reddys and Ranbaxy will surprise analysts with their fantastic results. These are the safe stocks in volatile markets.

2. Bet on Biocon. This may appreciate another 10% in this month.

3. Stay away from Cipla. Invest in this stock at Rs 185-190 level.

4. Reliance Energy will post wonderful results compared to Tata Power.

5. Capital goods stocks are poised for minor correction due to extreme rise in the past few sessions.

6. Infosys guidance on Wednesday will trigger a major collapse or rise until then markets will be volatile.

7. Subscribe to Everonn IPO. You will get 100% returns on the listing day itself.

8. Don’t neglect Aurobindo Pharma, Lupin and Ipca Labs. They are sound stocks for medium term investors.

9. Closely follow MRPL, India Foils and Birla power.

Stocks for July :

1. Power trading corporation - safe stock for medium term investors.
Target – 90-95.

2. IFCI-safe stock for long term investors.
Target – 70-75.

3. Ranbaxy – excellent results.
Target – 400-420 (medium term).

4. Reliance Communication – Wonderful results. Buy on dips.
Target – 580.

5. Praj Industries – Bonus. High risk stock.

6. HCL Tech – surprise results.

7. Paper stocks like TNPL and BILT.

Best stocks for day traders:

1. Reliance Communications.
CMP: 550.
Target: 563 and 576.
Stop Loss: 541.

2. Roman Tarmat.
Issue price: Rs 175.
Target: 275-300.

3. Hindustan zinc.
CMP: 716.
Target: 725 and 734.
Stop Loss: 709.

4. GSPL.
CMP: 55.6.
Target: 56.8 and 58.
Stop Loss: 54.

5. Reliance Energy.

6. MTNL.
CMP: 163.4
Target: 167 and 170.
Stop Loss: 160.

7. UP Sugar stocks.

Why markets will fall in the coming sessions?

1. Q1 results of most sectors will disappoint the investors and cannot justify their high PE values.

2. Except capital goods, power and some other stocks, most companies will announce decrease in their earnings.

3. Rise in inflation will have major impact on the interest rate decision. Rise in crude price will lead to rise in petrol and diesel prices by Indian oil marketing companies which will again leads to further rise in inflation.

4. Rupee will continue to rise – Exports will continue to decline.

Please share your views on my stock recommendations and share your views on your favourite stocks.

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.

volatile week due to expiry of derivatives

Indian stock markets will trade in the negative zone due to weakness in US markets and expiry of derivative contracts. PSUs like BEML, NTPC and other public sector companies may hog limelight in this week. There are no significant triggers to propel markets into higher zones.
Caution of the week: Derivatives expiry will make this week extremely volatile.

Stock of the week: BEML- IPO may boost sentiment in this counter.

Watch out sector: Textile sector.
1. Government will announce sops to revitalise this sector. Most of the stocks are near their 1 year low.

Stock advice:

1. Amara Raja Batteries may dip on Monday and again continue its march basing on wonderful results.
2. Spicejet will be in news (acquisition) in this week also.

Significant news:

1. SEBI barred Karvy broking for 3 months and no new demat accounts till December 31, 2007.
2. India will be the fastest growing market in entertainment &Media over the next 5 years –PWC.

Positive news:

1. Ranbaxy received tentative approval for Tamsulosin.
2. Satyam signed multiyear contract with hawker Beechcraft to provide design services.
3. NTPC entered into JV with TELK for transformers.
4. TV18 will announce bonus shares on July 5 in its board meeting.
5. Kalyani steel forged JV with Gerdau of Brazil.
6. HCL Tech announced $15 million contract with Alenia Aeronautica.

Negative stock news:

1. The drug control administration recommended ban on 1,105 drug brands. Cipla, Alkem, Nicholas Piramal, Lupin and Zydus Cadila are worst sufferers.

Companies in the Business Week’s top 100 list:
1. Bharti Airtel.
2. TCS, WIPRO and Infosys.
3. Satyam and HCL Technologies.

Value picks for Investors:

1. Alok Industries.
2. ITI Limited.

Best Pharma stocks for short-medium term:

1. IPCA Labs.
2. Matrix Labs.


Stock picks for long term investors:

1. Tata Chemicals: Betting on bio-fuels.
2. Wire and Wireless: Growth lies ahead.
3. Dish TV: Can it capitalise on DTH growth?

Stocks for day traders and investors:

1. Adlabs.
2. Network 18.
3. NTPC.
4. IFCI- Selling of malavika steel will boost value.
5. Ranbaxy.

Please share your views on Indian stock markets.

