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Indian markets follow Asian peers despite Europe & US rally

August 24th, 2011

Moody’s Investors Service has cut the Japan Government debt to AA3 following the inability of Japan to control its debt since the 2009 global economy crisis and the revolving-door policy of leadership in the Government. This has triggered Asian stocks to slide early in the day despite the US stock markets rallying. Back in January 2011, Standard & Poor has cut its rating on Japan to AA-.

Dow Jones (Aug 23) closed the day at 11176.76 rallying 322.11 points while Nasdaq (Aug 23) closed at 2446.06 adding 100.68 points. The S&P 500 added 38.53 points and closed at 1,162.35.

Meanwhile, the Indian stock markets started their day with a lower opening made a small attempt to come and stay in the green territory but it could not survive the attempt. Stocks soon began to fall dragging the indices into the red. Things did not change despite the opening of the European markets that are largely in the green.

SENSEX closed the day at 16284.98 losing 213.49 (-1.29%). NIFTY is at 4888.90 by closing time losing 60.00 (-1.21%). CNX Midcap at 7266.30 losing 58.20 (-0.79%) while BSE Smallcap is at 7158.64 down 36.68 (-0.51%). All major sectoral indices are in the red.

There are no block buster moves today, at least in the large cap stocks. Power Grid Corp, Hindalco, Grasim, Ranbaxy Labs, HUL, Reliance Comm, Dr Reddys Labs, ONGC and HDFC closed the day with modest gains. However, there are more downward draging large cap names today. Tata Steel and Tata Power are both down over 4%. IDFC, Maruti Suzuki, Tata Motors, SBI, Axis Bank are down over 3% each. HCL Tech, Jindal Steel, Reliance Capital and L&T are down over 2%.

Automobile tyre major Apollo Tyres (BSE: 500877; NSE: APOLLOTYRE; ISIN: INE438A01022) is given an ‘Outperformer’ rating by Standard Chartered in its recent report. The stock has a target of Rs. 80. The script closed the day at Rs. 56.60.

Lupin (BSE: 500257; NSE: LUPIN; ISIN: INE326A01037) from the Pharmaceuticals space is gaining attention of market experts. Hitesh Sheth of Prabhudas Lilladher says the target for the stock is Rs. 515. Motilal Oswal too had a target of Rs. 514. PINC Research in its research report dt July 28, 2011 has put a target of Rs. 505. The script enjoys and EPS (TTM) of 16.25 and a P/E of 27.66. The industry P/E is at 10.46. The script closed the day at Rs. 449.50.

Entry Filed under: Equity Markets, Automobile, Closing Bell, Pharmaceuticals