WINNING STROKES: THINK DIFFERENT:
[....look for discounts in the Paid Packages]
It is good to note that Mr.Arun Jaitley has decided to patch up with Mr.Rajnath Singh. I appreciate the efforts of these two respected gentlemen, in diffusing the tension, created over a very small matter. If you remember I had mentioned yesterday, that my sources in BJP in the North East, are upbeat after finding Mr.Sudhanshu Mittal (Many call him king-maker as due to his efforts only, the difficult AGP--BJP alliance was possible; according to a number of my sources in North East), at the helm of affairs.
The BJP apart from doing well in Assam (could sweep,unless the congress ties up with the Muslim League in Assam--the UDF, as it did in Kerala) and in Manipur, it would also do well in West Bengal, according to my analysis, as compared to last time; mainly on the back of the non-fragmentation of the core BJP voters in all these states. Remember in Assam, the situation is a litttle different, than rest of India, as it has been found that a good section of Muslims (who are basically Sufis) have always voted for the BJP. This time also a sizable section of the Assamese Muslims are going to vote for the BJP-AGP, combine due to this historic alliance---hence my analysis that AGP--BJP combine could sweep in Assam, in these elctions.
Moreover, the people at West Bengal are now a little confused, as whom to vote after an alliance was struck by the opportunists Congress and Ms. Mamata Banerjee. It is to be understood that though Ms.Banerjee, got the applaud from the poorer sections of the society as regards to Nandigram issue, but she basically infuriated the elite/upper middle class of West Bengal on this matter. Many think that Nandigram issue which led to the exodus of Tatas (or Tata Nano project), could dent the urban vote bank of both the Congress (a silent supporter) and Trinomool Congress (Ms.Mamata Banerjee's party).
In Bihar the Congress would find one of the greatest challenges, as it did away with alliance with RJD, in view of Laloo Prasad Yadav, saying SIMI (Student Islamic Movement of India) should not be banned. Mr.Laloo Yadav's, RJD is heading for one of the worst performances in recent times, as his M-Y (Muslim-Yadav) combine might not work this time, due to the fragmentation of the vote bank.
The same fate lurks ahead for Mulayam Singh Yadav, in Uttar Pradesh, as BSP would get majority of the Muslim/Lower Caste votes, inspite of the entry of Mr. Kalyan Singh into Samajbadi Party (SP). On the other hand, BJP is expected to improve its performance in Uttar Pradesh and Bihar, due to non-fragmentation of the upper caste votes and core lower caste votes (mainly OBC/Kurmi Voters in Bihar) in both the states. However, the main gainer of all these exercise would be BSP, led by Mayawati, in Uttar Pradesh.
The Left Parties are heading for one of their worst performances in recent times. In Kerala, also the Congress is expected to do well. In West Bengal, its seat could become half than what it got last time, due to the consolidation of the Muslim votes towards the Congress--Trinomool alliance.
Moreover, people are tired of Left's regressive and opportunists policies. Still now they believe in the classical form of economics when the whole world is following the Keynesian Concepts. With the governments of all the major countries announcing bailout packages, rate cuts and other such government action, it is the Keynesian line of thinking that they are adopting and implementing.
The Keynesian line of thinking includes the theory, that the total demand for goods in an economy might be insufficient during economic downturns, leading to unnecessarily high unemployment and losses of potential output, exactly the situation that we are currently in. It suggests that the solution to this is that government policies should be used to stimulate the wavering demand, which will help in increasing economic activity and consequently reduce unemployment and deflation.
For instance, according to Keynes a booming economy and high demand growth would call for raising taxes to cool the economy and to prevent inflation. Similarly in an economic downturn, it would be appropriate for the government to engage in deficit spending on labor intensive infrastructure projects to give a fillip to employment and prop up wages. Thus, continuously engaging in counter cyclical policies, to calibrate the growth of the economy in a smooth and even manner.
On the other hand, the opposite doctrine termed ‘classical economics’ suggests that the authorities should cut taxes when there are budget surpluses, and cut spending /increase taxes—during economic downturns. Thus trusting in the invisible hand of the market to adeptly allocate resources
on the basis of price signals in the market. Some would argue that this is the thinking that has got us to where we are right now. The essence of Keynes argument is that governments should solve problems in the short term rather than waiting for market forces to do it in the long run. That is because "in the long run, we are all dead."
