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The BSE SENSEX closed today i.e. 30th Nov'04 at an all time
of 6234. The BSE SENSEX on 9th Jan'04 tested an all time high of
but closed at 6199. The BSE SENSEX created history today by closing at
very bullish level of 6234. Up smartly 5.8 % from the Nov'04
of 5891. The intra month high and low for the month of Nov'04 were 6248
5878. The BSE SENSEX just fell short of testing the all time high of
as on 9th Jan'04.
The BSE SENSEX was bullish in Nov'04 as predicted. The SENSEX breached
6000 level easily. It also broke all important level of 6150 in Nov'04.
were very aggressive buyers of Indian Equities. FIIs pumped in around
$ 1.2 Billion into Indian Equities in the month of Nov'04. In the
year 2003 - FIIs pumped in US $ 6.59 Billion into Indian Equities. In
calendar 2004 till 30th Nov'04, FIIs have already pumped in approx US
Billion. It is expected that in calendar 2004 - this figure might be
to US $ 8.0 Billion. In other words analysts feel that in the month of
- FIIs will pump in US $ 1.0 Billion into Indian Equities. If this
then the BSE SENSEX will easily go past the all time high of 6249.50
will enter into ' Unchartered Territory '.
FIIs were very aggressive Buyer's into the frontline IT Sector, Banking
Auto Component Sector Stocks in Nov'04. Indian Operators were very
in the Mid Cap Stocks. Mid Cap Stocks are having a dream run but some
these Stocks are not based on fundamentals. Investors have already been
not to invest into Mid Cap Stocks without checking the fundamentals.
We feel the BSE SENSEX will be in a bullish mode in Dec'04. The levels
watch are :
S1 6150 S2 6000 S3 5880
R1 6250 R2
Beyond 6250 the BSE SENSEX could be heading anywhere. It could test
to 6700 levels in the next few months to come. This depends primarily
on the FII activity. FIIs have favoured Indian Equities ahead of China
Brazil. If FIIs pump in another US $ 1.0 Billion in Dec'04 as
by the analysts then we can see a level of 6400+ in Dec'04 itself. We
that BSE SENSEX will give a sharp 200+ point reaction after crossing
levels. At this reaction we recommend investment into four new Stocks.
We are recommending four additional Stocks to be bought for medium to
term horizon ( 3 to 6 months ) as below :
1. TIMKEN INDIA : It is a leading manufacturer of Taper Roller Bearings
is a Indian Subsidiary of Automotive/Railways Bearing Giant - TIMKEN
of USA. It closed today i.e. 30th Nov'04 at Rs.69.00. Its 52 week high
low are Rs. 87.00 and Rs. 33.00. Keep a buying target figure of Rs. 60
62. Target price Rs. 120+
2. CUMMINS INDIA : It is a leading manufacturer of Diesel Engines in
both for Automotive and Stationary use. This company too is now an
subsidiary of CUMMINS Inc. USA - a global giant in Diesel Engines. It
today at Rs. 125.00. It's 52 week high and low are Rs.135.00 and Rs.
respectively. Keep a buying target price of Rs. 118 to 120. Target
3. UTI BANK : We did not recommend any Banking Stocks over the past two
as we were worried about the high level of NPAs. This Banking Stock
today at Rs. Rs.166.00. It's 52 week high and low are Rs. 179.00 and
Keep a buying target of Rs. 145 to 150. This Bank could be a " Takeover
". Investors are advised to keep watchful eye on this Stock as regards
volumes traded on the BSE or NSE. If the Stock is traded heavily -
is some action in the Stock. Target price could be Rs. 250 to Rs. 300.
4. STANDARD INDUSTRIES : This is an old Textiles Stock and closed today
Rs. Rs. 19.40. Buy this Stock at market prices - say Rs. 20.00 to 21.50
feel this Stock will be Rs. 40.00++ in a matter of three months. Post
QUOTA Dismantling from Jan'05 onwards - this Stock will see a frenzied
EXIT from this Stock at Rs. 40.00.
We had recommended some Stocks in Oct'04. A brief synopsis
1. HELIOS and MATHEWSON : This Software Stock tested a level of Rs.
on a cum-bonus basis. We hope investors booked partial profits. Anyway
closed today ex-bonus level at Rs. 88.00. We advise Investors to stay
We stick to our target price of Rs. 180.00++
2. MRPL : This is our multi-bagger of 2004-05. It closed today at Rs.
Stay invested. We stick to our price of Rs. 100.00++.
3. ARVIND MILLS : This Textile major closed today at Rs. 114.00 up
from Rs. 84.00 as of 4th Oct'04. It tested a new 52 week high of Rs.
in Nov'04. Stay invested. We stick to our target price of Rs. 250.00.
4. GTN TEXTILES : This Cotton Yarn major closed today at Rs. 72.00 (
52 week high ) up smartly from Rs. 53.00 as of 4th Oct'04. Exit at Rs.
5. PETRONET LNG : This closed at Rs. 23.40 marginally down from Rs.
as of 4th Oct'04. Stay invested. This will be multi-bagger of 2005-06.
6. TCS : This Indian Software major closed at its new 52 week high of
1287.00 up smartly from 1081.00 as of 4th Oct'04. Stay invested. This
a Stock for every Indian Investor's Portfolio. Stay invested.
7. L & T : This Engineering Major closed today at its new 52 week
of Rs. 912.00 p smartly from Rs. 874.00 of 4th Oct'04. This is a Stock
every Indian Investor's Portfolio. Stay invested till further advise.
In August 2002 we had recommended LIQUOR and SPIRITS Stock -
at a level of Rs. 45.00. We had predicted that this Stock will be Rs.
in about one year's time. We were off by 12 months or so. McDOWELL
today at Rs. 124.00 but tested a 52 week high of Rs. 136.00 in Nov'04.
Stock will be Rs.150.00+ in the very near future. Investors who hold
Stock are advised to completely exit from this Stock at around Rs.
Some Market Pundits were making a laughing stock of our prediction in
2002 about this Stock. These guys called me a few days back and were
about the bull run in the Stock. God has been kind !
We predict Stocks in our own queer ways and most of the time our long
predictions have been 'Bulls Eye'. We again repeat Investors who have
holding capacity for medium to long term and who follow our timely
directions, will for sure make big bucks in the Indian Stocks.
The Indian Stock Markets are in for a big Bull Run in the coming months
all the negative news is being discounted. Happy Investing in Indian
The October 2004 closing is taken as 5th Nov'04 - weekly
closing at BSE. BSE SENSEX closed today at a bullish level of 5891 up
1.8 % from 4th
Oct'04 closing of 5785. As predicted BSE SENSEX corrected sharply in
month of Oct'04. The intra month high and low were 5901 and 5558 (
breaching S3 level of 5580 as mentioned in the forecast for Oct'04 ).
US Light Crude at NYMEX tested record high of US $ 55.67 pbbl on 25th
Oct'04. High Oil prices are a cause of worry globally as this would
lead to inflation.
