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Level to watch on sensex 15250
Maybe this is the dip one should buy at - however, since we cannot confirm whether this is a long term bear or short term bear market - one could just nibble selectively and not buy huge lots.
Today, we see a gap-down opening, but do not rule out a slight rebound later in the day if global indices reverse the weak trend. Short covering could be the only other factor which could lessen the damage. Some key markets in Asia are actually shut today for holidays, which may be of some help to the bulls. Get in with an investment view. Should you be able to pocket some gains in the brief reversals, no harm in booking some quick profits. The undertone remains precarious and fragile.
FIIs were net buyers of Rs766.5mn (provisional) in the cash segment on Friday while the local institutions poured in Rs4bn. In the F&O segment, foreign funds were net buyers at Rs3.05bn. On Thursday, FIIs were net sellers of Rs14.19bn in the cash segment. With this, they have pulled out a net of US$4.6bn (Rs186.6bn) from the Indian market this year so far. Mutual Funds were net buyers of Rs5.47bn.
Gokaldas Exports and Inox will announce their results today.
Today's Pick - JSW Steel
We recommend a sell in JSW Steel from a short-term perspective. The stock has been on a medium-term uptrend from its April low of Rs 490 levels.
However, the stock encountered resistance at Rs 1,200 recently and began to decline forming a bearish engulfing candlestick pattern in the daily chart. This reversal has been supported by the negative divergence in the daily Relative Strength Index (RSI). The RSI has entered the neutral region from the bullish zone.
A crossover in the daily moving average convergence and divergence indicates a sell signal. The stock is currently testing the medium-term up trendline around Rs 1,085 level.
Considering the above factors, we are bearish on the stock in the short-term. We expect the stock to penetrate the uptrendline and decline until it hits our price target of Rs 980 in the approaching trading sessions. Traders with short-term perspective can sell the stock while keeping the stop-loss at Rs 1,138 level.
Corporate News
Axis Bank plans to raise Rs65bn through upper and lower tier II bonds.(BS)
SpiceJet is looking to raise Rs4bn in equity capital to part finance aircraft acquisitions plans.(BL)
Punj Lloyd lines up a capex of US$100mn for 2008-09.(BS)
NTPC and its JV subsidiary, Nabinagar power plant, awards BTG contracts to BHEL for Rs35bn.(ET)
RCOM and MTN close to signing a deal to merge the two entities; swap formula of 35:100 likely.(BL)
Personal care product maker Emami forces Zandu Pharma to withdraw its preferential issue.(BS)
Nalco announces expansion plans worth Rs400bn for the next five years.(BL)
Essar Steel Holdings says it might raise its takeover bid for US based Esmark.(BS)
Punj Lloyd secures Rs6.5bn order from IOC for the latter’s Barauni refinery.(FE)
Reliance Petroleum's export oriented 29mn tons refinery to start generating revenues from current year.(BS)
Indian Oil and Oil India to acquire Reliance Industries’ offshore oil block in East Timor.(BL)
JK Lakshmi Cement is adding five more ready-mix concrete units as part of its expansion plans.(ET)
UAE based Etisalat pulls out of negotiations to acquire stake in Spice Communications; cites high valuations.(BS)
Cargill Ventures has cut by half the US$9mn investment it had announced into KPIT Cummins a year ago.(DNA)
GMR Infrastructure to relocate its 220MW power plant to Kakinada in AP from Mangalore in Karnataka.(DNA)
Sobha Developers to foray into the Mysore realty market with three projects in current fiscal.(BS)
Corporation Bank may waive Rs2.8bn under the debt relief scheme for farmers.(BL)
Coal India may come out with an IPO before getting ‘Navratna’ status.(BS)
UK based Vincent Tchenguiz is holding talks with Tata, to invite investment from the latter in a new US$10bn environment fund.(ET)
CavinKare and Henkel have announced a 5% hike across product categories.(TOI)
Axis PE, the PE arm of Axis Bank, is investing Rs1.4bn in two Ahmedabad companies.(ET)
Delhi government owned Indraprastha Power Generation to set up a 2,000MW coal fired power station in MP.(FE)
Gail India is looking at setting up a CNG corridor comprising Nagapattinam, Karaikal and Puducherry.(ET)
Adani Logistics is all set to develop 14 inland container depots across the country by 2010.(ET)
NHPC is likely to sign an agreement with J&K Power Development Corp. to harness 2,100MW at a cost of Rs150bn.(FE)
Six NBFCs, including Shriram Transport Finance, Ashok Leyland and Reliance Capital are believed to be in the race for buying a US$1bn loan portfolio of Citicorp Finance.(ET)
Renault-Nissan combine has started construction work on its passenger vehicle plant in Chennai.(ET)
Alok Industries has resumed talks with PE players to dilute 20% equity it owns in its unlisted unit, Alok Infrastructure.(ET)
Mercator Lines has chartered out a new offshore rig to a Singapore-based firm for US$93,000 per day for three years.(ET)
Economic News
The Government may increase export cess on long steel products from 10% to 15%.(ET)
Global telecom companies approach TRAI to open mobile market for entry of MVNO.(BL)
Seven bidders are vying for Mumbai International Airport’s Rs7bn annual ground handling contract.(Mint)
SEBI increases cumulative debt investment limits for FIIs to US$5bn and US$3bn in government securities and corporate debt, respectively.(FE)
NPPA, the pharma pricing authority, revises prices of 440 medicines.(BS)
PM’s Advisory Council scales down FY09 economic growth to 8% from 8.5%.(FE)
FMCG companies plan to increase prices again after the hike of 3-4% a few months ago.(BL)
Personal computer market in India grew by 10% yoy in January-March 2008 period.