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9am with Emkay |
Contents
n Dealer Comments
The markets started the day’s session on a negative note with almost 70 odd point’s downward gap tracking weak cues from the global markets particularly the weak Asian counterparts. Post weak opening markets regained some of the lost ground post some of the top Indian corporates paid higher Q3 advance tax. But the recovery was short lived as fresh selling emerged at recovered levels. The sell off was led by sagging Asian markets on the back of business sentiment survey in Japan and sharp fall in the Hong Kong markets. Post announcement that Hero group will buy the 26% stake of Honda for $1.12 bn and also pay royalty led to a sharp fall in the stock price and was down almost 7% for the day. Even concerns that fuel price hike may once again stoke the recently reined in inflation aided the sell off in the markets. The days fall was mainly led by profit booking in rate sensitive stocks ahead of the RBI’s midterm policy review tomorrow. Going ahead markets will continue to be driven by the news of the day, sometimes positive and sometimes negative but the only console is that the underlying sentiment and the outlook growth story shall continue to remain positive. Finally the markets snapped its three day winning streak and closed the day on a negative note towards the end near almost day’s lows with Sensex losing 151 points or 0.76% lower to settle at 19647 levels while Nifty lost 52 points or 0.87% lower to settle at 5892 levels. The overall traded volumes were higher compared to the earlier day by almost 18% and were at Rs 1288 bn. While delivery based volumes were once again flattish compared to the earlier day at 38.7 of the total traded turnover. Among the Fund activities FII’s were net buyers to the tune of Rs 0.52 bn while Domestic Funds were net buyers to the tune of Rs 2.98 bn on 14th December 2010. While on 15th December 2010 FII’s were net sellers to the tune of Rs 0.88 bn in the cash segment while in the F&O segment FII’s were net sellers to the tune of Rs 4.44 bn while Domestic Funds were also net sellers to the tune of Rs 0.98 bn.
n Technical Comments
Hurdles ahead
Nifty ended below 5900 mark after finding constant resistance in the range of 5940-5950. However, the higher top higher bottom formation on hourly chart is still intact and hence we are trying to capture a short term up leg, in which Nifty has a possibility to touch the 6000 mark. But the our overall view for the medium term players is bearish and therefore any kiss of 6000 level (which is also a psychological barrier) should be used for liquidating long positions. Apart from this, the daily MACD cycle has also turn bullish, which is the only answer to our short term bullish view of 6000 mark.
BSE Oil & Gas:
BSE Oil & Gas index is consolidating at the support of 20-HSMA and hence in the coming session too this rally is expected to continue upto 10,800-level.
Grasim Industries Company Update; VSF earnings to gain momentum-upgrade target; Accumulate; Target: Rs2,730
n Standalone earnings to gain momentum - VSF volumes set to reach peak levels of H2FY10. Surge in Cotton prices fuel domestic VSF prices (up Rs8/kg since Sept-10 to ~Rs125/kg)
n Southern & Western region have seen cement price hike of ~Rs40/bag from Aug lows- Ultratech’s earnings (though at nascent stage of sustainable recovery), likely to see sharp improvement in H2FY11
n Upgrade FY12 earnings by 3.2% -driving a 5% upgrade in our TP to Rs2730. At 25% holdco disc standalone business trades at undemanding EV/EBITDA multiple of 2.5x for FY12E
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