>BANKING SECTOR: Recommendations on Priority Sector lending by Nair Committee

The Reserve Bank of India (RBI) on 21 February 2012 released the report of the Committee headed by Mr. M V Nair which was constituted to re-examine the existing classification and suggest revised guidelines with regard to priority sector lending and related issues. The RBI has sought recommendations from various stakeholders by March 31, 2012.


We believe that the recommendations are broadly towards directing the credit flow to the economically weaker sections of the society and can be fairly achievable in a phased manner on overall basis given the timeline for implementation. The overall targets for PSL have been retained with certain new sub-segment targets introduced, which intend to improve the lending towards agriculture segment, ensure appropriate monitoring mechanism and change of methodology for calculation of shortfall to make it more effective and transparent. We believe that the recommendations are neutral for public sector banks and more on the negative side for private banks since they may fall short in meeting many new sub-targets given that the current lending towards such segments is already at the lower end. While the introduction of the guarantee scheme for SFMF, removal of DRI scheme, increasing housing and educational limits under PSL, change in calculation of shortfall and loans to NBFC’s for on-lending, buy-out & securitization classified as priority sector are positives amongst the recommendations, cap of 5% of ANBC for NBFC lending and introduction of sub-segments for meeting PSL targets are some of the negatives.


To read full report: BANKING SECTOR
RISH TRADER

>HIGHWAY DEVELOPMENT: Near term challenges; smoother times ahead

Roads & Highway development presents a structured, planned & definitive opportunity of ~` 1365bln (USD 26.25bln) to EPC & BOT developers. Dissecting this opportunity, we find that the scale, size & regional distribution of majority of balance projects may not be attractive for a BOT developer. Also, the competitive intensity of bids has challenged all industry players alike & warrant caution. In our opinion, these bids assume a consistent availability of cheaper source of finance which in itself is unsustainable over a longer time frame. We believe capital markets shall, in the long run, create a valuation differential between aggressive company managements and those with conservative & sustainable strategy. Hence, we like companies with business model & management style which does not encourage excessive risk taking, have projects with longer concession tail & are able to consistently generate positive FCFE with minimal support from the parent entity.


■ Definitive opportunity, award activity has already peaked
Highway development under the planned NHDP presents an opportunity of ~` 1365bln (USD 26.25bln). While we don’t deny the size & certainty of the opportunity we are concerned about limited projects fitting the size & scale of a PPP development. The regional spread too is not quite encouraging. Also, we expect FY12 to see peak of awards in near term.


■ Competitive pressures – no respite in near term
The recent bids by developers belie their stated IRR objective. Also, the expectation of gradual decline in competitive intensity has been proven otherwise. Supply side constraints along with demand side factors of declining order backlog/sales, lower asset utilization & scope for financial leveraging has attracted the breadth of the construction players to road projects particularly the NHAI project awards. Hence, we expect the competitive intensity to remain at elevated levels in near term restricting IRR’s of projects to lower teens.


■ Takeout essential (debt & or equity), equity requirement to pull plug on competitive intensity
We estimate an equity requirement of ` 2687bln over the next 3 years for projects currently under implementation. Additionally, ` 339bln of equity shall be required for projects which are expected to be awarded in the next 2 years. In our opinion, this shall be the sole factor for pulling the plug on the competitive intensity of the sector.


■ Challenging times to continue; Valuations offer comfort
The competitive intensity, amongst other reasons has led to underperformance of the sector with broader markets. The current average valuation of 1.5x P/B offer significant comfort from further downside. We initiate coverage on Ashoka Buildcon & ITNL with a Buy rating, downgrade IRB Infra to Hold, maintain Buy on Sadbhav Engineering. Sadbhav Engineering continues to occupy the top slot in our pecking order of stock selection.


To read full report: HIGHWAY DEVELOPMENT
RISH TRADER

>Pharma Q3FY12 Preview: Large caps Ranbaxy, Dr Reddy’s, Sun Pharma, Cipla, Lupin and Cadila expected to outperform

BIGGIES TO OUTPERFORM




Large Caps to post robust growth: Large caps (Ranbaxy, Dr Reddy’s, Sun Pharma, Cipla, Lupin and Cadila) under our coverage are expected to cumulatively post a topline growth of 19.3% & Ebitda growth of 44.5% driven by strong domestic market, currency depreciation & launch of blockbuster drugs by Ranbaxy and Dr Reddy’s. We expect Dr Reddy’s to post strong earnings growth led by launch of key products like Zyprexa & Fondaparinux. Ranbaxy’s performance will be driven by launch of one time exclusivities like Lipitor & Caduet contributing to higher margins and growth respectively. Excluding Dr Reddy’s and Ranbaxy EBITDA will grow by 38.4%. We are expecting the base business by both the companies to improve in this quarter.


