Small-cap, micro and mid-cap stocks came to the fore today as investors rotated money from frontline shares. The valuations of small-cap, Micro and mid-cap shares have turned attractive vis-a-vis frontline stocks following a surge some of the frontline stocks in the past few months. BSE Small-Cap Index rose 103.62 points or 1.5% today to settle at 6,635.01 and BSE Mid-Cap Index advanced 76.64 points or 1.3% to 5,727.85. In comparison, Sensex rose a muted 14.78 points or 0.1% to settle at 13,616.73. The S&P CNX Nifty rose 6.45 points or 0.16% to settle at 3,928.20. Volatility was high. After surging over 100 points at the onset of trading tracking firm Asian markets, Sensex gradually pared gains later and it even slipped into the red at one point of time at the fag end of the trading session. It recovered from the red and moved into the green again at close. Sensex hit a low of 13,586.04 and high of 13,711.76. Liquidation of positions in the November 2006 derivatives contracts ahead of expiry of November contracts on Thursday weighed on the bourses today. Five Sensex heavyweights Infosys, ICICI Bank, ONGC, Bharti Airtel and Reliance Industries (RIL) slipped into the red. These five stocks have a combined weightage of over 40% in Sensex. Asian and European markets were firm today. Japan’s Nikkei 225 average jumped 221 points or 1.3% to 16,076.20 following robust industrial output data. The market sentiment remains bullish due to strong FII inflow and expectations that corporate earnings growth will remain strong. Sensex has risen sharply over the past few weeks. The barometer index is up almost 45% in calendar 2006 so far. Market would keenly watch the extent of rollover to December contracts from November 2006 contracts which expire on Thursday 30 November. A large rollover would mean traders expect the rally on continue whereas lower rollover would indicate correction might be on the cards. The broad market depicted bullish trend today as gainers outpaced losers by a ratio of 1.77:1 on BSE. Select side counters surged. BSE clocked a turnover of Rs 4388 crore compared to Tuesday’s Rs 4161 crore. Cement shares extended their recent upmove on firm cement prices. ACC gained 3.6% to Rs 1140, Gujarat Ambuja Cements rose 2.3% to Rs 146.55 and Grasim gained 2% to Rs 2770. Cigarette major ITC advanced 2.5% to Rs 184.40. 9.3 lakh shares changed hands in the counter on BSE. Auto shares rose after the government today announced a cut of Rs 2 per litre in price of petrol and rupee one per litre in diesel. Bajaj Auto rose 1.1% to Rs 2670, Tata Motors gained 0.8% to Rs 817 and car major Maruti Udyog added 0.6% to Rs 920. I have already recommended Samkrg Piston & Rings Ltd today at Rs.86 with a price target of Rs.150—Rs.170 in 8—12 months time. This company came out with excellent set of numbers for the September, 2006 quarter. The company has gone in for massive restructuring exercise, the fruits of which have slowly started to come. It is one of the cheapest stocks in the auto ancillary space and is a leading player in the South India. Its client list consist who’s who of Indian Industry. Please read my earlier report on www.eindiabrokers.com. Refinery shares slipped on worries that cut in retail fuel prices would put further pressure on their marketing margins. HPCL shed 3.5% to Rs 291.50 and BPCL lost 1.7% to Rs 354. Indian Oil Corporation dropped 4.7% to Rs 459.90 and Bongaigaon Refinery shed 5.5% to Rs 50.65. Indian Oil Corporation (IOC) today recommended a swap ratio of four IOC shares for every 37 shares held in Bongaigaon Refinery, for merger of Bongaigaon Refinery in IOC. Oil exploration major ONCG dropped 0.8% to Rs 859.80. ONGC has to sell crude at a discount to state-run refiners to help them reduce losses incurred due to state-set prices. Bharti Airtel dropped 1.3% to Rs 620 on profit taking. Communist Party of India said on Tuesday it was against the entry of Wal-Mart Stores Inc. in India, a day after Bharti Enterprises – a Bharti Airtel group company announced a tie-up with the world's biggest retailer on Tuesday. ICICI Bank shed 0.8% to Rs 855 and Reliance Industries dropped 0.1% to Rs 1249. Software major Infosys shed 0.7% to Rs 2151 in volatile trade. On Tuesday, Infosys ADR rose nearly 1%. Tata Steel dropped 