Daily Market Strategy - Bulls may continue journey

We don't receive wisdom; we must discover it for ourselves after a journey that no one can take for us or spare us - Marcel Proust.

At the moment it looks like India is out-performing the world. This week’s movement presents ample evidence of that trend. Whether this pattern continues or not only time will tell. We expect a positive start and the same could be extended, provided there are no further hiccups in world markets. Small-caps have been buzzing, but make sure your allocation is also small on these counters given the heightened risk associated with such counters.

The overall outlook in the near term is still not very bright, mostly owing to external concerns. But, the Indian market is likely to remain resilient and could continue the gradual move up, especially when global cues are supportive.

Valuations might become a bit of an issue going forward. Also keep an eye on fund flows, which have been good so far.

The big local events that could have a bearing on sentiment are: IIP data (on Friday), inflation (on Sept. 14) and RBI review (on Sept. 16). Next month we will get the latest update on India Inc.’s report card.

Economic statistics from around the world will continue to exert their influence across markets and asset classes. Uncertainty on the outlook for world markets is expected to prevail for some time to come. Which means that investors will continue to switch between risk aversion and risk tolerance intermittently. If economic data from the US was good last week, we have been hit this week by a few downbeat reports from the euro-zone (particularly from Germany).

Euro-zone banks have been in focus amid lingering worries over the region’s sovereign debt issues. Talk of proposed new capital rules for global banks have also pressured some of these financials. The markets will remain choppy in the remaining part of the week. So it wouldn't be a bad idea to take a neutral stance and await more clarity.

Shares of Gujarat Pipavav port Ltd. will list on the exchanges today. The Company has fixed the issue price for its Rs5bn public issue at Rs46 a share while price band was at Rs42-48. The issue, which opened for subscription between August 23-26, was subscribed 19.94 times. Qualified institutional investors' portion got subscribed 13.2 times. Non-institutional and retail investors subscribed 85.70 times & 9.15 times, respectively.
FIIs were net buyers of Rs2.82bn in the cash segment on Wednesday (provisionally), according to the NSE web site. Local funds were net sellers of Rs982.1mn. In the F&O segment, the foreign funds were net sellers at Rs5.43bn.

Important News Snippets For The Day:

IT companies may be in spotlight due to the news of Ohio banning outsourcing from India. Vindhya Tele Links is the stock to watch out for, after the Company, along with its consortium partners won a huge deal from BSNL.

Kale Consultants could attract attention as a report suggests that French company Accelya is looking at buying a majority stake.

Tata Power might also be in focus after chairman Ratan Tata said at the AGM that it is in talks to acquire a majority stake in UK-based InterGen from GMR Infra.
Wipro may hike client billing rates.

Royal Orchid Hotels acquires 74% in Amartala Hospitality.

HUL, P&G hikes prices of detergents.

REC plans SPV with a global bank for banking license.

NMDC will initiate talks with Australia’s Riversdale Mining for picking up a minority stake.

Tata Steel is in talks with banks to raise between US$4.5-US$5.5bn loan to refinance debt at its European unit Corus.

Tata Steel has raised Rs7bn by selling shares of Tata Motors and Tata Power to a group company, Tata Industries.

Tata Steel plans to buy a ferrochrome mine in South Africa for captive use of its ferrochrome processing unit, Tata Steel KZN in that country.

TEN MOST ACTIVE FUTURES

Symbol	No.of Cont Traded	Last price	Open Interest	% chg in Op.Int
SBIN	41,390	2,878.50	5538750	9.09
TATASTEEL	36,403	578.15	22663500	3.25
RELIANCE	19,974	962.30	29707000	0.23
ICICIBANK	18,246	1,021.75	18397500	1.45
IDBI	16,012	134.90	20758000	17.61
TATAMOTORS	14,783	1,038.50	14149500	-0.64
HINDPETRO	14,668	531.90	11723000	9.77
INFOSYSTCH	12,803	2,861.80	4320750	3.69
RENUKA	12,013	74.75	44508000	-1.29
HDIL	11,801	281.35	14343000	5.19