The FIIs are bullish on India and we predict that BSE SENSEX will test
and even break the all important level of 6000 in Nov'04. At any level
- INVESTORS ARE ADVISED TO BOOK PROFITS.
The levels to watch in Nov'04 are :
S1 5840 S2 5750 S3 5680
R1 5940 R2 6000
No new Shares are being recommended. It is the time to take profits
home, if any !
The Sept'04 closing is taken as 4th Oct'04.
BSE SENSEX closed today at a whopping bullish level of 5785 up 10.2 %
from 6th Sept'04 closing of 5246. We had predicted that BSE SENSEX
breach the 200 DMA level of 5375 but due to very heavy FII buying after
mid Sept'04 the BSE SENSEX turned extremely bullish. Bears were running
for cover !
The intra month low and highs for Sept'04 for the BSE SENSEX were 5240
and 5785. Mid Caps rallied like mad bulls - some with little floating
and almost nil fundamentals. We had advised investors to stay away from
Aggressive FII buying towards mid September in the front line blue
chips in Oil and Gas, Petrochemicals, Heavy Engineering Machinery,
Cement, Steel, Sugar,Textiles and Cotton Yarn sectors propelled BSE
SENSEX past the confirmed bullish trigger of 5720.
The Securities Turnover Tax ( STT ) was effective in the Stock Markets
w.e.f. 1st Oct'04. The same was well received by all section of
- FIs, FIIs and individual investors. There were some apprehensions on
implementation of STT by the Indian Stock Market Regulator - SEBI,
were cleared to everybody's satisfaction by the last week of Sept'04.
further propelled the BSE SENSEX.
There is only 10 % capital gains tax on short term stock trading
profits and nil capital gains tax on long term profits ( beyond 12
months ) as per the Budget announced in July'04 by the Indian Finance
Minister. This was
a good news for all sections of investors but the ambiguities in
implementation of STT was not reflecting truly on the Indicies since
the announcement a
few months back. Once SEBI clarified as mentioned above - bulls moved
the Stock Markets aggressively in the last week of Sept'04. Short
were trapped and rushed in to cover their positions. This always adds
impetus to the Indicies.
FIIs pumped in close to US $ 600 Million into Indian Equities in
Sept'04. Bulk of this investment was done after mid Sept'04. FIIs were
Aug'04. FIIs pumped in close to US $ 1.0 Billion each in Taiwan and
Korean Equities during the same period.
The BSE SENSEX is now in a bullish mode with the under current also in
the same mode. It is well above the 200 DMA level of 5420 and will find
a very strong support at a level of 5720.
The BSE SENSEX will correct sharply in the coming weeks and may then
head towards an all important level of 6000! There are a few concerns
which are entailed towards the end of this update.
The levels to watch in Oct'04 are :
S1 5720 S2 5640 S3 5580
R1 5840 R2 6000
We are recommending a few stocks as below for medium and long term
investments. Investors who have a long term perspective have gained
enormously on our
advise. Investors to enter when the BSE SENSEX corrects sharply in
or accordingly as the case maybe.
For the next six months or so we fancy
a) HELIOS and MATHEWSON : A new kid on the block in the midcap software
sector with strong fundamentals. It closed today at Rs. 123. This price
is with 1:1 Bonus and we hope ex-bonus price would be around Rs.80 to
90. The 52 week high and low levels are Rs. 184 and Rs. 22
respectively. We expect this Stock to test Rs. 180 to 200 in the next
six months from the ex-bonus level of Rs. 80+. This is a turnaround
b) MRPL : This is our multi bagger for 2004 ! We are extending the same
to 2005. It closed today at Rs. 45. We expect MRPL to be
profitable company in 12 calendar months from now. It has started
generating cash profits and we hope by 31st March'05 or 30th Sept'05
the company would have have wiped
out all its accumulated losses ( Rs. 6271 Million ). As on 31st
March'04 the cash profit was Rs. 4594 Million and accumulated losses
were Rs. 6271 Million. Substantial improvement in performance YoY. We
feel MRPL will be a dividend candidate by 30th Sept'05, if not earlier.
We expect the price to be
Rs. 100+ in six months time as the stock markets discount the future.
Long Term :
The following are being recommended for 12 months perspective in mind.
These Stocks will give substantial returns as per our understanding in
long term as they are fundamentally strong stocks and are leaders in
pack in their sector.
1. ARVIND MILLS : This textile major is our fancied Stock in this
sector ahead of RAYMOND and ZODIAC. It closed today at Rs. 84. The 52
levels are 85/41 respectively.
We feel post 2005 April when the Quota Regime will be dismantled
globally under the MFN Agreement - ARVIND MILLS will be the best gainer
in the textiles sector. ARVIND is adding capacity to manufacture
garments on an international scale with global benchmarks. It is
already the world's second largest denim producer in the world. Plus
now vertically integrated up the value chain
for manufacture of garments apart from denim garments. We feel this
will be Rs. 250+ in the long term.
2. GTN TEXTILES : As a corollary to the bullish trend in the Indian
Textiles sector - the Indian Cotton Yarn Sector is another growth
story. We prefer this medium sized niche yarn producer with
conservative yet professional
management over the yarn biggies viz NAHAR,VARDHAMAN and MARAL.
GTN closed toady at Rs. 53. The 52 week high/low levels are 60/27
respectively. We expect this Stock to test a level of Rs. 80+ in the
3. PETRONET LNG : We have fancied Oil and Gas sector over the past
three years or so. Long term investors have made huge gains on our
stocks in this sector - IBP and ONGC.
LNG - Liquefied Natural Gas is the fuel of the future for Power
Generation, Urea and host of Other Industries which consume large
amounts of energy.
It is a clean fuel. PETRONET LNG is promoted by PSU Oil Giants in India
IOC, GAIL etc. ) with equity participation by the LNG supplier from
This is a joint-stock company which will Re-gasify the imported LNG at
major ports on the west coast of India and then transport the same
out the Nation. It is laying pipeline grid covering almost all user
geographical areas in India.
We feel this is another multi bagger stock for 2005. It closed today
Rs. 24. The 52 week high/low levels are 27/14 respectively. In the long
this Stock could be Rs. 45++.
This is one Stock which we advise long term investors to add to their
portfolios and keep for three years or so. It could test Rs. 250+.
Must for a long term investors portfolio.
4. TCS : India's largest Software company was not floated on the Stock
Markets. It was closely held by TATA SONS - India's biggest industrial
TATAs. The recent IPO from TCS was oversubscribed and well received by
sections of investors - FIs, FIIs and individual investors.
It closed today at Rs. 1081 - its new high since the IPO in Sept'04.
Its low is Rs. 959. We feel long term investors should have this Stock
in their portfolios for the next couple of years.
Over the next twelve months or so we feel that the investors should get
100 % returns on this Stock.
5. LARSEN : Our old favourite, now a pure Engineering Company.
Investors who missed are now advised to buy this de-merged stock for
long term. It
closed today at Rs. 874. Since its debut post de-merger of Cement
it has tested a high of Rs. 899 and a low of Rs. 636.