Lupin’s performance will be driven by strong growth in branded generics & better traction in US generics business led by launch of key products like Ultram, Lo Seasonique. Sun Pharma & Cipla will show a strong growth due to favourable currency movement. Both the companies have not taken any forward covers which we believe will have positive impact on EBITDA margins. We expect Cipla to show strong domestic performance as it has higher exposure to acute segment which is growing around 20%. Cadila will show a modest growth due to slowdown in its consumer business & Europe formulation segment. Traction in US business will be driven by Nesher acquisition & its domestic business will perform on account of Biochem acquisition that has huge exposure to anti infective segment which has shown growth above 15% in this quarter.


Mid caps to report subdued growth: Mid caps under our coverage (Strides, Biocon, and Unichem) will post cumulative topline growth of 4.2% y-o-y. Biocon’s topline growth will be affected due to selling off of Axicorp in Q4FY11. Unichem will show strong performance in export segment on account of commencement of contract manufacturing business from Ghaziabad facility. Domestic formulation business will continue to show degrowth due to ongoing restructuring exercise by the company to improve working capital cycle. Strides will perform in Q3FY12 on account of traction in specialty segment and significant product launches.


Top Picks: Lupin & Sun Pharma are our preferred picks in the large cap space. We believe Lupin has an excellent oral contraceptive (OC) pipeline which will drive the performance as it will be able to garner strong market share. The overall market size of OCs in USA is around 5bn$. Sun Pharma will benefit from key product launches in international markets & huge exposure to chronic segment in domestic market.


In the mid cap space we like Strides Arcolab as its presence in niche sterile space provides long-term growth visibility.


To read the full report: PHARMACEUTICAL
RISH TRADER

>GOLD LOAN NBFC's: Muthoot Finance & Mannapuram Finance

Glittering as Gold!!!


Gold financing: Strong growth here to stay



The structurally strong business of gold financing has been and is expected to remain an attractive form of consumer financing given the dichotomic lending structure in India, highly liquid collateral and huge untapped potential in terms of value unlocking opportunity that the asset offers. Considering this, we are bullish on gold NBFC’s and initiate coverage on Muthoot (MUTH) and Manappuram (MGFL) with a positive outlook given their extensive network in place, better services and variant/dynamic product range. With Unorganized segment getting re-aligned towards Organized lending market, we believe that these companies are well positioned for the next leg of growth and expect MGFL and MUTH to grow their AUM at CAGR 48% and 32% respectively for FY11-14E.


Indian gold loan market – Opportunities galore
Historically, given the “urgent and essential” nature of this loan, the leadership is with the unorganized sector (75%/25% market share for Unorganized/Organized in FY09) in spite of an analogous existence of Banks and RRBs. However over the years, the organized segment has grown at CAGR of 68% in FY07-11 with an estimated market share of ~34% as on FY11. Going forward, considering the buoyant gold demand (32% of world gold demand), hefty gold holding of Indian households and voluminous market size, we believe that the strong growth for the organized players remains the leitmotif.


Under-penetration the drive-network the key
Within the organized segment, specialized NBFCs have witnessed extraordinary growth with MUTH and MGFL growing their branches at CAGR 67% and 99% respectively through FY09-11 due to their swift branch expansion, superior service offerings and timely infusion of capital. Given the growth nature of the gold loan market, the sole cost to grow would be network expansion. Henceforth, major drive for MUTH and MGFL, apart from their new branch openings, would also be coming from the maturing branches and hence increasing the penetration of the immature branches, which as on FY11 comprised a substantial weight in the blend: 64% for MUTH and 75% for MGFL.


Spreads to normalize- Scale to offset
Removal of PSL status from the funding by banks (direct or indirect), increases the cost of funds by 150-200bps. Adjacently, the competition intensities, should going forward result in yield moderation.


Impact of both of which should be normalization in the spreads by ~75bps for MUTH and ~200bps for MGFL. Having said that, with the increasing weights of mature branch in the blend, the benefits of operating leverage would reduce the Opex/Avg. Assets.


