Thursday, June 3, 2010

Indian equities to recover

Wall Street jumped on better than expected pending home sales data on wednesday. Asian markets greeted wall street's upmove with a positive start thursday morning. D-Street is no exception with a gap up start expected.

We still question the current uncertainity and stick to our earlier view of sticking to sidelines. Nifty will look good only above 5100 levels. One should be extremely catious below that level.

While there were many stunning numbers from corporates this quarter, Suzlon and Punj Lloyd disappointed. One should be careful in picking stocks that have longivity and fundamental strength.

Shree Renuka Sugars has managed to salvage its billion-dollar acquisition of closely held Equipav SA Acucar e Alcool, the sugar and alcohol assets of Brazil’s Equipav Group. As per business standard's report the company will now be getting the 51 per cent controlling interest by paying only $240 million or Rs 1,080 crore, 25 per cent less than its original bid, sources close to the development said. What’s more, say sources, it will not have to give its own corporate guarantee to Equipav’s lenders for the Brazilian company’s debt.

Indian inflation is another cause of concern and RBI governor Mr.Subba Rao is in a tight spot to raise rates again. For today it is time to ride the rally