TEN MOST ACTIVE OPTIONS

	Option Type	Strike price	No.of Cont Traded	Open Interest	% Chg in Op.In
SBIN	CA	2,900	6,727	342250	31.07
UNITECH	CA	85	5,160	7352000	10.06
TATASTEEL	CA	580	4,858	2857500	11.69
TATASTEEL	CA	600	4,445	1523000	32.38
RELIANCE	CA	1,000	3,079	2513500	-2.21
RELIANCE	CA	960	2,518	710500	9.27
RELIANCE	CA	980	2,512	1220000	0.39
TATASTEEL	PA	540	2,497	1176500	76.52
SBIN	CA	2,850	2,399	84625	-12.65
IDBI	CA	130	2,200	1384000	-19.91

SUPPORT & RESISTANCE LEVEL

Company Name	S3	S2	S1	Close	R1	R2	R3
Sensex Index	18,548	18,576	18,607	18,667	18,726	18,757	18,786
Nifty Index	5,570	5,579	5,589	5,608	5,627	5,637	5,646
ABB Ltd	779	780	781	784	786	787	788
ACC	959	967	976	993	1,011	1,020	1,028
Ambuja Cements	134	135	136	137	139	140	140
Bajaj Holdings	823	830	838	854	870	878	886
BHEL	2,421	2,426	2,431	2,440	2,449	2,454	2,458
Bharti Airte	341	344	347	352	357	360	363
Cipla	307	308	309	311	313	314	315
Dabur India	104	104	105	107	109	110	111
GAIL India	460	462	463	467	470	472	474
Grasim Ind.	2,108	2,121	2,136	2,163	2,191	2,205	2,219
HCL Tech	400	401	403	406	409	410	412
HDFC Bank	2,160	2,165	2,170	2,180	2,189	2,195	2,199
Hero Honda	1,688	1,692	1,697	1,706	1,715	1,719	1,724
Hindalco	178	179	180	181	183	184	184
Hindustan Unilever	270	271	272	274	276	278	279
ICICI Bank	1,015	1,018	1,021	1,028	1,034	1,037	1,040
Infosys Tech	2,839	2,849	2,859	2,879	2,900	2,910	2,920
ITC Ltd	163	163	163	164	165	166	166
L&T	1,846	1,851	1,856	1,867	1,877	1,882	1,887
MTNL	63	64	64	65	66	67	67
M&M	628	630	632	635	639	641	642
Maruti Suzuki	1,285	1,291	1,296	1,308	1,319	1,324	1,330
Mahindra Satyam	92	92	93	94	95	95	96
National Alumin	400	402	403	406	408	410	411
ONGC	1,339	1,343	1,347	1,356	1,364	1,368	1,372
Oriental Bank	430	433	435	440	444	447	449
PNB	1,204	1,210	1,216	1,229	1,242	1,249	1,255
Ranbaxy Labs	503	506	508	512	517	519	521
Reliance Capital	759	764	768	776	785	789	793
Reliance Comm	161	162	163	165	166	167	168
Reliance Energy	1,011	1,015	1,019	1,026	1,033	1,037	1,040
Reliance Inds	951	953	955	960	964	966	968
R Power	154	155	155	156	157	158	158
Siemens India	702	703	704	707	709	710	711
SBI	2,829	2,845	2,862	2,896	2,930	2,947	2,963
TCS	852	858	865	879	893	900	906
Tata Motors	1,021	1,024	1,027	1,033	1,039	1,042	1,045
Tata Power	1,260	1,263	1,267	1,274	1,281	1,285	1,288
Tata Steel	568	571	574	581	587	590	593
Tata comm	333	334	336	340	344	346	348
Wipro	402	404	406	411	415	417	419
Wire And Wireless	14	14	14	14	14	15	15
Zee Entertainment	286	288	289	292	294	296	297

 

 

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