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Foreign investors may invest and trade India through Country Funds (IFN, IGF, JFI), or individual stocks with ADRS on the NYSE such as ICICI (IC) or Nasdaq listed companies such as Infosys Tech (INFY) and SATYAM INFOWAY (SIFY). To track the Indices and Prices of shares, visit Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE).

Please note the Astrologers Fund, Inc was stopped out of a first trading buy on the May 15th NYSE ADR listing SAY- Satyam Computer Services Ltd at a buy price of US$10.50 with an intermediate-long term target of $15.  We are now looking to buy SAY in November under $7, with a new, lower 2002 target of $10+.  We also recommend SIFY under $1 for a long term buy to $1.50 to $2.50 which it reached earlier than expected 11/25-11/26.

The BSE SENSEX closed on 29th Nov'01 at 3287 up 7.6% from the 2.11.2001 close of 3053. There was a local holiday on 30th Nov'01.
We had predicted BSE SENSEX to be range bound in the month of Nov'01 - between a level of 2850 and 3200, but the BSE SENSEX was in control of the Bulls for Nov'01.
The intra month high and low for the BSE SENSEX for Nov'01 was 3377 and 3013. BSE SENSEX convincingly breached the level of 3250 and was very close to the next resistance level of 3400. BSE SENSEX could not sustain higher levels and settled at 3287 levels from the high of 3377. The under tone was bullish and not range bound as predicted.  TMT Stocks and Cement Stocks were the main drivers of the BSE SENSEX.
The BSE SENSEX is due for a reaction of another 100 points anytime, but the under tone is bullish. Short term target of BSE SENSEX is a level of 3600, but this level may not be seen in the month of Dec'01 itself. It may well be seen by first week of Jan'2002.
BSE SENSEX will find a strong support at around 3150 levels.
Dec'01 will be "Traders Month". Punters can enter into select Software, Cement and Pharma Stocks when the BSE SENSEX reacts to this level of around 3150. Traders are advised to book profits when BSE SENSEX is around 3600 levels.
We recommend the following as purely Trading Stocks in their respective sectors :
c) Pharma - REDDYS, RANBAXY.
Macro Level indicators for the Financial Sector for the Indian Economy are still negative. Govt. of India decided to inject US $ 375 Million to bail-out two nearly bankrupt Public Sector Banks - Indian Bank and UCO Bank. McKinsey had mentioned about the problems in the Indian Public Sector Banks. We had referred about the same in our Nov'01 forecast. It is promising to learn that the Indian Govt. is addressing the problem and is injecting capital into sick Public Sector Banks with a rider of professional  and clean management. This is good news, although tax-payers money is being utilized to bail-out sick banks.
We are also concerned about the US Market. If NASDAQ closes below a level of 1865 for three consecutive days - there will be a crash in the US Markets. This will impact the Global Stock Markets with BSE as no exception. Punters to keep an eye on the NASDAQ also.
The US led 'War against Terror' seems to be going as per plan and the situation looks in control in Afghanistan. This region is not without its problems even in its current positive situation. There are too many imponderables plus Pakistan is a suspect State. Pakistan's double standards have become public now but USA still strangely supports its old cold-war ally. A stable Pakistan is important for South East Asia.
We also recommend that High Net Worth Investors should lower their exposure to the Equity Market and Shift to Gold till end March'02. We have mentioned earlier also, that astrologically things do not look good in February/March'02. The situation will look stable as regards 'War against Terror', but in Feb-March'02, we expect turbulent times for the American and British Economies. This will have global impact as well. Hence our recommendation about Gold to investors.
1. Investors and Readers may kindly note that we update the "India Web Page" keeping in mind the weekly settlement, which is on a Friday. Hence sometimes the update is late/early by a few days.
Ideally we should have updated the Nov'01 forecast on 31.10.2001. But this was mid-week i.e. Wednesday. Hence we waited for the update till Friday - 2.11.2001, to end the weekly settlement in T+5 Scrips.
2. The BSE SENSEX was bullish or the "Technical Pullback" was much stronger than predicted for the month of Oct'01. This was contrary to our predictions - as the "Retracement" was upto a level of 3098 for the BSE SENSEX. We had predicted that a level of 3000 would not be breached during the rally or "retracement' in Oct'01.
BSE SENSEX was bullish on account of :
- Fresh Buy-Back Norms issued by SEBI. This makes buy-back of its own Stock by a Corporate easier, as per new guidelines by the market regulator in India - SEBI. Markets welcomed this announcement.
- Better than expected Q2 results from Indian Pharma Majors - REDDYS LABS. and RANBAXY etc. This is on account of 'Flight 911' and 'Anthrax Bio-Terrorism' in USA. Strong export orders executed for Generic Antibiotics - CIPRO, DOXY and Anti-Depressant FLUOXETINE by these Indian Pharma Majors.
Intra Month, High and Low for BSE SENSEX for the month of Oct'01 was 3098 and 2742 respectively. The month of Oct'01 is stretched till 2.11.2001, as per para (1), as above. BSE SENSEX closed on 2.11.2001 at 3053 - up 9.2 % from the close of 1.10.2001.
3. We expect the BSE SENSEX to be range bound for the month of Nov'2001. The BSE SENSEX should trade between 2850 and 3200 levels. No new Stocks are being recommended. We stick to our old favourites as mentioned in October update.
4. We would like to point out however that some of the Indian Macro Level Economic Indicators are still negative. Stock Markets can only rally in the near or medium term if these negative elements are addressed by the Indian Govt. Failing which Markets will dip in the medium/long term. We still believe that one of the safe bets, to make money in the Indian Stock Markets in the current scenario, is to invest in Profitable PSUs like NALCO, ONGC and IBP, which are "Disinvestment Candidates".
The second safe bet are "M & A Stories". That is why we recommended TATA POWER. Indian PHARMA Majors are also a safe bet, but when the Markets react. At these levels it is dangerous to enter into REDDYS and RANBAXY. We missed this bus !
5. Global Consulting Giant - M/s. McKinsey Inc. in its recent report is ringing alarm bells for UTI and the Indian Banking Sector. McKinsey mentions :
a) UTI - India's largest Mutual Fund, may need upto US $ 1.0 Billion to stay solvent.
b) Indian Public Sector Banks will require fresh capital infusion of
US $ 9 to 15 Billion over the next five years. NPA of these Banks is a major cause of vulnerability. McKinsey believes that if fresh capital is not injected in these Banks and also the NPA problems is not taken care of by the Management of these Banks, then the Indian Banking Sector will face dire consequences.
This Banking Sector problem can have a bearing on the overall health of an already recession hit Indian Economy. The Indian Finance Ministry will have to come out with some sops again, to bail out UTI. In addition some PS Banks also need fresh capital injection or face closure.
We feel that this negative Macro Level parameter needs to be finally addressed by the Indian Govt. No decision is being taken on both the above issues in the past six months and in the end both UTI and some PS Banks may bleed to death, if not treated now.
6. On the flip side, if the American War crosses the boundaries of Afghanistan, then the BSE SENSEX can go to any levels - as mentioned in October'2001 forecast. It depends on what dimensions does the American War against Terror take ? Anybody's guess ? Investors to keep an eye on Afghanistan also