Taking a leaf out of Keynes’ book, that is what governments the world over are doing currently.
It is to be remembered that in the last elections, Trinomool Congress was routed, as the Muslims did not vote for that party. This time the people of West Bengal has to decide between the parties who are soft on Terrorism or Champions of backward economic policy and a party who is strong on Terrorism and has an almost equivalent economic policy of the UPA. The people of West Bengal might question the UPA government, on their progress of nabbing the perpetrators of the Mumbai Carnage. The UPA Government hardly did anything, except giving false promises and lip services; even after almost 4 (four) months of that ghastly incident, which shook the whole world.
Moreover, in this election, please think why you should vote the white elephants of Indian democracy, who have no track on what is happening in India--Shashi Tharoor, Mallika Sharabhai (She stood against Mr. L K Advani only to create a stunt which is her inherent characteristics), Sanjay Dutt (he did all the anti-social things and now he is shamelessly asking for votes. Is this the democracy we boast of.....Democracy does not mean mobocracy as we have in Pakistan. In Pakistan they have invented an absurd concept called Islamic-democracy), Jaya Prada (If she gets a ticket, this time. If you remember, she got brick-bats from the voters after she visited the constituency a couple of months back. She virtually did nothing for the Muslims, majority of whom gave their votes to her), Azhar Uddin (the former Cricket match-fixer is now Congress Party's mascot in the south India. At last we now have a match-fixer in Congress!!), Kabir Sumon (From Sumon Chatterjee after embracing Islam in order to marry Sabina Yashmin, a popular Bangladeshi Singer. He makes us remember the Fiza--Chand Muhammod story), etc.
Anyway, lot of politics, let us focus on the stock market. Sarda Energy and Power Ltd is now being recommended by my friend Ashish Chugh. The stock hit the buyer freeze. There is also a report on the company at www.sumanspeaksplus.blogspot.com. Crude Oil reached my target of $51 per barrel on Nymex, which is look to break the next level of $54 per barrel ahead of summer driving season. If you remember I had predicted this target when the crude was trading at $34 per barrel and most of the analysts were saying it would reach $28 per barrel. This is definitely going to help the financials of the Oil exploration companies, like Selan Exploration Ltd, Reliance Industries Ltd, etc.
Vikash Metal and Power Ltd hit 6th consecutive buyer freeze yesterday. The company is now a power play along with the steel play.
KEC International Ltd recommended at Rs.113--Rs.120 range, touched Rs.142.35 yesterday. The stock should be accumulated in bulk on all dips.
Selan Exploration Technology Ltd recommended to the Paid Groups and here in this blog, touched Rs.124.90, before coming off a little. The company has started buy back of the shares from the open market.
Oracle Financial Services Software Ltd recommended a couple of days to the PAID GROUPS around Rs.600 jumped to Rs.703.70 before cooling down reflecting a boom in the stocks, related to the mid-cap IT space. I had mentioned earlier that the stock would be the biggest beneficiaries of the recovery of the US Financials.
Phoenix International Ltd nearly hit the buyer freeze yesterday, on positive outlook on the company. The company sister company is coming out with gas production in this year, which would benefit the shares of this company. The fact that the shares of the company are trading near its 52-week low price gives further ammunition to the bulls.
Thermax Ltd recommended to the Paid Groups in the last Sunday Report touched Rs.187, before coming down a little. There is a report on the company at: www.sumanspeaksplus.blogspot.com.
Areva T&D India Ltd recommended in this blog, moved to Rs.187. The company bagged the first private sector Ultra High Voltage Generator Transformers order from Lanco Infratech Ltd. The order valued at more than 33 million Euros, includes supply of 765 KV Generator Transformers, Shunt Reactors and 765 KV of 400 KV interconnecting transformers for switchyard associated with the 1200 MW, Thermal Power Plant.
Kohinoor Broadcasting Corporation Ltd hit the buyer freeze on the opening trade, yesterday.
