Domestic Market: Sensex, the domestic market barometer, has gained 134 points last month on a modest pull-back on March 29 and 30 on account of short covering. Automobiles, FMCG, metal, small- and mid-cap stocks underperformed last month. Healthcare, capital goods and PSU stocks posted their biggest monthly gain of around four per cent. IT stocks were steady at around their month-ago levels.
Global Markets: European stocks declined last week as reports on the US economy raised concerns that earnings growth worldwide may slow more than expected. The rise in oil prices, after Iran seized 15 British sailors in the Persian Gulf, added fuel to the worries.
Asian stocks slid this week following reports of a slow down in the US economic growth and on Federal Reserve Chairman Ben S Bernanke’s statement that inflation remains a risk.
The Morgan Stanley Capital International Asia-Pacific Index lost 0.9 per cent to 144.65 in the previous five days, sliding for the fourth time in five weeks. Declines this week trimmed the measure’s gain in the first three months of the year to 2.9 per cent.
NIFTY SNAPSHOPT
The S&P CNX Nifty went up 76.25 points last month to close at 3,821.55. Nifty futures traded at a discount to underlying value of the Nifty throughout the month, except for the last few trading sessions of March expiry. Nifty near-month (April expiry) traded at a discount on the first day of trading.
SECTOR ANALYSIS
Auto & Auto Ancillary: Avoid. Banking & Finance: Good rollovers seen. But initiate positions only once remarkable fresh build-up takes place. Cement & Construction: Avoid. IT & Telecom: Satyam may outperform, avoid others.
Metals: Good rollovers seen. Expect metal stocks to outperform. Keep a close watch for fresh build-up. Oil, Gas & Refinery: Bullish on RPL. ONGC looks strong. Pharmaceuticals: Good rollovers seen. Expect positive move. Keep close watch for fresh build-up. Power & Engineering: Bullish on CESC. Sugar: Short covering continues.
PUT-CALL RATIO
The Nifty PCR (OI) is currently at 0.91 compared with 1.05 in the previous week. The Nifty call options shed 1.45 crore shares (-59.3 per cent) & put options shed 16.4 crore shares (-64.25 per cent) in OI during the week.
Nifty 3900 & 4000 have witnessed substantial call writing at higher strike prices. On the put options side, 3800 put options hold over 30 lakh shares, at the very beginning of the month, indicating it to be the expected support level in the immediate term.
FIIs investment in emerging markets: Foreign institutional investors were net sellers in South Korea and Taiwan while making modest purchases in March 2007. Their net sales stood at $3.23 billion worth of shares in Taiwan, pulling down Taiwan weighted by 0.22 per cent.
The corresponding figures in South Korea was at $1.04 billion. However, South Korean index went up 2.48 per cent last month. FIIs bought $208 million worth Indian shares, $336 million in the Philippines, $119 million in Thailand and $34 million in Vietnam.
FIIs TO FIIs TRADE
The six-lakh series of the BSE and the LS series on the NSE allow the FIIs to sell or buy scrips among themselves for those companies in which maximum ceiling for the overall FII investment has been attained. Simply put, when a company hits the FII ceiling, fresh buying by FIIs is capped but one FII can always buy from another FII within the overall limit. The special counters ensure the inter-FII trade.
FIIs IN DERIVATIVES
Cumulative FII positions as percentage of total gross market position in the derivative segment as on March 29, 2007, is at 41.69 per cent. The FIIs bought futures contracts worth Rs 25,703 crore and sold contracts worth Rs 25,666 crore. At the end of the week, FIIs were holding 7.49 lakh contracts of index futures, 2.05 lakh contracts of index futures and 5.14 lakh contracts of stocks futures.
STOCK OF THE MONTH: Sakthi Sugars
Last month close: Rs 100.80; Previous month close: Rs 66.40 Sakthi Sugars gained a whopping 52 per cent in March with a five-fold jump in average monthly volumes of five lakh odd shares after touching a 52-week low levels in the same month.
The company’s fantastic stock performance is despite the weak financial performance in the last two quarters like that of other sugar manufacturers and gloomy outlook for the sugar sector.
The company’s net sales for nine months ended December 2006 grew just six per cent to Rs 600 crore while net profit jumped 65 per cent to Rs 51 crore mainly due to 36 per cent rise in net sales and a growth of 35 times in net profit in the June 2006 quarter. Despite the phenomenal rise in its stock price, some analysts are still positive on the stock as the company is in their buying list of battered sugar stocks.
Source : http://www.business-standard.com
