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We expect the market to open on a weak note and the trend may not change for most part of the day, unless there is some fresh short covering. The market will have to keep one eye on New Delhi and the other eye on global markets. Quite a strain for the eyes and the market!
FIIs were net sellers of Rs4.35bn (provisional) in the cash segment on Wednesday while the local institutions poured in Rs1.94bn. In the F&O segment, foreign funds were net sellers of Rs1.93bn.
The institutions remain sluggish to buy at lower levels and that more or less explains the continued tension on the bourses. After a two-day rally (any small gain is a rally these days), the key indices gave up some of the gains. Renewed weakness in global markets and fresh tension between the Government and the Left parties over the Indo-US nuclear deal played spoilsport. The sudden rise in political temperature in New Delhi could do some more harm today amid worries over the fate of the Congress-led UPA regime. Given the uncertain political environment, the bulls may like to tread cautiously. Also, global markets fell sharply overnight while Asian markets too are in the red this morning. Crude oil continues to be highly volatile, keeping global markets on the edge.
Today's Pick - Bank of Baroda
Picks - SUJANA TOWER,GSS AMERICA, BURNPUR CEM
We recommend a sell on Bank of Baroda from a short-term perspective. From the charts of Bank of Baroda, we note that the stock has been on an intermediate-term downtrend, since its January 2008 high of Rs 501, forming lower peaks and lower troughs.
However, after touching 2008 low of Rs 211 on June 9, the stock witnessed a corrective up-move.
This up-move of the stock did not sustain, as the stock encountered twin resistances (a key resistance level and down trendline) at about Rs 260.
On June 18, the stock declined and formed a dark cloud candlestick pattern that indicates bearishness. The weekly momentum indicator is featuring in the bearish zone and the daily momentum indicator is likely to re-enter this zone.
With the intermediate-term down trendline still intact, we are bearish on the stock in the short-term. We expect the stock to decline until it hits our price target of Rs 218 in the upcoming trading sessions. Traders with short-term perspective can sell the stock, while maintaining stop-loss at Rs 258.
Shares of Niraj Cement Structurals Ltd. will get listed today.
Results Today: EIH Associates, Future Capital, JHS Svendgaard, Kirloskar Ferrous, Ratnamani Metals, Simplex Realty and Uniflex Cable
Corporate News
Ranbaxy settles worldwide patent litigations with Pfizer over Lipitor. Under the agreement, Ranbaxy will be allowed to sell generic versions of the drug in the US from November 30, 2011. (BL)
ONGC, IOC and Gail have expressed interest in buying ADB's stake in Petronet LNG. (ET)
RCom may initiate criminal proceedings against RIL officials involved in the signing of January 12, 2006 agreement. (BL)
The MSRDC may ask Mukesh Ambani-controlled SeaKing Infrastructure Ltd (SKIL)-led consortium to bring down the concession period for the Rs60bn, 22-km sea link between Sewari and Nava Sheva. (BS)
MTNL has received the international long distance license from DoT. (ET)
Zee Entertainment may list its two divisions Zee Motion Pictures and Zee Limelight on the London Stock Exchange’s AIM. (FE)
Tata Steel and Essar Steel are vying for a majority stake in the proposed joint venture of Indonesia's PT Krakatau Steel to build a 2.5mtpa plant. (BS)
The Government may infuse more capital into Central Bank of India on improved performance. (FE)
RIL has denied it has signed formal gas sale contracts with prospective customers in defiance of a Bombay High Court order. (ET)
M&M plans to roll out "Mahindra" tractors from the Punjab Tractors unit in Mohali. (BS)
The NCD-cum-convertible warrants offer of Indian Hotels faced lukewarm response, forcing the promoters to pick up the unsubscribed portion of just over 80% for about Rs4.8bn. (ET)
Reliance Big Entertainment is in talks with PEs for selling a 10% stake for a valuation of US$5bn. (ET)
Andhra Bank to raise US$300mn foreign currency loan in 2008-09. (BL)
The Leela Palaces, Hotels and Resorts signs a sales and marketing agreement with US-based Preferred Hotel Group. (ET)
MindTree to invest US$45mn in its new software development centre at Mahindra World City SEZ in Maraimalai Nagar. (BL)
Union Bank of India to raise US$2bn through medium term debt from international market for its overseas expansion. (ET)
With the Karnataka High Court approving the Kingfisher Airlines – Deccan Aviation merger, Kingfisher Airlines’ plans to fly overseas soon. (BL)
Moschip Semiconductor has acquired US-based Indigita, the audio and video division of Intellasys. (BL)
Sintex Industries has acquired Digvijay Communications and Networks in the form of a slump sale. (BL)
Citrix to invest US$200mn in its second R&D facility in Bangalore over the next five years. (ET)
Sujana Towers has acquired of 51% stake in an African telecom infrastructure company, Telesuprecon. (BL)
Exide Industries acquires 51% in Bangalore-based lead smelter Leadage Alloys India Ltd. (BL)
Shyam Group and Spanco have sign an agreement with Punj Lloyd to acquire its Internet services company Spectranet. (BL)
Economic News
Infrastructure sector growth dips to 3.6% in April compared to the same month last year. (BL)
Aided by higher TDS collections, the Centre’s net direct tax collections recorded a 71.3% increase during the first two months of the current fiscal to Rs228.4bn against Rs133.4bn in the same period last year. (BL)
India to receive an estimated loan amount of US$9.2bn from the Asian Development Bank between 2008 and 2010 for various development projects. (FE)
The Government to allow only Gujarat companies to export cement. (ET)
The RBI has made it mandatory for RRBs to report all suspicious transactions above Rs1mn to the directorate of financial intelligence as part of exercise to strengthen the anti-money laundering drive. (ET)
The Government reduced prices of complex fertilizers by up to Rs2,296 per ton.