Attractive return ratios; Initiate with Buy rating
The current valuations of MGFL and MUTH are at 1.3x and 1.4x of FY13E BV respectively and doesn’t really factor the scalability, potential earnings growth and attractive model of high yield-low risk business in comparison with other asset financing NBFCs. We expect MGFL and MUTH to deliver an average RoE’s of ~26% and 30% through FY12-14E driven by their earnings growth of 47% and 32% respectively for the similar period. Given the huge value unlocking potential that this business has, we remain upbeat on the gold financing sector as a whole and initiate coverage with BUY rating on MGFL and MUTH with a target price of ` 76 and ` 232 respectively. Key risks: i) Significant and sustained drop in gold prices ii) Regulatory risks iii) Capital constraints and iv) Stiff competition from new entrants and banks.


To read the full report: GOLD LOAN
RISH TRADER

>Metals & Mining – Q3FY12 Preview

Problem of Plenty!!!!!


Q2FY12 ended with many problems and almost all the problems have increased further in Q3FY12. Companies have found it extremely tough to maintain their utilization levels and to manage the extremely volatile currency. However Q3FY12 numbers would be better than anticipated earlier as companies are able to hold on higher prices inspite of lull demand due to rupee depreciation.

■ Stable realization lessen contraction of EBITDA/ton for ferrous players

Inspite of lull demand, steel prices remained more or less stable during the quarter due to ongoing mining crisis in Karnataka. Stable realizations will help companies to somewhat mitigate higher raw material prices. EBITDA/ton of ferrous players are expected to fall by ` 1000-1500/ton during Q3FY12.

■ LME and cost blues for Non Ferrous

Base Metals prices have significantly corrected during the quarter due to credit crisis in Europe and credit tightening in China. Lower LME price would be somewhat mitigated by higher volume however margins is set to fall for all companies due to higher input cost and adverse movement in currency.

■ Mining segment would be better

Mining segment is set to do better in this quarter due to higher production and favorable currency movement. CIL is set to increase its volume and firm prices will help the company to deliver better numbers. Rupee depreciation will provide cushion for Sesa Goa and will help the company to somewhat offset impact of lower volume and realization.

Outlook

Slowing global economy has taken a serious toll on Metal and Mining companies and the conditions are expected to remain tepid at least in next two quarters. However except Tata Steel, all other Indian companies have been impacted by India specific issues. The shadow of global slowdown is yet to come in Indian metals and mining space. We believe that ongoing issues like mining mess, policy paralysis and slowing economy are structural in nature and the condition are going to remain stressed at least in next two quarters. Thus we continue to maintain our negative stance on sector. However Inspite of directly exposed to Europe, Tata Steel remains our prefer pick due to structurally changing business model.

To read the full report: METALS & MINING

RISH TRADER

>Metals & Mining – Q2FY12 Preview

Q2FY12 was very eventful for the entire Metal and Mining space. The sector is facing many demons all at a time (fear of global recession, ongoing slump in Indian markets, regulatory blows on mining and industry unfriendly mining bill). Nevertheless, Q2FY11 numbers would be better than anticipated earlier as companies are able to hold on higher prices inspite of lull demand. Thus the contraction in margins will be much lesser than earlier expectations.

Stable realization lessen contraction of EBITDA/ton for ferrous players

Inspite of lull demand, steel prices remained more or less stable during the quarters due to ongoing mining crisis in Karnataka. Stable realizations will help companies to somewhat mitigate higher raw material prices. EBITDA/ton of ferrous players are expected to fall by ` 1000-1500/ton during Q2FY12.

Non-ferrous results would be better, mining to take a hit

Base Metals prices have marginally corrected during the quarter due to credit crisis in Europe and credit tightening in China. However the correction is very marginal to have a material impact on company’s financials. Sterlite and Hindustan Zinc are expected to report good numbers due to volume ramp up in Zinc and power business and improved Tc/Rc margins. NALCO and Hindalco are expected to benefit from high alumina and aluminum prices. Mining segment is hit hard by ongoing mining crisis and very heavy rains. Both volume and profitability of mining companies are expected to remain subdued.

Outlook

We continue to maintain our cautious view on the sector as slump in demand is much higher than expected and thing are still not moving on ground. Moreover fear of recession in the western world and sovereign default risks of Euroland has made things very difficult for the sector. We believe that H2FY12 is going to be tough for metal and mining space and companies will see margin contraction and lower growth. Inspite of negative view, we believe that there are few structural stories unfolding in the Indian Metal and Mining space and the correction should be used to accumulate good quality stocks. Our top picks in the sector are – Tata Steel and Sterlite Industries.

