Buy Recommendation

Keep buying on Mahindra and Mahindra with a target price of Rs 800. According to media reports, Mahindra and Mahindra (M&M) will be selling a 10% stake in its used car business, Mahindra First Choice (MFC), to PHI Advisors for about Rs 80 crore. The company's management, in a media interview, has said that it plans to infuse Rs 20 crore via rights issue and Rs 60 crore via a stake sale into MFC. In case there is a 10% stake sale for Rs 80 crore, MFC's enterprise value would rise to Rs 800 crore.

INFLATION HITS 13-YEAR HIGH

India's inflation, based on the wholesale price index (WPI), soared to 11.05% for the week ended June 7 versus 8.75% in the preceding week.

This is the highest level of inflation in India in the last 13 years.

Buy Recommendation

Keep buying on Ranbaxy Laboratories with a target price of Rs 585.Ranbaxy has entered into agreements with Pfizer Inc to settle patent litigation worldwide involving Lipitor in US ( USD 8 billion) and 7 other countries (USD 2.5 billion). The settlement also involves Caduet USD 400 million (combination of Atorvastatin and Amlodipine).

Nuclear Deal - problem for congress

RJD chief Lalu Prasad and DMK supremo M. Karunanidhi express their support to the Prime Minister. CPI (M) leader Sitaram Yechury says Left may withdraw support

Even as the Left parties threatened to pull the rug from under it's feet, the Congress on Thursday received backing from two of its key allies over the civilian nuclear deal with the United States.

Advice and Suggestion for Investors - II

The market is expected to move down again, so one should select fundamentally sound stocks and buy them in a staggered way at every fall, says market expert, Ashok Ajmera, on Zee Business. Also, invest for the long term to gain more, he suggests.

The market seems ranged for now, but much of the froth is out. Going forward, one should not expect any surprises in Q1 numbers. The MF house is underweight on real estate, pharma and FMCG.

HDFC Mutual Fund advises retail investors to invest at every dip in the market. The MF house expects superior returns in 15-18 months from the Indian markets. Indian markets are getting closer to fair value now.

The market is expected to move down again, so one should select fundamentally sound stocks and buy them in a staggered way at every fall. Also, invest for the long term to gain more.

Any good moves in the oil marketing companies should be used to book profits. Their gains may not be sustainable.

Buy Recommendation

Keep buying on Gujarat Mineral Development Corporation with a target price of Rs 443.Being the leading lignite merchant in the country, the company already stands in a pioneer position in the sky rocketing coal prices regime. With the allotment of coal blocks in Chattisgarh and Orissa, the company shall be able to feed 4750 MW power and if negotiations with PIPDC prove fruitful, the company will also be able to gener-ate maximum benefit from the block through its expertise.

Also, the company’s diversification into cement, power, SEZ and port arena is expected to increase future earnings visibility by securing captive coal customers through the proposed JVs. The stock at the current market price of Rs 304 trades at 18.31 times to its earning per share of Rs 16.60 and 4.55 times to its book – value of Rs 66.77. The stock looks attractive at the current valuation with the strong upside potential in the long term investment horizon.

Market View - Small Bull Run Can Start

The bulls may have regained some lost ground with bears covering their shorts in the last couple of days. Global markets too have big held up quite well and oil prices have retreated a bit. Lack of fresh bad news coupled with buying by local institutions have kept the bears on the defensive in the last two days. FIIs turned net buyers in the cash segment yesterday. However, it remains to be seen whether the current momentum can be sustained, as the bulls still lack conviction.

Mutual funds may be sitting on a huge pile of cash, but the market needs FIIs to turn net buyers in a big way. In short the FIIs have to light the fuse to ignite positive action in the Indian bourses. Plus, the macro and micro environments have to change drastically. The flow of bad news has to slow down. All this will take a while to materialise. As a result, the market will remain largely rangebound and choppy with alternate bouts of buying and selling. It’s a no brainer that this outlook is subject to global market conditions and improvement in local fundamentals.

Today, we expect another cautious to slightly positive start, as the US indices fell overnight but most Asian markets are on a firm ground. The overall trend could slightly favour the bulls purely due to the current momentum though there may be some cooling at higher levels.

Results Today: Aurobindo Pharma, Dish TV, Era Infra, Finolex Industries, Greenply, Hotel Leela, Indraprastha Gas, Kei Industries, Marg, Mascon Global, Power Grid Corp., PNB and Rajesh Exports.

FIIs were net buyers of Rs1.4bn (provisional) in the cash segment on Tuesday while the local institutions poured in Rs4.2bn. In the F&O segment, foreign funds were net buyers of Rs9.51bn. On Monday, FIIs were net sellers of Rs5.33bn in the cash segment. With this, they have pulled out over $5.5bn from the Indian market this year.

Resources - Indiainfoline News Services