Reliance Industrial Infrastructure Ltd moved to Rs.284.70. The stock is going to give stupendous returns going forward. Meanwhile Reliance Industries Ltd which was recommended around Rs.1100 in this blog and in the Free Yahoo Group, SumanSpeaks, moved to Rs.1354, yesterday, before cooling down a bit.
Following F & O Call was given to the Paid Groups, yesterday:
1. Buy RELINFRA MAR 500 Call @ 8 - 102.
2.Buy RELINFRA MAR 460 Put @ 7 - 9
The outlook of the stock is positive and volatility can be expected to trade higher levels. The stock has resistance at XXX and XXX. Above this level, further uptrend is likely. On the downside, the support will be at XXX and XXX. Below this level, further downside is expected. The intra-day call on Reliance Capital Ltd reached target in the opening trade yesterday.
It was a day of immense volatility with alternate bouts of buying and selling. The barometer index BSE Sensex ended slightly higher after recovering sharply in mid-afternoon trade. Expectations of a further cut in policy rates by the Reserve Bank of India and firm European markets triggered a late recovery. Volatility in index heavyweight Reliance Industries (RIL) caused volatility in key benchmark indices today. Banking stocks, too, were choppy. IT and realty stocks rose.
Shares of some textile, gems and jewellery and leather exporters rose after Trade Secretary Gopal Pillai said exports of textiles, leather and gems and jewellery, which contribute heavily in India's total export basket, were showing signs of a pick up.
The BSE 30-share Sensex rose 25.07 points, or 0.28%, off close to 100 points from the day's low but down close to 85 points from the day's high. The Sensex flirted with the 9,000 level throughout the day.
The market surged at the onset of the trading session on mostly higher Asian stocks, increase in risk appetite globally, hopes of a recovery of the global economy, a strong rebound in rupee against the dollar and on buying by foreign funds. The barometer index BSE Sensex moved past the psychological 9,000 level. However, the market soon came off the day's high on lingering concerns about the slowing Indian economy and on lower US index futures. It slipped into the red later as some Asian stocks slipped into the red.
The Sensex moved into the green from red after the inflation data hit the market in early afternoon trade. It later recovered again after slumping to the day's low in afternoon trade. However, the recovery proved short-lived and the market weakened later. The Sensex fell below the psychological 9,000 level. It cut losses trade to trade in green for a brief period. It fell once again to hit day's low before recovering in mid-afternoon trade regaining 9,000 level. The market pared gains in late trade with the Sensex once again falling below the 9,000 mark.
Inflation based on the wholesale price index (WPI) rose 0.44% in the year through 7 March 2009, a record low for the current series data released by the government today showed. The rate of growth in inflation was much lower than previous week's annual rise of 2.43%.
A sharp fall in inflation in the past few months has provided room for the Reserve Bank of India (RBI) to cut policy rates. Japanese financial services firm Nomura expects a 100 basis points reduction in key short-term interest rates by RBI in April-June 2009 quarter.
However, the central bank would be in dilemma over further rate cuts as other gauges of inflation that it takes into account when deciding policy are at a decade high. The inflation rate as measured by consumer price index for industrial workers, which seeks to represent the impact of retail prices on the country's workforce, had risen to 10.45% in January 2009, compared to 9.7% in the previous month.
Similarly, consumer price index for urban non-manual employees suggests that the annual rate of inflation in 59 Indian cities had been 9.8% in December 2008, the latest month for which data is available.
Nonetheless, a rally in rupee against the dollar has helped reduce concerns about the increase in costs of imports for Indian firms arising from a recent steep slide. However, volatility of the currency remains a cause for concern. Early this month, the rupee had tumbled to a record low below 52 a dollar.
The Indian rupee strengthened past 51 per dollar for the first time in three weeks on Thursday, boosted by firmer Asian stock markets and a weakening dollar. The partially convertible unit was at 50.32, sharply higher than Wednesday's close of 51.29/30.
The increase in global risk appetite in the past few days is a good news for Indian Inc which is facing liquidity crunch as Indian banks have become risk averse on fears of rising defaults in a slowing economy and due to the global financial sector crisis. Fund crunch for the corporate sector has, in turn, accelerated slowdown in the economy.
