SENSEX 17752.68
+21.56
NIFTY 5385.20 +09.70
USD/INR 0048.95 -00.12
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UPDATEDTIME 09.28 PM 29 FEBRUARY 2012
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The National Stock Exchange's Nifty ended
volatile session on a flat note as cautious traders booked profits after weak
Q3 Gross Domestic Product data spooked sentiments.
The market had opened with a gap-up on the back of positive cues from global peers. However, the bulls ran out of steam as India's economy grew at 6.1 per cent in Q3 as compared to 6.9 per cent growth in previous quarter.
According to analysts, there is downside risk to Q4 GDP and the FY12 GDP may be sub 7 per cent.
It is possible that GDP growth in Q4 FY12 could slip by 20 bps to 6.6%, resulting in an overall GDP growth rate of 6.8% for FY12.
Experts are of the view that in view of the slowing down economy, the Reserve Bank of India may go for interest rate cuts at its policy meet in March 2012.
"The RBI had been anticipating a soft economy. This is even softer than they anticipated. Inflation has been falling quite aggressively so I would expect them to cut the interest rate perhaps by 50 bps in March.
His view was echoed by Manish Wadhawan, Director and Head of Interest Rates, HSBC, who sees a possibility that RBI might put 25 basis point rate cut on the table before the beginning of the new financial year.
The market is likely to see sharp moves for the next few sessions ahead of important events like outcome of assembly elections, union budget and Reserve Bank of India's policy meet.
"March is going to be far more complicated. We are going to have volatility. Markets are going to consolidate. It actually may not be a bad thing for the markets to consolidate because you had a 1000 point run from 4600 to 5600. It was practically non-stop. So the markets were highly overbought.
The Nifty ended at 5385.20, up 9.70 points or 0.18 per cent. The broader index touched a high of 5458.80 and low of 5352.25 in trade today.
The Bombay Stock Exchange's Sensex closed at 17752.68, up 21.56 points or 0.12 per cent. It touched intraday high of 18001.35 and low of 17677.97.
Market will probably be more choppy, more volatile, more subdued and will face supply pressure at higher levels. Good strategy would be to sell on every gap up or at positive events and declines should be used to buy into.
We still have that medium term view which is extremely positive. 5300-5250 would be excellent buying range and therefore I would wait for these kinds of dips to happen.
BSE Midcap Index was up 1.10 per cent and BSE Smallcap Index moved 0.62 per cent higher.
Amongst the sectoral indices, BSE Oil&gas Index gained 2.53 per cent, BSE Metal Index moved 1.45 per cent higher and BSE Realty Index advanced 1.10 per cent. BSE Capital Goods Index was down 1.59 per cent and BSE FMCG Index slipped 0.72 per cent.
The market had opened with a gap-up on the back of positive cues from global peers. However, the bulls ran out of steam as India's economy grew at 6.1 per cent in Q3 as compared to 6.9 per cent growth in previous quarter.
According to analysts, there is downside risk to Q4 GDP and the FY12 GDP may be sub 7 per cent.
It is possible that GDP growth in Q4 FY12 could slip by 20 bps to 6.6%, resulting in an overall GDP growth rate of 6.8% for FY12.
Experts are of the view that in view of the slowing down economy, the Reserve Bank of India may go for interest rate cuts at its policy meet in March 2012.
"The RBI had been anticipating a soft economy. This is even softer than they anticipated. Inflation has been falling quite aggressively so I would expect them to cut the interest rate perhaps by 50 bps in March.
His view was echoed by Manish Wadhawan, Director and Head of Interest Rates, HSBC, who sees a possibility that RBI might put 25 basis point rate cut on the table before the beginning of the new financial year.
The market is likely to see sharp moves for the next few sessions ahead of important events like outcome of assembly elections, union budget and Reserve Bank of India's policy meet.
"March is going to be far more complicated. We are going to have volatility. Markets are going to consolidate. It actually may not be a bad thing for the markets to consolidate because you had a 1000 point run from 4600 to 5600. It was practically non-stop. So the markets were highly overbought.
The Nifty ended at 5385.20, up 9.70 points or 0.18 per cent. The broader index touched a high of 5458.80 and low of 5352.25 in trade today.
The Bombay Stock Exchange's Sensex closed at 17752.68, up 21.56 points or 0.12 per cent. It touched intraday high of 18001.35 and low of 17677.97.
