Markets may stabilise at current levels
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Breaking the sequence of five straight weekly losses, Indian markets logged significant gains during the week ended.
The Sensex closed 972 points higher at 16,821 and the Nifty rose 300 po-ints to end at above 5,000 mark. It needs to be noted that indexes have gained almost eight per cent from the recent lows.
Though domestic institutional investors were in selling mode, renewed FII buying and steady global markets kept the sentiment upbeat.
Market participants say that the rally is a hollow one with more short covering than delivery buying.
With food inflation back to double digits, fears are back that RBI will again hike rates in its next policy meeting.
The weekend fall in US markets on fears of a double-dip recession may see Indian markets open on soft note on Monday.
Analysts, however, expect the markets to stabilise at current levels on the back of policy action from the Centre.
Key events to track in the coming week are US job data, ECB meet, domestic inflation data and the passage of Bills in the parliament.
For the week ahead, chartists predict a trading range of 16,250 and 17,150 for the Sensex and 4,850-5,180 for the Nifty.
Supports for the week are at 16,550 and 16,250 and 4,950 and 4,850. Resistance zones for the indexes are at 17,050-17150 and 5,125-5,175.
Stocks scan
Puneet Resins Ltd is manufacturer of Rubber and PVC compounds which have specialised properties such as oil resistance, flame retardancy, ozone resistance, fuel and solvent resistance. Strong demand from user industry and expanded capacity has helped the company post good performance for the past few quarters.
The company has been included in the “Best under $1-billion list of Forbes”. Excellent Q1 results make this stock good bet for a target price of Rs 75 in medium term.
Alkyl Amines Chemicals Ltd is a global supplier of amines and amine based chemicals. The company has controlling stake in Diamines and Chemicals Ltd, the only manufacturer of ethylenesamines in India. Buy for a target price of Rs 150.
With focus on high growth lifestyle segments like CNS, CVS and diabetes, Torrent Pharma has outperformed the industry. Beginning of supplies to Astra Zeneca and improvement in profitability of global business make the stock safe bet for target price of Rs 800.
Wockhardt is generating renewed investor interest on the back of its plans to cut debt and turnaround performance. Its sales for the first time crossed Rs 1,000 crore sales in a quarter.
Sources hint at strong insider buying ahead of settlement of FCCB dues. Buy in the corrective phase for a target price of Rs 750 in medium term.
C. Kutumba Rao is a Hyderabad-based stock market analyst.
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