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Indian stock market and companies daily report (March 18, 2010, Thursday)

Contributed by Angel Broking

By Angel Broking

The benchmark indices surged in early trade, tracking firm global stocks. Global stocks rose after the US Fed held benchmark rates near zero and maintained its pledge to keep them low for an extended period. However, after hitting its highest level in nearly two months in morning trade, the market trimmed gains in early afternoon trade. The Sensex and the Nifty gained 0.6% and 0.7%, respectively, while the BSE Mid-cap and Small-cap indices gained 0.2% and lost 0.1%, respectively. Among the front-liners, Hindalco, ICICI Bank, TCS, L&T and Sun Pharma were up by 2-3%, while Maruti, HUL, Tata Power and Mahindra & Mahindra were down by 1-2%. In the mid-cap segment, STC, Andrew Yule, HMT, Amtek Auto and Engineers India were up by 5-18%, while Shriram City, MVL, Bannari Amman Sugar, Coromandel Intl, and Shree Renuka were down by 4-6%.

Markets Today

The trend deciding level for the day is 17485 / 5223 levels. NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 17581 – 17673 / 5269 – 5307 levels. However, if NIFTY trades below 17485 / 5223 levels for the first half-an-hour of trade then it may correct up to 17394 – 17298 / 5186 – 5140 levels.

News Analysis

- Persistent Systems Limited (PSL) IPO – Recommend Subscribe

- RBI asks banks to divulge details of Deposit, Advances in Balance Sheet

Persistent Systems Limited (PSL) IPO – Recommend Subscribe

Persistent Systems (India), promoted by technocrat, Dr Anand Deshpande, is one of the leading players in outsourced software product development services, employing about 4,639 employees. The company's offshore development centres are located in Pune, Nagpur, Bangalore, Goa and Hyderabad. The company owns most of its development centres. We believe the PSL issue is reasonably priced considering the healthy financials, strong offshoring opportunity in the OPD services and the company’s foray in the new nonlinear segments. PSL, at its upper price band of Rs310 is trading at an economical valuation of 10.3x of its FY2012E earnings of Rs29.8 per share (as against a peer average of 12x); hence, we recommend a Subscribe view on the issue.

RBI asks banks to divulge details of Deposit, Advances in Balance Sheet

As per a recent notification to banks, banks are expected to divulge a host of details in the notes to accounts in the balance sheet for the year ending March 2010, which will vastly increase the level of transparency. Among the information that banks are required to disclose includes concentration of deposits, advances, exposures and non-performing assets (NPAs). In addition, banks will have to disclose sector-wise NPAs. This is a positive move by the RBI, with an objective to improve the transparency in the banking system. We maintain our positive view on the sector.

Economic and Political News

- Ports capacity to reach 1.5 billion tonnes by 2012: Shipping Ministry

- Govt. to invite bids for mega road projects

- India's arms import doubles in five years

Corporate News 

- L&T bags Rs1,000cr project from ONGC

- Sanofi faces heat as WHO halts use of Shantha vaccine

- Dr Reddy's opens mPEG alcohol manufacturing plant in Mexico

Source: Economic Times, Business Standard, Business Line, Financial Express, Mint