Indian stock Markets will make new highs

Indian share markets will open on positive note with selective buying in specific sectors like Real Estate, Sugar, Telecom and Financial sectors. Auto stocks will see heavy selling in their counters. Market indices will make new highs but may see some profit booking in the late session. Rising crude rate and mixed signals from Global markets are the only concerns.

Stock of the week: IFCI. Target is Rs 63-65.

IPO of the week: Everonn-Best stock for listing gains and Long term. Even though HDIL priced attractively, real estate sector may be in down trend at the time of listing.

Sector of the week: Real Estate due to DLF listing. DLF may not cross Rs 600 on listing. Book profits and exit.

Most significant news:

1. US federal reserve did not hike interest rates.

2. We will try to bring down the inflation to 3% - RBI.

3. DLF listing date is July 5.

4. BSE SENSEX may touch 50,000 by 2018- Morgan Stanley. Foreign investors are waiting for correction to enter into Indian stocks for long term.

Positive stock news:

1. IFCI board will announce stake sale in July 6 board meeting. There is enormous value left in this stock. Don’t book profits immediately.

2. Bank of Baroda sold 0.9% stake in NSE to Citi group at 2,282/share.

3. Tricom India announced wonderful results. Good stock for medium term.

4. Kernex Microsystems announced stock split and bonus.

5. Aurobindo Pharma announced 108% rise in net profit.

6. Tata steel will sell aluminium business of Corus.

7. GMR Infra announced 1:5 stock split.

8. CMC and Tata Technologies may merge with TCS but not Tata Elixi.

9. Emami posted good results and 63% increase in net profit.

10. Reliance Communications tied up with PBTL for international roaming.

11. Moser Baer will take price war to even new titles.

12. Wipro will buy Unza of Singapore.

13. Simplex Infrastructure bagged $11.1 million contract and rise in 29% profits.

14. Biocon will announce overseas listing by the end of next year. Long term investors should closely watch this stock to invest on dips.

15. Telecom companies may announce good subscriber numbers for the month of June.

16. Liberty shoes will dilute its stake in subsidiary to raise funds.

17. ICICI Bank approved $200 million loan to Videocon for acquisitions.

Negative stock news:

1. IPCL Q4 results are disappointing.

2. Bajaj Auto sales were down in June by 12%. Auto stocks will continue to feel the heat.

3. Infosys bidding is a speculation- Capgemini.

4. Tata steel lost bidding battle for Vietnam steel companies.

5. Dr Reddys is the lone Indian company in the SEC list of terrorist link companies.

6. Jewellery companies will be hit by US orders of withdrawal of concessions. Titan Industries will see selling pressure.

Stock advice:

1. Sugar stocks will continue to rise due to change in the fortunes of sugar prices. Keep trailing stop losses.

2. As I said in earlier posts, Investors at last recognised the true potential of GMR infra. You may exit the counter after another 15% rise and re-enter into wonderful stock on dips.

3. Financial stocks like IFCI, IDBI, IDFC, TFCI and PFC will continue to gain in the coming days. But you may get exceptional returns in IDBI and IDFC.

4. I suggested EID Parry for long term investors 10 days back. It already gave 10% returns within 10 days.

5. Capital goods index is at all time high. We may see some selling in this sector in July in spite of orders.

6. Medium term investors can enter into HUL –They will announce wonderful results and dividend. Bonus gossips are spreading.

7. Hinduja TMT will see some positive news within a short term. Risk taking investors can bet on this stock for short term.

8. You can accumulate Cairn India and RPL for long term.

9. Deepak fertilizers will give 10% returns in July due to monsoons and gas supply news.

10. Ranbaxy and Cipla may continue their positive momentum on Monday and Tuesday.

11. Global players want to buy some stake in Jet Lite. Buy Jet Airways on dips for short term gains.

Value stocks for long term investors: Best stocks in correction time.

1. Wire and Wireless.
2. Dish TV.
3. Cheviot.
4. RSWM and Welspun.
5. Raymonds- strictly long term.

Stock picks for medium-short term:

1. HDFC.
2. TCS-Results will not be as disappointing as analysts are thinking.
3. Kernex Microsystems-High risk and high returns.
4. Hindustan Lever.
5. Eastern Silks.

Stocks for day traders:

1. IFCI-Stake sale.
2. Aurobindo Pharma – Wonderful results.
3. RNRL and Tata Tele.
4. IDBI-Stake in IFCI.
5. Tricom India- Good results.
6. Renuka sugars and other sugar stocks – Positive momentum.
7. Unitech, Parsvanath and Sobha.
8. Ranbaxy and Cipla - with risk.
9. Sell IPCL.
10. Sell Bajaj Auto.
11. Sell Titan and Gitanjali Gems.
12. Sell HPCL and BPCL- Crude is above $70.

Why markets will crash in July?

Investors are in euphoric mood due to unexpected rise in the past 2 days. But future is looking bleak due to negative triggers. Except some sectors, most companies will announce disappointing results. It will be difficult for RBI to keep rupee value above 41 against dollar. If RBI will not hike interest rates, inflation will again move northwards. Crude price is another worry.

My advice: Some good stocks are at or near 1 year low. Take long positions in those stocks. Don’t take long positions in the sunrise stocks, most of them are near 52-week high. If markets undergo correction, they will suffer heavily. Sit on cash and buy on dips.

Please share your views on my analysis.

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.