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
Showing posts with label latest news on share market. Show all posts
Showing posts with label latest news on share market. Show all posts
Tuesday, December 11, 2007
Tuesday, December 4, 2007
Buy Tata Motors
Anish Damania of Emkay Stock Brokers is of the view that in the commercial vehicle space one can buy Tata Motors. It is a dominant player in 16 tonne and the 25 tonne segment and we are seeing greater potential for this stock to surprise on the upside.
Damania told CNBC-TV18, "If I were to buy anything in the commercial vehicle space, I would prefer to buy Tata Motors because if I were to look at it, economy is still going strong nothing wrong there, some financial troubles were there because the interest rates were high and maybe some delinquencies have stated on the lending front, so there was a slowdown there. But now when we speak to our banking channels inquires have started coming in for the 16 tonne and the 25 tonne segment in which Tata Motors is more dominant. If you look at it the inquires have picked up more in the north and therefore Tata Motors being a dominant player there, we are seeing probably greater potential for Tata Motors to surprise on the upside."
He further added, "Thirdly, as we go into the next year we will have a low-based effect so which would mean that you should see early better growth than most of the expectations. So today Tata Motors is underweight in most of the funds, so I would definitely start looking at this counter."
Source: Moneycontrol.com
Damania told CNBC-TV18, "If I were to buy anything in the commercial vehicle space, I would prefer to buy Tata Motors because if I were to look at it, economy is still going strong nothing wrong there, some financial troubles were there because the interest rates were high and maybe some delinquencies have stated on the lending front, so there was a slowdown there. But now when we speak to our banking channels inquires have started coming in for the 16 tonne and the 25 tonne segment in which Tata Motors is more dominant. If you look at it the inquires have picked up more in the north and therefore Tata Motors being a dominant player there, we are seeing probably greater potential for Tata Motors to surprise on the upside."
He further added, "Thirdly, as we go into the next year we will have a low-based effect so which would mean that you should see early better growth than most of the expectations. So today Tata Motors is underweight in most of the funds, so I would definitely start looking at this counter."
Source: Moneycontrol.com
New highs before Dec-end doubtful
It was a quiet day for the frontliners, but the midcaps continued to set the floor ablaze reports CNBC-TV18. Subdued global cues and profit booking pulled the Nifty down seven points with the index shutting at 5,858. The Sensex, meanwhile, ended the day 74 points lower at 19,530.
Banking and technology stocks traded weak while consumer durables capital goods, metal, oil, power stocks were in the green. BSE sector indices were trading mixed and the breadth was in favour of the advances.
The top losers of the day were VSNL, ICICI Bank, Unitech, TCS, Maruti, Wipro and Tata Motors. Meanwhile, Tata Steel, M&M, BHEL, GAIL, HPCL, PNB and Siemens were among the top gainers.
So are the markets poised for all-time highs in December? According to Anish Damania of Emkay Stock Brokers, markets could see some leveling off near the highs. “A lot of investors don’t want to take fresh positions in this month, they are all light on their positions. So at least till January they would be off. Otherwise, in terms of value buying, that keeps on happening,” he said adding that he isn’t too sure about the Sensex crossing its highs this month.
When asked whether the advantage will be for the midcaps or will the interest largely remain in the midcap space, Damania opined that the midcaps will continue to do well selectively. “I would look at the real estate sector where some of the midcaps could outshine,” he added.
Rahul Mohindar of Viratechindia.com feels that the immediate short-term outlook is a bit patchy. “It looks like the market will consolidate a lot more before going up,” he said adding that unlike 2-3 months back where one could see just a 100 points move up in a single day it’s unlikely that markets are going to see that kind of a sudden upmove coming in. “It will be a slow and steady buildup but we are likely to see newer highs, not necessarily this month. It may take up till January,” he added.
According to Mohindar, the undertone is still good. “We have stayed above the 5,800 mark which is important for us. So, the undertone remaining bullish, one should stay long on the Nifty. But if one just looks at all the indices, I think we are going to see a round of midcap out performance here,” he explained.
Source: Moneycontrol.com
Banking and technology stocks traded weak while consumer durables capital goods, metal, oil, power stocks were in the green. BSE sector indices were trading mixed and the breadth was in favour of the advances.
