market outlook 5th january 2012
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8/3/2019 Market Outlook 5th January 2012
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Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539 1
Market OutlookIndia Research
January 5, 2012
Dealer’s Diary
Indian markets are expected to open lower following negative cues from the
European markets and the Asian markets. Asian stocks are trading in the redafter Italy’s biggest bank said it needs to raise more capital, spurring concern
that the European debt crisis is worsening.
Indian shares ended a choppy session modestly lower on Wednesday, with key
benchmarks indices losing less than half a percent each, as investors took some
profits after a two-day rally.
European shares snapped a four-day streak of gains on Wednesday as UniCredit
SpA’s plan to sell shares fueled concern that banks need to raise capital to
weather the debt crisis. US market traded lower in the first half due to profit
taking, with some traders cashing in on Tuesday's strong gains amid lingering
concerns about the European debt crisis and the outlook for the global economy.The downward momentum was partly offset by the release of a report from the
Commerce Department showing a rebound in new orders for U.S. manufactured
goods, leading to US markets ending marginally in the green.
Markets Today
The trend deciding level for the day is 15,903/4,754 levels. If NIFTY trades
above this level during the first half-an-hour of trade then we may witness a
further rally up to 15,984 - 16,086/4,779 - 4,808 levels. However, if NIFTY
trades below 15,903/4,754 levels for the first half-an-hour of trade then it may
correct up to 15,802 - 15,721/4,725 - 4,700 levels.
Indices S2 S1 Pivot R1 R2
SENSEX 15,721 15,802 15,903 15,984 16,086
NIFTY 4,700 4,725 4,754 4,779 4,808
News Analysis
Cement Dispatches – December 2011
KEC International secures orders worth ` 1,253crRefer detailed news analysis on the following page
Net Inflows (January 03, 2011)
` cr Purchases Sales Net MTD YTD
FII 1,357 1,031 326 287 287
MFs 538 223 315 260 260
FII Derivatives (January 04, 2012)
` cr Purchases Sales Net Open Interest
Index Futures 1,210 1,359 (149) 10,517
Stock Futures 1,294 1,241 52 23,310
Gainers / Losers
Gainers Losers
Company Price (`) chg (%) Company Price (`) chg (%)
MMTC 730 17.8 Bajaj Holdings 649 (5.6)
Hindustan Copp 253 15.3 Bajaj Auto 1,426 (4.7)United Spirits 561 9.4 M&M 638 (4.3)
Gujarat NRE Coke 17 5.1 Bajaj Finserve 420 (3.6)
Neyveli Lignite 79 4.7 ACC 1,104(3.4)
Domestic Indices Chg (%) (Pts) (Close)
BSE Sensex (0.4) (56.7) 15,883
Nifty (0.3) (15.7) 4,750MID CAP 0.2 8.8 5,265
SMALL CAP 0.1 5.6 5,691
BSE HC 0.5 27.1 5,974
BSE PSU 1.7 114.4 6,731
BANKEX 0.7 66.5 9,643
AUTO (1.2) (98.9) 8,102
METAL 0.6 61.8 9,887
OIL & GAS (0.5) (37.6) 7,738
BSE IT (0.5) (29.2) 5,925
Global Indices Chg (%) (Pts) (Close)
Dow Jones 0.2 21.0 12,418
NASDAQ (0.0) (0.4) 2,648
FTSE (0.6) (31.5) 5,668
Nikkei 1.2 104.8 8,560
Hang Seng (0.8) (150.1) 18,727
Straits Times 0.8 22.7 2,711
Shanghai Com (1.4) (30.0) 2,169
Indian ADRs Chg (%) (Pts) (Close)
Infosys (0.5) (0.3) $53.2
Wipro (1.7) (0.2) $10.3
ICICI Bank (0.1) (0.0) $28.1
HDFC Bank 0.5 0.1 $27.3
Advances / Declines BSE NSE
Advances 1,499
Declines 1,200 655
Unchanged 135 72
Volumes (` cr)
BSE 2,184
NSE 9,716
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Market Outlook | India Research
January 5, 2012 2
Cement Dispatches – December 2011
UltraTech reported cement dispatches for December 2011, which were up by
strong 10.6% yoy to 3.62mn tonnes. However, for 3QFY2012, growth in
dispatches has been modest at 5.9%. In December 2011, the company managed
to post better growth in dispatches compared to Ambuja Cements' growth, which
reported modest growth of 5.7% yoy. We continue to remain Neutral on UltraTech.
KEC International secures orders worth `1,253cr
KEC International (KEC) has bagged orders totaling ` 1,253cr across various
business verticals. In the transmission and distribution space (T&D), the company
secured orders worth ` 976cr. Order intake in MENA region stood at ` 414cr
( ` 310cr and ` 104cr worth of orders from Saudi Arabia and Afghanistan,
respectively). SAE Towers secured orders worth ` 154cr. In addition, ` 350cr worth
of orders came from the U.S., Kenya and Philippines. Notably, only one order
came from the domestic T&D space ( ` 59cr), thus demonstrating the company’s
globally diversified strength. The completion time of all these orders ranges from
12-27 months. In addition to the above, the company bagged orders in the
business verticals of water ( ` 123cr), cables ( ` 105cr) and telecom ( ` 49cr). The
current order book of the company stands at ` 9,000cr.
KEC’s globally diversified model has enabled it to gain an edge over its domestic
peers in the T&D space. While domestic players have struggled to secure orders
amid the slowdown, KEC has consistently maintained its average quarterly run rate
of ~ ` 1,200 since the past several quarters. In addition, new businesses of water,
railway and telecom are faring well (pace of new orders is gradually increasing).
Hence, given the latent potential of the company and healthy return ratios (~25%),
the valuations of 4.3x FY2013E EPS (well below its historic PE multiple average of
14.0x) are compelling. We recommend Buy with a target price of `45.
Economic and Political News
Government defers decision on PSU disinvestment via buyback
Finance Ministry rules out floating rates in postal savings
Global food prices expected to remain high: FAO
Corporate News
ONGC finds four more potential reserves
Bosch to invest ` 3,000cr in India on expanding capacity
Hero MotoCorp unveils three new products at Auto Expo, New Delhi
TCS adds 200 clients on its SME platform iON
Dhanlaxmi Bank raises NRE term deposit rates
Economic Times, Business Standard, Business Line, Financial Express, Mint,
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Market Outlook | India Research
January 5, 2012 3
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