Sensex trades with marginal gains; IT, capital goods up

The benchmark indices were trading with marginal gains amid volatility. Buying was seen in IT, capital goods and pharma stocks while metals, auto and select oil & gas stocks were under selling pressure.

At 14.57 hrs IST, the Sensex was up 50.62 points or 0.28% at 18427.10, and the Nifty was up 18.95 points or 0.34% at 5535.70.

The market breadth was negative; about 1294 shares advanced, 1453 shares declined, and 900 shares remained unchanged.

Positive contributors to the Sensex were Reliance, Infosys, ICICI Bank, L&T and HDFC. However, Tata Steel, Tata Motors, ONGC, SBI and ITC were negative contributors.

Top gainers on the Sensex were Cipla at Rs 330.80 up 2%, HDFC at Rs 671.90 up 1.85%, HDFC Bank at Rs 2,376.95 up 1.15%, L&T at Rs 1,731.50 up 1.14% and ICICI Bank at Rs 1,060.55 up 1.12%.

Top losers on the Sensex were Jaiprakash Asso at Rs 83.15 down 1.89%, M&M at Rs 657.50 down 1.45%, Hindalco at Rs 187 down 1.27%, ONGC at Rs 276.45 down 1.25% and HUL at Rs 315.60 down 0.85%.

Most active shares on BSE were Aanjaneya Life, Sun TV Network, SBI and HCL Tech.

Top percentage gainers on the BSE - Ram Ratna Wires, Jai Balaji Ind, NDTV, TV TodayNetwork and Systematix Corp were up 10-17%.

Top percentage gainers on the NSE - Jai Balaji Ind, NDTV, Berger Paints, TV TodayNetwork and Sujana Towers were up 10-16%.
source-moneycontrol

Stevenson
Management trainee-Fundamental analyst
Denip Consultants Pvt. Ltd

Sensex May Rise 19%:Morgan Stanly.

The Bombay Stock Exchange's (BSE) Sensitive Index (Sensex) can climb as much as 19% even as investors debate whether soaring inflation will eat into growth and lead to earnings downgrades, said Morgan Stanley. Adani Enterprises , DLF and Coal India are top picks and small-cap companies are an attractive lot which can surprise on the upside, Morgan Stanley said. "Indeed, the dispersion in valuations, earnings growth and stock returns appear to be favorable to stock picking," said analysts led by Ridham Desai. "Earnings growth dispersion is high, valuation dispersion has been rising whereas return dispersion has been falling. The bottom line is that the micro environment is appealing for stock picking." Morgan Stanley's Sensex forecast is 22100. It ended at 18503.28 on Tuesday. "India's biggest tail risk is that the MENA (Middle East and North Africa) crisis is prolonged and crude oil prices stay higher for longer," he said. The strategist and head of India equity research believes the market is only 9% away from their bear case level for 2011. "Near term, we think the market is operating in a range of 17500 to 21000. As such we remain buyers of Indian equities with a 12-18-month view. The market is cautiously positioned if our sentiment indicator is a guide," he added. Inflation risks remain on higher commodity prices, says Chetan Ahya, Asia Pacific & India economist at Morgan Stanley. "We believe that prices of global commodities, including crude oil, will be key to the inflation outlook," he said. "However, considering that the cost of capital might stay higher for longer, we see downside risks to our growth outlook -- to the extent of 0.25-0.5% points," says economist Chetan Ahya who forecasts GDP growth to fall to 7.7% in 2012 from 8.6% in 2011. He expects the central bank to hike the repo rate by another 75 basis points. "The market is pricing in slower near-term growth and implying an attractive 14.5% long-term return," says Desai. According to him earnings growth appears to be nearing a trough given the margin compression that has already happened. Return on equity, too, is off the bottom. He favours stock picking in the current environment since he believes the "macro effect" has peaked. He sees more rewards in small- and mid-caps and stocks down the quality curve. Sectorally, Morgan Stanley has shifted from global cyclicals (materials) to domestic consumer cyclicals. They remain overweight on industrials but are cognizant of the downside to capital expenditure.

Source: The economic times

Vivek Agrawal
Summer Intern-Fundamental Analysis
DENIP Consultants Private Limited.