The top losers of the day were VSNL, ICICI Bank, Unitech, TCS, Maruti, Wipro and Tata Motors. Meanwhile, Tata Steel, M&M, BHEL, GAIL, HPCL, PNB and Siemens were among the top gainers.
So are the markets poised for all-time highs in December? According to Anish Damania of Emkay Stock Brokers, markets could see some leveling off near the highs. “A lot of investors don’t want to take fresh positions in this month, they are all light on their positions. So at least till January they would be off. Otherwise, in terms of value buying, that keeps on happening,” he said adding that he isn’t too sure about the Sensex crossing its highs this month.
When asked whether the advantage will be for the midcaps or will the interest largely remain in the midcap space, Damania opined that the midcaps will continue to do well selectively. “I would look at the real estate sector where some of the midcaps could outshine,” he added.
Rahul Mohindar of Viratechindia.com feels that the immediate short-term outlook is a bit patchy. “It looks like the market will consolidate a lot more before going up,” he said adding that unlike 2-3 months back where one could see just a 100 points move up in a single day it’s unlikely that markets are going to see that kind of a sudden upmove coming in. “It will be a slow and steady buildup but we are likely to see newer highs, not necessarily this month. It may take up till January,” he added.
According to Mohindar, the undertone is still good. “We have stayed above the 5,800 mark which is important for us. So, the undertone remaining bullish, one should stay long on the Nifty. But if one just looks at all the indices, I think we are going to see a round of midcap out performance here,” he explained.
Source: Moneycontrol.com
Monday, November 26, 2007
Sensex may not cross or hold 20K levels
The markets kicked off the week on a strong note. Boosted by positive global cues, the indices surged ahead and closed with handy gains. Nifty closed at 5,732 up 123 points, while Sensex shut shop at 19,248 up 395 points.
Markets closed the day with handsome gains on heavy buying seen in scrips across sectors. It was a good of trade for most of the equity markets across globe. Asia had a strong session today, barring Shanghai Comp most of the Asia closed in green. Europe was also trading in positive terrain.
HDFC Bank, Tata Steel, SAIL, Bharti Airtel, Unitech, HDFC, TCS, ONGC, Reliance Energy are among the top gainers. Deccan Aviation, Voltas, IndusInd Bank were among the strong midcap stocks.
Technolgy stocks have bounced back today and were among the top gainers.
Dipan Mehta, Member, BSE & NSE feels that some FII money may have been coming into the Indian markets. He said, “Markets are always right and although there is skepticism, the screen clearly shows the 400-point rally. Today I think some of the FII money may have been coming into the market. We have been seeing consistent negative flows over the past almost three weeks or so. But today, maybe slightly different, given the fact that a lot of largecap stocks have rallied on the back of decent volumes. So that is one part of the reason. Some amount of short covering as well as build up on the futures side and fresh long positions also could be responsible for this kind of a rally that we have seen.”
He further added that there may be some flows coming in from retail investors and domestic investors. “At the same time I think the retail investors who are pegged down by some other worries in the global markets and with some of the concerns easing, there maybe a surge of flows coming in from retail investors and domestic investors as well because we are seeing a lot of the action in some of the side counters and the cash group, the B group shares as well. Question is whether the market is scaled to go beyond 20,000 and holds those gains. I do not think that is a possibility,” he said.
Deepak Mohoni Of Trendwatch (India) says that he would hold on to positions because there is global rally building up, apparently on the word that the pre-Christmas sales in the US have been very good. “So if there is a global rally that you certainly don’t want to argue against, and as far as 20,000 is concerned, that is only 3.5%-4% from here. So that is not really formidable target in percentage terms. So I think its okay to be optimistic, at least in the short-term.”
Source: Moneycontrol.com
Markets closed the day with handsome gains on heavy buying seen in scrips across sectors. It was a good of trade for most of the equity markets across globe. Asia had a strong session today, barring Shanghai Comp most of the Asia closed in green. Europe was also trading in positive terrain.
HDFC Bank, Tata Steel, SAIL, Bharti Airtel, Unitech, HDFC, TCS, ONGC, Reliance Energy are among the top gainers. Deccan Aviation, Voltas, IndusInd Bank were among the strong midcap stocks.
