Keep eyes on sterlite ind,Bhushan steel, Ispat Ind
Nifty (4870) Sup 4780 Res 4910
Bulls look to carry momentum
Today's Pick - TV18
We recommend a buy in TV 18 from a short-term perspective. We note that the stock has been on an intermediate-term downtrend form its January 2008 high of Rs 599 levels. However, the stock found support at around Rs 300 level in late April and again in mid May the stock found support just above this level.
The stock has formed a falling wedge pattern spanning over the past four months, which is a bullish pattern. Falling wedge pattern has occurred at the bottom of the downtrend indicating reversal in the current trend. The daily momentum indicator has found support at 40 levels recently and bounced up. The daily moving average convergence and divergence is displaying positive divergence, supporting our bullish view.
We are bullish on the stock in the short-term. We expect the stock to rally to our price target of Rs 360 in the upcoming trading sessions. Traders with short-term perspective can buy the stock while keeping the stop-loss at Rs 300
Market's worst fears have turned out to be a case of false alarm. We are of course talking about the GDP numbers, which came in ahead expectations. At 9%, the FY08 GDP growth beat all optimistic forecasts. That too when most were expecting a contraction due to a slowdown in industrial activity. An improved show by the farm sector helped as did the continued momentum in services. For the current fiscal year, expectations are for 8-8.5% GDP growth. This is pretty good considering the fact that it will come on top of the high base of last year. What's more, the strong growth momentum underscores India's long-term macro-economic fundamentals amid a slew of headwinds and a slowing global economy. So, in that sense, the bulls should be happy.
Of course, ground reality remains that rising inflation is reducing the weight of wallets across the board. Inflation has the potential to touch double-digits in a few week's time. If inflation does spiral out of control, the RBI will have no choice but to resort to some tightening measures. The RBI may even hike the repo rate, which may not please India Inc and the bulls.
For the day, we expect the market to open on a cautious to flat note as most global markets are sluggish. Thereafter, the trend will turn sideways and rangebound. With the GDP data out of the way, the focus will be on crude oil prices and whether the Government manages to bite the bullet and increase retail fuel prices.
Corporate News
Sterlite Industries to buy operating assets of Asarco, a US based mining, smelting and refining firm for US$2.6bn. (BL)
Essar Oil bids for an offshore block in Australia; in talks with foreign companies to explore for oil in Egypt and Yemen. (BS)
Emaar MGF plans to develop 31mn sq.ft of commercial, residential, SEZs and hospitality spaces in South India at an investment of Rs125bn.(FE)
HDFC Venture has picked up 49% stake in two subsidiaries of Godrej Properties, the real estate arm of Godrej group.(BS)
Government asks NTPC to resolve all its disputes with foreign vendors.(ET)
JSW Steel to invest US$500mn over next three years to expand capacity of iron ore mines acquired in Chile.(BL)
L&T plans to invest Rs25bn in the current fiscal to augment capacities at its growth centers.(DNA)
Bajaj Auto posts 7.6% growth in motorcycles sales in May; Hero Honda motorcycles sales growth rises 9.5%.(BS)
Tata Steel to raise its Jamshedpur plant capacity to 10mn tons pa by 2010.(BL)
M&M defers its plan to build a Rs4bn tractor facility in Chennai.(BS)
Apollo Gleneagles to invest Rs14bn in the next two years to set up 2,000 more beds.(BL)
Alstom Power is likely to enter into a US$500mn JV with Bharat Forge.(ET)
BSNL may go for a listing as trade unions likely to respond positively to the government’s call in this regard.(TOI)
Godrej Properties files a draft prospectus for its IPO; estimated to raise up to Rs6bn.(FE)
Air India announces hike in fare prices as ATF prices go up.(Mint)
Essar Oil to raise fresh debt of up to US$5bn through ECB.(BL)
Rashtriya Ispat Nigam is mulling a merger with NMDC.(BL)
Emami group acquires 27.5% stake in Zandu Pharmaceutical.(TOI)
Satyam Computers takes on lease 0.4mn sq ft of office space in Chennai SEZ.(BL)
UB Group in talks with France based EADS Socata to invest US$200mn to co-develop business for jets.(DNA)
BPCL may improve capacity utilization after merger with IOC. (BL)
L&T on look out for a JV with Indian Railways to manufacture equipment for the railways.(ET)
Elder Pharmaceuticals to invest Rs250mn in API space.(DNA)
Times of India group buys UK based Virgin Radio for Rs4.5bn.(TOI)
Genpact, EXL Services may buy a major stake in Infovision.(ET)
Sun Pharma to file 30 ANDAs in FY09.(DNA)
MRTPC issues notification to Dish TV over misleading advertisement of its free set-top box offer.(TOI)
DHL is planning to make an offer to shareholders of Blue Dart.(ET)
Mercator Lines renews a vessel charter to ArcelorMittal for two more years.(BL)
WNS Holdings emerges as the highest bidder for Aviva’s BPO operations with an offer of US$200mn.(ET)
Economic News
Fiscal deficit touches Rs329bn for April; constitutes 24.7% of the fiscal 2009 target.(FE)
Government allowssoftware developers, hotels and hospitals to raise up to US$100mn for import of capital goods.(ET) Government is believed to have decided to impose 15% export duty on iron ore.(TOI)
Air fares to go up with the government announcing an 18.5% average increase in ATF prices.(FE)
India turns into a net importer of steel with imports of 7mn tons in 2007-08.(BS)
Committee of Secretaries decides to remove export duty on most steel products.(DNA)
JNPT to invest Rs70bn in an up gradation drive.(ET)
Kerala and West Bengal government may reduce sales tax on petrol and diesel.(BS)
Department of Post in talks with Deutsche Postbank to enter into housing loan business.(FE)
Government to consider uniform state laws for liquor.(BS)
Finance ministry turns down a proposal from DIPP to give 35% abatement on excise duty to cement manufacturers.(ET)
Government announces 1% reduction in central sales tax.(FE)
RBI issues new draft norms to review current stipulations to minutely monitor off-balance sheet exposures of banks.(ET)
GoM to take a call on whether foreign and domestic companies can participate in the auction for 3G spectrum.(FE)
Indian shipping firms would meet a global deadline to phase out all single-hull tankers by 2010