Sunday, February 28, 2010

Weekly Nifty Update 27 Feb, 2010 by Tanmay G Purohit
Nifty has closed positive (+77 points) at 4922 positive close 3rd week in a row and it was able to cross 4950-resistance intraday on Friday, though close came below that only. Monthly chart shows Nifty gained 40 points in February 2010 and in record books it would show Nifty was +0.82% in the month of 2010-budget. Nifty can go towards 5040 if it can sustain 4880 this week on a sustainable basis, Budget reaction was very positive but markets would open only on Tuesday after a 3-day weekend and that reaction would be more important, below 4850 caution advised. HINDALCO was once again top gainer this week with 8.5% rise followed by MARUTI, RANBAXY, REL CAP and L&T. HERO HONDA rose 15% in February while SIEMENS, ICICI BANK, AXIS BANK were up more than 10% each. ITC was big loser (-6.5%) this week after the stock fell due to more excise burden on cigarettes. BHARTI AIRTEL underperformed in whole month as it lost 11% after Zain acquisition.
Indian bank loans rose 14.8% on year as of Jan 29, the central bank's data showed and Deposits were up 17.1% from a year earlier. Steelmakers are eyeing short-term contracts as they foresee sharp rise in raw material costs – Steelmakers expect 70-80% rise in Iron Ore prices and 80-100% rise in Coking coal prices, Raw Material costs to be passed on to end-users. The National Stock Exchange will include KOTAK BANK in its benchmark Nifty Index, replacing GRASIM w.e.f. April 8; selling pressure in GRASIM may be seen while KOTAK BANK can see fresh buying as index funds change composition. Core infrastructure industries grew by a robust 9.4% in January against meagre 2.2% in the year-ago period reflecting the sound state of recovery in industrial production. India's food price index rose 17.58 percent in the 12 months to Feb. 13; lower than an annual rise of 17.97 percent in the previous week.

Union Budget effect: The budget didn’t have any big surprises in my view and even expectations were lower this time. Fiscal deficit has been addressed well and it should please many experts. It was a double trouble for car-makers as car prices would have to be raised and both Petrol and Diesel are costlier now.

Positive for:
SUN PHARMA, BIOCON, DIVI, RANBAXY – Weighted average deduction on in-house research and development to 200% from 150%.
POWERGRID, NTPC – Allocation to power sector doubled to Rs 5130 Cr
SBI – Agriculture loan waiver extended till 30 June 2010
IDBI Bank – Possibility of capital infusion as Government to infuse Rs 16500 Cr in FY11 in banks
IDFC, IFCI, REL CAP – More banking licenses from RBI
SUZLON – Excise duty exemption for wind turbines
Supp 4875/4790/4670 Res 4970/5062/5150

Relief to tax-payers in budget; petrol, diesel prices up
Car makers to hike rates after excise duty increase

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