Technolgy stocks have bounced back today and were among the top gainers.
Dipan Mehta, Member, BSE & NSE feels that some FII money may have been coming into the Indian markets. He said, “Markets are always right and although there is skepticism, the screen clearly shows the 400-point rally. Today I think some of the FII money may have been coming into the market. We have been seeing consistent negative flows over the past almost three weeks or so. But today, maybe slightly different, given the fact that a lot of largecap stocks have rallied on the back of decent volumes. So that is one part of the reason. Some amount of short covering as well as build up on the futures side and fresh long positions also could be responsible for this kind of a rally that we have seen.”
He further added that there may be some flows coming in from retail investors and domestic investors. “At the same time I think the retail investors who are pegged down by some other worries in the global markets and with some of the concerns easing, there maybe a surge of flows coming in from retail investors and domestic investors as well because we are seeing a lot of the action in some of the side counters and the cash group, the B group shares as well. Question is whether the market is scaled to go beyond 20,000 and holds those gains. I do not think that is a possibility,” he said.
Deepak Mohoni Of Trendwatch (India) says that he would hold on to positions because there is global rally building up, apparently on the word that the pre-Christmas sales in the US have been very good. “So if there is a global rally that you certainly don’t want to argue against, and as far as 20,000 is concerned, that is only 3.5%-4% from here. So that is not really formidable target in percentage terms. So I think its okay to be optimistic, at least in the short-term.”
Source: Moneycontrol.com
Sunday, November 25, 2007
Reasonable for market to correct further
Surjit Bhalla of Principal O(x)us Investments said, the markets may see more downsides from here and a consolidation was likely with a downward bias. He said the market was concerned about negative fundamental as well as technical cues. He noted that “try to take quote here”
He said he was not super bullish on the global situation. He added that global growth had slowed and was likely to remain so. According to him, it was difficult to predict the outcome of the US Fed meeting on December 11. He felt that US interest rates were still on the higher side, and the odds were favour of a 50-75 bps easing over the next six months.
When asked about sectors, he said the depreciation of the rupee was making technology worthwhile at current levels. He was also bullish on power and infrastructure sectors, adding that the long-term growth story in the sectors remained intact.
Excerpts from CNBC-TV18's exclusive interview Surjit Bhalla:
Q: What is making you circumspect, patience or is it the global cues that you are seeing? Why do you think the risks are more on the downside?
Bhalla: I think both fundamentals and technicals. On the fundamentals, it is much of what you said that the global cues are certainly not very comforting. One can argue however that all the bad news is out. But if it was a case that valuations were lower, then the argument that all the bad news is out is a very good argument and makes one extremely bullish.
Now, we are sitting close to 6,000 or 10% below that. In that context with PE ratio somewhere in the 22-25 range, the bad news may be all out. But that doesn’t make one go ahead and aggressively buy. The other side of the story, the technicals is the other side - that is suggesting that perhaps at these levels, the reasonable way for the market is to move downwards.
Most markets in the emerging markets space have corrected much beyond 10%. We are at somewhere around 8% or so. That is the third factor. I think Brazil and we are the only two countries that haven’t really depreciated or corrected by double-digit figures.
We add all of that up together - how much can you then say that - listen one should go ahead and buy, I just don’t find that a very comforting view.
Q: What about the global situation most emerging markets, as you said, have corrected more than us and there seems to be a debate on, on whether the Fed will cut in December again or not? What do you think is the likely outcome from the December meeting?
Surjit Bhalla: It is a close call. If you go by the minutes of the last Fed meeting, they clearly stated that they would on hold for the time being unless something exceptional happens. Weighed against that is the news about the economy which is not shockingly weaker but certainly weaker than what the Fed had led us to believe. Add to that the fact that the real interest rates in the US are still quite high- I am talking about the Fed funds rate though the two-year note and the 10-year have corrected or have come to very reasonable yields. So the odds are if I were to put a bet that the Fed would ease and would continue to ease - maybe there is another 50-75 basis point over the next six-months until we get imbalance with- the real Fed funds rate should be somewhere close to 2% and we are not quite there yet and that’s 2% on when the economy is doing well.
