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morning mantra (www.ssfin.in)
| From : Cm T at 08:41 AM - Aug 20, 2010 (18 months ago) |
Market Mantra
Market outlook
Global cues could shorten party!
Pain is inevitable. Suffering is optional. - MK Casey
Just yesterday, the indices were racing ahead kicking away any concerns that came their way. Today is a different day; after touching 30-month highs, the Indian indices could see some pressure given the global cues this morning.
On the domestic front, Food inflation has come down to stood 10.35% during the week to August 7 as against 11.4% reported in the previous week.
A couple of economic reports released in US brought the bears back with some gusto.
The Dow fell 144 points, the S&P dropped 19 points and the Nasdaq lost 37 points. Disappointing numbers on weekly jobless claims, slowdown in the manufacturing numbers in the Philadelphia region and the lesser than expected increase in the index of leading economic indicators spooked the Street.
The weakness spread over to the Asian market with the MSCI Asia Pacific falling after gaining five days in a row. The Nikkei 225 is down over a percent, Kospi has shed half a percent. The Cabinet Committee on Economic Affairs (CCEA) which was to meet on Thursday will now meet today at 10 am.
Trading ideas (Time period: 1-3 days)
Prism Cement (BUY, above Rs56.50, Target Rs60.50): Prism Cement is about to break through from consolidating flag pattern after prices closing above its 100-DMA yesterday with rise in volumes. The stock also has been making inverted head and shoulder on daily chart and move above Rs56.50 to confirm breakout from its neckline. On downside, Rs54.50 to provide as short term support which corresponds to trough of right shoulder while RSI holding above the levels of Rs50 earmarks inherent strength in the counter. We advise buying the stock above Rs56.50 with stop loss of Rs54.5 for Target of Rs60.50.
JBF Industries (BUY, above Rs151, Target Rs161): On Thursday, the stock broke out past its recent peak of Rs150 which was acting as a stiff resistance for the stock since last two months. Daily chart suggests formation of distinctive pattern this is most likely to result into a short-term rally in the counter. We believe that the current breakout is likely to lead to a potential upside up to the levels of Rs160 and above. Momentum oscillators are also exhibiting strength in the upmove. We expect the stock to remain in the momentum as long as it sustains above its last week low of Rs145. We recommend traders to buy the stock above Rs151 with stop loss of Rs146 for a target of Rs161.
Derivative strategies (Time period: Till expiry)
± Short IndiaBulls Real Estate Aug Future in range of Rs192-193 for the target price of Rs177 with a stop loss placed at Rs199.
Lot size: 2000
Remarks: Net maximum profit of Rs30,000 and net maximum loss of Rs14,000.
± Long Aurbindo Pharma Aug Future in range of Rs1073-1075 for the target price of Rs1100 and stop loss placed at Rs1062.
Lot size: 250
Remarks: Net maximum profit of Rs6,750 and net maximum loss of Rs2,750.
Mutual funds
|
Fund focus |
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ICICI Prudential Dynamic Fund |
Invest |
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Fund manager |
S Naren |
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Min investment |
Rs5,000 |
|||
|
Latest NAV |
Rs103.0 |
|
Entry load |
Nil |
|||
|
NAV 52 high/low |
Rs103/74 |
|
Exit load |
1% <1 yr |
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|
Latest AUM |
Rs2,282cr |
|
Latest dividend (under dividend option) |
10% (Aug 20, 2010) |
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|
Type |
Open-ended |
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Benchmark |
S&P CNX Nifty |
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|
Class |
Equity – diversified |
|
Asset allocation |
Equity (77%), Debt (0%), Cash (23%) |
|||
|
Options |
Growth & dividend |
|
Expense ratio |
1.9% |
|||
Corporate Snippets
± RIL-NTPC dispute over D6 heading for truce. (BS)
± RCom ropes in four executives for wireless management board. (BL)
± Fiat JV revival becomes a priority for Tata Motors. (BS)
± Dr Reddy's in talks with Japanese pharma cos for tie-ups. (BL)
± Lanco Infratech has partnered with Indonesian coal mining company Bukit Asam to bid for a 600 megawatt power project. (BS)
± ONGC may have to pay US$13bn if it were to exercise its pre-emption or right of first refusal to buy Cairn India in the giant Rajasthan block (ET)
± Huaneng Group may pay GMR Infrastructure US$1.4bn to buy 50% of InterGen (ET)
± Dr Reddy's Laboratories and the Indian School of Business (ISB) on Thursday signed a memorandum of understanding to set up ‘Dr Reddy’s Cell for Employability and Skilling’ at the ISB. (BS)
± Lanco Infra expects two tollways under development in Karnataka to be commissioned later this year along and adding to cash flows. (BL)
± HCL Infosystems enters the gaming zone. (BS)
± Patni to start entrepreneurship programme for employees. (BS)
± BEML, Coal India, Damodar Valley close to finalising joint venture equity structure. (BL)
± Emami is again on the prowl to acquire FMCG companies in India and abroad. (BL)
± Central Bank arm to offer loan syndication, merchant banking services. (BL)
± With a view to boost its commercial vehicle finance portfolio, Allahabad Bank has entered into a tie-up with Ashok Leyland. (BL)
± Sadbhav Engineering's wholly-owned arm, Sadbhav Infrastructure Project (SIPL), has got Rs4bn equity funding from global investors. (BL)
± Greaves Cotton plans to build an automotive engine manufacturing plant in Aurangabad for ~Rs1bn (ET)
± Federal Bank has introduced real time money transfer facility from Gulf Cooperation Council (GCC) countries. (BL)
± Dhanlaxmi Bank has increased the interest rates on domestic term deposits by 25-75 bps across maturities with immediate effect. (BL)
± Royal Orchid Hotels will raise up to Rs1.5bn to fund its new projects (ET)
± MIC Electronics has bagged orders worth ~Rs200mn, majority of them being from the Indian Railways (ET)
Economic snippets
± Food inflation stood at 10.35% on a yoy basis during the week to August 7, lower than the 11.4% annual rise reported in the previous week. (BL)
± Policy bottlenecks may further delay GST rollout. (BS)
± The government was looking into the proposal of allowing foreign airlines invest in domestic carriers. (BS)
± Banks may have to reveal use of funds raised via CPs. (BS)
± The Government may come out with more representative data on industrial production by this year-end by adding nearly 150 new items and deleting the obsolete ones from the index (ET)
± The Reserve Bank of India has strongly advocated the use of public-private partnership (PPP) to fund infrastructure projects in the country. (BL)
± Asian Development Bank likely to revise upwards its growth and inflation projections of India for FY11. (BS)
Warm Regards,
www.ssfin.in
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