To read the full report: METALS & MINING

>AUTOMOBILE SECTOR: Monthly Numbers update September 2011

September sales brought some cheer for the domestic automobile industry as the 4W players recorded positive growth (incl unlisted players) sequentially with start of festive season and the 2W players continued the robust growth. New launches in the PC segment, increasing discounts and attractive financing scheme supported sales with beginning of the festive season. Tata Motors recorded strong growth as PC sales grew for the first time in the year while M&M continued its strong traction (higher exposure to strong rural market). So while M&M, Tata Motors, Hero Motocorp, Bajaj Auto and TVS Motors clocked growth on y-o-y basis Maruti Suzuki reported a decline of 21% as labor related issues disrupted production.

Bajaj Auto: September sales came in at record 417,686 units representing a growth of 18% on a y-o-y basis and up 9% m-o-m. The company has recorded highest quarterly volumes and we expect company to report strong Q2 results (strong quarter for three wheelers).

TVS Motor: TVS reported total vehicle sales of 219,369 units up 17% y-o-y and up 13% m-o-m as motorcycle growth surprised us positively.

Hero MotoCorp: Hero MotoCorp recorded another month of sales more than 5lacs units with beginning of the festive season, we however expect competition to intensify in H2 FY12.

Mahindra and Mahindra: Mahindra & Mahindra continues to grow across segments, with total vehicle sales up 20% y-o-y to 82,656 units driven by higher tractor and automotive segment (especially LCV segment).

Tata Motors: Total vehicle sales grew 22% to 78,786 units as the strong PC sales supported growth in CV segment. Exports grew 23% y-o-y and 48% m-o-m to 6,220 units.

Maruti Suzuki: Subdued PC sales coupled with disruptions at Manesar plant resulted in total vehicle sales declining 13% y-o-y to 91,442 units. Exports surprised with sales up 18% y-o-y to 14,356 units. YTD FY12, total sales are down 8% to 448,268 units.

We list vehicle sales of other unlisted players to just give an idea of how competition is shaping up in the Indian automobile industry.

We remain positive on 2W industry on the back of rising rural demand, shift in consumer taste towards higher end bikes and expect Bajaj Auto and TVS Motors to be the primary beneficiary (see valuation snapshot in appendix). Tata Motors (not rated) trades at favorable valuations with JLR recording strong volumes and domestic sales pick up ahead of festive seasons. We remain cautious on passenger segment post festive season as macro uncertainties still persist. We do not expect interest rates to come down until end FY12 (though another hike remains a tail event) and expect it to negatively impact PC and M&HCV growth in current fiscal.

To read more >>>>

>Capital Goods Q2FY12 Preview

During Q2FY12; CG index underperformed sensex by 11.8%. IIP numbers also did not help as capital goods de grew by 15.2% for July. Obstacles in the form of land acquisitions, environment clearances and rising interest rate still linger on and will continue for near term. We expect flat top line performance for our coverage universe and de growth in EBITDA and PAT due to rising input and interest cost respectively.

Flat growth in top line for Q2FY12

We expect revenue of our coverage universe to witness flat growth as a result of declining or stagnant order book for companies like BGR, Voltas and Crompton Greaves. Crompton Greaves’ overseas business will benefit from Euro appreciation against Rupee by 8% y-o-y. Elecon Engineering and Jyoti Structures shall post decent growth due to growing order book.

EBITDA and PAT to be once again hit by higher material cost and interest charges

EBITDA for coverage universe is likely to decline by 10.3% as a result of mix of increased cost and competition. Therefore, we expect margin for our coverage universe to decline by 120bps. Companies with lower base or escalation clause shall be able to at least maintain their margins. PAT is expected to de grew by 20.6% y-o-y. The de growth is likely to be a result of increased interest cost particularly for BGR Energy and Jyoti Structures.

Another dry spell for order inflow

Announced order inflows for the sector indicate that Q2FY12 could well be another dry spell for orders. Amongst large caps, L&T has just managed an order win of ` 91bln while BHEL did not announce any significant order win except a single BTG package order of 2x660MW from Singareni Collieries for ` 32bln each. Although opening of NTPC super critical bulk tenders (9x800MW) did provide a ray of hope in otherwise a lackluster quarter. Moreover, PGCIL announced orders worth ` 34.5bln (83.3% y-o-y) which may boost order book of T&D companies.