0.04% to Rs 475.60 in volatile trade after Anglo-Dutch steelmaker Corus Group said on Wednesday its third-quarter earnings rose 63% on the back of higher steel prices. Corus last month agreed a 4.3 billion-pound takeover offer from Tata Steel. However, Brazil's Companhia Siderurgica Nacional has since proposed making a higher bid and it has been conducting due diligence with the help of senior Corus management. Corus this week delayed a shareholder meeting to vote on Tata's takeover offer until Dec. 20. Tyre shares extended their recent rally as natural rubber prices remained low. JK Industries gained nearly 5% to Rs 141.90, CEAT rose 4.4% to Rs 131.75, Apollo Tyres rose 4% to Rs 357 and MRF rose 2.7% to Rs 4612. There are reports that CEAT is going to sell its Bhandup property soon. Shriram Transport Finance jumped 6% to Rs 140. The company today reported 11.4% growth in net profit for Q2 September 2006 to Rs 39.49 crore (Rs 35.44 crore). Total income rose 37.8% to Rs 318.21 crore (Rs 230.76 crore). This company should gain from the fall in the Petrol / Diesel prices. Recently listed Lanco Infratech jumped 14% to Rs 267. The scrip rose on huge volume of 1.1 crore shares on BSE. Torrent Power jumped 20% to Rs 84.80. Volumes in the stock were a huge 70.9 lakh shares on BSE. Torrent Power is the umbrella company of the newly amalgamated generation, transmission and distribution businesses of the Torrent Group. It debut on the bourses was listed on the bourses on Tuesday (28 November). The T & D shares have never been too favourite of bourses except a select few. Torrent seems to have a mark in this favourite list. Distillation equipment maker Praj Industries gained 4% to Rs 195.20 after the company said on Wednesday it had secured an order worth 2 million euros to design a bio-ethanol complex in Belgium. But since the sector in which it manily performs is on a downturn and hence it is better to avoid this counter for the time being. Bilpower rose 0.2% to Rs 154.15 after the company said on Wednesday it bought 30,999 shares of Tarapur Transformers for Rs 3.41 crore. The firm has also funded Tarapur to the tune of Rs 4.95 crore Jindal Saw jumped 6% to Rs 404.90 on strong Q4 results. Jindal Saw reported a surge in net profit for Q4 September 2006 to Rs 47.56 crore from Rs 24.13 crore in Q4 September 2005. Net sales rose 98.9% to Rs 1123.39 crore from Rs 564.71 crore. Voltas gained 2.4% to Rs 110. 21.3 lakh shares changed hands in the counter on BSE. This stock is being moved by Bombay based operators time and again. The company’s main season has already eneded. Keep away from this counter, except if one wants to play according to Charts for some speculative gains. GE Shipping lost 5% to Rs 213. The stock was relisted on Monday following a scheme of arrangement whereby it transferred its offshore services division to a separate company Great Offshore which would be listed separately. Gujarat NRE Coke rose 20% to Rs 32.25 after the company said the shareholders of Zelos Resources which is listed in the Australian stock exchange last week passed a resolution giving effect to the company taking a controlling 85% stake in the Australian resources firm. Zelos Resources is now being renamed Gujarat NRE Resources NL. BPO firm Tricom India rose 10% to Rs 123.60. On Monday, the company announced that it plans to put up a new centre at Nashik with a recruitment of 400 freshers to its fold. But another BPO firm FCS Software Solutions Ltd fell like nice pins after hitting the buyer freeze at Rs.112.5. I am investing the cause why this stock fell so low, even after hitting the buyer freeze in the early hours. But SEBI should look at this matter. I think some operators are active in this counter who have resorted to large scale selling to corner the scrip. But I am not "unduly" worried as the company is exceedingly doing well, and is planning to open an Overseas Branch soon. The Company has a good order book position. But please keep a stop loss at around Rs.92 and keep holding those who have entered the scrip. Avoid taking fresh positon until the haziness surrounding the counter is cleared. NDTV lost 1.3% to Rs 229.75 after the company said it has entered into a strategic alliance with Karan Johar and Dharma Productions for