America was attacked by terrorists on 11th Sept'2001. A day which shall never be forgotten in American and World History. We strongly condemn these attacks on American soil. These events(referred to Flight 911 for future correspondence) led to a snowball effect in the world financial markets and India was no exception. NYSE and NASDAQ were closed for four days. Carnage was witnessed after the American Markets opened. Bush Administration has declared a "Worldwide War on Terrorists". This War can have far reaching implications which are difficult to forecast.
In the Indian context, as predicted BSE SENSEX was bearish for the month of September. BSE SENSEX closed on 1.10.2001 at 2787 down 14 % from August'2001 closing of 3245 level. Intra month high and low were 3267 and 2594 respectively. New eight year low was tested at 2594. This had the effect of Flight 911.
Pre Flight 911 - BSE SENSEX did slide to 3150 level, as forecasted. In fact BSE SENSEX closed on 11th Sept'2001 at this crucial level. BSE SENSEX went into a tailspin post Flight 911 and breached 3096 - the existing 52 week low. In fact BSE SENSEX crashed to its new eight year low closing at 2599. Software Stocks were hammered down to
new lows. Old Economy Stocks were also beaten but the TMT Stocks were massacred. Pharma Stocks also lost on profit booking.
IMF in it's recent report on India has forecast a GDP Growth of below 5 % for the current fiscal. We have been mentioning this for the past couple of months. Indian Govt. now has declared that GDP Growth will be hit on account of Flight 911 fallout, but does not agree with World Bank estimates. It is still talking up the Indian Economy !
We are not bullish for the month of October'2001. We expect a "Technical Pull-Back" for the BSE SENSEX to rally to a level of 2850. If this is breached the rally may last for another 150 points to take the BSE SENSEX to a major resistance level of 3000. We feel this will not be breached. The BSE SENSEX has fallen whopping 20 % from September opening of 3245 levels to 2594 levels. A retracement is expected to 2850 to 3000 levels as mentioned above. Generally when Markets fall so sharply a Technical Pull-Back also called "Retracement" is noticed.
On the other side, if the American War goes beyond the boundaries of Afghanistan - we expect the BSE SENSEX to crash to its existing low of 2599 level. If this level is breached it is possible to see a level of 2450.
Keeping in view the above, only one new share is being recommended.
TATA POWER - India's largest private sector Electricity Producer. We predict TATAs might pick up the controlling stake in the controversial American ENRON promoted company - M/s. Dabhol Power Co. India.
We stick to our old favorites :
- LARSEN & TOUBRO at around Rs. 144.
- NALCO at around Rs. 42.
- ONGC at around 120.
- TATA POWER at around Rs. 80.
These are the levels indicative if the American War confines to the boundaries of Afghanistan and BSE SENSEX is around 2600.
Investors to exit the market completely if the American War spreads beyond Afghanistan as then we can expect the BSE SENSEX to be around 2450 or any lower levels - 2150, depending on the scale and magnitude of the American War. If Pakistan erupts, then America will have to exit the Pakistani soil and may shift the Command Center to its new found ally - India. We are in for
un-predictable times and I personally feel it will be a "Black October" for the Indian Stock Markets.   

