Weekly wrap: Banks, Metal, Oil & Gas aid Sensex regain 10K
Published on Friday, March 27th, 2009 at 7:34 PMAuthor: admin (5507 Articles)
During this week the Indian equity markets surged in line with global peers. The benchmark indices Sensex closed above its psychological 10,000 and Nifty above 3100 level. The Sensex and Nifty were up 12% and 10.5% respectively. All BSE sectoral indices ended in the green; gains at least 5%.
Experts like Jai Bala of Reliance Equities International and Hemang Jani of Sharekhan feels this rally has a lot of leg to go higher. However, Bala was quick to caution that he doesn’t see markets going vertically up.
Jani feels the market will give opportunities to play for a 15-25% kind of a move both in the midcap and the largecap space.
The Nifty Junior gained 10.3% and CNX Midcap Index was up 5.5%. The BSE Small-cap Index was up 3.8%.
Index Gainers : Unitech up 33%, Suzlon up 19%, Tata Motors up 15%.
Sectors and their stocks performance for the week:
The BSE bank Index up 18.5%; HDFC Bank, ICICI bank up 19%, SBI up 17% and PNB up 33%.
The BSE metal Index up 15.5%; Tata Steel up 25%, Sterlite up 19% and SAIL up 15%.
The BSE oil & gas Index up 12.5%; RIL up 15%, RPL up 14.5% and ONGC up 6.5%.
The BSE Cap Goods Index up 12.5%; L&T up 15.5%, ABB up 13.5% and BHEL up 12.5%.
Midcap and Smallcap movers
Mid-cap gainers: Lanco Infra up 28%, Aban up 27%, Axis Bank, Sesa Goa up 25%, JSW Steel up 21%.
Small-cap: Gokaldas Exports up 66%, S Kumars, Deccan Chronicle and Matrix up 35%.
So, where do experts see markets heading?
Jai Bala, Technical Analyst, Reliance Equities International, feels this rally has a lot of legs to go higher. But was quick to caution that he doesn’t see markets going vertically up. “The Nifty had drifted down to 2,550 and there was also a time pivot of March 13. This rally has actually began on March 12, so we have a price and time confluence on that particular factor and the market has rallied strongly because of that. For the first time during this rally, the market is getting overbought. During bear market rallies you never see markets getting overbought on a particular momentum reading. So, there is definitely a change in internals. The market breadth during this rally has been pretty impressive. So, the next move will come after this pullback.”
Hemang Jani, Senior Vice-President, Sharekhan, said the market rally has come on the back of very strong volumes. “There is also a bit of a participation coming in from the midcap space.” He expcts to see more room for upside from here. “But as elections are round the corner, there is going to be some kind of a weakness whenever you see some kind of a momentum in the next one or two-weeks. If the global situation stabilises, the market will give opportunities to play for a 15-25% kind of a move both in the midcap and the largecap space.”
Reliance Equities’ Jai Bala expects the markets to take out January highs. “We see 3250 Nifty being taken out and one could probably see the market rallying even up till July.” He feels select capital good stocks, IT heavyweights, and one-two stocks in the healthcare sector will power the rally to 3,250 and beyond.
Bala thinks the markets have probably seen a cyclical low. “I don’t think a new low is going to come this year. If at all a new low is going to come, it will come in 2010. This rally was triggered by happenings in the US. The wave structure of the US markets its pretty close to what happened in 1937. The markets actually rallied and then the new low was made four years hence. If a similar rally to what happens in 1930s does happen, we are going to have quicker lows that comes probably next year.”
Stockts to watch out for next week:
Sudarshan Sukhani of Technical Trends said Reliance Natural Resources has gone up almost 70% or 80% from its lows. “The stocks are seeing a relief rally as it had fallen a lot.”
Sukhani feels sugar will remain an outperformer next week. “In sugar, one can look at Balrampur Chini and Renuka Sugars. Both of these are good stocks. While the sector will not go against the broad market trend, I suspect even if the market remains steady, sugar in general will outperform.”
Sharekhan’s Hemang Jani expects about 25-30% kind of growth in terms of price in Bharti Airtel. “Despite the slowdown and the fact that the Reliance Communications’ GSM launch and Idea has been very aggressive, the company has been able to add about 2.7 million subscribers. Also, operating profit margins are still at about 41% and most of the risks are behind us. It is one of the very stable high quality stocks.”
Source : MoneyControl
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