When the economy is doing badly as clearly the US economy is doing though I don’t belong to the camp that says that it will go into recession that maybe you want to get the Fed fund’s rate, the real Fed funds rate down to about 1.5% or so, which is about 3.5%. That’s again on a long-term basis; I am not saying that’s going to happen or should happen over the next six months. The international situation for the first time in a long while, actually since 2001, is not in a super bullish state and even though global growth will be there, it will clearly be slower. As far as India is concerned, we are one of the few emerging markets amongst our competitors whose growth rate already is lower than last year and that has to do with both the high interest rate policy that we are followed as well as the high rupee value that we followed.
But that is an interesting statistic that amongst all our comparators, there growth rate this year GDP growth rate is higher than what was last year. Ours is lower. So you add that to the mixture, which says that, our valuations are somewhat on the higher side. Growth in prices has been rather exceptional. We have not corrected so much and the global situation n- I am just saying it’s very long bet; all puns intended, to think that the market will make a significant move to the upside from these levels.
Q: You are sounding more circumspect than I have heard you over the last many months. Even if there is not too much downside you would feel that 20,000 is an intermediate top in place which would be difficult to take out given the factors you mentioned?
Surjit Bhalla: I really think so. Here at O(x)us, we emphasize technicals a lot as well as fundamentals and what you have is a double whammy on the 20,000 side. You have got 20,000 and 6,000 on the Nifty. This is a relatively rare occurrence. So just add up all of the elements and it just seems- and the story was very different 10-days ago where it really looked like we on our ways to make an new high and the fact that we failed that adds additional evidence. The reason we failed exposed that if you will, we haven’t corrected as much as the Asian markets. So there is definitely a bit of catch up involved. You can’t have this kind of a gap all in the space of 3-months to persist for very long. So either other Asian markets really rally and I don’t see the elements in place for that happening or we fall a bit more than the rest of our neighbours.
Q: Would you agree or would you buy them after the fall?
Bhalla: Let me answer this is a slightly belated fashion. I have been sounding circumspect or not as bullish as I have been. There is a silver lining, there is something that can be bullish and likely will be bullish and therefore that signifies a particular sector to be in. That is the dollar or the rupee. Our view is that the dollar is very close to historical lows against the Deutsche Mark, against the euro, against the yen and if you will, against the rupee as well.
So, we see a significant correction in the dollar against these currencies, not against China, not against East Asia, but certainly against the euro, the pound and the rupee. If the rupee depreciates by 2-4%, which we think is quite likely, then I think the software sector, forget the power sector - just look at the software sector as to how much has been beaten down. I think that will provide a fillip to the software sector. Also, the software sector provides a safe haven in times of when the momentum play is being unraveled.
The infrastructure story in India started, if you will, about a year-year and half ago and will persist for the next 5-10 years. This is not a fly by night, internet boom where there is no valuation and no real profits and real activity. I think you have to correct perhaps even more and then it becomes rather attractive. So I like the software sector a lot at these levels. Power and infrastructure sector, if they correct, seems at least probable, if not likely.
Then they will become attractive. But one point I do want to make, this is an unfortunate recurrence for value players like myself. That is, I just see a lot more operator activity in leading stocks than I have ever seen before. I don’t think that is a healthy development.
Basically the momentum plays that you talk about is a code word for operator activity. I think that is confusing - the value play in the market place. If that is the case and if market corrects, then the market will go much more to the downside than befits it or the fundamentals suggest. That is the other danger lurking in the Indian equity space. You would probably have a better reading on how much operator activity there is. But I certainly feel it and we measure it by indicators in several stocks that it has really zoomed up in the last six months.
Source: Moneycontrol.com
He said he was not super bullish on the global situation. He added that global growth had slowed and was likely to remain so. According to him, it was difficult to predict the outcome of the US Fed meeting on December 11. He felt that US interest rates were still on the higher side, and the odds were favour of a 50-75 bps easing over the next six months.
When asked about sectors, he said the depreciation of the rupee was making technology worthwhile at current levels. He was also bullish on power and infrastructure sectors, adding that the long-term growth story in the sectors remained intact.