As advised in our Aug'04 Update - This Engineering Giant Stock is a
must for every long term investor. From these levels of Rs. 800 to 850
a 100 % return on investment in the next twelve months or so. Over the
next couple of years - long term investors can expect multiple gains.
As usual we address concerns too in our update.
i) Crude Oil prices above US $ 50 pbbl are a sure cause of worry.
Although this level is not sustainable but one never knows what can
happen in Niger Delta or Iraq or Venezuela or even with Yukos ? Any
disaster in these areas could propel Crude Oil to US $ 54++.
ii) India's FDI is too low as compared to China. China's FDI in 2004 is
estimated at US $ 60 Billion. India's FDI in calender 2004 would not
exceed 4.5 Billion. India needs FDI to upgrade its roads, ports etc. in
the Infrastructure Sector.
iii) China Factor. We had mentioned in our Aug'04 update that China
would be under pressure to de-value its currency - Renimbi or Yuan.
putting pressure on China to do exactly the same !
Investors to keep a keen eye on the China Situation. Chinese have
recently admitted to the world media for the first time that that their
banking sector needs reforms before they open their markets as per WTO
Guidelines. Please go through our comments on the China Factor in our
Aug'04 Update. What we predicted seems to be coming true
The BSE SENSEX closed today i.e. 6th Sept'04 at level of 5246
up approx. 1.0 % from the 2nd Aug' 04 close of 5202. The intra month
high and low for the BSE SENSEX was 5269 and 5022. This low was tested
the price of US Light Crude tested US $ 49.40 pbbl at NYMEX on Friday -
20th Aug'04. We had predicted in the Special August'04 Update that if
Light Crude Oil futures close above
$ 45.50 level for three consecutive days at NYMEX , then the price of
Crude Oil would test $ 50 level at NYMEX. We were just short on our
The BSE SENSEX would be range bound for the month of Sept'04. There is
a major resistance at the 200 DMA i.e. 5375. The 100 DMA for the BSE
SENSEX is at a level of 5125. The levels to watch are as below :
S1 5200 S2 5125 S3 5040
We feel the BSE SENSEX will move between 5040 and 5375. Some pundits
are predicting that the BSE SENSEX will breach past the 200 DMA of 5375
and then from this level gain another 100 to 150 points. We feel this
level of 5375 will not be breached.
FII activity is limited on the Indian Stock Markets. FIIs poured more
funds into equities in South Korea and Taiwan in Aug'04 as compared to
India. We feel this trend will continue and FIIs will not buy Indian
Equities aggressively in the near future due to inflationary pressures
in the Indian Economy and lack of equity culture on the retail level in
India as compared to other Asian economies as above.
Domestic Operators have taken a fancy to Mid Cap Stocks in Textiles,
Paper, Auto and Metals Sector. These Mid Cap Stocks have liquidity
problems. We do not advise Investors to put funds into Stocks which are
not liquid - float is less. In turbulent times it is not easy to get
out of these Stocks. We prefer to invest funds in frontline blue chip
fundamental stocks in respective sectors.
Yes, there is enough money to be made in Mid Cap Stocks but we feel
that most of these Stocks are and can be easily manipulated by
Operators and Fund Managers as the Equity is small and aggressive
buying can propel prices and vice a versa. These Stocks are risky as
per our judgement. Investors can
easily be trapped in these Stocks. Stay away from these Mid Caps until
is a M & A or a Turnaround Story. We will advise if there is/are
sure bets in these Stocks.
One issue which is bothering us is the continued pressure from the Left
Front on the Govt. to slow down the Reforms Process in India. The
Congress Party is supported by the Left Front which has Communist
We feel that the Indian Stock Markets cannot be bullish unless this
Front is 'out of the scene'. Unfortunately this cannot happen in the
circumstances as the Govt. cannot remain in power without the support
the Left Front.
Hence we feel that BSE SENSEX will not breach the 5375 level in the
near future. Traders can have a field day with Mid Cap Stocks!
SPECIAL AUGUST OIL UPDATE
We had mentioned in our forecast for August'04 that US
Light Crude Oil may test US $ 45.45 pbbl. It tested this level on 12th
at NYMEX. Bull's Eye !
Three consecutive closings at NYMEX above a level of US $ 45.50 pbbl
will propel the Crude Oil prices into unchartered territories. Very
situation if the Crude Oil prices spiral out of control and test a
of US $ 50 pbbl as per some petroleum sector analysts at leading global
brokerage houses. We also feel this level of US $ 50 pbbl is a distinct
Stock Markets will crash worldwide. Hence we advise global investors
to completely exit from all equities except core oil exploration
companies - SHELL, MOBIL-EXXON, BP etc.
Indian investors have already been advised to only stay invested in
ONGC and MRPL. We stick to our recommendation.
Enter LARSEN and TOUBRO now at around Rs. 650 levels as we expect
Indian Stock Markets to be bearish.
YUKOS, VENEZUELA and now IRAQ factors are weighing very heavy on global
Crude Oil prices which are showing no signs of weakening on the charts.
We advise investors in India to completely exit out of all equities
including Sugar and Commodity Stocks.
Stay invested only in ONGC and MRPL or other Oil Stocks viz. IOC, HPCL,
Chaotic situation ahead.
The BSE SENSEX closed today i.e.2nd Aug'04 at a level of 5202, up 7.3 %
from the July 14 closing of 4847. The prime reason for this rally was
that two issues - Turnover Tax on Equities and progress of SW Monsoon,
both addressed favourably. Former by the Indian Finance Minister and
by the Almighty.
Turnover Tax concessions were announced by the Hon. Finance Minister to
the satisfaction of all players in the Indian Financial Markets - FIIs,
FIs,Banks, Day Jobbers, Investors and Brokers.
SW Monsoon although late by 4 weeks or so did finally shower well on
the dry and parched areas of Central and North Western India. About 25
of India's GDP still comes from Agriculture and most of the same is
heavily dependent on the SW Monsoon rains.
The BSE SENSEX highs and lows for the period 14th July - 2nd Aug'04
were 5211 and 4845 respectively. We predict BSE SENSEX to be bullish
the month of August'04 but will face a major resistance at its 200 DMA
i.e. 5340. The levels to watch are :
R1 5240 ( 100 DMA ) R2 5340
S1 5150 S2 5000 S3 5940
The Indian Stock Markets are now in sync with global markets. The Crude
Oil prices and the American Terror Alert are two factors which loom
large on the Global Stock Markets of which DJIA is the undisputed king.
The former adds inflationary pressures on the consumer retail indices
worldwide and the latter keeps investors at bay as the fear of
terrorist attacks are a big negative.
These two factors will cast a doubt on the Global Stock Markets which
take cues from the American Stock Market. Crude Oil tested an all time
high US $ 43.92 pbbl at NYMSE for US Light Crude today - a level never
seen since 1983 when Crude Oil Futures trading started at NYMSE.
in Iraq, Problems with YUKOS and Political turmoil in Venezuela are not
getting better either. Crude Oil will remain firm - above US $ 40 pbbl
the next six to eight weeks. Do not be surprised if US Light Crude Oil
US $ 45.45 within the next four to five weeks.