BSE SENSEX closed on 31.8.2001 at a new 50 week low - 3245. It was marginally down a 1.18 % from BSE SENSEX close of 3284 on 1.8.2001. The BSE SENSEX was range bound with intra-month high and low closing levels of 3359 and 3245 respectively. We were bearish for the month of August'2001 and advised investors to stay away from Software Shares. The BSE SENSEX could not break all important resistance level of 3360. Software Shares were battered to new lows.
We had predicted the BSE SENSEX to test a level of 3096 - the existing 52 week low. We fell short again !
We have been warning investors of India's poor macro-economic fundamentals in the recent past. Our views were endorsed by a leading International Rating Agency. Standard Poors on Tuesday the 7th of August'2001 downgraded India's local currency(Indian Rupee) rating by a notch and revised its outlook on the country to negative, citing poor public finances and slow reforms. General Govt. debt could approach an alarming figure of 70% of GDP or more than 400 % of revenues - higher than in most similarly rated countries as India, as per SP.
In addition, JP Morgan announced that the move by SP was justified. Macro-Economic condition has deteriorated in the past months in India and there are no signs of reversal. Future looks gloomy still. JP Morgan said :
- Combined Fiscal Deficit will exceed 10 % of GDP. This has been the case for the past three years in a row. This shows that across the political party lines there is no improvement in managing the Indian Economy. One should not entirely blame the current Indian Finance Minister - this is what JP Morgan seems to hint. No doubt that he has to pump-prime the economy as soon as possible.
- There are no signs of Industrial Growth. Figures released by the Govt. of India bear testimony to the above fears by JP Morgan. Industrial production is down to a dismal 2.1% for Q1'2001(April-June) as against 6.1% for YOY for Q1'2000. This is despite thirteenth good monsoon rains in India.
- GDP growth slowed to an estimated 5.2% last year(April'2000 to March'2001) from the previous year's 6.4%. The GDP growth is estimated by the Indian Central Bank Governor at 6.5% for this fiscal(April'2001 to March'2002) but as per JP Morgan this figure maybe as low as 5.5 to 6.0 %. This figure is also estimated by some leading economists in India. Some of the economists estimate the GDP growth this fiscal to be slightly lower than even 5.5%.
Keeping the above factors in mind and also the Technical Analysis of BSE SENSEX, we predict that the BSE SENSEX will test the existing 52 week low of 3096 in September'2001.
We have been predicting this for the past few weeks, but the BSE SENSEX showed a very strong support at 3250 levels in August'2001. This was finally breached as BSE SENSEX settled at 3245 on closing of 31.8.2001. The next strong support for BSE SENSEX is at 3175 or as per other analysts at 3150. We predict that this support of 3175 or 3150 will be breached and BSE SENSEX will crash to it's existing 52 week low of 3096 in September'2001. If the BSE SENSEX does not stabilize at 3096 levels, then one expect a level of 2850 in the next couple of months. We will advise accordingly.
Investors are advised to wait for this level of 3096 to be tested and then take investment decision in the following two old economy shares, which have been recommended earlier :
We are not bullish on India Pharma Shares as per renowned Pundits of Indian Stock Markets. Due regards and respect for them - but with overall sentiment being so weak, we feel the Institutional Investors will book profits in the Pharma Sector to keep their cash flows positive and will switch to Debt Instruments.
Investors are advised to stay away from Software Shares till further notice as we predict NASDAQ to hit a level of 1492 in the coming two three months.  
NIKKEI 225 is at a new 17 year low - 10, 410 and NASDAQ is near 1800 levels. Global problems do have an impact on Indian Stock Markets as India is no longer a closed economy as was the case in pre-1991 era. If DJIA, NASDAQ and NIKKEI etc. are hammered, BSE SENSEX will also bear the brunt.
Investors to be very cautious in September'2001. 

