Markets gain further ground: Nifty hits 6,100

It has been a strong session for markets so far as they continue to trade firm at the higher levels. Cues from the global markets have also been very encouraging today. After Nifty even Sensex has hit a new high. Nifty has hit 6,100 for the first time ever. All eyes are on the Fed on rate cut decision, analyst feel that there could be a 25 bps rate cut. ONGC, Bharti Airtel, HDFC, Nalco, Glaxo Smithkline are the top gainers on the frontline indices.

Broader markets have also participated in the uptrend CNX Midcap and BSE Smallcap are each up 2%. Breadth is extremely strong at 4:1. Cues from the global markets have also been very encouraging today. Rupee is trading firm against the dollar at 39.36.

Nalco is a star performer as the stocks is up 8% followed by Unitech up over 6%, ONGC & Bharti up nearly 4%. Other gainers are Zee, Bharti Airtel, SAIL, GAIL, Grasim, HDFC and GSK.

Abhishek Ind up 16%, Lanco Infra and Sonata Soft each up 9%, Omaxe up 8%, followed by Rain Calcining, CBoP and Vijaya Bank are some of the gainers in the broader markets.

At 2.00 hrs IST, the Sensex is up 343.66 points or 1.72% at 20274.34, and the Nifty up 140 points or 2.32% at 6100. About 2320 shares have advanced, 717 shares declined, and 49 shares are unchanged. Realty index is up over 3% and the top gainers are Ansal Housing up 17%, Omaxe up 8% and Purvankara up 5%.

IT pivotals Infosys and TCS are the top losers on the Sensex as well as Nifty. Infosys is down 2% and TCS is down nearly 1%. TataTeleservice, Ispat Industries, Centurion Bank, Reliace Inds and Bharti Airtel were some of the most active counters on the bourses today. Pharma stocks were in focus today and the top winners in this sector were Pfizer, Divis Lab, Wyeth and Nicholas Pharma. In the power space, the top gainers were Torrent Power, GMR Infra, GVK Power and NTPC.

Market trades higher: Nifty hits new all time high

The markets are trading firm at the higher levels and Nifty has touched a new life time high at 6068. Sensex and Nifty are trading near the day's high. Broader markets have also participated in the uptrend CNX Midcap and BSE Smallcap are each up 2%. Breadth is extremely strong at 4:1. Cues from the global markets have also been very encouraging today. Rupee is trading firm against the dollar at 39.36.

At 12.18 hrs IST, the Sensex is up 255.44 points or 1.28% at 20186.12, and the Nifty up 99.55 points or 1.67% at 6060.15.

About 2396 shares have advanced, 643 shares declined, and 47 shares are unchanged.

Abhishek Ind up 16%, Lanco Infra and Sonata Soft each up 9%, Omaxe up 8%, followed by Rain Calcining, CBoP and Vijaya Bank are some of the gainers in the broader markets. ONGC, Bharti Airtel, HDFC, Nalco, Glaxo Smithkline are the top gainers on the frontline indices. IT pivotals Infosys and TCS are the top losers on the Sensex as well as Nifty. Infosys is down 2% and TCS is down nearly 1%.

TataTeleservice, Ispat Industries, Centurion Bank, Reliace Inds and Bharti Airtel were some of the most active counters on the bourses today. Pharma stocks were in focus today and the top winners in this sector were Pfizer, Divis Lab, Wyeth and Nicholas Pharma. In the power space, the top gainers were Torrent Power, GMR Infra, GVK Power and NTPC.

Mkts in momentum; power, oil&gas pharma stocks up

The markets have gained further points and were trading strong on account of good amount of buying witnessed across the board led by power, oil & gas, metal and pharma stocks. Market breadth was extremely strong with good volumes so far.

At 11.30 pm, the Sensex is up 226.48 points or 1.14% at 20157.16, and the Nifty up 89.70 points or 1.50% at 6050.30. About 2408 shares have advanced, 629 shares declined, and 49 shares are unchanged.