We forecast a major terrorist attack in Paris within the next four to
five weeks by Islamic Militants who may have links to UBL. There may
not be a major terrorist attack in USA in the near future. But with
Paris burning - markets will crash worldwide. We hope our predictions
about Paris are not correct.
One more factor which is of concern to global investors is the China
Factor - IMF has long ago said in its annual report that four of
China's largest Banks - Bank of China, China Agricultural Bank etc. are
technically insolvent. The Chinese Govt. is re-capitalizing these sick
Banks to keep them afloat. No one really knows what is the actual level
of NPAs of these four large Chinese Banks plus the NPAs of China's
Regional Banks.Some western economists estimate that the NPAs of the
Big Four in China would exceed US
$ 600 Billion. To stem the GDP Growth in China i.e. 'slow down' the
'over heated economy' - Chinese think tank is now seriously reviewing
the possibility of devaluation of their currency - Renimbi or Yuan. For
years now, Renimbi has been pegged constant to the US $, whereas
currencies in Asia have depreciated since 1997 against the US $.
JAPANESE YEN, THAI BAHT, PILLIPINO PESO, MALAYSIAN RINGITT, PAKISTANI
RUPEE and INDIAN RUPEE have all depreciated between 16 to 28 % since
this period. China has not revalued or devalued its currency while all
Asian Economies have adjusted their currencies.
We predict that China will devalue its Renimbi before Nov'04. When this
happens - commodity prices worldwide will crash. Wheat, Edible Oil,
Fertilizer, Iron Ore, Steel, Alumina, Aluminium etc. prices will be
depressed as China will import less of these commodities which it is
currently gulping ! Investors are advised to completely exit all
commodity stocks except GOLD.
For the Indian Investors the same applies. Please exit from SESA GOA,
TISCO, HINDALCO, NALCO, - these are Stocks of Iron Ore/Steel and
Aluminum Companies which are exporting their produce in substantial
ratios of their total production. Investors can
re-enter these Stocks later as and when advised. As of now we feel that
it is the time to exit from these Indian Commodity Stocks.
Indian Investors are also strongly advised to completely exit from
Sugar Stocks in the next two months or so, if they are holding the
same. Sugar prices are having a dream run and the bottom lines of
Indian Sugar Cos. are very healthy. Remember Stock Markets discount the
future always. We predict that India will be short on Sugar in the next
six months or so. Govt. of
India will have no option but to allow free import of Sugar like in the
90s. The Sugar prices will be depressed as cheap imported Sugar from
Philippines, Thailand etc. will flood the Indian Markets. Hence we feel
is the right time to exit from Indian Sugar Stocks - BALRAMPUR CHINI,
HINDUSTAN, THIRU AROORAN etc.
We had mentioned that we will re-view engineering major - LARSEN &
TOUBRO Ltd. ( L & T ) post de-merger of its Cement Business.
De-Merged L & T was listed on BSE on 23rd June'04 at Rs. 636. L
& T now has a face value of Rs. 2.00. It tested a high of Rs. 807
22nd July'04 at BSE. We strongly recommend this Engineering Company's
at Rs. 750+ levels. Must for every Indian Investor's Portfolio who
a long term perspective.
We advise investors to re-enter ONGC and MRPL. ONGC is defensive
stock. MRPL is our multi-bagger for 2004.
The Update for the month of July'04 is delayed on account of Union
Budget which was announced on 8th July'04 and also on account of SW
Monsoon which has a big impact on the Indian Economy.
The BSE SENSEX closed today ( 14th July'04 ) at a level of 4847, about
1% lower as of 4th June'04. The Budget announced by the new Govt. has
lead to a lot of confusion amongst the coalition partners. This has
resulted to a debate in the Govt. regarding the rollback of some
decisions and some compromises. The details of the Budget are available
on MoF's Website.
The Budget is Farm Sector Reforms Oriented but a lot of sectors have
left out in the lurch. The Left Parties are against Market Reforms and
increase in FDI in Telecom and Insurance Sectors. The Govt. has to deal
with these difficult issues.
There are possibilities of a rollback of Turnover Tax on the Equities
and other Financial Instruments Traded. Nothing is clear and hence we
are going to wait till end July'04 for further predictions for the
Indian Stock Markets.
SW Monsoon is also playing hide and seek ! The prediction by the Met
Department was that the Monsoon would be more than normal. The onset
was good but now it seems that SW Monsoon may not be as good as
If the SW Monsoon does not progress well in the next three days further
north west then the Stock Markets will go southwards.
Keeping in view the uncertainty of the Budget Rollbacks and Concessions
plus the possible Partial Failure of the SW Monsoon, we advise
investors to completely stay away from the Equities Markets. The BSE
SENSEX may crash to 4200 levels if the SW Monsoon fails to proceed
further towards Northwest in India and the concessions are not
announced by the Finance Minister on Turnover Tax on Equities.
The closing of May'04 is taken as 4th June'04 - Friday. The BSE
SENSEX closed today at 4889 - down 3.5%.The BSE SENSEX closed on 14
May'04 at 5070, down a whopping 329 points. This crash was followed by
the worst ever intra-day crash in the 129 year history of BSE. The BSE
SENSEX crashed by 16.6 % on Monday - 17th May'04 from a level of 5070
to 4227 ( down 16.6 % intra-day) before recovering to close at 4505.
Down 565 points i.e.
11.1 %. This is the single largest daily fall in the history of BSE
its inception 129 years back. Political uncertainty was the main reason
as no political party got a majority in the results of the General
FIIs were heavy sellers of Indian Equities.
We had advised investors to completely exit the Indian Equity Markets
well in time. We predicted in the last update that there will a heavy
bear hammering in Indian Equities. Exactly the same happened. The
intra-month highs and lows from 17th May'04 to 4th June'04 were 5213
and whopping 4227.
As predicted by us as one possibility - Indian National Congress Party
formed the Government in New Delhi with outside support from the Left
Front ( Communists ). The Indian Stock Markets regained their lost
ground after the new minority Govt. was sworn in with the support of
Leftists who propagate populist policies and are anti-reform. The Prime
Minister was a surprise candidate - a bureaucrat turned politician -
Dr. Manmohan Singh. Dr. Singh - a renowned Oxford educated economist
who is hailed as India's Reforms Man, has held many important positions
in his life as a bureaucrat. He
was the Governor of India's Central Bank - Reserve Bank of India. He
also Indian Finance Minister in 1991 to 1995 in the Congress Govt.
We feel that the Left Front will the call the shots in India with
this minority Govt. in place in New Delhi. The Left Front is totally
against economic liberalization and globalization. We fear that fiscal
deficit may balloon up to 12 % of the Indian GDP in this fiscal if the
Left Front has its way. They have a firm grip on this Congress lead
Govt. as they are against scrapping or lowering of Petroleum and Farm
Sector subsidies. The PSU Oil companies will face the music in the
coming months and maybe years. No
one knows when will the Left Front withdraw support to the Congress
Congress Party does not have the numbers in the lower house of the
to run the Govt. without the support of the Left Front. A very sad
of affairs but the facts are facts.