1. As predicted BSE SENSEX was bearish for the month of July'2001.
On 29th June'2001, the BSE SENSEX closed at 3456. On 1st August'2001, the BSE SENSEX closed at 3284 - down a whopping 4.98 %. This closing level of 3284 for the SENSEX is a new 12 week low. The intra-month high/lows for the SENSEX were 3512 and 3244 respectively. The Indian Stock Markets including the premium BSE could not sustain higher levels. Software Stocks were battered to very low levels of new 52 week lows.

We had predicted that the BSE SENSEX would breach a level of 3150 and then test the existing 52 week low 3097. It tested an intra-day low for July'2001 at 3244 as mentioned above and then there was a brief technical pullback.

2. On the macro-level, as mentioned in our July'2001 update - Fiscal Deficit of Government of India, was a major cause of worry. The figures released by the Ministry of Finance corroborate our views. For Q1 2001 i.e. April-June'2001, the fiscal deficit is 1.7% of the GDP as against 1.17% for Q1 2000. This needs to be pruned failing which it will have serious impact on the already beleaguered Indian economy.

UTI fiasco snow-balled in July'2001. UTI's Chairman and two Executive Directors were arrested alongwith a BSE Broker on insider trading charges and also on account of "US 64" Scheme meltdown. Govt. of India, stepped in and the new UTI Chairman has declared that w.e.f. 1st August'2001 small investors can redeem a maximum of 3000 units of 'US 64" at the issue value i.e. at par @ Rs. 10 per unit. This has put some stability in the financial markets failing which BSE SENSEX would have tested the predicted lows as above. Medium scale investors in "US 64" Scheme have to wait for further news from UTI. Large investors re-deemed their units under the "US 64" Scheme in March-May'2001 ! They had inside news ! Might is Right in India ! Ordinary investors in this Scheme are trapped and are at the mercy of corrupt establishment.
Just for matter of record - Govt. of India bailed out UTI in 1998-99 with capital injection of Rs. 30 Billion ( US $ 636 Million at current exchange rates as mentioned below).

I personally feel that things are not rosy with other score odd Schemes that UTI Operates. Pandora's Box has been opened with 'US 64" fiasco. There are talks in the Ministry of Finance and UTI to make "US 64" an NAV linked Scheme from the current "Fixed Rate of Return Scheme" in a couple of years. There are unconfirmed news that other UTI Schemes which offer a fixed rate of return may also be dumped in future and be converted unilaterally to NAV linked schemes. This is perjury with National Wealth. UTI must weed out the corrupt elements and put it's house in order with efficient and market savvy managers. It has a total corpus of Rs. 600 Billion ( US $8.9 Billion at current exchange rate of 1US $ = Indian Rs. 47.00) and is the largest domestic Financial Institutional (FI). UTI must put it's house in order and restore investor confidence.  

3. We are bearish for BSE SENSEX for short-term i.e. around Mid- August'2001. We predict BSE SENSEX to test it's existing 52 week low of 3097 during August'2001. After testing this level there could be a very sharp brief technical rally of 100 to 150 points.      

We are not adding any new Stocks for investment for the moment. At around 3150 to 3100 levels we only recommend our old favorites :


Investors are advised to stay away from Software Stocks.
JULY 2001

BSE SENSEX was bearish for June as predicted. BSE SENSEX closed on 29th June'2001 at 3456, down 2.8% from opening level of 3558. The intra month high and lows for the SENSEX for June'2001 were 3589 and 3298 respectively. This low of 3298 was a new 11 week low.

We continue to be bearish for the month of July'2001. We predict the BSE SENSEX to test the existing 52 week low of 3097. There is a support at 3150, which we feel will be breached.

Macro level parameters of the Indian Economy continue to be disturbing :
- Fiscal Deficit causes a major worry.
- Disinvestment of Govt. Equity in PSUs is slow. Against a target of Rs. 100 Billion  till 31.3.2001, Govt. of India could only raise Rs. 5.8 Billion by selling BALCO Equity.
- Agricultural Growth was below 1% last fiscal year i.e. April 2000 to March 2001. In India financial for the Government is April-March. This is really disturbing. Indian Agricultural output has been decling but this figure of less than 1% is disturbing. This reflects on the purchasing power of the people who are dependent on agriculture for their living. This figure was around 1.3% a year before last. This also reflects on  Indian GDP as a whole, as 25 % of India's GDP comes from Agriculture. India is still an agrarian economy, although it is perceived to be a super-power in Software Development in the Western World.
Agriculture Growth needs to be addressed by the Indian Government on priority.
-India's largest Financial Institution " Unit Trust of India (UTI) " is facing tremendous redemption pressures for its flagship scheme  "US 64". There are a lot of reasons being attributed to this by UTI and Media. The fact is that UTI was hit by the Indian Stock Markets Crash of March'2001 led by NASDAQ Crash. Coupled with this was the Indian Bull - KP going burst, during the same time. UTI was holding large chunk of three/four KP's favorite ICE Stocks. There are rumors in the market that there was some nexus between top brass of UTI and KP. This needs to be probed. In March-April'2001, UTI re-deemed to Indian Corporates and Investors "US 64" Units worth Rs. 42.0 Billion.
UTI is in a financial mess. It announced on 3rd July'2001 that it will suspend redemption of "US 64" Units till 31.12.2001. This leaves investors in the lurch. Investor sentiment is severely effected and UTI's credibility is lost.