Outlook

We understand poor performance of capital goods sector is built in stock prices to a certain extent; thereby arresting major downside for stocks with good revenue visibility and margin stability. Hence, we like Elecon Engineering and AIA Engineering; Elecon for its strong order book and diversified business and AIA Engineering for its successful headway into international markets in mining and cement that shall reap rich dividends in the long term.

To read the full report: CAPITAL GOODS

>Power Sector Q2FY12 Preview: Operational weakness; sector reforms

Adani Power

We expect sales of 3494 MU at an overall average PLF of 74% .EBIDTA margins are expected to improve by 300bps sequentially on account of better operational efficiency. However, the next and the following quarter is expected to be tough as the rupee has depreciated over 8% We expect APL to clock a PATJSW Energy

PLFs and short-term realizations could drive Q2 FY12 results, as global spot coal prices (RB Index) are sequentially flat. Operational softness is expected to continue – SBU I-II (76% PLF), Raj West I (shutdown), Ratnagiri I (70% PLF). We forecast a 153bp Q-o-Q margin contraction as declining merchant realizations outweigh nonrecurrence of one-time expenses from Q1 FY12.

KSK Energy

We expect (1) Wardha Warora offtake and fuel dynamics and (2) taxes to be the key earnings drivers. Following the recent WCL linkage activation, we factor in lower Wardha Warora fuel costs at ` 2.75/unit but also model low project PLFs (60%) and high auxiliary consumption (12%). Q1 FY12 had benefited from a negative tax rate that we do not expect to recur.

Orient Green Power

Q2 is expected to be the best quarter seasonally for OGPL, and thus expect average Wind PLFs of 21%. We expect OGPL to sell 168MU (vs 127MU in Q1FY12) at an average realization of ` 4.6/unit. EBIDTA margins are expected to remain flat yoy and improve by 795 bps sequentially to 51%.We expect Q2FY12 PAT to come in at ` 79mln which translates to an EPS of ` 0.17

PTC India

Q2 is the best quarter for PTC in terms of volumes as cross border volumes peaks during this period. We forecast PTC to trade 9.9 BU inclusive of 3 BU of Cross border Trades at average margins of 4.5bps. We expect overall EBIDTA to come in at ` 589mln implying EBIDTA margins of 1.6% and overall PAT and EPS to come in at 552mln and ` 1.87.

Outlook

PLFs have continued to decline this quarter: -842 bp among private players, -777 bp all-India. Key drivers, in our view, include SEB backing down, ongoing capacity addition, seasonally-weak demand (monsoons), and preferential use of hydropower in the merit order dispatch. This quarter also saw plenty of action in coal regulatory developments and distribution sector reforms: (1) no-go/CEPI, (2) draft MMDR Cabinet approval, (3) MRRT/Australian carbon tax, (4) proposed distribution reforms and discom tariff increases, and (5) progress toward revised Case 1/2 standard bidding documents with increased fuel passthrough.

To read the full report: POWER SECTOR

>Daily Market Preview (MARWADI FINANCIAL)

● Strong market upmoves (close to 6%) in the last 2 days in domestic indices indicate that March may not see the much feared extreme distress and new lows. The F & O internals also suggest the underlying support for the market at the 2500 Nifty level.

● We feel Nifty in the near term could see further gains upto 5%. Robust market trajectory that has sustained for the last couple of days globally emboldens us to recommend a positive look at stocks. We advice to hunt for bargains and invest currently 20-25% of your investible corpus.

To see full report: MARKET PREVIEW 16-03-09

>Daily Technical Report (MARWADI FINANCIAL)

Wall street consecutively perform in good rally, Asian market also trading in positive range due to optimism stimulus will revive growth. Since last two trading session we seen the good rally in domestic market also and we expect that the rally may continue for short time. So it is advisable to book some amount of profit at every higher levels. Again the inflation numbers is continuing in southwards direction so it is good sign to developing economy. Now onwards we have to seen, how central bank manages unnecessary volatility in the currency, and it is required to stabilize the currency rate. Power Finance company also get good amount of liquidity to further finance the project as well as execution the project, keep watch on that counters.

On technical note today market open with positive note and after positive opening it will take volatile mode so intraday trader we recommend to trade with positive bias. In morning session market open with marginal positive note, so wait fro the conformation of the trend to take long view. Again the investor have to book profit in good market and wait for lower levels buying.

