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Sluggish (D)-street
The key to change is to let go of fear. - Rosanne
Cash.
Fears of a weak start in the last trading week of
the year appear to have been unfounded. The
Chinese market has shrugged off the weekend
rate hike after premier Wen Jiabao said his
government will be able to contain inflation.
Stocks in Japan too have gained. Markets in Hong
Kong are shut.
We expect a steady start though things might
turn a little choppy due to the F&O expiry.
Trading volume could get a fillip owing to the
derivative settlement but the overall activity may
remain sluggish. The key indices are unlikely to
budge much from the current position.
Real action is expected only in January when
markets will digest latest quarterly results, along
with fresh economic statistics. The RBI’s
quarterly review will also be an important event
in the face of the fresh upturn in inflation.
Global markets will continue to see muted action
to the year-end factor. Individual stocks will
continue see some action based on the news
flow. The Nifty failed to surpass 50 DMA.
Therefore, the sentiment remains cautious. We
expect the Nifty to be in a range of 5850-6080.
Corporate snippets
Central Bank of India has got the RBI's nod
to go ahead with its rights issue; it plans to
mop up around Rs25bn to shore up capital
adequacy ratio. (BL)
LGS Global, formerly Lanco Global Systems,
will raise Rs4bn through FCCBs, QIPs and
other instruments. (BL)
NIIT Technologies has acquired an
electronic health records and referral
management platform to get into the
healthcare segment in the US. (BL)
IRDA has served a notice to SKS
Microfinance on ‘violations' of some norms
in the sale and management of insurance
policies for its clients. (BL)
Allahabad Bank has sought infusion of Rs
10bn from the government; bank is also
planning to raise Rs14bn Tier-II bonds before
the close of this fiscal. (BL)
International Coal Ventures, an SPV
formed by Steel Ministry to acquire coal
assets abroad, and including SAIL, Coal
India, NTPC, NMDC and Rashtriya Ispat
Nigam, has a month's time to bid higher than
US$3.9bn for Riversdale Mining. (BL)
Welspun Infra Projects, a closely held
entity of the Welspun Group, says it would
acquire 35% stake in Leighton Contractors
India, the Indian operations of Australian
infrastructure major Leighton International,
for Rs4.7bn. (BS)
Coal India to start work in 2 Mozambique
blocks next fiscal. (BL)
GMR Infrastructure arm GMR SEZ & Port
Holdings has entered into a share
subscription agreement to subscribe to 51%
in Kakinada SEZ. (BS)
Tata Steel has decided to raise long-term
funds of up to US$1bn by a way of share sale
through the Differential Voting Rights route.
(BS)
Gujarat State Petroleum Corp. has struck a
gas reserve in an on land exploration block at
Ankleshwar in the state. (ET)
Titan Industries plans to add around 108
outlets in its key verticals of jewellery,
watches and eye-gear to reach a total
strength of 700 by end the of this financial
year. (BS)
International Finance Corporation would
make an equity investment of US$25mn in
Bhagyanagar Gas, floated by HPCL and
GAIL for setting up city gas distribution
projects in Andhra Pradesh. (BS)
Havells India will invest Rs1.2bn to double
its compact fluorescent lamps capacity in two
years. (FE)
Tata Steel, the largest shareholder in the
Syndey-based Riversdale, said in a regulatory
filing that it “will evaluate the takeover bid in
the context of other alternatives available to
Tata Steel”. (TOI)
Air India has asked for equity infusion of
Rs20bn more from the government in the
current financial year. (BS)
NMDC is likely to raise iron ore prices by 3%
next week for the January-March quarter.
(BS)
Hospitality arm of DLF to pay Rs1.5bn to
settle dispute.(ET)
Economy snippets
Sugar futures set to resume from today after
a gap of 19 months with the Forward Markets
Commission giving its permission for the relaunch.
(BL)
National Pharmaceutical Pricing Authority says
it has increased prices of six drugs, including
anti-asthmatic and pain killers. (BS)
In a boost for industrial activity in HP and
Uttarakhand, govt has expanded the scope of
the excise duty exemptions extended to units
set up in these states before end March 2010.
(BL)
An internal working group of RBI is likely to
propose the model of an apex holding
company for banking conglomerates. (FE)
Foreign exchange reserves fell by US$817mn
to US$295bn in the week ended December
17. (FE)
Nifty extended gains for the second week but
failed to surpass an important hurdle of 50 DMA
to close above 6,000 levels. Though Nifty has
signaled breakout from ‘triangle’ pattern above
5,965 levels, but has still not demonstrated its
implications in the form of a bullish breakout.
This suggests that the sentiment still remains
cautious alongside lower participation due to
holiday season in the west
Biocon (BUY, above Rs408, Target Rs425):
Biocon, on Friday has formed a ‘bullish engulfing
line’ pattern on candlestick on the daily chart and
has managed to surpass above the critical
resistance levels of Rs407. With appearance of
‘inverted head and shoulder’ on the medium term
chart, stage is set for the stock to re-test its 52-
week peak of Rs472 in the coming months. On
the oscillator front, RSI also has been trading
with positive crossover which exhibits strength
and supports buying argument in the short term.
We advise buying stock above Rs408 with stop
loss of Rs400 for Target of Rs425.
PNB (BUY, above Rs1,220, Target Rs1,260):
After hitting an 52 week high of Rs1,400 in
November 2010, the stock had seen a sharp fall
to the support of its 200-DMA (Rs1,126). From
which the stock has seen a smart recovery
without the re-test of its earlier low. Trendline
breakout is seen in the daily chart where prices
successfully traded above the falling resistance
line with positive crossover in RSI. Based on the
hourly chart, the stock has also seen a breakout
from a Symmetrical Triangle pattern. Such back
to back confirmation of on the hourly and daily
charts is likely to ignite buying momentum with
immediate target seen above Rs1,270. We
advise buying the stock above Rs1,220 with
stop loss of Rs1,200 for target of Rs1,260.
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