Markets swing to election tunes
DESPITE WEAKNESS IN the global markets, euphoric trading over expectations of NDA win in general elections helped Indian markets record third straight week of gains during the week ended. The Sensex and the Nifty closed 1.2 per cent higher at 22,629 and 6,776, respectively.
However, markets continued to ignore a slew of negative economic data like widening trade deficit; and continued to focus on the general elections.
With valuations of large cap stocks looking a bit stretched, relatively cheap valuations of midcap and small-cap stocks are now making them darlings of market participants. Weekend IIP data and results of Infosys will “set” the opening of coming week and set the tone for the rest of the week.
Holiday laced week may see dip in volumes. The main catalyst for this week’s sell-off at US markets was a souring on socalled momentum stocks, including shares of many technology and healthcare companies.
For the week ahead chartists predict trading band of 22,250-22,900 for the Sensex and 6,650-6,875 for the Nifty. Immediate supports for the indices are at 22,450 and 22,300 and 6,725 and 6,665.
With all eyes on the outcome of the general elections, 2014 is already shaping up to be a much more volatile year than 2013. Avoid over leveraging and keep trailing stop loss to protect profits. The fundamental law of investing is the uncertainty of the future.
NCL Industries manufactures and sells building materials in India and internationally. It operates in five segments: cement, boards, Prefab structures, hydel power, and ready mix concrete. The recent issue of shares to promoters on preferential basis to comply with the promoters contribution stipulated under the corporate debt restructuring (CDR) scheme sanctioned by the CDR Cell has been done at `22 per share.
The sum of the parts valuation of the company as seen from recent sale of Anjani Portland can be nearly double the present market cap. A buy for surprising target of `50 in the medium-term.
Dredging Corporation of India, a PSU providing a range of dredging and allied services to the major and minor ports, Indian Navy, fishing harbours, and other marit-ime organisations in India and internationally. The company’s fleet of dredgers comprises trailer suction hopper dredgers, cutter suction dredgers, and others. Buy on declines for price target of `450 in medium term.
Camlin Fine Sciences manufactures and exports bulk drugs, fine chemicals, and food grade products in India and internationally. It offers food ingredients, industrial products that comprise diphenol downstream products, and flowers to complement the taste, color, and nutritional composition. Buy on declines for `90 in the medium-term.