IDBI Capital Research
16 November 2011 “If we chase perfection we can catch perfection ”
Asian mkt Levels 1D Change Growth concerns in European market takes a toll in Indian markets
Shanghai 2527 -2.8 -0.11%
Nifty opened on a weak note on the back of weak global market sentiments.
Straits Times 2824 12.6 0.45%
However market remained volatile and traded higher before closing down. We
Hang Seng 19389 41 0.21%
attribute following reasons for the market to see stiff fall: -
Nikkei 225 8539.81 -2.12 -0.02%
1) Global market sentiments were already negative
European mkts Levels 1D Change 2) Lack of positive trigger in the market.
DAX 5933 -51.9 -0.87% 3) European markets opened weak. While persisting Euro-zone concerns
BEL-20 2068 -21.2 -1.01% and Germany’s lower GDP growth of 0.5% led the European markets to
CAC 40 3049 -60 -1.92%
fall further down.
4) Fall in banking space on the back of concerns that slippages/NPAs
FTSE 100 5517 -1.6 -0.03%
would further increase going forward.
5) Fall in steel companies after steel secy said that Steel demand growth
US Mkts Levels 1D Change has come down to 2.8% in H1.
S&P500 1258 6 0.48% 6) Oil companies were under selling pressure after the news of petrol
Dow Jones Ind. Avg. 12096 17 0.14%
price cut by Rs 2 per litre by tomorrow.
7) UB group companies saw selling pressure despite management
clarification that they had not asked banks for any bail out. However
Indian mkts Levels 1D Change the investors remained worried about the group’s stance to look for
S&P CNX NIFTY 5069 -79.9 -1.55% working capital loan from banks. KFA already has ~Rs 7000 cr of debt
CNX NIFTY JUNIOR 9505 -297.4 -3.03% with market cap of Rs 1000 cr.
CNX IT 6175 -35.2 -0.57% All sectoral indices closed negative with realty, capital goods, banking and metal
BANK NIFTY 9086 -189.3 -2.04% being the worst performers. Auto and oil & gas, too, lost significantly to put
pressure on the indices.
INDIA VIX 26 0.7 2.69%
CNX 100 4937 -89.7 -1.78%
S&P CNX DEFTY 3466 -84.2 -2.37% World markets:
S&P CNX 500 3997 -77.6 -1.90%
US market closed positive on the back of batch of better-than-expected U.S.
CNX MIDCAP 6863 -181.7 -2.58%
economic data temporarily overshadowed ongoing fears about the eurozone
NIFTY MIDCAP 50 1994 -64.9 -3.15% debt crisis.
CNX INFRA 2549 -65.5 -2.50%
European markets slid in yesterday’s session after reported weak economic
CNX REALTY 224 -13.9 -5.84% growth numbers. Overall euro zone reported 0.2% growth with Germany
reporting 0.5% growth. New Greece PM’s vote of confidence today will again
decide the market trend. Market should cheerfully welcome the new PM on
expectation of some better reforms.
Asian markets were trading slightly negative with Singapore Nifty trading almost
half a percentage points down.
Market Outlook
Indian markets are expected to open down and to remain quiet and dull
throughout the day in lack of any positive trigger in the market. We may see
technical bounce if global markets are supporting. European markets are
expected to open positive today which may decide the direction of Indian
markets during the afternoon. However unpredictability of the moves from ECB
will keep the trading interest down.
Markets in the medium to long term:
We maintain our cautious stance on markets due to euro-zone concerns and lack
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of reforms and absence of positive triggers in the Indian markets. In fact market
may remain highly volatile in the range of 4900 and 5400 in the medium term.
Sectoral outlook:
IT space: Large cap IT stocks may open positive today on the back of further
depreciation of rupee against the dollar and positive economic data numbers in
the US.
Oil space: Oil companies have raised cut petrol prices after considering drop in
crude oil prices. We believe this is negative for oil companies as the rupee dollar
movement is also not in favor of oil importers and the decision of price is not
looking due to market determinant factors. On the other hand, the decision of
hike in jet fuel prices by 2% will offset the impact of cut in petrol prices on under
recoveries.
Aviation space: The whole aviation space is struggling with high fuel prices. The
recent hike in jet fuel price by 2% will further impact the profitability of the
company. The economic condition across the globe and India is also not
favorable to spurt airline traffic growth. Jet Airways has already seen a fall after
the decision of jet fuel price hike. Hence today may see buying from lower levels.
Banking space: Inflation is still a worry and however we don’t expect any
further step from RBI to increase rates to tame down inflation. We are cautious
in banking space for the near to medium term considering the reports of higher
slippages especially in PSU banks.
Auto space: Four wheeler space has not reported good numbers, hence we
remain cautious in this space for the near to medium term. However Tata
Motors and M&M may see buying from lower levels. Similarly in two wheeler
space we like TVS Motors which is good for the medium term investment.
Soya oil: Demand for soya oil has seen an increase. We expect the companies
suchj as Ruchi Soya, KS Oil and Marico will benefit in the near to medium term.