Top gainers on the Nifty are NALCO at Rs 397 up 5.22%, Grasim at Rs 3,720 up 3.13% and GAIL at Rs 513.80 up 2.73%. Top losers on the Nifty are Sun Pharma at Rs 1,110.55 down 0.95%, Infosys at Rs 1,732.25 down 0.94% and Tata Motors at Rs 764 down 0.32%. TataTeleservice, Ispat Industries, Centurion Bank, Reliace Inds and Bharti Airtel were some of the most active counters on the bourses today.

Pharma stocks were in focus today and the top winners in this sector were Pfizer at 781, Divis Lab at 1815, Wyeth at 500 and Nicholas Pharma at 321.95. In the power space, the top gainers were Torrent Power, GMR Infra, GVk Power and NTPC.

Markets open firm; power, metal stocks gain

The markets opened on firm note today ahead of Fed meeting in line with its global peers. Cues from the global markets were good today. Oil & gas, metal and power stocks were strong in the early trade.

At 9:56 am, Nifty was up 54 points at 6014 and Sensex was up 101 pints at 20031. Major gainers in the early trade were Reliance Inds, GAIL, HPCL, SAIL, Unitech, Tata Steel, Sterlite inds, BHEL, Cipla, Nalco, Ambuja Cement, MTNL, NTPC and L&T. However, HCL Tech and Rel Comm were little subdued.

Asian markets were trading higher. Hong Kong's Hang Seng surged 1.15% or 327.55 points at 28,828.65, Japan's Nikkei rose 0.71% or 113.62 points at 16,038.01, Taiwan's Taiwan Weighted gained 0.25% or 21.28 points at 8,619.31, Singapore's Straits Times advanced 0.37% or 13.11 points at 3,566.19 and South Korea's Seoul Composite shot up 0.47% or 8.98 points at 1,915.40.

US markets: Wall Street ended higher ahead of Fed rate decision today and financial stocks also added some positive momentum in the markets. The Dow gained 101.45 points, or 0.74%, to 13,727.03. The Standard & Poor's 500 index shot up 11.30 points, or 0.75%, to 1,515.96. The Nasdaq composite index advanced 12.79 points, or 0.47%, to 2,718.95.

Market cues:

* FIIs net buy USD 1.3 million in equity on Dec 7
* MFs net buy Rs 71.1 crore in equity on Dec 7
* NSE F&O Open Interest up by Rs 2307 crore at Rs 1,02,690 crore

Source: Moneycontrol.com

Watch out for these hidden gems!

CNBC-TV18 has analysed over 4,000 small and midcap companies to find some hidden gems. These are companies with low PE, high dividend yield, price to book value of less than 1, positive cash flows, EPS and good profit growth.

All these parameters have been looked at together and some companies have been shortlisted from those 4,000 odd companies. The analysis has excluded export-oriented companies, IT companies, trading companies, investment and holding companies. It is looking at a pure manufacturing play.

One such pick is Alps Industries, which is from the textile sector. The price to earnings of Alps Industries is about 5.5 times currently and the industry PE for that sector is about 18 times. It is a low PE sector, but the segment in which Alps is working in has a PE of about 18 times. The price to book value of this company is about 0.6 times. Analysts said that even if you are buying this company for the book, you are getting it cheaper at this point. The book value per share is around Rs 90 per share and dividend yield is around 1.5%.

For those who believe in the long-term play, dividend yield is one factor. The Sensex has a dividend yield of less than 1%. The stock has an EPS of around 10 and cash EPS of around Rs 13. This is a company from the small and midcap space, but there is huge institutional demand in this segment. Morgan Stanley, SBI, GIC and Bank of New York cumulatively hold over 25%. If you buy on the institutional side, this is a story to look out for.

Sales growth is up about 65% and PAT growth is up about 27%. Its 52-week performance is such that it has underperformed the Sensex by about 70%. The textile sector is a low margin business and the government has started to offer sops like the Technology Upgradation Fund, which is coming up, and rupee appreciation is hurting that sector a bit.

The other hidden gem is from the food-processing sector and the stock is KRBL. Its PE is about 6.4 times and the industry PE is about 20 times. The price to book value is about 0.6 times. The book value per share is about Rs 130 and dividend yield is about 2.3. EPS is about 13.5 and cash EPS is about 23%. There is big institutional activity on this counter. SBI, LIC, Deutsche Bank and Reliance Commodities hold about 18% in this stock. Sales growth is about 26% and PAT growth is about 55% in this company. The food-processing sector is growing, as organized retail come into the foray.

