Nifty has closed negative (-32 points) at 5271 but this week and month of April 2010 has closed with flat gains of just 23 points. The government has formed a ministerial panel headed by the finance minister on freeing retail fuel prices, which led to a rally in the oil marketing companies. CAIRN was top gainer in Nifty with 5% gains and TATA MOTORS turned out to be major gainer for the month with 15% rally. Steel stocks remained under pressure this week and for month too they underperformed – SAIL lost 13% this month. SUN PHARMA was plagued by many cases and lost 8% this week. MARUTI numbers were excellent but stock lost 7% as profit-taking emerged immediately, stock still looks weak.
Global market saw selling pressure due to Greece & Goldman Sachs, Rating agency S&P slashed Greek debt to junk status with Portugal also downgraded to A- from A+, citing concerns about the Portuguese economy's ability to stabilize deteriorating public finances. S&P also lowered Spain rating. U.S. stocks tumbled Friday, with reports of a criminal probe into Goldman Sachs Group dragging the major indexes to their worst week since January. China Market is trading near 7month low and Dollar Index has started to show strength.
Corporate results available for 799 companies indicate sales has grown by 31% while net profit has improved only by 27% with Interest cost coming down by 8% so cost pressure is high which is reflected in Cement, Telecom and Capital Goods results are mostly negative with BEL seeing 60% dip in NP and ABB, SIEMENS, ACC, ULTRATECH and INDIACEMENT disappointing. While on the positive side Metals, Auto and Auto ancillary posted good results and in Banks UCOBANK and ORIENTALBANK posted good results.
Fertilizer stock saw good buying with UNIPHOS result above market expected and TATACHEM making 2years high after prospect of good monsoon benefited this sector Sugar stock saw selling.
The RIL and RNRL verdict seems imminent in the next week as the Chief Justice of India who is presiding over the case will retire on 11 May. The outcome of this case is important as this would ensure steady supply of the fuel and savings for a lot of industries. RIL & RNRL judgment if RNRL wins the case the main beneficiary will be RELIANCE INFRASTRUCTURE and if RNRL loses the case RPOWER would be worst impacted along with RNRL. The Finance Bill was passed with little amendments––the form of relief on the service tax front and a resolve that fiscal discipline is pertinent.
Government advising power companies to import 35 million tonnes of coal during the current financial year to tide over supply shortages would add to rally in GUJNRECOKE. Coal prices in Asia and China are on an 18 month high on back of strong demand from China, Coal prices were hovering around USD108/ tonne. Renewed demand from Japan is also pushing up prices.
Technical View: Nifty has Gapped-Down and it is important that 5310 above level is crossed to test high of 2010 at 5399 and below 5200 selling pressure will be very high; 5040 would be level to watch on lower side.
Stocks looking good: TATASPONGE, FSL, NHPC, IFCI
Weak Stocks: BEL, ABB, ACC, ULTRATECH
Supp 5230/5160/5100 Res 5320/5370/5435
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