MARKET ENDED 18.12.2009 FRIDAY& HAPPY WEEKEND

TOP TRADED

SENSEX 16719.83 -174.42
NIFTY 4987.70 -54.05
NASDAQ 2176.05 6.87
DJIA 10426.31 -11.11
RS/$ 46.25 -0.16

Weekly Closing:

Sensex: 16719.83 -399.20 (-2.39%)

Nifty : 4987.70 -129.70 (-2.60%)

Equities slipped sharply in the last one hour of trade Friday and closed below psychological support levels. Realty, banks and oil&gas Led the decline while healthcare and auto stocks ended marginally higherMarket opened on a subdued note in line with other Asian markets. Benchmarks moved in a narrow range but gave away support in the afternoon to slip sharply lower despite positive opening of European markets.

National Stock Exchange’s Nifty closed at 4987.70, down 54.05 points or 1.07 per cent from Thursday’s close. The index touched intra-day low of 4979.05 and high of 5043.40.

Bombay Stock Exchange’s Sensex ended at 16719.83, down 174.42 points or 1.03 per cent. The 30-share index hit a low of 16693.06 and high of 16899.19. We see 4920 as an important support for the Nifty and unless that is broken market will be range bound.

We are not bearish at the moment and may look at buying at lower levels. Stocks like RIL, ONGC, Deccan Chronicle, Praj Industries and Core Projects are looking good on the chartsThe BSE Midcap Index was down 0.66 per cent and BSE Small cap Index moved 0.38 per cent lower.

Amongst the sectoral indices, BSE Realty Index was down 2.06 per cent, BSE Oil gas Index slipped 1.74 per cent and BSE FMCG slipped 1.23 per cent. BSE Healthcare Index was up 1.32 per cent and BSE Auto Index moved 0.27 per cent higher. Unitech (-3.09%), GAIL (-2.87%), DLF (-2.78%), Reliance Industries (-2.77%) and Sterlite Industries (-2.66%) were amongst the Nifty losers.

Tata Motors (3.14%), HCL Tech (2.04%), Ranbaxy Laboratories (1.15%), TCS (0.99%) and Sun Pharma (0.88%) resisted the fall. Shares of DLF have been under pressure ever since the company decided to merge its commercial realty arm DLF Assets (DAL) with itself, a move aimed at repaying some of DAL’s debt. Given the current portfolio as well as future development portfolio of both the entities, we believe the ratio is marginally in favour of the promoters. We value Caraf at Rs 25.5 billion and DCCDL at Rs 51.2 billion (details in table 2 below). However, DLF shareholders will now get valuation upside from the REIT listing of DCCDL due to reduction in cap rate (we have assumed 10% cap rate for our valuation). Though we believe this is a step in the right direction, we believe the valuations of DLF are factoring in strong recovery in the real estate market. We maintain our NAV estimate of Rs 340. Maintain our reduce rating on the stock with target price of Rs 300.

Shares of Tata Motors were in limelight after the company’s global sales, including those for Jaguar and Land Rover, rose 62 per cent in November, on the back of improved demand and low sales base. Global sales of the two British premier brands, Jaguar and Land Rover, rose to 18,825 vehicles in November, up 30 percent from a year earlier. Market breadth was negative on the BSE with 1,650 declines and 1,180 advances.

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