When you know what you want, and you want it badly enough, you'll find away to get it" - Jim Rohn
Indian market
closed the week on a buoyant note backed by continued buying interest shown by FIIs, strong macro economic scenario over the progress of monsoon and better than expected Q1 earnings by the corporate sector. The market remained positive on three out of five trading sessions last week. The Sensex finally closed the week at 18130 gaining 175 points whereas the Nifty closed at 5449 gaining 55 points.Results were mostly in line with expectations and there has not been any major nasty surprise. The earnings outlook for the Indian companies remains bright in line with the prospects for the Indian economy. The PM's Economic Advisory Council has set a target of 8.5% and 9% for the next two years.
Inflation
continues to be an issue and may take time to soften. The RBI is expected to continue its calibrated approach to monetary policy. Markets expect the RBI to announce another small hike of 25 basis points at next week's policy review. Volatility might increase slightly owing to the F&O expiry. What is heartening is that FIIs remain upbeat on India and have already pumped in close to US$ 9bn. So, the broad undertone is positive and the market could gain some more ground from here. But, global uncertainty and high valuations may play spoilsport. Monday's start will partially hinge on the outcome of the European banks' stress tests.The Put Call Ratio ( PCR ) seems to be hovering above the 1.50 mark indicating the presence 1.5 puts for every call. A higher PCR seems to indicate limited downside to the market for the short term, at least in the Indian context.
MAJOR NEWS:Food inflation softens to 12.47%
Bharat Heavy Electricals Q1 net profit jumps 42% yoy
Wipro posts good Q1 nos
HDFC Bank Q1 net profit rises 34% yoy
Cabinet clears Power Grid FPO; to divest 10% stake
Bajaj Auto Q1 net doubles; board approves 1:1 bonus issue
RECO FROM DIFFERENT BROKERS:
EDELWEISS: TECHNICAL PICKS::
Corporation Bank, Mcleod Russel, Idea
ANAND RATHI: Bharti Airtel top pick in telecom space: Bharti may provide another 15-20% upside within 9-12 months.
`Hold` Asian Paints, Dabur in FMCG space.Recommends 'Buy' for Colgate Palmolive (CMP 845) for a 20.71% upside target 1020
AMBIT CAPITAL:
Recommends 'Buy' for PTC India (CMP 108) for a 25% upside target 135
Recommends 'Buy' for Crompton Greaves (CMP 270) for a 17.40% upside target 317
MOTILAL OSWAL:
Recommends 'Buy' for Sesa Goa (CMP 352) for a 30.68% upside target 460
Recommends 'Buy' for HDFC Bank (CMP 2045) for a 7.57% upside target 2200
PRABHUDAS LILADHAR:
Recommends 'Buy' for United Spirits (CMP 1392) for a 10.84% upside target 1543
The softening of food inflation eased some concerns over the interest rate hike in the upcoming Reserve Bank of India (RBI) meet on July 27, 2010 (Tuesday) but still markets expect the RBI to announce another small hike of 25 basis points in the apex bank’s meeting to review monetary policy. On the global front, encouraging economic data from the European markets, the US Federal Reserve Chairman Ben Bernanke suggesting that there is a safety net in place and upbeat corporate earnings announced on Thursday (July 22, 2010) boosted the investors' confidence globally lifting all the major indices. Watch ADANI POWER Ltd, NHPC Ltd and SHRIRAM TRANSPORT FINANCE CO. LTD. closely as they will be available in F&O (derivative segment) w.e.f. 30th July, 2010. Also, watch TITAN, SINTEX and BANK OF INDIA since these are the three stocks in Group ‘A’ that gives consistent upmove for the last three weeks (week to week basis).
