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Tuesday, 23 September 2014

Nifty struggles below 8150 ahead of F&O expiry; HUL up 1%

Gautam Chhaochharia, Head of India Research at UBS remains bullish in India and retains his official target of 8000 for Nifty by December 2014. From the next year perspective, UBS is comfortable that earnings momentum will be back to match the estimates, which has been missing over the last 3-4 years.

"We don’t have forecast but we do remain constructive in that context," he said. UBS has high conviction on cyclical recovery in India and remains positive on Voltas , Crompton Greaves and Carborundum . Chhaochharia feels financial sector will be a big bet as valuations look attractive. In the segment, he is bullish on LIC Housing Finance and Shriram Transport . He also remains bullish on oil and gas over the next 6-12 months on macro triggers and reasonable valuations.

11:30 am Buzzing: Investors have consistently been buying shares of National Buildings Construction Corporation (NBCC) after Nomura initiated buy rating on the stock with a target price of Rs 1,049, implying a 49 percent upside. The stock rallied as much as 8 percent intraday to touch a record high of Rs 765 on the Bombay Stock Exchange. It surged 400 percent in 2014 (year-to-date).

The brokerage believes strong growth prospects with an asset light business model will drive further re-rating for the stock.

 "NBCC enjoys negative working capital (and a cash-rich balance sheet) and passes on risks to subvendors on back-to-back contracts, thus remaining asset light," it explained.

The market is under pressure ahead of August F&O expiry. The Sensex is down 55.16 points at 27151.58 and the Nifty is down 17.15 points at 8129.15. About 1110 shares have advanced, 1295 shares declined, and 105 shares are unchanged.

 Bajaj Auto, Maruti, BHEL, HUL and Wipro are top gainers in the Sensex. Among the losers are Hindalco, M&M, Cipla, Bharti Airtel and Tata Steel.

It’s a welcoming reception for Sharda Cropchem that debuted on the bourses with a premium of over 70 percent.

Globally, Asian markets bounced back after the Chinese flash HSBC PMI came in better than estimates. China's manufacturing sector expanded at a slightly faster pace in September even as employment fell to a 5-1/2-year low, a preliminary HSBC survey showed. The HSBC/Markit Flash China Purchasing Managers' Index (PMI) rose to 50.5 in September from August's final reading of 50.2, beating a Reuters poll forecast of 50.

The employment sub-index fell to 46.9, a low not seen since February 2009. A hefty drop in employment could raise alarm bells for the Chinese government, which has indicated it will tolerate slower economic growth as long as employment is not affected. More information please visit this site

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