Markets decline 3% in February

Bears again took control over the Indian markets in February 2011. Unrest in Egypt over resignation of President Hosni Mubarak, concerns of political instability over the 2G spectrum scandal coupled with violence in Libya leading to a rise in crude oil prices disrupted the investor sentiment. Crude oil prices touched the 30-month high level on unrest in Libya while 2G scam also created havoc after former telecom minister A Raja alongwith his private secretaries and DB Realty’s Managing Director Shahid Balwa were arrested by the Central Bureau of Investigation. Foreign institutional investors (FIIs), the key drivers of Indian markets, reduced their exposure owing to such tensions leading to a further decline in markets. India’s index of industrial production (IIP) data fell to 1.6% for the month of December 2010 as compared to 2.7% seen in previous month also weighed on the markets.

Why Markets Down Today?

The markets closed flat today after volatile session as a result of high crude prices. Banking, auto and IT gained moderately while capital goods was among the prime losers in today's trade.The Sensex closed at 18486, down 3 points from its previous close, and Nifty shut shop at 5538, up 2 points.

Tips for Tomorrow

Patel airtemp (India)Ltd,
Cmp:70,
Action:Buy,
Target:106.00.
Andhra bank Ltd,
Cmp:142.20,
Action:Buy,
Target:151.
Suzlon Energy Ltd,
Cmp:48.40,
Action:Buy on Dips
IDBI Bank Ltd,
Cmp:138.35,
Action:Buy,
Target:142.

Markets today

It was a highly volatile trade, with the markets witnessing huge swings during the day. Investors reacted to the developments in Libya. The markets showed sharp recovery in afternoon trade after the news that Libyan leader Muammar Gaddafi accepted peace plan to end crisis in North African country. But again there were reports from agencies that fresh air strike has hit Brega oil terminal in East Libya, which dragged markets lower. So there was no confirmation on any news from Libya side. However, another bounce back in the last hour of trade led the markets to close with modest gains.The Sensex rose 43 points to close at 18490 and the Nifty settled at 5536, up by 14 points.

What experts says?

Sangeeta Purushottam, Market Analyst.Says,
ITC could outperform more because the key concern is out of the way and the stock has underperformed offlate. So it is possible that it could go up some more.
The company's trailing 12-month (TTM) EPS was at Rs 6.13 per share. (Dec, 2010). The stock's price-to-earnings (P/E) ratio was 28.30. The latest book value of the company is Rs 18.15 per share. At current value, the price-to-book value of the company was 9.56. The dividend yield of the company was 5.77%.

What experts says on Budget?

Ajay Srivastava, CEO, Dimensions Consulting says,
''There maybe euphoria and we may feel nice about the 4.6% deficit, which is good but the intrinsic issues remain as they were before the budget. Nothing tells us that the market has a major trigger to go up,infrastructure will suffer much more because the budget has gone through now and we don’t see anything major happening in the next three-six months''

ExpertsView On Budget

Sandeep Bhatia, Kotak Institutional Equities says,
It is very difficult to pin out any big sectoral impacts, since there have been no major tax changes,  “It is very difficult to point out any big positive or negative,I would think that markets should trade lower, at least during the next three-four months,”

What experts says?

Saurabh Mukherjea, equities head, Ambit Capital,
“There wasn’t much in the Budget for us to change our view that there could be another 10-15 % correction in the Sensex over the next three months,”stocks of companies in consumer goods and durables, tobacco and paint sectors, which are less likely to be impacted by rising prices and would benefit from the government’s rural spending." My preferred stock picks are in media and entertainment, power generation and distribution and construction sectors".
Nandkumar Surti, chief investment officer , JP Morgan Asset Management India,
equities would continue to be exposed to external challenges such as the US growth and rising oil prices.
Kehair,Wealth manager, ICICI Securities,Most wealth and fund managers recommend locking money in shortterm mutual fund debt products, such as fixed maturity plans, to benefit from higher interest rates. “Investors can park lumpsum money in fixed income schemes of shorter tenure and avoid long-term bonds. But, if oil prices fall, long-term bonds may appear attractive,  

Stocks to Watch On Tomorrow

Marico Ltd,
Cpm:118.55,
Action:Buy,
Target:140.
Amtek auto Ltd,
Cpm:111.85,
Action:Buy,
Target:161.
Punj Lloyd Ltd,
Cpm:59.95,
Action:hold,
Target:91

Impact of union budget:Sensex up

Union Budget 2011-2012 appeared to be a complete game changer for the Indian markets. Stupendous rally was seen post budget with investor sentiment upbeat. However, the macro-economic concerns and soaring crude oil prices led the markets to trim gains at the close. The Sensex touched the 18000 mark and the Nifty hit 5400 levels during the day. Overall, the markets cheered the Union Budget.The Sensex surged 122 points to settle at 17823 and the Nifty closed at 5333, up by 30 points.

Stocks To Watch Tomorrow

ITC Ltd,
Cpm:156.15,
Action:Buy,
Target:207.
Chambal Fertilizers & Chemicals Ltd,
Cmp:68.50,
Action:Buy,
Target:79.
Apollo Tyres Ltd,
Cmp:54.00,
Action:Buy,Hold.
Target:91