The NAV of one Rs. 10 face value "US 64" Unit is around Rs. 6.8 only now as per reliable estimates. UTI has slashed dividend on "US 64" from 13.5% last year to 10% this year. UTI pays it's annual dividend on "US 64" Scheme on 1st July every year since 1964, when the scheme was launched.        

  UTI has a total corpus of Rs. 600 Billion. It invests in Equities, Govt.  Debt. Instruments and other financial instruments in the market. It is learnt  from reliable sources that UTI's exposure to "US 64" is around 25 % of the total funds it manages in India i.e. Rs. 600 Billion. UTI's exposure to "US 64" Scheme hence is estimated at Rs. 150 Billion. It is learnt from reliable sources, that on account of UTI's Stock Market Operations, it has suffered a loss of US $ 1.0 Billion (Rs. 47000 Million or Rs. 47 Billion  assuming that 1 US $ = 47.0 Indian Rupees at current exchange rate) since June'1998-June'2001. On account of these losses UTI is unable to pay back investors  for "US 64" Scheme.

UTI says that it will only be able to re-consider the redemption of funds to investors in "US 64" Scheme, if the BSE SENSEX rises by 20% from the current levels of around 3400. This is un-becoming of India's largest Financial Institution(FI). What if the Indian Stock Markets do not rise by 20% or so ? Will UTI again defer the redemption of it's flagship scheme "US 64" Units ? This is ambiguous and Indian Finance Ministry must take immediate action to bail out UTI and restore investor confidence.

On account of the above disturbing factors we feel that investors should wait for the BSE SENSEX to test a level of 3097 and then take decisions to invest in the following stocks, which we have recommended in the past.
No new Stocks are being recommended at present.


Investors to kindly note that the above recommended stocks are for long-term investors - who can hold them for six to nine months.
JUNE 2001

1. We continue to be bearish till 2nd July'2001 - the date fixed by SEBI to abolish Badla System and to start Futures/Options Trading on the Indian Stock Markets. Finally, SEBI did decide to scrap the age old "Badla" much sooner than expected. FIIs did react very positively to these announcements and BSE SENSEX did touch a high of 3760 during May'2001, but closed today on 1st June'2001 at 3558, marginally up from opening level of May'2001.

We advise Investors to stay away from the market till 2nd July'2001.

2. India's Sovereign Rating has been downgraded toady from "Stable" to "Negative" by a renowned global credit rating agency - FITCH. India's growing fiscal deficit, delay in privatization of PSUs and deterioration in Foreign Investment Climate have been sited as the major reasons for this downgrade. I expect this will have a bearing on the FII investment in the Indian Stock Markets till the time the present Indian Government can pull up its socks and improve its performance.

I predict bearish conditions in the Indian Stock Markets for June'2001.
If BSE SENSEX breaches a level of 3421 convincingly, then the BSE SENSEX will slide to 3097 levels, as mentioned in our earlier update.

3. IBP - As predicted, IBP touched Rs. 400. Investors are advised to book profits by at least selling 75 % of their holdings. Balance hold. Sell around Rs. 600 in a few months !

No additional shares are being recommended till 2nd July'2001. Let the markets be allowed by SEBI to work in a normal  manner. Till 2nd July'2001, all short sales are banned. This is not normal market functioning.

4. Investors are advised to book profits in Stocks where they are making even marginal profits. Avoid capital loss. Stay away especially from ICE Sector as I feel this sector will see the maximum fall in the coming weeks due to bull unwinding. All positions - Long or Short have to be squared up by the 2nd July'2001.
MAY 2001

As predicted the BSE SENSEX was bearish for the month of April'2001. It tested a new 52 week low, although it closed slightly above the 2nd April'2001 closing of 3441 level.  BSE SENSEX closed on 3.5.2001 at 3494 levels. The Intra-Month movement in April'2001,  was a high of 3637 and a new 52 week low of 3097.

We had predicted that if the BSE SENSEX breached 3421 levels then it will tumble to 3150 levels. Exactly the same happened and in fact the BSE SENSEX crashed to a intra-day level of 3097. However it did not close below this crucial level of 3150 on any day. BSE SENSEX closed on a daily basis, during the month of April at its lowest at 3184 level after testing a new 52 week low of 3097.