WE ADVISE INVESTORS TO STAY AWAY FROM THE EQUITY MARKETS TILL
FURTHER ADVISE. PARK FUNDS IN LOW YIELD BUT SECURE DEBT FUNDS OF THE
PRIVATE BANKS OR FIIs.
The update is delayed on account of Indian General Election
Results, which were declared on 13th May'04.
The ruling BJP led NDA Govt. lost the people's mandate and the serving
Prime Minister and his team of Ministers resigned today i.e. 15th
May'04. No one ever thought that the ruling NDA Govt. would be voted
out of power. We mentioned on the 6th May'04 forecast that the Third
Front could form the Govt. in New Delhi with the support of the
Congress Party. Who knows - our prediction may come true ? In politics
anything can happen.
There was no single political party with a clear mandate to form the
Government in New Delhi as per the results announced by the Election
Commission. However the single largest party was the main opposition
- The Indian National Congress. But the problem is that even the
Party cannot form a stable Govt. in Delhi without the support of the
Front which is dominated by the Communists.
The BSE SENSEX closed today i.e. 14th May'04 (Black Friday ) at
a whopping low level of 5070. Down 12 % from the 2nd April'04 level of
5788. The fall in the BSE SENSEX today was 329.00 points or
6 % - highest fall in a single day since 4th April 2000, when it
fell 361.48 pts. It was bloodbath, carnage, mayhem - call what you
may on BSE and NSE in India on Black Friday. The intra month highs and
low were 5979 and 5044.
The main reason of this fall on the Stock Markets was that the Indian
National Congress cannot form the Government without the support of the
Left Front. The Left Front dominated by the Communists has clearly
spelt out that they will only support the Congress Party if the
Profitable PSUs are not disinvested and privatized, Disinvestment
Ministry is scrapped, Labour reforms are put on hold, Subsidy to farm
sector is increased, Oil sector subsidy is not cut inspite of soaring
Crude Oil etc etc. Communists are demanding their pound of flesh after
a long time ! FIIs do not like
back tracking of Reforms which the NDA Govt. was pushing very
Hence Foriegn Hedge Funds and FIIs dumped Indian Stocks on this Black
There is political instability in India as of now. This is very
bad for the Indian Stock Markets. FIIs have invested close to US $ 7.00
Billion in the Indian Equities over the last eighteen months or so.
Imagine the BSE SENSEX if even 3.50 Billion Dollars are
re-deemed by the FIIs from Indian Equities. BSE SENSEX could be
anywhere between 3800 to 4800 levels depending on the FIIs Selling or
Exit India Equity policy for a few months or till the next General
We do not know what stand FIId will take as it is contingent on
political scenario in India ? Unfortunately - We are not experts at
predicting political events.
The Left Front may only support the Congress Party from outside
and may not join the Government. Then the Congress Party will have even
more difficulty in forming a stable Govt. as it would need support from
a few more small regional political parties.
Political instability is a big big negative for the Stock Markets. We
feel that even if the Congress Party is able to muster enough support
and it forms the Govt. in New Delhi - the Coalition would be on a shaky
foundation. Anytime the Congress led Coalition Govt. could be swept
away from power on account of Communists and Socialists putting
roadblocks in the Reforms Process. Also these set of alliance partners
will force Congress Party to announce populist measures which are big
drag on the National
WE ADVISE INVESTORS TO COMPLETELY EXIT FROM THE EQUITY MARKETS ASAP
AND SWITCH THEIR FUNDS TO LOW YIELD DEBT MARKET. WE FEEL THE INDIAN
STOCK MARKETS ARE IN A FOR A BEAR PHASE TILL A NEW STABLE GOVT. IS IN
PLACE IN NEW DELHI.
There might be very strong bear hammering in the Indian Stock Markets
in the balance two weeks of May'04. There could be a sharp technical
rally of about 150 to 300 points or so on the BSE SENSEX, but this
unlikely. If there is a sharp technical rally on account of Congress
Party forming a Govt. - Use this rally to exit from the Equity
completely. Do not be emotional. Just convert your investments from
Equity to Debt until further advise.
On 13th May'04 - US Light Crude tested an all time high of
US $ 41.57 pbbl in New York. This level is higher than that of October
1990 when the US Light Crude hit US $ 41.15 pbbl in New York. Higher
Oil prices give rise to inflation and global markets head southwards.
Global Investors should keep a close tab on the Crude Oil prices. It is
to partially switch from Stocks into physical Gold or Gold Futures in
Global Markets. Gold might test US $ 450 pto in the near future. We
in Dec'03 that Crude Oil will test US $ 40 mark in the short term
The update for May'04 will be done between 13th and 15th May'04 as
we expect the results of the General Elections on the 13th May'04. By
15th May'04 we will have some clarity who is going to form the next
Govt. in New Delhi.
If a stable Govt. is formed by the BJP led NDA Coalition then the
Indian Stock Markets will be very bullish.
If an unstable Govt. is formed by the Third Front supported by
Congress then the Indian Stock Markets will crash. In this case
should exit Equity Markets completely.
We will advise Investors accordingly between 13th and 15th May'04.
We regret we are delaying the May'04 forecast by two weeks.
The closing of March is taken as 2nd April'04 ( weekly closing at
BSE ). The BSE SENSEX closed today at 5788 down 1.6 % from the Feb'04
closing level of 5880. The intra month highs and lows were 5951 and a
whopping low of 5325. The Stock Markets were bearish in the second and
third week of March'04 as against our prediction of being bullish. The
Markets were bearish on account of fiscal year ending profit booking by
domestic FIs and Indian Investors.
BSE SENSEX breached even the S4 level of 5600 in the month of
March'04. It in fact tested a low of 5325 as mentioned above. Heavy
profit booking by Indian Mutual Funds as the financial year closed on
31st March'04. On the positive side the BSE SENSEX could only break the
R1 level of 5740 as forecasted for the month of March'04.
The BSE SENSEX showed remarkable recovery towards the end of March'04
after the GoI announced that Indian GDP growth was 10.4 % in Q3 of the
current fiscal ( Oct'03 to Dec'03 ). In India the fiscal year is from
1st April to 31st March. This news brought backs bulls to the Indian
Markets. FIIs returned back to the ring !
We feel that BSE SENSEX will be range bound in April as the Nation goes
to polls in April'04. The election results would be available in the
beginning of May'04. However we expect the under tone to be bullish as
poll analysts predict the return of the current BJP lead NDA Coalition
Government. In this event the Indian Stock Markets will be firm control
of bulls and we predict that the BSE SENSEX will break the R3 level of
6250 convincingly. FIIs will be active Buyers of Indian Equities. Even
domestic FIs and other Indian investors will be active buyers in the
Stocks. Retail Investors will also join the bandwagon ! It will be a
beginning of a new bull phase in the Indian Stock Markets. We will
advise investors accordingly maybe by a 'special update' close to or
after the election results.
BSE SENSEX will be range bound for April'04 with a bullish undertone.