Earlier the global financial crisis ends and sooner the risk appetite of global investors and global companies improves, better it will be for India Inc. An increase in risk appetite of global investors/global companies will help Indian firms raise overseas funds required for business expansion. The global financial crisis has chocked the overseas funding route for Indian firms.
Lack of funding has hit a slew of long-gestation infrastructure projects in India. World Bank Chief Economist & Senior Vice-President, Dr Justin Yifu Lin, on 13 March 2009, said if India can improve its infrastructure such as electricity, power, transportation and port facilities, it will be well on its path to achieve a 9-10% growth.
Risk appetite rose globally following the latest aggressive move by the US Federal Reserve. The Fed on Wednesday said it would buy $300 billion in longer-dated Treasurys over the next six months, along with another $850 billion in mortgage-related debt, in a bid to improve credit markets and pull the US economy out of its hole.
The Fed kept the benchmark interest rates unchanged at between zero and 0.25%.
European shares rose on Thursday, tracking gains on Wall Street after the Federal Reserve said it would buy long-term Treasury bonds for the first time in four decades to try and revive the economy. Key benchmark indices in France, Germany and UK were up between 1.75% to 2.3%.
Asian markets were mixed in contrast to a firm start on lower US index futures. Key benchmark indices in Japan, Taiwan and South Korea were down by between 0.23% to 0.7%. Key benchmark indices in Singapore, Hong Kong and China were up by between 0.1% to 1.89%.
Meanwhile, Oracle Corp jumped 7.4% in after-hours trade in the US after the company said it would pay its first-ever dividend. Its fiscal third-quarter net income eased 0.8%. Yet, trading in US index futures indicating that the Dow could slide 36 points at the opening bell on Thursday, 19 March 2009.
Closer home, concerns about the slowing Indian economy remain. Indian commercial banks have become more averse to extending loans, further throttling the economic growth.
On the flip side, foreign institutional investors (FIIs) are now in buying mode which follows easing of FII selling vigour in the past few days. FIIs bought shares worth a net Rs 353.70 crore on Wednesday, 18 March 2008. FIIs can also take solace in the recent strong rebound in the rupee. A recent sharp slide in the rupee to a record low had resulted in a depreciation in the value of their equity portfolio to the extent of the fall in rupee.
Domestic institutional investors (DIIs) bought shares worth a net Rs 526.34 crore on Wednesday as per the provisional data. DIIs have been absorbing heavy selling by foreign funds in calendar year 2009.
However, the upside on the domestic bourses will be capped in the next two months due to political uncertainty ahead of parliamentary election to be held between mid-April 2009 to mid-May 2009.
Meanwhile, FIIs have responded enthusiastically to the government's decision to increase the cumulative investment limit in corporate debt from $ 6 billion to $ 15 billion. In an open bidding held at the National Stock Exchange (NSE) recently, a total of 24 bidders were allocated investments of Rs 29350 crore, the highest ever investment allocation by FIIs in India. In comparison, the net investment of FIIs in 2008 was only Rs 12069 crore. Since January 2009, FII's net investment in debt instrument has fallen by Rs 634 crore.
As per the Securities and Exchange Board of India (Sebi) data, $8 billion (Rs 41,000 crore) was available for allocation to FIIs and their sub-accounts in an open bidding platform.
Attractive interest rates have lured foreign funds to Indian debt market. For instance, corporate debt returns in the US are 1-1.5%, whereas in India, the rates are as high as 8-9%. Bonds floated by state-run firms fetch yields in the range of 9.30%, which are about 300 basis points higher than 10-year G-Sec yields. As per reports, FIIs are likely to invest in attractive PSU bonds floated by quasi-government entities like Power Finance Corporation and Rural Electrification Corporation.
Meanwhile, foreign direct investment (FDI) in India in January 2009 was up 55% at $2.73 billion from $1.76 billion for the same month in the preceding year. Up to September this fiscal year, the monthly inflows were in excess of $2 billion. However, the following three months witnessed a sharp dip in the overseas investment, due to the backdrop of the global financial crisis. The January figures bring a renewed hope that India is back on the radar of global investors.