Volatility will return to Indian stock markets

With uncertain cues from global markets, Indian stock markets will again return to volatile zone today. BSE Sensex and NSE Nifty will find it difficult to break resistance zones. Rupee depreciation is the only factor that can move these indices into higher zones. Will it happen? Watch out.

Global Markets: US Markets are ended in negative zone while Asian markets are in positive zone.

Sector of the day: IT Stocks may bounce back id dollar appreciates.
Stock of the day: State Bank of India- Merger of 4 wings with SBI.

Warning News:

1. The Directorate general of Hydrocarbons slashed the estimates of gas discoveries by GSPC and ONGC.

Significant news:
1. Government is planning to auction 80 oil blocks for exploration in August.
2. Government is planning to disinvest 10% stake in Oil India along with IPO later this year.
3. Cabinet may give nod to Mittal-HPCL deal.
4. Wadias (Britannia) will end their dispute with DANONE.
5. Tata Motors will launch 1 lakh car in early 2008.

Positive stock news:

1. Melstar will buy 14.4% stake in GE Shipping.
2. PSL bagged Rs 380 crore order.
3. UB Holdings make an open offer to the equity shareholders of Deccan Aviation. Offer price is Rs 155 a share and open between July 25 - August 13, 2007.
4. Ranbaxy got tentative US FDA approval for Amlodipine.
5. BHEL is increasing power equipment manufacturing capacity.
6. Yahoo partnered with Idea cellular in Mobile search.
7. Gillette sold Gurgaon property for Rs 78 crore.
8. BEML may bounce back today.

My stock picks for medium term investors:

1. Hindustan Construction Company.
2. Hitachi Home.
3. Royal Orchid Hotel – Safe bet even for long term.

Stock picks for value investors:

1. FDC Pharma.
2. ITI Ltd.
3. Himachal Futuristic Communications.
4. RSWM.

Safe stocks for Long term investors:

1. Bharti Shipyard.
2. Wire and Wireless – with some risk.
3. Nagarjuna Constructions – Wait for correction.
4. Tata Motors.

Stocks of the Day:

1. State Bank of India.
2. Ranbaxy.
3. Melstar.
4. Tata Power.
5. Tech Mahindra-watch out for rupee.
6. Satyam-watch out for rupee.
7. Deccan Aviation.

Please share your views on my stock picks.

Markets are in negative zone

Indian stock markets are in the crucial period with slow down in US economy, rising crude price and appreciation of rupee against dollar will make markets continue to spiral downwards. Market operators may try to give positive edge but that is not sustainable. Stay away from markets until these wild moments stopped.

Market moments: Bearish.
NSE Nifty may trade in the range of 4095- 4120 while BSE Sensex may trade in the range 13,920-14,050.

Significant news:
1. ICICI Bank FPO opens today.

Stock Investment advice:
1. Stay away from IT, BPO and Textile stocks as rupee will continue to appreciate.
2. Stay away from Banking and Automotive stocks as rate hike is necessary.
3. Don’t believe in the ambitious statements by Textile minister. Even though volumes may rise, margins will suffer.

Positive Stock News:

1. Wipro will acquire IT arm of a major German company.
2. Reliance Communications will form JV with Accenture to maintain IT Infrastructure and services.
3. BHEL bagged Rs 139 crore order from NTPC.
4. Shareholders of Indoco remedies agreed merger proposal.
5. TRF and HCL got big orders.

Negative stock news:

1. Spicejet denied stake sale. But I believe in the rumours. Consolidation is healthy for Aviation industry.
2. Punjab National Bank dropped equity offer plan.
3. Oil price is at 9 year high. No hike in petrol and Diesel prices in India. Stay away from oil refining companies.
4. ABG Shipyard failed to announce inspiring results.

Results today:
SREI Infrastructure, Cambridge Solutions and Indian hotels.
I am advising investors to stay away from these extremely volatile markets for some more time. I will recommend any stocks.

Black days will continue for Indian investors

Today will be another painful day for Indian Investors. Some operators are trying to keep the positive momentum in the hyped and overvalued markets by raising the stock prices like Hindalco and ACC without any specific reason. But negative triggers emerging from global markets will continue to dampen the spirit of those bull operators. Correction is due for some time and markets will continue to give losses for some more time.

Market movements: BSE Sensex will trade between 14,000-13,870 while Nifty will trade between 4115-4075. Sentiment is very weak in the markets. Some late recovery may be seen.

