Nifty (4740) Supp 4630 Res 4820
BUY IN DIPS IS OUR FUNDA FOR TODAY SPECIFIC STOCK
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We expect our market to extend yesterday's selloff, given the plethora of negative factors, both local and global. Also, technical and F&O indicators are far from positive, and signal more pain in the immediate future. Select buying may always take place at lower levels. Review your financial comfort before adding stocks. Remain cautious at this juncture as the undertone has suddenly taken a reverse swing. FIIs continue to be net sellers. Supporting the market at this juncture is not on anyone’s agenda. 4800 was seen as a big support for the Nifty. But, that level was breached quite easily yesterday. The put-call ratio of option contracts expiring in June is also indicating further slide. Nifty futures continues to trade at a discount to the spot index and saw addition in its open interest, suggesting fresh build up in short positions. It remains to be seen if these shorts will get covered over the next few days or will there be further increase. Given this backdrop, one has no choice but to stay on the sidelines before there is more clarity on the market's direction.
Today's Pick - Moser Baer
We recommend a sell in Moser Baer India from a short-term perspective. The stock has been on an intermediate-term down trend from its January 2008 peak at Rs 344.
However, the corrective up move from March low of Rs 119 to May high of Rs 201 in the stock has retraced almost 38.2 per cent fibonacci retracement of its prior down move. After encountering resistance at around Rs 200, the stock resumed the downtrend. It tumbled 5 per cent, penetrating the 21-day moving average on June 2, 2008.
The daily momentum indicator is declining in the neutral region. The moving average convergence and divergence has displayed negative divergence and is indicating a sell. Our short-term outlook for the stock is bearish. We expect the stock to decline further until it hits our price target of Rs 150 in the short-term. Traders with short-term perspective can sell the stock while keeping the stop-loss at Rs 182 leve
Corporate News
Tata Motors has acquired the Jaguar Land Rover business from Ford Motor for a net consideration of US$2.3bn. (ET)
Bharti Airtel and US based VeriSign enter into 3 year arrangement for developing security solutions for Indian corporates. (ET)
Infosys has bagged patents for mobile tech, holography from the US Patent and Trademark Office. (ET)
Axis Bank and Yes Bank are securitizing loans worth over Rs10bn that were extended to HPCL and BPCL. (BS)
Ambuja Cement is set to buy a stake in ACC’s ready-mix concrete subsidiary – ACC Concrete. (ET)
ICICI Bank has raised interest rates on credit cards. (BL)
The financial closure of the Krishnapatnam UMPP of Reliance Power would be achieved in the coming three months. (BL)
SBI has launched its Agriculture Debt Waiver and Debt Relief Scheme-2008 in Jamli village near Indore. (BS)
GAIL India says its 100% subsidiary GAIL Gas will take up city gas distribution projects in 17 cities in the first phase. (BL)
IOC is in initial phase of discussions with ITC for merchandise supplies from the latter’s Choupal Sagar stores for its 2,050 kisan seva kendra (KSK) outlets across the country. (FE)
Videocon-promoted Datacom will invite bids for rolling out 70mn GSM mobile lines envisaging an investment of over Rs120bn in the next four years. (ET)
Jet Airways, SpiceJet, Kingfisher and other airlines have told the government they would curtail services frequency and air routes to cut losses after oil companies raised ATF prices by 18.5%. (BS)
The Kingfisher-Deccan combine has decided to increase fuel surcharge by Rs300-550. (BL)
Jindal Steel & Power is planning to build a Rs50bn, 1,080-mw, coal-fired captive power plant in Orissa. (BS)
Hexaware has appointed Mr P.R. Chandrasekar as the CEO and Vice-Chairman and Prateek Aggarwal as the CFO of the company. (BL)
HCL Info, HP, LG and Zenith are raising prices of personal computers (laptops and desktops), LCDs and plasma TVs, and IT peripherals by up to 13%. (BS)
The Allahabad Bank board has approved the proposal to raise about Rs1.5bn from selling rights shares to stakeholders. (BS)
Emami and a string of entities acting in concert purchased 23.6% stake from one of the promoter groups of Zandu Pharma at Rs6,900 per share for Rs1.3bn. (BL)
The Parikh family, co-promoters of Zandu Pharma is not in favour of selling its stake to Emami. (ET)
Dabur Group and the US-based Liberty Mutual Group have announced their plan to form a non-life insurance company. (BL)
The department of fertilizers has asked RCF to go ahead with the pre-project and pre-investment activities for the revival of Hindustan Fertiliser Corporation’s (HFC) Durgapur plant and Fertiliser Corporation of India’s (FCI) Talcher unit. (FE)
As part of its diversification plans, Omaxe is eyeing the power sector through its new subsidiary Omaxe Power. (BS)
Indus Fila is planning to invest Rs2bn in retail and set up 30-40 retail outlets within a year. (BS)
Sobha Developers is foraying into Mysore realty market with three projects. (BS)
Logix Microsystems will soon open an advanced photography studio in Brussels as part of its plans to enter the European market. (BS)
TDSAT has restrained BSNL from disconnecting Tata Tele over non-payment of access deficit charge. (BS)
Tamil Nadu Newsprint and Papers plans to tie up with other paper mills to get the surplus pulp converted to paper. (BL)
Bharat Gears has wiped out all its accumulated losses and has drawn up capex plans to cater to higher demand as well as technological upgradation. (BL)
The Burmans (Dabur group) plans to foray into clinical services segment through OncQuest, a privately held company. (ET)
Spanco BPO, the hived-off BPO unit of Spanco Telesystems is on the lookout for a Rs1bn KPO buy. (DNA)
Phoenix Mills is in the process of forming a separate company to manage all its real estate assets. (ET)
Vodafone has offered SouthAfrica’s Telkom to buy a further 12.5% stake in mobile operator Vodacom for US$2.47bn. (ET)
Tata Sky has cut its subscription rates.