its entertainment business. It remains to be seen if Karan Johar’s entry can make people say, ”Kuch Kuch Hota Hai” if one watches NDTV. Torrent Pharma rose 3.6% to Rs 197. Dr. Reddy's Laboratories said on Wednesday it had signed a deal with Torrent Pharmaceuticals to sell the latter's anti-cholesterol products, Listril and Listril Plus, in Russia. Kamat Hotels India rose 0.7% to Rs 170.45. The company said on Tuesday that Kotak Securities under its portfolio management schemes, raised its stake in the company to 5.09 percent. The schemes of Kotak Securities acquired 47,648 shares, or a 0.36 percent stake, on Nov. 24, the company said. Gitanjali Gems rose 10% to Rs 239.90 on reports is in talks to acquire U.S. jewellery retailer Samuels Jewelers Inc. in a transaction valued at $25 million. One my earlier recommended pick Radhe Developers Ltd which brought lot of Controversies in 2005, with NDTV coming into action is hitting the buyer freeze. But offlate I have not recommended the counter, since the company has not performed according to expectation. Please trim ur holdings unless you want to earn through speculative bids. This is a Gujarat based company into Housing and Infrastructure developments, with least transparency. I have also recommended Soma Textile Industries Ltd today in view of the company coming out with better than expected results in the September, 2006 quarter and also due to the fall in the cotton prices. The company finished its Rs.87 Cr expansion in the early part of this year. Also the company would get cheap electricity from MSEB in this fiscal. This is an excellent stock to buy, those who have missed Pioneer Embroideries Ltd. I have placed a target of Rs.60 in 8—18 months time. The expected EPS of the company should be in the range of Rs.6—Rs.7 for FY-2006-07. PBA Infrastrucutre Ltd hit the 5th Consecutive buyer freeze today. The stock was recommended at around Rs.128 some days back. The stock witnessed a solid spurt in the past few days, from Rs 121.60 on 20 November to Rs 142.50 on 28 November on the back of winning a number of contracts. . On 28 November, PBA Infrastructure rose 2.96% to Rs 142.50 after it bagged an order for providing four laning to Aurangabad — Jalna road worth Rs 297 crore from the World Bank Project Division, Maharashtra in joint venture with Sadbhav Engineering known as Sadbhav-Prakash. The concession period of the Project is 23 Years and 6 Months. PBA Infrastructure has 49% while Sadbhav Engineering has 51% stake in the joint venture. Gravity(I) Ltd slid a little after it rose to Rs.8.76 on the back of sustained buying from the retail investors, in the early trade. The stock should get better valuations in the days to come in the view of its retail foray and a number of other initiatives. Keep accumulating the stock on all declines.
Till this report is being prepared, the US Indices are trading in the Green. Wall Street rose for a second straight session today after the government's latest gross domestic product reading showed the economy was in better shape than expected, easing concerns that growth was moderating too sharply.The US market appears to be in a consolidation phase after its big rally the past two months. The fact that it has rebounded rather than extending Monday's plunge, when the Dow Jones industrials fell 158 points, indicates that many investors want to keep buying although they're watching closely for any signs of economic trouble. "There is still negative news out there, outside of the GDP numbers, and I don't know what is going to shock this market," said Alexander Paris, president of Chicago-based Barrington Research. "Investors are really looking over the valley right now, and all this data is going to test that conviction." In midday trading, the Dow rose 84.44, or 0.70 percent, to 12,220.89. The Dow rose 14.74 Tuesday. Broader stock indicators also advanced. The Standard & Poor's 500 index was up 11.11, or 0.80 percent, at 1,397.83, and the Nasdaq composite index added 19.11, or 0.79 percent, to 2,431.72. [With Inputs from the Internet] More in the following postings..... Best Regards, Suman Mukherjee India. www.pkblogs.com/sumanspeaks http://finance.groups.yahoo.com/group/SumanSpeaks/
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