Excerpts from CNBC-TV18's exclusive interview Surjit Bhalla:
Q: What is making you circumspect, patience or is it the global cues that you are seeing? Why do you think the risks are more on the downside?
Bhalla: I think both fundamentals and technicals. On the fundamentals, it is much of what you said that the global cues are certainly not very comforting. One can argue however that all the bad news is out. But if it was a case that valuations were lower, then the argument that all the bad news is out is a very good argument and makes one extremely bullish.
Now, we are sitting close to 6,000 or 10% below that. In that context with PE ratio somewhere in the 22-25 range, the bad news may be all out. But that doesn’t make one go ahead and aggressively buy. The other side of the story, the technicals is the other side - that is suggesting that perhaps at these levels, the reasonable way for the market is to move downwards.
Most markets in the emerging markets space have corrected much beyond 10%. We are at somewhere around 8% or so. That is the third factor. I think Brazil and we are the only two countries that haven’t really depreciated or corrected by double-digit figures.
We add all of that up together - how much can you then say that - listen one should go ahead and buy, I just don’t find that a very comforting view.
Q: What about the global situation most emerging markets, as you said, have corrected more than us and there seems to be a debate on, on whether the Fed will cut in December again or not? What do you think is the likely outcome from the December meeting?
Surjit Bhalla: It is a close call. If you go by the minutes of the last Fed meeting, they clearly stated that they would on hold for the time being unless something exceptional happens. Weighed against that is the news about the economy which is not shockingly weaker but certainly weaker than what the Fed had led us to believe. Add to that the fact that the real interest rates in the US are still quite high- I am talking about the Fed funds rate though the two-year note and the 10-year have corrected or have come to very reasonable yields. So the odds are if I were to put a bet that the Fed would ease and would continue to ease - maybe there is another 50-75 basis point over the next six-months until we get imbalance with- the real Fed funds rate should be somewhere close to 2% and we are not quite there yet and that’s 2% on when the economy is doing well.
When the economy is doing badly as clearly the US economy is doing though I don’t belong to the camp that says that it will go into recession that maybe you want to get the Fed fund’s rate, the real Fed funds rate down to about 1.5% or so, which is about 3.5%. That’s again on a long-term basis; I am not saying that’s going to happen or should happen over the next six months. The international situation for the first time in a long while, actually since 2001, is not in a super bullish state and even though global growth will be there, it will clearly be slower. As far as India is concerned, we are one of the few emerging markets amongst our competitors whose growth rate already is lower than last year and that has to do with both the high interest rate policy that we are followed as well as the high rupee value that we followed.
But that is an interesting statistic that amongst all our comparators, there growth rate this year GDP growth rate is higher than what was last year. Ours is lower. So you add that to the mixture, which says that, our valuations are somewhat on the higher side. Growth in prices has been rather exceptional. We have not corrected so much and the global situation n- I am just saying it’s very long bet; all puns intended, to think that the market will make a significant move to the upside from these levels.
Q: You are sounding more circumspect than I have heard you over the last many months. Even if there is not too much downside you would feel that 20,000 is an intermediate top in place which would be difficult to take out given the factors you mentioned?
Surjit Bhalla: I really think so. Here at O(x)us, we emphasize technicals a lot as well as fundamentals and what you have is a double whammy on the 20,000 side. You have got 20,000 and 6,000 on the Nifty. This is a relatively rare occurrence. So just add up all of the elements and it just seems- and the story was very different 10-days ago where it really looked like we on our ways to make an new high and the fact that we failed that adds additional evidence. The reason we failed exposed that if you will, we haven’t corrected as much as the Asian markets. So there is definitely a bit of catch up involved. You can’t have this kind of a gap all in the space of 3-months to persist for very long. So either other Asian markets really rally and I don’t see the elements in place for that happening or we fall a bit more than the rest of our neighbours.
Q: Would you agree or would you buy them after the fall?
Bhalla: Let me answer this is a slightly belated fashion. I have been sounding circumspect or not as bullish as I have been. There is a silver lining, there is something that can be bullish and likely will be bullish and therefore that signifies a particular sector to be in. That is the dollar or the rupee. Our view is that the dollar is very close to historical lows against the Deutsche Mark, against the euro, against the yen and if you will, against the rupee as well.