We predict the BSE SENSEX to oscillate between 5600 to 6000. However
the levels to watch are :
R1 5850 R2 6000 R3 6150 R4 6250
S1 5760 S2 5680 S3 5600 S4 5540
Investors are advised to sit on the fence with an intention to enter
the Equity Market if the poll results are as per prediction of the
analysts ! We do not forecast political events.
A stronger Indian Rupee is the spoil sport in the medium term
! The for the Indian Software Industry it is highly export oriented.
The Indian Rupee has recently appreciated to level of Rs. 43.30 to a
US Dollar. Stronger Indian Rupee hurts the revenue and hence the
of export dependent companies. Indian Software Majors like INFOSYS,
and WIPRO will have lower profits if the Indian Rupee appreciates
vis a vis the US Dollar. These Indian Software majors earn more than
80 % of their revenues from the North American Market and the
currency is US Dollar.
A brief synopsis of a few our favorite and/or recommended Stocks.
- LARSEN : This engineering giant closed today at Rs. 526. We
hope investors booked profits at Rs. 600+ as advised in Jan'04 update.
This Stock tested a new 52 week high of Rs. 614 in March'04. Exit from
- MRPL : This Refinery Stock now under the ONGC umbrella closed today
at Rs. 56. We advise investors to stay invested in this Refinery Stock
even though the margins are under pressure due to high Crude Oil
prices. This Stock will be re-rated when ONGC buys out 17 % equity of
in MRPL. This is likely to happen after the next government is in place
by May'04 onwards. This Stock is a multi bagger for calendar 2004.
- TISCO : It closed today at Rs. 403. We advise investors to stay
- ONGC : It closed substantially higher today at Rs. 859. ONGC's maiden
IPO of Rs. 100 Billion was oversubscribed by about 6 times by the close
on 13th March'04. We advise investors to stay invested in ONGC as Crude
Oil prices are firming up.
We had predicted in Dec'03 that Crude Oil could test US $ 40 pbbl
levels in the near future. On 17th March'04 - US Light Crude April
futures tested a level of US $ 38.81 in New York. This is a new 13 year
level. Highest since October 1990. We feel we will see a level of US
$ 40 pbbl soon as predicted in Dec'03.
- HPCL : It closed today at Rs. 526. This Oil Refiner and a major
Retailer tested a new 52 week high of Rs. 542 in the month of March'04.
We had predicted last month that Oil and Gas sector stocks will be
bullish ! Investors are advised to buy this Stock at market prices if
the BJP lead NDA Government returns to power in the forthcoming polls.
This will be first Stock to be disinvested or privatized if the said
returns to power in New Delhi.
- NALCO : This PSU Aluminium major closed today at a strong level of
Rs. 193. Book partial profits at Rs. 250+. Balance stay invested.
It is a Rs. 450+ Stock if the said government returns to power in New
Delhi. This Stock will be privatized.
- TATA MOTORS : It closed today at Rs. 496. Book profits or exit at Rs.
600+ in the medium term.
- RELIANCE : It closed today at Rs. 566. We hope investors booked
profits at Rs. 600+. Exit from this Stock at Rs. 600+ levels if not
done already as advised last month.
We are not recommending any fresh Stocks till we are close to
the results of the forthcoming General Elections in India.
The reference date for Feb'04 closing is taken as today i.e. 5th
Mar'04 as we were waiting for the outcome of ONGC's - Rs. 100 Billion
(US $ 2.22 Billion ) IPO to open on BSE/NSE on 5th March'04 morning.
This is the single largest IPO in India's history and it made history
of all sorts. GoI offered 10 % of ONGC's Equity between Rs. 680 to Rs.
750 band to the various Investors both in India and Overseas. In the
first half an hour of trade ONGC's IPO worth Rs.100 Billion, was lapped
up by Indian and Global Investors. By today evening the IPO was
by 2.7 times. The IPO is open till March 13th and analysts predict it
will be over-subscribed by 4 times. GAIL IPO was also on the offer
It was a much smaller IPO ( US $ 300 Million ) but was over-subscribed
by 8 times by close of today.We salute the Indian Disinvestment
BSE SENSEX closed today ( 5th March''04 ) at 5880 higher 4.6
% than Jan'04 closing of 5621. The intra month high and lows were 6083
and choppy low of 5556. SENSEX was choppy in the last week of Feb'04.
As predicted BSE SENSEX was range bound between 5600 to 6000 levels. It
however was very close to the S2 level of 5550.
FIIs were nett buyers of Indian Equities in the month of Feb'04 too.
ONGC and GAIL IPO's were a step in the right direction. FIIs were
active investors in the ONGC and GAIL IPO offerings. GoI's
Disinvestment Target for this Fiscal ( Rs. 145.00 Billion i.e. approx.
US $ 3.2 Billion ) will more or less be met with the super success of
these two IPOs. Plus it is official now - GoI's Central Statistical
Organization has declared that Indian Economy will grow this Fiscal at
8.1 % on an annualized basis. This makes the Indian Economy - The
fastest growing Economy in the World !
We feel that BSE SENSEX will be bullish range for the month of
March'04. FIIs will be active Buyers of Indian Equities. Fiscal Deficit
will be stemmed for the current Fiscal ( ends on 31st March'04 ) as
GoI will fetch close to Rs. 130 Billion from it's Disinvestment
Programme. Political Parties had blocked the privatization of HPCL,
SCI etc. These Parties also blocked Disinvestment of BPCL. The Indian
Disinvestment Minister in one stroke decided to meet the Disinvestment
Target of the current Fiscal by placing ONGC's and GAIL's 10 % Equity
in the Indian and Global Markets. It was a very bold move and paid
Once again we congratulate the Indian Disinvestment Minister.
FIIs were always worried about De-railment of the Disinvestment
Programme and India's Fiscal Deficit. With these two issues addressed
by the Indian Finance and Disinvestment Ministers, we feel FIIs will
pour more funds into the Indian Equities in the near future. Since
Jan'04 FIIs have been chasing a few Indian Blue Chip Auto and Bank
Stocks. Since the start of this Fiscal (1st April'03) FIIs have pumped
in about US $ 7.0 Billion into Indian Equities and about 1.0 Billion
into Indian Debt Markets. This is an astounding figure and shows the
level of confidence FIIs have in the Indian Economy.
We did not put up any Banking Stocks on our Radar Screen this fisca
inspite of the passing of the Asset Securitization Bill by the GoI. We
were pessimistic about India's PSU Banks which have high NPAs. We feel
that FIIs will focus on India's Oil and Gas Sector and Non-Ferrous
Metals Sectors in addition to the Auto and Banking Sector Socks in the
Merrill Lynch has predicted that BSE SENSEX will test 7600 level within
the next 12 to 15 months We are even more bullish than Merrill Lynch -
If the current NDA Govt. is returned to power in May'04 after
the General Elections and the Indian Monsoon is above average in
June-July'04, we predict BSE SENSEX will be 8000+ in Sept'04 itself.