Analysts are of the view that these companies will see some action. Historically, these companies have not seen any momentum. These institutional players look at all these parameters. In the absolute short term, these companies may underperform, but in the long-run there can be outperformance.

Source: Moneycontrol.com

Stick to midcap stocks, feel experts

It started as a good day for markets but the frontliners failed to hold their gains at the higher levels and ended near the lowest point of the day. The rally in the midcaps and smallcaps continued and the market breadth was significantly positive. Nifty closed flat at 5,908, while Sensex shut shop at 19,633 down 65 points.

Analysts believe that it is better to stick to the midcap index and also some of the leading frontline highly liquid counters rather than get into counters which have just about started seeing explosive volumes because volumes can dry up as fast as they have spurted up.

Ajay Srivastava of Dimensions Consulting believes a basic shift has taken place in terms of the demand and supply in the midcaps and smallcaps space. He said there is a lot of liquidity in the stocks. As an investor one should ideally allocate 20-25%, not more than that of the portfolio to midcap and smallcap, he explains. “The critical element is that whenever there is a correction, in the liquid stocks, in the mainline stocks, you can sell out. Here, there is no exit for months.” he adds.

So, he said, people must be very clear that they will have to hold these stocks for longer periods and volatility is very high. Therefore, he advises, not to allocate more than 20-25% to these stocks, irrespective of the returns of 30-35%.

Dipan Mehta, Member Of BSE & NSE feels that clearly there is a changing complexion of the investors in the market and the liquidity flows over the past couple of months was from institutions and the FIIs which were driving these stocks over here and "therefore we saw the kind of outperformance in the large cap stocks and the index stocks but over the past about 15-20 trading sessions, we have seen the emergence of the Indian retail investors category into the market and that’s the reason why we are seeing so much of action and pick up in volume in some of the midcap and the smallcap stocks".

Experts feel that there are typical stocks which are quite illiquid and even with the small dose of capital coming into these counters, they have fantastic moves, which is seen over the past few days.

Source: MoneyControl.com

US economy may see $2 trillion shock

The impact of the U.S. mortgage market crisis on the underlying economy could be "dramatic" as leveraged investors may need to scale back lending by up to USD 2 trillion, according to investment bank Goldman Sachs.

Chief U.S. economist Jan Hatzius said a "back-of-the-envelope" estimate of credit losses on outstanding mortgages, based on past default experience, was around USD 400 billion.

But unlike stock market losses, which are typically absorbed by "long-only" investors, this mortgage-related hit is mostly borne by leveraged investors such as banks, broker-dealers, hedge funds and government-sponsored enterprises.

And leveraged investors react to losses by actively cutting back lending to keep capital ratios from falling -- A bank targeting a constant capital ratio of 10 percent, for example, would need to shrink its balance by USD 10 for every USD 1 in losses.

"The macroeconomic consequences could be quite dramatic," Hatzius said in the note to clients. "If leveraged investors see USD 200 billion of the USD 400 billion aggregate credit loss, they might need to scale back their lending by USD 2 trillion."

"This is a large shock," he said, adding the number equates to 7 percent of total debt owed by U.S. non-financial sectors.

"It's basically another downside risk to the macroeconomy at a time when the macroeconomy already isn't doing that well," Hatzius told CNBC. He said such a shock could produce a "substantial recession" if it occurred over one year, or a long period of sluggish growth if it occurred over two-to-four years.

Hatzius underscored the macroeconomic nature of the shock in his interview with CNBC. "I don't think there's a direct stock market implication from this, perhaps with the exception that it does point to a slow-growth environment, significant risk of recession, and that's probably in an envrionment in which the cyclical sectors are going to underperform."

One of a number of caveats outlined in the report was that baseline economic forecasts may already include significant reductions in the pace of mortgage lending.

But the conclusion remained a gloomy one regardless. "The likely mortgage credit losses pose a significantly bigger macroeconomic risk than generally recognized," he wrote.

"While the uncertainty is large, the associated downward pressure on lending raises the risk of significant weakness in economic activity."

Courtesy cnbc.com...