Frontline Technology Stocks were battered merciliessly. We saw new  52 week lows for INFOSYS( Rs.2720) and SATYAM(Rs.160). Our predictions went wrong for these two scrips. We had mentioned Rs. 3800 for INFOSYS and Rs. 210 for SATYAM as good levels to start buying, when the BSE SENSEX was around 3150 to 3200 levels. The SENSEX level suggested was dot on, but at these low levels of BSE SENSEX - INFOSYS was battered to Rs. 2800 levels and SATYAM to Rs. 170. INFOSYS closed today at  Rs. 3800 and SATYAM at Rs. 207.

On LARSEN & TOUBRO and TISCO, our recommended levels were more or less correct. LARSEN touched a low of Rs. 206 and TISCO was available around Rs. 115.

After Bombay Big Bull - Mr. Ketan Parikh(KP), went bust in March'2001, the markets crashed. His scrips mainly - Information Technolgy, Communication and Entertainment Stocks (ICE Stocks) were massacred on BSE. Really bear hammered to unrealistic low levels. One of KP's scrip was SATYAM, which saw a low of Rs. 160.
A few Indian Banks also lost money with KP going burst. Govt. of India intervened through SEBI and as a "first step" banned all short sales, to arrest the sliding markets. This arrested the markets to fall further downwards from 3097 levels. Markets stabilized by SEBI intervention.

Unfortunately Indian Stock Markets including BSE are a few Markets in the world, where one can go short on the scrips within the weekly settlement without having physical delivery of shares. In the carryforward system at BSE - "BLESS" and at NSE - "ALBM" one can go short for 90 days max. without having physical delivery of shares through a "stock lender" or one's own shares. This point is in favour of bears and the FIIs have been demanding a ban on this age-old system in India called 'Badla System". Under this system - Shortsellers are at an advantage when the markets are bearish. FIIs will have to wait for some more time till another KP like scam to happen in India when SEBI will ban this "Badla System" of forward trading !

FIIs are right. This practice of getting a "contango" reward to a short-seller plus the difference in price, if any - should be scrapped. "Futures and Options" need to be put in place. This will take some time in India as these advanced tools for speculating need a lot of infrastructure and guidelines. We in India might take another couple of years to scrap "Badla System" and put in place "Futures and Options".     

SEBI - The Indian Stock Market regulator announced some harsh measures to curb speculation in Mid-April. All Short sales were banned are still banned. All forward positions - 'Long' or 'Short'  in the Group "A" Scrips (wherein carryforward is allowed) on BSE have to be 'squared off' by 2nd July'2001. This date - 2nd July'2001, is sacrosanct and SEBI has announced that ban on short sales will be lifted by this date. When one is playing/tinkering with the basics of the Stock Markets - In this case "Ban on Short Sales" in all Stock Markets in India including BSE, predictions have little room.

We expect wild fluctuations in BSE in the month of May'2001. No one knows what is the extent of long and short positions in the BSE 30 SENSEX Scrips where in Carryforward Trading is done. Now till 2nd July'2001, one can only Buy first and then Sell and not the other way round as "Short Sales" completely banned by SEBI. This is an artificial sort of market and we advise Investors to stay away from the market, till 2nd July'2001.

We still predict a level of 3097 for BSE SENSEX being tested again in May/June'2001. The upperside for a Bull Market would mean that BSE SENSEX closes above 3650. There could be wild fluctuations in individual Scrips and the BSE SENSEX, as bears and bulls both will be squaring off their speculative positions by 2nd July'2001.   

If the BSE SENSEX closes below this level of 3100 for two/three days in a row - do not by shocked to see a BSE SENSEX of 2850.

APRIL 2001

The BSE SENSEX has touched a 52 week low of 3436 in Mid-March'2001 and it was near this low at 3441 on first day of the financial year in India i.e. 2.4.2001. We predict a bearish market for the month of April'2001. There could be technical pull back of about 100 to 150 points of BSE SENSEX. Looks difficult.

The BSE SENSEX is expected to breach the level of 3421 and close below this level. This will lead to BSE SENSEX tumbling to a level of 3150. BSE SENSEX should find a strong support at this level. If this level is also breached, then there will be a bloodbath on BSE and other Stock Exchanges in India. Investors to take notice of this level. We feel this level will not be breached. But no one can predict 100 %. 

We advise investors to start buying the following shares at this level of 3150 to 3200 . Investors to keep in mind that market will be bearish till May'2001. The returns should be expected on the following shares keeping four to six months perspective :

1. INFOSYS - This is the darling of Indian Stock Markets. It is a Rs. 5 paid up share and currently quotes at Rs. 4100. At around 3800 - 3900 it is a good buy. It's ADR is also listed and traded at NASDAQ - INFY

2. SATYAM - Another blue chip in IT Sector. It is a Rs. 2 paid up share and currently quotes at Rs. 240. At around Rs. 210 -215 it is a good buy. SATYAM's subsidiary a ISP Provider is listed at NASDAQ - SIFY.