So, we see a significant correction in the dollar against these currencies, not against China, not against East Asia, but certainly against the euro, the pound and the rupee. If the rupee depreciates by 2-4%, which we think is quite likely, then I think the software sector, forget the power sector - just look at the software sector as to how much has been beaten down. I think that will provide a fillip to the software sector. Also, the software sector provides a safe haven in times of when the momentum play is being unraveled.
The infrastructure story in India started, if you will, about a year-year and half ago and will persist for the next 5-10 years. This is not a fly by night, internet boom where there is no valuation and no real profits and real activity. I think you have to correct perhaps even more and then it becomes rather attractive. So I like the software sector a lot at these levels. Power and infrastructure sector, if they correct, seems at least probable, if not likely.
Then they will become attractive. But one point I do want to make, this is an unfortunate recurrence for value players like myself. That is, I just see a lot more operator activity in leading stocks than I have ever seen before. I don’t think that is a healthy development.
Basically the momentum plays that you talk about is a code word for operator activity. I think that is confusing - the value play in the market place. If that is the case and if market corrects, then the market will go much more to the downside than befits it or the fundamentals suggest. That is the other danger lurking in the Indian equity space. You would probably have a better reading on how much operator activity there is. But I certainly feel it and we measure it by indicators in several stocks that it has really zoomed up in the last six months.
Source: Moneycontrol.com
Thursday, November 22, 2007
Markets recover: What's the next resistance level?
What are the views of brokerages and technical analysts on where the support and resistances for the market lie?
On speaking to technical analysts, the consensus seems to be that the intermediate downtrend has been established. The Nifty did close below the 5,700 level yesterday. Many critical support levels have been broken. But the next major level to watch out for and all seem to be unanimous on this, is 5,470-5,475.
CLSA earlier today, gave out a target of 18,275 as the next major support on the Sensex. They said that below this, a typical head-and-shoulder pattern would be formed out. In simple words, a head-and-shoulders pattern would see a huge volume build-up at the initial peak, at the peak of the market, which is at 6,000 level on the Nifty or 20,238 on the Sensex.
We saw low levels of volumes, so if this statistical support level of 18,275 is broken, a head-and-shoulders pattern may emerge, which would lead to a further downside of about a 1,000 points, where the next major support would emerge.
Technical analysts say that 5,475 would be the critical support level; 5,462 is the low of today and intermediate support levels have been broken at about 5,530.
Technical indicators like the RSI have indicated a pretty oversold market and there may be some bounce back on short covering, but all these bounce backs must be sold into and profits must be taken.
5,600-5,650 are the next major resistance levels on the top and 5,700 is the key resistance level below which the market closed yesterday.
If one does want to participate in this market, largecaps would be the safest and best bets and stocks like Reliance, L&T, NTPC and Neyveli Lignite would be the choices.
Source: Moneycontrol.com
On speaking to technical analysts, the consensus seems to be that the intermediate downtrend has been established. The Nifty did close below the 5,700 level yesterday. Many critical support levels have been broken. But the next major level to watch out for and all seem to be unanimous on this, is 5,470-5,475.
CLSA earlier today, gave out a target of 18,275 as the next major support on the Sensex. They said that below this, a typical head-and-shoulder pattern would be formed out. In simple words, a head-and-shoulders pattern would see a huge volume build-up at the initial peak, at the peak of the market, which is at 6,000 level on the Nifty or 20,238 on the Sensex.
We saw low levels of volumes, so if this statistical support level of 18,275 is broken, a head-and-shoulders pattern may emerge, which would lead to a further downside of about a 1,000 points, where the next major support would emerge.
Technical analysts say that 5,475 would be the critical support level; 5,462 is the low of today and intermediate support levels have been broken at about 5,530.
Technical indicators like the RSI have indicated a pretty oversold market and there may be some bounce back on short covering, but all these bounce backs must be sold into and profits must be taken.
5,600-5,650 are the next major resistance levels on the top and 5,700 is the key resistance level below which the market closed yesterday.
If one does want to participate in this market, largecaps would be the safest and best bets and stocks like Reliance, L&T, NTPC and Neyveli Lignite would be the choices.
Source: Moneycontrol.com
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