Important Company News
20:20 Promoter holding may have fallen: Gati
20:07 Mallya says deliveries of A380 pushed back
19:58 India would be impacted by newer regulations: Subbarao
19:56 HPL promoters must find solution to dispute: Godrej
19:50 Ambuja Cement can merge with Holcim India: HC
19:48 Realty czar KP Singh nearly exited DLF in 1975
19:39 Posco to have management control in SAIL JV: Verma
19:19 Unitech sells properties worth Rs 2,088 cr in Apr-Sep
19:12 Lavazza brings 'Espression' to India with Rs 120-cr unit
18:40 Jaypee Group to take stake in Andhra Cements
18:37 GAIL wins rights to lay Surat-Paradip pipeline
18:17 Kingfisher seeks funds, interest concession from banks
18:15 Timex forays into health, wellness watches segment
18:08 Uninor's Rs 8,250-cr rights issue proposal approved
17:57 Venus gets nod from UK, New Zealand for antibiotic drug
17:49 Godrej Consumer mulls price hikes to offset input costs
17:39 SAIL, Oman Oil to set up Rs 15,000-cr steel plant
17:23 Kingfisher has not sought any fresh money: SBI
17:19 Kingfisher rights issue in FY12, FY13
17:13 Aditya Birla Retail plans Rs 1,500 cr investment in 5 yrs
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16:59 Tata Com, Oman-based Nawras connect by undersea cable
16:59 Tech Mahindra Q2 net profit up 60%
16:54 Vedanta mulls bid for Australia's New Hope
16:51 Strides gets USFDA nod to market generic cancer injection
16:30 Gold bull Paulson sells third of bullion holdings
15:20 Dabur promoters, Espirito Santo Investment Bank form JV
15:02 Neyvelli Lignite opposes divestment move
15:01 Kingfisher sees joining OneWorld alliance next year
14:23 M&A in technology space up 22% to $56.4 bn in July-Sep
14:08 New pricing policy can lead to shortage of drugs: Sun Pharma
14:03 FMCG spending in modern retail to be $5 bn by 2015
13:45 Kingfisher has not sought govt bailout: Mallya
13:13 Hexaware Tech wins Rs 1,265 cr contract
Source: Capitaline, Economic Times
Today’s intraday calls
1) SELL Coal India at 318-320, target: 310, SL: 325
2) SELL Sail on highs at 100-101, target: 97, SL: 102
3) Buy Havells India at 417, target: 425/428, SL: 411
Tata Motors and Bharti may see upside in today’s trading session. Other intraday
calls will be provided during the market hours.
Important economic events ahead
Nov 30: GDP growth estimate for Jul-Sep, and Apr-Sep, by CSO.
Dec 30: Balance of payments for Jul-Sep, by RBI.
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Result Calender, November 2011: Important Results
Sunday Monday Tuesday Wednesday Thursday Friday
1 2 3 4 5
Central Bank, EIH Ass Hyderabad Inds, ICRA, Whirlpool, Kesoram Usha Nestle, ONGC, EMCO, PSL,
Hotel, Ambuja Cements, Uflex, Trent, L&T Finance, Martin, Asahi Infra, SAIL, Elder Pharma, TV Today, HCL
Aditya Birla Nuvo, PNB, Andhra Bank, Onmobile Allcargo, TVS Motor, Info, Marico, Geodesic, HEG,
Mcleod Russell, HPCL Global, Berger Paints, Vadilal Ent., Jubiliant food, Glaxosmithkline, NCC,
Karur Vysya Bank, Piramal Tata Teleservices Venky's, Mangalam Cement
Life, Rico Auto, Allahabad
Bank, Taj GVK
6 7 8 9 10 11 12
Prakash Ind, SKS Auro Pharma, Kaveri CESC, Voltamp Surana Telecom, Tata MOIL, UTV Software, Shree
Microfin, Jain Telecom, Opto Circuits, Transformer, Zydus Steel, JBF Industries, Allied Cements, Tilaknagar Ind.,
Irrigation, Pioneer ABB, Bank of India, Wellness, PTC India, Moser Digital, ADF Foods, Camlin Bartronics, Pipavav Defence,
Dist., Kaveri Seed, Bosch, Pidilite Ind., IDFC, Baer, DS Kulkarni, Bombay Fine, Cummins, Pantaloon HDIL, Jet Air, Kohinoor Foods
Munjal Auto, Cosmo Films, Rpower Dyeing, Assam Company, ret., Provogue, Titagarh
Madras cements, IL and FS Trans., Godavari Wagons, Ceat, GVKPIL
Dalmia Sugar, Power, Radico Khaitan
Advanta, Guj NRE
Coke
13 14 15 16 17 18 19
Gayatri Proj., ICSA
Asian Hotel east,
Talbros Auto,
Everest Ind.,
Graphite ind,
Balrampur Chini,
Oil India, Empee
Dist., GSPL, Rasoi
20 21 22 23 24 25 26
Pix Transmission BF Utilities
27 28 29 30
Abhay Amlekar, abhay.amlekar@idbicapital.com, 022 43221257
Harsh Gupta, harsh.gupta@idbicapital.com, 022 43221167
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IDBI Capital Research
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