3. LARSEN and TOUBRO(L & T) - Cement and Engineering Major. It is a Rs. 10 paid up share. They are expecting to hive off their Cement division into a JV with an overseas Cement Giant - LAFARGE, BLUE CIRCLE, HOLDERBANK, CEMEX etc. They will get huge cash for this sale. They are also expected to spin off their 'Software Exports Division' into a separate company  - LTITL i.e. Larsen Toubro Informational Technology Ltd. This re-structuring is expected to be done this fiscal.
L & T post re-structuring will be a hard core Engineering Giant. Currently the Share quotes at Rs. 218. At around Rs. 200 to Rs. 210 it is a good pick.

4. TISCO - We already are bullish on this Steel Major. It is currently quoting at Rs. 118 per Rs. 10 paid up share. At around Rs. 112 it is a safe long term (six) month investment.

We expect these shares to give at least 30 % ROI in the next six months if not more. Long term investors can hold till further period subject to our comments for May'2001 onwards

MARCH 2001

We had a predicted a bull market for Feb'2001. Our predictions fell short of actual bull levels for BSE SENSEX. Our prediction was around 4780 levels but the BSE SENSEX could only reach 4460 levels. Prime reason being the NASDAQ EFFECT. The TMT Stocks in India are called ICE Stocks - Infotech, Communications and Entertainment Stocks. Some of the ICE Stocks on the BSE SENSEX hit their 52 week lows on 2nd March (weekly settlement) or earlier during the month. Stars of Indian Stock Markets - INFOSYS and SATYAM hit their new 52 Week lows on 2nd March'2001. This is the main reason of BSE SENSEX closing at 4095 levels on 2nd March'2001.

However, all our shares except MTNL outperformed the BSE SENSEX once again. We predict for March that the BSE SENSEX will test a level of 4040. It should not breach a level of 4000 decisively. It is breaks this level, then it fall sharply to a level of 3850. We feel it will, if NASDAQ breaches all important level of 2000. Investors to keep an eye on these levels. There will be further erosion in ICE Stocks. Keep away from ICE Stocks for the time being as there could be some more down side.

We feel the market will be sideways or bearish. India did sign WTO Agreement which will come into effect from 1.4.2001. From this date onwards, almost 750 new items will be freed from Import License Regime. Govt. of India will only control the inflow of imports by Tariff Barriers and not by License Barriers. This will have a serious impact on some domestic industries, which need protection.

In view of the above two parameters, we are not recommending any additional Stocks for March'2001. We are very cautious and wish to wait till 15th March'2001.
Our forecast for Jan'2001 for BSE SENSEX was 3950 to 4300. We expected a healthy market on account of Indian Government's serious efforts to privatize PSUs. Govt. is moving ahead slowly but surely on PSU Disinvestment. Our predictions were more or less correct. BSE SENSEX touched a intra-month low of 4000 and a high of 4400 during Jan'2001.
BSE SENSEX closed at 4352 on 2nd Feb - weekly settlement.

We predict a BULL MARKET for Feb'2001.
BSE SENSEX could touch 4790 by End Feb. Crucial level of BSE SENSEX of 4300 has been broken decisively. This is the 200 DMA for BSE SENSEX.

Foreign Institutional Investors (FIIs) have pumped in approx. US $ 900 Million into the Indian Stock Markets, in the month of Jan'2001. Inspite of the Killer Earthquake in Western India on 26th Jan'2001, the FIIs are bullish on the Indian Economy. The prime reason being that Indian Govt. since the last two decades has been only talking about disinvestment in PSUs, but there was no action on the ground. This time, actual disinvestment is happening. Fiscal Deficit will be contained by this PSU Disinvestment. Although the Disinvestment Process is slow, but it is actually happening. This is a very bullish sign for FIIs.

Secondly some major destinations in Asia are 'falling out of favour' with the FIIs. There are reports that FIIs are pulling out huge amount of Dollars from Philippines, Indonesia and Thailand on account of political instability in these three Asian countries. These countries were once 'Hot' Destinations for FIIs. Hong Kong due to its Chinese parentage is not getting due share of FII funds because of China's Human Rights history. America is talking tough with China on this important issue. Earlier this would not have effected Hong Kong, but now it definitely does. Hong Kong is not attracting Foreign Funds for its Stocks. Lastly - Japan is not able to pull itself out from recession.

Indian GDP estimates are around 5.6% for 2001-02. Plus it is expected that US President Bush will lift Sanctions on India in March'2001,  which were imposed in June 1998, after Indian Nuclear Explosions in May'1998. This is a very positive news for the Indian Economy.