Investors to please note that this prediction is contingent on two
factors - Return of the
NDA Govt. in May'04 and a good Monsoon by July'04. Failing which BSE
might be around 4000 levels or lower. But we somehow have a gutfeel
the former will be true ! Cheers to the Indian Stock
We are bullish for the month of March'04. However the levels
to watch are :
R1 5940 R2 6150 R2 6250
S1 5840 S2 5760 S3 5680 S4 5600
Investors can make fresh purchases of recommended Equities.
A brief synopsis of a few our favorite and/or recommended Stocks.
- LARSEN : This engineering giant closed today at Rs. 596. We hope
investors booked profits at Rs. 600+ as advised in Jan'04 update. This
Stock will be re-rated after De-merger and split. We advise investors
to liquidate their holdings at these levels or Rs. 600+ levels. We will
review after De-merger of Cement Division and Relisting of the split
- MRPL : This Refinery Stock now under the ONGC umbrella closed today
at Rs. 58. We repeat MRPL is our Stock for 2004. We stick to our
prediction of Rs. 200+ in calendar 2004. Investors can buy this Stock
at these levels with a stop loss of Rs. 48. MRPL is now running at 100
% capacity utilization - Thanks to ONGC's Management.
- TISCO : It closed today at Rs. 442. Target price - Rs. 600, as
revised in Dec'03 forecast.
- ONGC : It closed substantially higher today at Rs. 802 as its maiden
IPO of Rs. 100 Billion was oversubscribed by about 3 times by close of
today. ONGC could touch Rs.1500+ levels or more in the next nine months
after the total De-Control of Natural Gas prices. Plus Crude Oil prices
are firming up.
We had predicted in Dec'03 that Crude Oil could test US $ 40
pbbl levels in the near future. On 4th March'04 - US Light Crude tested
US $ 37.20 in NY. This level is a new one year high for US Light Crude
prices. Political crisis in Venezuela and OPEC Production Cuts may be
the two prime reasons for the Crude Oil prices firming up. We feel we
will see a level of US $ 40 pbbl soon as predicted in
- NALCO : This PSU Aluminium major closed today at a strong level of
Rs. 180. Book partial profits at Rs. 250+. Balance stay invested.
It is a Rs. 450+ Stock. This is our old favourite stock and now with
FIIs focusing on Indian Non-Ferrous Industry - we feel there is no
better Stock in this Sector although it is PSU Stock.
- TATA MOTORS : It closed today at Rs. 534. It tested a new 52 week
high of Rs. 570 during the month. Book profits or exit at Rs. 600+ in
the medium term. This Stock is FIIs darling !
- RELIANCE : It closed today at Rs. 586. We hope investors booked
profits at Rs. 600+. Exit from this Stock at Rs. 600+ levels.
We recommend fresh investments in MRPL and NALCO for investors who do
not hold these two stocks and wish to invest in the Indian Equities.
Please remember we recommend Stocks with long term perspective and
outlook. Returns have been handsome for investors who have held on to
our recommended stocks over the long term.
The reference date for Jan'04 closing is taken as 3rd Feb'04 as we
were waiting for some clear trend to emerge for the BSE SENSEX. We are
late by a couple of days.
BSE SENSEX closed today ( 3rd Feb'04 ) at 5621 lower 6.7% than Dec'03
closing of 6027. On 9th Jan'04 history was created once again at the
BSE. The SENSEX touched an all time high of 6250 on 9th Jan'04 although
it closed much lower for the day at 6120. BSE SENSEX had intra month
high of 6250 and a whopping low of 5550. SENSEX was like a yo-yo for
a few days and was 'Day Jobbers' nightmare. Too much volatility is not
a good sign for the Markets.
BSE SENSEX was so volatile that it breached pass our predicted R1 at
6150 and crashed below our S4 level of 5750 during the month of Jan'04.
As predicted BSE SENSEX gave a very sharp reaction after
testing/breaching 6150 levels.
FIIs were nett buyers of Indian Equities again in the month
of Jan'04. The Indian Economy may grow at around 7 % per annum in the
coming year as per most of the leading economists and as per Survey of
The General Elections have been pre-poned by the current coalition
Government in India. The General Elections will be held sometime in
April'04 instead of Nov'04. This important development will also have
an impact on the Indian Stock Markets in May'04 when the new Government
is in place in New Delhi. A stable Government will propel the BSE
SENSEX past 6500 levels or even 6800 levels in May'04. Failing which
one could see BSE SENSEX at 4500 levels in case there is an Un-Stable
Government after the General Elections.
We feel that BSE SENSEX will be range bound for the month of Feb'04 as
estimated by some leading stock market pundits - between 5600 to 6000
levels. But we feel that BSE SENSEX may test a very crucial level
of 5450 in Feb'04. A very good level for punters or traders to enter
for short term gains !
For the month of Feb'04 the levels to watch are :
R1 5780 R2 5860 R3 5940 R4 6150
S1 5600 S2 5550 S3 5450
No investment is recommended for the time being in the Indian Equities.
Small Investors are advised to stay away from the Equity
Market as volatility would hurt.
A brief synopsis of a few our favorite and/or recommended Stocks.
- LARSEN : This engineering giant closed today at Rs. 502. It tested a
new 52 week high of Rs. 602 during the month as predicted.
We hope investors booked profits at Rs. 600+.
- MRPL : This Refinery Stock now under the ONGC umbrella closed today
at Rs. 52. It tested a new new 52 week high of Rs. 69 during
the month. This Refinery Stock will soon be under the ONGC Umbrella
completely. ONGC wishes to pick up HPCL's 16.9 % equity in MRPL at Rs.
37.50 per Share. This awaits GoI's approval, which now would be when
new Govt. is in place after the General Elections.We repeat MRPL is our
Stock for 2004. We stick to our prediction of Rs. 200+ in calendar 2004.
- TISCO : It closed today at Rs. 386. It tested a new 52 week high of
Rs. 466 during the month. In fact this is a eleven year high
for this Steel Major. We hope investors booked profits at - Rs.
450+ levels. Target price - Rs. 600, as revised in Dec'03 forecast.
- ONGC : It closed substantially lower today at Rs. 692. It
tested a new 52 week high of Rs. 995 during the month. Subsidy on LPG
and Kerosene has hit the quarterly results of this Oil and Gas Giant.
Only a temporary blip ! Ultimately GoI will pay ONGC the subsidy amount
and in any case over the next year or so we expect subsidy on LPG to be
near zero. On Kerosene the subsidy may take another two years. On the
positive side we expect Natural Gas(NG) prices to be completely
'De-Controlled' in the next one year.Just watch ONGC touch Rs.1500+
levels or more in the next nine months after the said de-control. Stock
Markets discount the future ! If Crude stays firm the way it is - ONGC
may even cross Rs. 1800 levels in the medium term as this is a bonus
post de-control of NG Prices.
We had predicted in Dec'03 that Crude Oil could test US $ 40 pbbl
levels in the near future. On 5th Jan'04 Crude tested
US $ 33.95 in NY. GOLD tested US $ 428.50 pto at LME on the
same day. A fifteen year high since 1988. PLATINUM tested US $ 850 on
the LME. A level not seen since 1980 - a 24 year
- NALCO : This PSU Aluminium major closed today at whopping
low of Rs. 146. It tested a new 52 week high of Rs. 206 during the
month. Book partial profits at Rs. 250+. Balance stay invested. It
is a Rs. 450+ Stock.
