Q4 results likely to move markets

Buoyed by IMD forecast of good monsoon, heartening macroeconomic data and positive global trends; markets were on a high during the week ended. The Sensex and the Nifty vaulted by 953 points and 295 points to close at 25,627 and 7,850 respectively. Renewed buying from FIIs kept the momentum positive. Market breadth indicates return of risk appetite among market players. For the medium term, structural reforms like Bankruptcy Code and GST are necessary, aver market observers. Earn-ings of major corporates, macroeconomic data, trend in global markets, FII investment pattern, movement of the rupee against the dollar and international crude oil prices will dictate the near term trend of markets. For the truncated week ahead, chartists predict trading range of 25,200-26,350 and 7,715-8,050 for the indices. Key supports for the indices are at 25,350 and 25,000 and 7,750 and 7,650. Infosys results have given a positive start to the earnings season. Market response to results will be clinical, adopt stock specific strategy and avoid irrational exuberance.

After a lot of turbulence for last several weeks, emerging markets are making a strong comeback. Factors like prices of commodities stabilising and trending upwards, easing fears over Chinese economic slowdown, dollar beginning to correct against currencies which have weakened last year and expectations that US Fed will not raise interest rates in a hurry have contributed to the recent turnaround in emerging markets. Analysts say that financial markets in the emerging world will continue to perform well this year.

Stock scan National Aluminium Company Limited operates through chemicals and aluminium segments. It engages in the bauxite mining, alumina refining, aluminum smelting, power generation, and port operations. It owns and operates a wind power plant with 50.4 MW of generation capacity in Gandik-ota, Andhra Pradesh; and a wind power plant with 47.6 MW of generation capacity at Jaisa-lmer, Rajasthan. In addition, it owns and operates mechanized storage and ship handling facilities for exporting alumina and importing caustic soda located in Visakh-apatnam, Kolkata, and Paradeep. Moves are on for reducing equity by buyback of shares. Buy on declines for target price of `80.

Madhucon Projects is one of the India's leading EPC and BOT contractor. In addition, it engages in the generation, transmission, and distribution of coal fired thermal energy; and toll collection operations. Simhapuri Energy Ltd, a subsidiary of the company has fully commissioned power generation capacity of 600MW. To reduce debt, it has embarked on monetising its road assets. Buy on declines for target price of `100 in medium term.

Can Fin Homes, the first housing company to be promoted by a nationalised bank, is one of the top players in the housing finance sector today. It provides housing finance services primarily to individuals and builders in India. The company is also one of the few housing finance institutions permitted by NHB, to accept deposits from public. Buy for target price of `2,000 in medium term.

F&O Bulls were on rampage during the three session week ended. Brisk trading activity was seen in the derivative segment and most of the sectors moved above their short term averages suggesting that market is moving into new orbit. Highest open interest concentration in options was seen at 8000 call option and 7700 put option defining Nifty range of 7700-8000. Renewed buying was seen from institutional players.

Leading the rally were auto stocks on expectations of strong volume growth in the fourth quarter improving earnings of most automobile companies. Buy on declines Tata Motors, M&M, Bajaj Auto and Hero Motocorp.

On the back of Infosys which announced better than expected results on Friday and FY16 results from TCS on Monday, IT stocks are likely to be in limelight in the coming week. Stocks looking good are Amara Raja, Biocon, BpB, Cipla, CIL, Gail, Granules, ITC, Syndicate Bank, Tata Elxsi, Tata Chemicals and BHEL.

(C. Kutumba Rao is an avid follower of stock markets. This newspaper is not liable for decisions made on the basis of this column. Views expressed in the article are personal views of the writer.)