Market outlook
Finally, bulls kick off!
The rules of soccer are very simple. If it moves, kick it. If it doesn't move, kick it until it does.
As the World Cup Soccer gets underway in South Africa, the bulls are brimming with confidence and energy ready to kick the bears around. Without doubt the bulls will need to defend their turf while looking to score more goals.
Global markets seem to have taken off where the Indian indices left on Thursday. A fine Friday start awaits us as we expect the key indices to start on a firm footing. Hopefully, the market may even end the day and week higher if there are no fresh hiccups. But, don't write off the bears, because unlike football, the market game just doesn't get over. The stock market and investors have shifting goal posts. Penalty for complacency is a given so ensure that you don't lose grip of your existing portfolio while enjoying the action.
IIP data, HUL buyback decision, Standard Chartered listing and Dish TV's restructuring announcement are some key events to watch out for today. On the weather front, a normal monsoon will go a long way in shoring up growth for India.
Trading ideas (Time period: 1-3 days)
Bajaj Auto (BUY, CMP Rs2,244, Target Rs2,310): After consolidating in the range of Rs2128-2242 for last 9 trading session, the stock has managed to form a 9-day high accompanied and closed above Rs2220 levels. This move is expected to trigger buying momentum in the coming days and is likely to test levels of Rs2310 from hereon. RSI sustaining above its 9-DMA during the consolidation exhibits strength in the counter and sharp upside ranging from 5-7% can be expected if the stock is able to surpass important hurdle of 2310. We would advise buying in the range of Rs2225-2235 with stop loss of Rs2200 for target of Rs2310.
GSPL (BUY, CMP Rs95, Target Rs102): Stock at present is trading near its 50% retracement support of initial up move which began from Rs87 till Rs102 levels. The support levels ranging from Rs94.5-95 also coincides with earlier breakout levels of Rs94 and its strong support area of 50 DMA and 20 DMA. With volume activity shrinking during price declines, it affirms bullishness in the counter and move past Rs96 is likely to support upside momentum to test its interim peak of Rs102. We would advise buying stock above levels of Rs96 with stop loss of Rs93.5 for target Rs102.
Derivative strategies (Time period: Till expiry)
± Long Yes Bank June Future in range of Rs282-283 for the target price of Rs293 with a stop loss placed at 278.
Lot size: 2200
Remarks: Net maximum profit of 22,000 and net maximum loss Rs11,000.
± Long DLF June Future in range of 264-266 for the target price of Rs276 and stop loss placed at 259.
Lot size: 1925
Remarks: Net maximum profit of Rs19,250 and net maximum loss Rs9,625
Mutual funds
| Fund focus | |||||||
| UTI Opportunities Fund | Invest | ||||||
| Fund manager | Harsha Upadhyaya |
| Min investment | Rs5,000 | |||
| Latest NAV | Rs23.2 |
| Entry load | Nil | |||
| NAV 52 high/low | Rs25/12 |
| Exit load | 1% <1 yr | |||
| Latest AUM | Rs1,453cr |
| Latest dividend (under dividend option) | 15% (Jan 22, 2010) | |||
| Type | Open-ended |
| Benchmark | BSE 100 | |||
| Class | Equity – diversified |
| Asset allocation | Equity (95%), Debt (2%), Cash (3%) | |||
| Options | Growth & dividend |
| Expense ratio | 2.3% | |||
Corporate Snippets
± RIL is considering buying a stake in shale gas assets owned by Pioneer Natural Resources. (ET)
± Bharti Airtel has announced an extension of its managed services portfolio by entering into a strategic relationship with VMware. (BL)
± Infosys BPO will look for acquisitions in Europe and Africa this year. (BL)
± The Metallurgical, Material Handling & Water Operating Company of Larsen & Toubro has secured orders totaling Rs7.5bn. (BL)
± Wipro and automobile and parts distribution specialist TV Sundram Iyengar & Sons have signed a 10-year total outsourcing contract. (BL)
± Reliance Power is buying out two coal companies in Indonesia. (BL)
± HCC has sold 74% stake in a commercial building to IL&FS Milestone Fund for Rs5.8bn. (ET)
± JSW Energy may pick up 70% in South Africa-based Indian Ocean Mining. (ET)
± Intelenet Global Services has outbid bigger rivals such as Genpact and Wipro BPO to win the tender for providing call centre services for the UID project. (ET)
± Tata Communications has shelved its plan to form a joint venture with Beijing-based China Entercom Communications due to lack of clarity on the Chinese Government's consent for the deal. (BL)
± Videocon to sell mobile arm stake, in talks with South Korea's S K Telecom for offloading 26% in the venture. (ET)
± LIC and four leading banks may invest around Rs1.6bn in Videocon Industries to fuel its expansion programme. (ET)
± Adani Power is likely to commission the third unit (330 MW) of Mundra thermal power station within a month. (BL)
± Orchid Pharma to buy US-based marketing company Karalex Pharma for an undisclosed sum. (ET)
± Allahabad Bank seeks Rs10bn capital infusion from the Government. (ET)
± Firstsource is in discussions with Barclaycard, part of Barclays Global and Retail Banking division, to take over its customer service centre in Teesside, UK. (ET)
Economic snippets
± The annual food inflation, based on the Wholesale Price Index, rose 16.74% in the week ended May 29, up from the previous week's annual rise of 16.55%. (BL)
± The Government increased the MSP for paddy for the kharif year 2010-11 by Rs50 per quintal and for pulses by up to Rs 700 per quintal. (BS)
± The all-India bid price for the broadband spectrum stands at Rs127.75bn at the end of Day 15. (BL)
± The Centre has mooted a proposal to set up a company that will be owned by all telecom operators and will be responsible for managing, maintaining and building communication networks for them. (ET)
± Disinvestment in the two state-run miners, HCL and Coal India, put on hold. (ET)
± The Government has approved setting up a greenfield international airport in Goa, relaxing the 150 km minimum separation norms. (ET)
± The Government has approved four new road projects worth about Rs25bn in Bihar, MP, Gujarat, UP and West Bengal. (ET)
± In a bid to boost broadband penetration in India, the Telecom Regulatory Authority of India has suggested giving fiscal incentives, including an income-tax break to subscribers. (BL)
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