Today Sensex trade in the range of 8930-8620 And Nifty in the range of 2775-2670

To see full report: Technical Report 16-03-09

>F&O Daily Open Interest Report (MARWADI FINANCIAL)

To see report: OPEN INTEREST REPORT 12-03-09

>Daily F&O Report (MARWADI FINANCIAL)

To see report: F&O Report 12-03-09

>Daily Market Preview (MARWADI FINANCIAL)

# After massive sell off last week equities seem still to be a riskier asset and so we expect de-leveraging to continue. In absence of any major trigger in short term, we feel that Indian markets will trade in narrow range with upside capped.

# We might see some technical bounce back on the back of short covering, but it will be hard to sustain its recovery. We suggest staying away from taking any fresh position.

To see full report: Market Preview 090309

>Daily Technical Report (MARWADI FINANCIAL)

TECHNICAL REPORT

Wall street closed on flat, Asian market falls led by banks on capital concern. Last Friday we saw some sort of short covering from oversold territory. Again the inflation is at lower levels, is a good sign to Indian economy. Now onwards we have to seen the effects of the stimulus major and how effectively implement is a matter of concern. Macro economic picture is also played an important role for further market direction.

On Technical note market looks today open with marginal negative note and after negative opening it will take volatile mode. We continue to recommend to trade with caution approach, intraday trader have to wait in morning session and after conformation of the trend make fresh position.

Today Sensex trade in the range of 8485-8185 And Nifty in the range of 2670-2580

To see full report: Technical Report 090309

>Daily F&O Report (MARWADI FINANCIAL)

To see report: F&O Report 09-03-09

>Daily Market Preview (MARWADI FINANCIAL)

MARKET PREVIEW

* The rate cut will boost positives of global markets. The RBI has done the final act - one more round of rate cuts and we feel that this move is continuation with fiscal & monetary imperative to bolster sagging economy. But it’s still uncertain when Demand cycle turns upward and
downward growth is captured.

* Indian markets are expected to be in recovery mode as world markets also rallied smartly from their much oversold territory. The narrowed discount on the Nifty shows some sign of short covering and we believe that markets to move upto 2700. Accumulate Metals, Banking, and FMCG stocks

To see full report: Market Preview 05-03-2009

>Daily Technical Report (MARWADI FINANCIAL)

TECHNICAL REPORT

Wall street snaps 5-day losing streak, Asian market up as china’s wen pledges increased spending. Reserve bank fulfill the much awaited reduction in Key policy rate, both Repo and R-repo rate cut by 0.5%. From this decision we expect that the liquidity situation, especially in PSU bank is increase. Further loan rate cut and lending increase from this levels. Housing and other interest sensitive sector get the benefit from this decision, and provide some base to create to demand. So this is allover good effects to Indian economy and stabilization of currency, that is good sign to Indian economy.

On technical note we expect market open with positive Gap and through the day will remain in positive territory. Today especially banking counters and interest sensitive counters looks attractive so concentrate in that segment. Intraday trader it is advisable to make fresh position after conformation of the trend and in morning session open with Gap up but it may consolidate further so wait for that consolidation and after it is recommend to make fresh position.

Today sensex trade in the range of 8475-8345 And Nifty in the range of 2670-2630

To see full report: Technical Report 05-02-2009

>Market Preview (MARWADI FINANCIAL)

MARKET PREVIEW

* The sellers are on rampage and equities are testing multi year lows. The surge in VIX indicates more sell-off to come and Indian markets are also looking very weak as economy has also become vulnerable in the wake of global slow down and huge FII outflows. The sharp contractions (16%) in export and rupee at 52 are worrisome. However there was some respite in the reported healthy auto sales numbers for the month of February.

* We advice to postpone buying and to buy out of money index put option for any eventuality of new lows in the month of March series. Crucial level on the Nifty would be 2700 on the upper side.

To see full report: Market Preview 03-03-2009

>Daily Market Preview (MARWADI FINANCIAL)

MARKET OUTLOOK

Reliance Ratio Key, Markets groping for trend…

* The surprise move announced by Mukesh Ambani controlled RIL to merge RPL with itself will have lot of bearing on the market and the merger ratio to be known by 10 AM, will set the course for the day. Cancellation of treasury stock would also be a crucial decider.

* World markets are in a major downtrend and are trading below key support levels and are highly oversold. We would advice against shorts even suggest hedging of shorts. Also recommend very selective buying based on deep values. Crucial level to watch would be 2660 for Nifty on the downside.

To see full report: Market Preview 2-03-2009