Stock of the day: Time Technoplast.

My Stock advice:

1. Don’t be hyped by DLF subscription data. Most of those bids were by foreign investors with long term view. DLF will give heavy losses to medium term investors but may give good returns on listing day. I prefer Vishal retail.

2. Investors may buy good stocks after crash with BTST (Buy Today and Sell Tomorrow). This advice is only for risk taking investors.

Why DLF will rise on the listing day?

Foreign and long term investors who missed the allotment will lift the stock by buying on the day of listing.

Significant News:

1. Government will take measures to reduce overheating in Real-Estate and Housing- Finance Minister.
2. Time Technoplast will be listed today. Investors may make smart gains.

Negative stock News:

1. Indian consumer durables production is decreased.
2. Mayawati government will probe land allotments to IVRCL and others in Noida, Lucknow and Kanpur.

Positive stock news:

1. Reliance Energy’s Dadri project may get clearance from UP government.
2. L & T got Rs 911 crore order from ONGC and SAIL.
3. Cadila mulls to launch GDR issue.
4. Sundaram InfoTech bagged Microsoft order.
5. Government will give some sops to Textile sector. Short term risk taking investors may buy these stocks for short-medium term.
6. Deccan Aviation will hike prices in some routes.

My Stock picks for medium-long term investors:

1. Carborundum
2. Britannia.
3. Fortis health care.
4. Wire and Wireless (2-3 years).
5. Berger Paints.
6. Bharti Shipyard.
7. Areva T&D
8. Idea Cellular(6-12 months) and Tata tele.
9. RNRL (1-2 years).
10. Ispat Industries.

Note: Due to my personal busy schedule, I am unable to do sufficient research on stock markets to recommend stock picks for day traders. Mistakes are regretted. Am I addicted to blogging and stock markets? May be.

Indian Stock Markets will rebound on Global cues

Indian stock markets will rebound today on positive cues from Global and Asian markets. Dollar appreciation and fall in crude oil will increase the positive sentiment. BSE Sensex may open with more than 100 points rise but short-medium term outlook remains negative while stock specific news based trading will continue in the next 2 months not an ideal environment for real investors. Nifty may touch 4200 and retreat back. Investors may closely watch DLF IPO subscriptions to get an idea about realty stocks. Nifty will trade between 4200-4170.

Positive News:

1. Reliance may get 5-year extension in KK basin.
2. Jet Lite may operate in international routes.

Stock of the Day: Glenmark Pharma.

Stock advice:
1. Invest in Vishal Retail IPO.
2. Vishal retail IPO will give better returns than DLF IPO on the listing day.
3. Short term sentiment is bad for markets. Serious investors should stay away from markets until markets give a clear signal.

Best stock picks for Long term investors: (Buy them on dips).

1. RNRL: Target is Rs 100 by 2008-09.
2. BHEL and L&T:
3. Dishman Pharma.
4. KSB Pumps.
5. Tamilnadu news Print.
6. Idea cellular: Target Rs 250-300 by 2008.
7. Wire and Wireless and Dish TV: Buy them immediately and hold them for 2-3 years for stunning returns.
8. Sun TV: Fundamentals are strong.
9. Gateway Distriparks.
10. Power is the best sector for Long-term investors.
11. Ispat Industries.

Best stock picks for this week:

1. Hindustan construction Company.
2. Idea cellular: It may touch Rs 129 again.
3. AIA Engineering: Good results.
4. Dr Reddys labs.
5. Unitech: depends on DLF IPO response.

Dangerous stock of the week:

1. Hindalco: I may never understand why some investors buy some stocks? Operators irrationally lifted Raj TV stock in May now they fall back on Hindalco. SEBI should monitor these activities. Hindalco may rise another Rs 5-10, it will return back to Rs 145-150 levels soon.

Hot stocks for Investors and Traders:

1. Glenmark Pharma: Stock split.
2. Reliance Capital: Market sentiment.
3. Reliance Communications: Market sentiment.
4. GAIL: Unexpected fall in the last week..
5. SAIL: JV with JAYPEE and recent fall. High Risk.
6. Kinetic Engineering: Order from Tata motors.
7. Mahindra and Mahindra: Chinese tractor company acquisition.
8. Dr Reddys: Steroid drug launch.

Indian markets will continue to follow Global markets in the coming days. Don’t take long position in any high value stock. Q1 results may increase the P/E valuations and spoil the mood.

Please share your views on my stock recommendations.