The BSE 30-share Sensex was up 25.07 points, or 0.28%, to 9,001.75, its highest closing since 19 February 2009. At the day's high of 9,086.77, the Sensex gained 110.09 points in early trade. At the day's low of 8,900.39, the Sensex fell 76.29 points in mid-afternoon trade.
The S&P CNX Nifty was up 12.45 points or 0.45% to 2,807.15.
From the recent low of 8,160.40 on 9 March 2009, the Sensex has risen 841.35 points or 10.31% in six trading sessions. Yet, the Sensex is down 645.56 points or 6.69% in calendar 2009 from its close of 9,647.31 on 31 December 2008. The S&P CNX Nifty is down 152 points or 5.13% in calendar 2009 from its close of 2,959.15 on 31 December 2008.
The BSE clocked a turnover of Rs 3,967 crore, lower than Rs 4,148.70 crore on Wednesday, 18 March 2009.
Nifty March 2009 futures were at 2801.55, at a discount of 5.60 points as compared to the spot closing of 2807.15. Turnover in NSE's futures & options (F&O) segment was Rs 48,752.20 crore, sharply lower than Rs 54,871.64 crore on Wednesday, 18 March 2009.
The BSE Mid-Cap index was up 0.52% and BSE Small-Cap index rose 1.08%. Both the indices outperformed the Sensex.
The BSE Realty index (up 2.48%), the BSE IT index (up 1.58%), the BSE TECk index (up 0.83%), the BSE Oil & Gas index (up 0.74%), the BSE Bankex (up 0.61%), the BSE Metal index (up 0.59%) outperformed the Sensex.
The BSE Capital Goods index (down 2.62%), the BSE Auto index (down 0.71%), the BSE FMCG index (down 0.28%), the BSE Consumer Durables index (down 0.19%), the BSE Power index (down 0.08%), the BSE Healthcare index (up 0.03%), the BSE PSU index (up 0.12%) underperfomed the Sensex.
The market breadth indicating the overall health of the market was positive on BSE with 1,335 shares advancing as compared with 1,128 that declined. A total of 62 shares remained unchanged. The market breadth had turned even in afternoon trade from a strong breadth earlier in the day.
From the 30 share Sensex pack, 19 stocks rose while rest fell.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) was volatile, moving between positive and negative zone. It provisionally rose 1% to Rs 1,344.65. The company is likely to start production of gas from KG basin, off the east coast, this month. RIL's advance tax payment fell 16.47% to Rs 370 crore in Q4 March 2009 over Q4 March 2008.
India's largest oil exploration firm by revenue ONGC rose 0.97% as crude oil prices rose more than 2% in Asian electronic trading on Thursday, 19 March 2009. Rise in crude oil prices would result in higher realizations from crude sales for the oil exploration firms.
Rate sensitive real estate shares rose on hopes lower rates will spur housing demand. DLF, Indiabulls Real Estate and Unitech rose by between 1.11% to 3.81%. Most of the realty deals including sale of commercial property and housing sales is driven by finance.
Arihant Foundations & Housing rose 4.47% after one of the promoter group companies hiked stake in the firm.
Rate sensitive banking shares rose in choppy trade on hopes a further fall in interest rates may boost lending growth. The stocks were volatile. India's largest private sector bank by net profit ICICI Bank rose 0.87% to Rs 338.10, off the day's low of Rs 327.60. Its American depository receipts (ADR) jumped 6.19% on Wednesday, 18 March 2009. ICICI Bank's advance tax payment remained unchanged at Rs 250 crore in Q4 March 2009 when compared to Q4 March 2008.
India's largest bank in terms of assets and branch network State Bank of India rose 0.75% to Rs 968.20, off the day's low of Rs 936.40. Its advance tax payment jumped 27.64% to Rs 1810 crore in Q4 March 2009 over Q4 March 2008.
India's second largest private sector bank by operating income HDFC Bank fell 1.48% to Rs 830.20, off the day's low of Rs 819.40. Its ADR rose 4.77% on Wednesday. Its advance tax payment rose 10% to Rs 275 crore in Q4 March 2009 over Q4 March 2008.