All these factors put together plus a clear signal from the Charts -

The following is an update on some select shares that we forecast would outperform the BSE SENSEX in February 2001:

1. IBP: This PSU Petroleum Retailing Stock closed at BSE on 2nd Feb at Rs. 248.
Up 58 % from Jan'2001 level of Rs. 156.  Global Petroleum Giants - SHELL, EXXON-MOBIL, TOTALFINA etc and Indian Petroleum Giant - RELIANCE are interested to pick-up Indian Govt.'s 33.6 % equity stake in IBP in the Disinvestment process. We expect this Stock to be anywhere between Rs. 400 to 600 in the next two months. That is why we called this stock as a "Multi Bagger of 2001". Investors to decide target prices and exit levels on their own.

2. MTNL: This Telecom PSU Stock closed at BSE on 2nd Feb at Rs. 204. Up 7 % from Jan'2001 level of Rs. 190. We expect MTNL to touch Rs. 250 in Feb'2001. Exit level - Rs. 240 for investors.

3. HINDUSTAN LEVER : This FMCG Multinational Giant is weak. Exit at Rs. 220 or even earlier. It closed at BSE on 2nd Feb at Rs. 200. It is looking weak both - fundamentally and technically.

4. ONGC: This Crude Oil and Natural Gas PSU has got up from its deep slumber. This will be another IBP Story. A Multi-Bagger. It closed at BSE on 2nd Feb at  Rs. 149. There is a major resistance at Rs. 155 level for this Stock.  Once it crosses this resistance it will shoot up to Rs. 220. This is a Blue Chip PSU Stock, which is grossly undervalued. We expect this stock to give multiple returns in the next phase of PSU Disinvestment in June'2001. Investors to decide accordingly. LONG TERM INVESTORS ARE ADVISED TO HOLD ON TO THIS STOCK AND EXIT AT Rs. 600 to 900.

5. NALCO:  This Aluminium PSU Giant closed at BSE on 2nd Feb at Rs. 48. Down 6 % from Jan'2001 levels. Like ONGC this will be disinvested in the second phase of PSU Privatization in June'2001. We expect this Stock to be Rs. 80 in Feb/March'2001.

We recommend two new stocks for Feb'2001 :

a) RELIANCE INDUSTRIES Ltd. -  "RELIANCE" is India's Largest Private Sector Company. It is a Petro-Chemical Major. It closed at BSE on 2nd Feb at Rs. 394. Its 52 Week - High and Low are Rs. 391 and Rs. 199 respectively. Target price Rs. 480.

b) TATA IRON AND STEEL COMPANY -  "TISCO"  is India's largest  primary Steel Producer in the Private Sector. It closed at BSE on 2nd Feb at Rs. 143. Its 52 Week - High and Low are Rs. 149 and Rs. 85 respectively. Target price Rs. 180.


As predicted the Indian Stock Markets were range bound. BSE SENSEX did touch 3803 to 4278 on intra-day basis. We had mentioned the range to be 3850 to 4200. It was more or less in this range.

We forecast a healthy market as Govt. is giving strong signals that Reforms will be pushed through in the next three months, come what may. PSU will be disinvested. We have been telling this PSU STORY much in advance. The BSE SENSEX would oscillate between 3950 to 4300 levels in Jan'2001. Select PSU Shares will outperform the SENSEX.

Exactly the same is going to happen what we had predicted six months ago. Govt. will privatize PSU Companies in Phases . Market discounts the future. Some PSU Stocks are already galloping - MTNL, BHEL etc.

We do not recommend any new shares. Our shares are talking :

- HINDUSTAN LEVER. We recommended at  Rs. 165. It closed today at Rs. 203. Up 23 %. This could be around Rs. 240 by end Q1 2001.

- MTNL. A telecom PSU. It closed today at Rs. 190. We recommended at  Rs. 110. It was Rs. 170 when we last updated in Dec'2000. From that level it is further up by another 11 %. This share could be around Rs. 240 by end Q1 2001.

On the PSU - we continue to be bullish on two of our old favorites, we recommend the following specifically again, if already not purchased :

- NALCO. Aluminum PSU. At around Rs. 51 per Share it is still a good buy. We expect 60 % appreciation by end Q1 2001.

- IBP. Petroleum Products Retailing PSU. This is currently quoting at Rs. 156. It is still a plum pick at this level also. We expect 50 % appreciation by end Q1 2001.

The information above is provided by the source indicated and presented by the Astrologers Fund Inc. Neither the Astrologers Fund Inc. nor the source guarantee that the information supplied is accurate, complete or timely, or make any warranties with regard to the results obtained from its use. The Astrologers Fund does not guarantee the suitability or potential value of any particular investment or information source. Remember always to check with your licensed financial planner or broker before acting. This is just the starting point of your research and you must carefully investigate before you buy/or sell.
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