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9am with Emkay |
Contents
n Dealer Comments
The markets started the day’s session on a very quiet note almost flattish tracking weak to subdued cues from the global markets particularly the mixed Asian counterparts. Post flattish opening markets traded marginally above yesterday’s closing levels for sometime and thereafter wilted under selling pressure to slip in the red led by good sell off in the banking space. Markets continue to witness absence of any major flows either on buying or selling for most part of the day for third consecutive day and looks to be in a very lacklustre mood. Once again concerns over China tightening interest rates again this weekend to curb excessive heating of their economy resurfaced led to subdued trading in the Asian markets. Today banking stocks continued to reel under selling pressure post RBI asking the banks to trim their interest margins with an all round selling across the space. While metal space continued to sizzle with buying interest for second day in a row. Besides buying in oil & gas, cement, select technology and auto stocks helped markets to limit losses for the day. Finally the markets once again closed the day on a marginal negative note towards the end with Sensex losing 47 points or 0.23% lower to settle at 19935 levels while Nifty lost a mere 16 points or 0.26% lower to settle at 5976 levels. The overall traded volumes were flattish compared to the earlier day and were at Rs 1151 bn. While delivery based volumes were also slightly higher compared to the earlier day at 42.5% of the total traded turnover. Among the Fund activities FII’s were net buyers to the tune of Rs 0.61 bn on 6th December 2010. While on 7th December 2010 FII’s were net sellers to the tune of Rs 5.23 bn in the cash segment while in the F&O segment FII’s were net sellers to the tune of Rs 7.40 bn while Domestic Funds were also net sellers to the tune of Rs 4.27 bn.
n Technical Comments
Below the averages
Indian indices waited in the red for a larger part of the trading session today. Although, there were some attempts made in the afternoon session to push above the dotted line, which proved futile and the markets closed into the red in the final trading hour. Also, the final closing was below 20- and 50- daily simple moving averages, which indicates that Nifty is still facing selling pressure on every spurt. Apart from this, intraday chart of Nifty has also opened up a possibility of “Head-and-shoulders” pattern, which is still under making. Moreover, the right shoulder is still below 20-HSMA, and the pattern will remain valid unless Nifty goes pass our short term reversal.
BSE Bankex:
BSE Bankex was the key loser in today’s session and since it is standing at the channel support, we feel that a bounce may be witnessed in the coming session.
Infinite Computer Solutions Initiating Coverage; Credible transformation in play; BUY; Target: Rs250
n Infinite is a ‘credible transformation in play’ offering the highest EPS growth(26% CAGR over FY10-13E) in our mid cap IT coverage universe at attractive valuations
n Apart from strong revenue growth ( driven by aggressive client mining within a marquee client base), Infinite is likely to enjoy benefits of multi year margin tailwinds, in our view
n Estimate a 25%, 23% and 26% revenue, EBITDA and profit CAGR (28.4% US$ revenue CAGR assuming INR/US$ of Rs 45/$ for FY11, Rs 44/$ for FY12/13) over FY10-13E
n Growth at attractive valuations- Infinite trades at ~6x/4.7x FY12E/13E EPS, factoring in risks from high clients/vertical concentration. BUY with a March’12 TP of Rs 250
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