Bond prices surged in early trade today ahead of the central bank's purchase of Rs 10000-crore of existing debt from investors in an effort to cap yields. The yield on the 6.05 bond maturing in February 2019 dropped 14 basis points to 6.3% as of 9:13 IST in Mumbai. Bond yields and bond prices are inversely related.
Outsourcing focussed IT firms gained on hopes of revival in the US economy, the biggest market for IT firms. A surprise move by the Federal Reserve to buy government bonds revived hopes the battered US economy could soon begin its recovery.
India's largest software services exporter by sales TCS rose 1.62% to Rs 514.80 off the day's high of Rs 517.95. The company's advance tax payment fell 54.3% to Rs 53 crore in Q4 March 2009 over Q4 March 2008. The company during trading hours on Monday 16 March 2009 said its promoter Tata Sons has pledged more than 12.06 crore shares or 12.33% of the equity capital of the firm.
India's fifth largest IT major by sales HCL Technologies rose 2% extending recent gains on securing a contract worth $350 million on Monday, 16 March 2009.
India's third largest software services exporter, Wipro rose 0.89% as its ADR rose 5.05% on Wednesday. Recently its unit Wipro Infotech won an outsourcing contract worth Rs 1,182 crore from the Employees State Insurance Corporation (ESIC).
India's second largest software services exporter Infosys Technologies rose 1.44% as its ADR gained 3.31% on Wednesday. Infosys chief and co-founder Mr S Gopalakrishnan said on Sunday, 15 March 2009, the Indian IT industry would tide over the current downturn and might surpass the US in terms of having the largest number of IT professionals in the world in the next three years.
MindTree surged 32.58% on reports the company will restructure its business into five independent business units.
However, a stronger rupee may cap upside in IT stocks in the near future. The Indian rupee strengthened past 51 per dollar for the first time in three weeks on Thursday, boosted by firmer Asian stock markets and a weakening dollar. A stronger rupee affects operating margins of IT firms negatively as they earn most of their revenues from exports.
Metal stocks gained on jump in metal prices on London Metal Exchange. Steel Authority of India, Hindustan Zinc, Sterlite Industries and Hindalco Industries rose by between 0.01% to 2.91%. But Tata Steel and National Aluminum Company fell by between 1.76% to 2.32%.
Rate sensitive auto shares fell on worries a sluggish consumer spending may dent demand for cars, motorcycles and scooters. Profit taking was another reason for slide in auto stocks after recent strong gains. Mahindra & Mahindra and Hero Honda Motors fell by between 0.65% to 1.89%. But India's largest car maker by sales Maruti Suzuki India rose 1.7%.
India's largest commercial vehicle maker by sales Tata Motors fell 2.75% after a recent strong rally in the stock ahead of the launch of its Rs 1-lakh car Nano on 23 March 2009. Tata Motors paid no advance tax in Q4 March 2009 compared to Rs 75 crore in March 2008.
Some FMCG stocks fell on profit taking after recent gains triggered by expectations of better Q4 March 2008 results following reports of higher advance tax payment by these firms. Nestle India, Dabur India, Britannia Industries, Marico and United Spirits fell by between 0.2% to 3.98%. India's largest FMCG firm by sales Hindustan Unilever fell 1.03% extending recent fall even as the company's advance tax payment rose 30% to Rs 130 crore in Q4 March 2009 over Q4 March 2008.
Some healthcare stocks fell after recent gains triggered by expectations of better Q4 March 2008 results on reports of higher advance tax payment by these firms. Cipla, Wochardt, Biocon, Glenmark Pharmaceuticals, Lupin fell by between 0.03% to 3.61%.
Areva T & D India gained 0.76% on bagging an order worth 33 million euros.
Cals Refineries clocked the highest volume of 2.01 crore on BSE. Suzlon Energy (96.87 lakh shares), Unitech (84.65 lakh shares), Firstsource Solutions (81.46 lakh shares) and NIIT (72.01 lakh shares) were the other volume toppers in that order.
Akruti City clocked the highest turnover of Rs 994.03 crore on BSE. Reliance Industries (Rs 192.40 crore), ICICI Bank (Rs 169.95 crore), Educomp Solutions (Rs 144.15 crore) and HDFC (Rs 113.1 crore) were the other turnover toppers in that order.
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