- TATA MOTORS : It closed today at Rs. 512. It tested a new
52 week high of Rs. 540 during the month. Book profits or exit at Rs.
600+ in the medium term.
- RELIANCE : It closed today at Rs. 556. It tested a new 52 week
high of Rs. 603 as predicted. We hope investors booked profits at Rs.
The Indian Stock Markets will be range bound for Feb'04.
The reference date for Dec'03 closing is taken as today - i.e. 2nd
Jan'04 as this is the weekly closing at BSE.
BSE SENSEX created history of all sorts by closing today (
2nd Jan'04 ) at it's highest ever level at 6027. On 14th Feb'2000 the
BSE SENSEX had tested an intra day high of 6150 but closed on 2/14/200
at 5924. Today is a Golden Day in Indian Stock Markets as for the first
time the BSE SENSEX closed above the magical figure of 6000.
Please refer to our Special Mid-Oct'03 Update for the Indian Stock
Markets. We had predicted that BSE SENSEX was for sure heading towards
that magical figure of 6150 !
The BSE SENSEX closed today at 6027 up a whopping 17 % from the
1st Dec'03 level of 5161. The BSE SENSEX was far far bullish than our
predictions for the month of Dec'03. We had predicted a level of 5450
for the month of Dec'03.
FIIs were heavy buyers of Indian Equities in the month of Dec'03. This
was on the back of some encouraging figures that Indian GDP grew by 8.2
% in Q2 of 2003-04 as compared to 5.2 % QoQ for 2002-03 fiscal. The two
primary reasons were Bumper Monsoon Rains in India this Summer. This
fuels rural demand of FMCG Products and Consumer Durables in India.
Secondly there was a substantial growth in the Services Sector in the
Shares of Automobiles, Auto Ancillaries, Banks, Cement, Steel, Power,
FMCG and Pharma were in good demand on the Indian Stock Markets in
Dec'03. FII hot money chasing a few quality Stocks in the Indian
Stock Markets ! Some penny and worthless stocks rise in such bull
Investors should be very careful to stay away from such stocks.
The Indian Economy may grow in excess of 6.2 % this fiscal. All most
all Stock Market Pundits are saying that BSE SENSEX will be around 6500
to 6800 levels by June'04. We feel that BSE SENSEX will be far far
ahead of 6800 levels by June - Sept'04. We will update in the
due course of time.
For the month of Jan'04 the levels to watch are :
S1 6000 S2 5920 S3 5840 S4 5750
We are not recommending any new shares at these 6000+ levels of BSE
SENSEX. Investors to book profits all levels of BSE SENSEX above 6150
levels. We feel the BSE SENSEX will give a sharp reaction after testing
A brief synopsis of a few our favorite and/or recommended Stocks.
- LARSEN : This engineering giant closed today at Rs. 537-
a new 52 week high. The Stock has performed better than our
expectations. We are revising the price target of this Blue Chip to
Rs. 600+. After De-merger of it's Cement Business, the company is
planning to sell it's 'non-core' engineering businesses i.e. glass
containers, metal packaging etc. Book profits at around Rs 600.
- MRPL : This Refinery Stock now under the ONGC umbrella closed today
at Rs. 54 - a new 52 week high. We repeat MRPL is our Stock for 2004.
We stick to our prediction of Rs. 200+ in calendar 2004.
- TISCO : It closed today at Rs. 457 - a new 52 week high.
Investors to book partial profits at these - Rs. 450+ levels. Target
price - Rs. 600, as revised in Dec'03 forecast.
- ONGC : It closed toady at Rs. 943 - a new 52 week high. Our
prediction that ONGC is a Rs. 900 Stock has hit a bull's eye !
ONGC has been our favourite stock for the past 15 months or so.
The GoI has decided to sell 10 % equity of ONGC in the Indian Market
through an IPO Route to raise about US $2.76 Billion. The Disinvestment
and Strategic Sale of Equity in PSUs - HPCL, NALCO etc. had hit a
serious roadblock with GoI. The GoI has a target to raise cash to the
tune of US $ 3.0 Billion by end of this fiscal year i.e. by 31st
March'04. The Disinvestment and Privatization Programme of GoI had to
be stalled for various reasons. The GoI is cash strapped and has a
burgeoning fiscal deficit - in excess of 10% of it's annual GDP. In one
stroke GoI decided to sell 10 % equity of ONGC and GAIL - another
smaller profitable PSU to raise this money and bridge the ficsal
deficit as per it's Annual Plan. We salute the Disinvestment Minister -
GoI, for his bold initiative. We also congratulate the GoI for this
This decision of GoI led to fresh demand of both the Stocks - ONGC and
GAIL.GoI has targeted to raise US $ 220 Million from the sale of 10 %
of GAIL's Equity.
Based on the above news of a forthcoming IPO this fiscal for ONGC and
the fact that we predict a bullish BSE SENSEX in the
coming six to nine months - we are revising our target price for ONGC
upwards from Rs.1200 for March'04. We predict a price of Rs.1500 to
for ONGC by March'04. This could be a Rs. 2500 Stock by June-Sept'04
if Crude Oil prices do not come below US $ 30 pbbl.
We have predicted in Dec'03 that Crude Oil could test US $
40 pbbl levels in the near future. We stick to our predictions. Hence
ONGC to be a Rs. 2500 Stock can be a reality as far we are concerned !
GOLD tested US $ 415.50 pto in Asia on 29th Dec'03 - highest figure
since Feb'96. We stick to our predictions of GOLD testing US
$ 450+ pto in the near future.
- NALCO : This PSU Aluminium major closed today at a new 52 week high
of Rs. 203. Book partial profits at Rs. 250+. If and when the
GoI decides to privatize this PSU - This stock could be Rs. 450+. It
all depends on the next Government at the seat of power in Delhi in
or Dec'04. General Elections are due in Nov'04 but could be pre-poned
and held in May'04. Then the new Government will be in place by end
- TATA MOTORS : It closed today at a new 52 week high of
Rs. 461. Target price Rs. 600+ in the medium term.
- RELIANCE : It closed today at Rs. 590 - a new 52 week high. This
Stock has also performed better than our expectations. Book profits at
The BSE SENSEX has performed much better than the other Indices
in the Asian Economies in the past 12 months in 2003. BSE SENSEX was up
by 73 % as compared to HANG SENG - Up 34 %, Singapore's STRAIT TIMES -
Up 29%, KOSPI - Up 29% and TAIWAN's - Up 32 %. NIKKEI 225 was also up
The FOREX Reserves of GoI are close to US 100 Billion. This is a
welcome news. Fiscal Deficit is being addressed to by the GoI. The only
other major problem which needs to fixed on the Macro Level in the
Indian Economy is the level of - Domestic Debt. The new Finance
Minister will address this too in his unconventional style ! We
sincerely hope this will happen soon.
Cheers to the Indian Economy and to the BSE SENSEX !
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