Market will probably be more choppy, more volatile, more subdued and will face supply pressure at higher levels. Good strategy would be to sell on every gap up or at positive events and declines should be used to buy into.
We still have that medium term view which is extremely positive. 5300-5250 would be excellent buying range and therefore I would wait for these kinds of dips to happen.
BSE Midcap Index was up 1.10 per cent and BSE Smallcap Index moved 0.62 per cent higher.
Amongst the sectoral indices, BSE Oil&gas Index gained 2.53 per cent, BSE Metal Index moved 1.45 per cent higher and BSE Realty Index advanced 1.10 per cent. BSE Capital Goods Index was down 1.59 per cent and BSE FMCG Index slipped 0.72 per cent.
SAIL (3.76%), ONGC (3.46%),
Wipro (3.18%), Sesa Goa (3.12%) and Tata Power (2.99%) were the major Nifty
gainers.
Shares of ONGC surged higher on reports that the government is set to launch its FPO through share auction. The government is likely to raise around Rs 12000 crore the stake sale.
At current market price, the stock (ONGC) is indeed a BUY and we have have an outperform rating on the stock. However, the stock does suffer from high subsidy burden and lower realisation, which are on an average maybe $50 in the recent past.
Essentially for ONGC the fundamentals of the company are turning around. Its reserve placement ratio has exceeded more than a 100% in the last three or four years, which as a result has resulted in a revival in volumes. So it is going to see a small increase in volumes going forward.
The valuations are indeed compelling on an EV to reserves of 6 times versus global average of about 17 and an EV/EBITDA of four times, it certainly presents some compelling valuations. So that's more sort of from a fundamental perspective.
Larsen & Toubro (-3.28%), HDFC Bank (-2.81%),Siemens (-2.28%), Jindal Steel (-1.62%) and Reliance Infrastructure (-1.50%) were amongst the index losers.
Market breadth was positive on the NSE with 825 gainers against 570 losers
As per the provisional data, Foreign Institutional Investors bought shares worth Rs 727.59 crore on Tuesday. FIIs bought shares worth Rs 24495.58 crore so far in the month of February against investment of Rs 10357.70 crore in the month of January 2012.
In another development, the European Central Bank has offered 530 billion euros to eurozone banks in its second long-term refinancing operation. Analysts say this is likely to increase liquidity in the system.
The European markets were up on buying interest. CAC 40 was up 0.35 per cent and DAX moved 0.45 per cent higher. FTSE 100 was down 0.05 per cent.
Shares of ONGC surged higher on reports that the government is set to launch its FPO through share auction. The government is likely to raise around Rs 12000 crore the stake sale.
At current market price, the stock (ONGC) is indeed a BUY and we have have an outperform rating on the stock. However, the stock does suffer from high subsidy burden and lower realisation, which are on an average maybe $50 in the recent past.
Essentially for ONGC the fundamentals of the company are turning around. Its reserve placement ratio has exceeded more than a 100% in the last three or four years, which as a result has resulted in a revival in volumes. So it is going to see a small increase in volumes going forward.
The valuations are indeed compelling on an EV to reserves of 6 times versus global average of about 17 and an EV/EBITDA of four times, it certainly presents some compelling valuations. So that's more sort of from a fundamental perspective.
Larsen & Toubro (-3.28%), HDFC Bank (-2.81%),Siemens (-2.28%), Jindal Steel (-1.62%) and Reliance Infrastructure (-1.50%) were amongst the index losers.
Market breadth was positive on the NSE with 825 gainers against 570 losers
As per the provisional data, Foreign Institutional Investors bought shares worth Rs 727.59 crore on Tuesday. FIIs bought shares worth Rs 24495.58 crore so far in the month of February against investment of Rs 10357.70 crore in the month of January 2012.
In another development, the European Central Bank has offered 530 billion euros to eurozone banks in its second long-term refinancing operation. Analysts say this is likely to increase liquidity in the system.
The European markets were up on buying interest. CAC 40 was up 0.35 per cent and DAX moved 0.45 per cent higher. FTSE 100 was down 0.05 per cent.
Regards
RAKESH MAKIN
+91,
9041667797(DIRECT), 9915684997
OFF
0172-4657997
PANCHKULA (Haryana).
Email:makin_97@yahoo.com
Group mail id: makin97NSEtips@yahoogroups.co.in
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