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3rd April 2013 Market Commentary

Shares rallied on Tuesday after a sedate start, with investors appearing to have regained their appetite for midcap stocks. The biggest news of the day was an inter-city fiber sharing agreement between the Ambani brothers. The deal had a positive effect on Anil Ambani's group stocks. Reliance Power, Reliance Capital and Reliance Broadcast ended with hefty gains.

Statistics

While the BSE Sensex ultimately closed 176.2pts or 0.93% higher at 19,040.95, the Nifty gained 43.7pts or 0.77% to close at 5,748.1. Broad market indices too ended higher as the BSE Mid Cap and Small cap indices gained 1.43% and 2.28% respectively. Market breadth was positive as the A/D ratio was 2.36:1 on the BSE. NSE cash turnover was Rs.8,821crs. Vs. Rs.7,166crs. in the previous session.

Sectoral and Stock movers

All the sectoral indices ended higher. The top gainers were the BSE Metal, Oil and Gas, Capital Goods and Healthcare indices. The biggest gainers from the BSE 30 were Sun Pharma, Wipro, Sterlite and ONGC. The biggest losers were Bajaj Auto, HDFC, Tata Power and ICICI Bank.

Stock Recommendation:-

Honda Motocorp – Buy (CMP - 1532, TARGET – 1550)

Honda Motorcorp will spend Rs 2500 crore on a 1,20,000 cars-per-year plant in India, a senior executive said, as the Japanese carmaker looks to ramp up its activity in the country after splitting from its former partner.

Honda will roll out its first car from the plant in Rajasthan next year, Yoshiyuki Matsumoto, Honda managing officer, told reporters on Tuesday.

The investment will allow the plant, which currently builds car parts, to produce full vehicles. Honda will also introduce diesel models across its entire range in India, the company said.

Honda's car sales in India have grown by around 45 percent this financial year, bucking negative growth in the wider industry, thanks to its small Jazz and Brio models. The Japanese carmaker ended a 16-year joint venture in India in August after buying out its former partner, which had disagreed with Honda over a ramping up of investment in the business that saw the Rajasthan factory delayed.