It was bad week for the Indian equity markets , but there was a glimmer of hope seen towards the end of the week. After two days of downfall, the markets saw smart recovery. However, for the week, the markets closed in the red. The Nifty and Sensex ended down 5.7% and 4.5% respectively.

Experts’ views on the road ahead for the markets:

Andrew Holland of Ambit Capital:

If global markets do take a hasty retreat than what we have seen more measured falls recently so I think the risk to that is higher than the more recent fall that we have been seeing in global markets. I could easily make a case for 12,000 but if things are more measured then 13,000-13,500 on the Sensex can be a short term base.

I think we will be buying on dips partly because with the government having the mandate it has, has changed our views in terms of the longer-term growth potential for India.

Atul Suri, Trader :

What is most important for the markets right now is for this bull market to sustain. I would not be bothered till we breach 4,100. If you look at these current moves, the post-circuit scenario when we went to 4,200-4,300, we retraced to 4,100 and then we got into a newer top, which is 4,600-4,700 on the Nifty. So essentially what has happened is that we have made a higher top at 4,100. So for this bull market to continue, I think 4,100 will hold and the market may exhaust a little bit, retrace a little bit from these levels.

Sunil Singhania, Reliance MF:

In the near-term there can always be a short-term correction but the way things are progressing and the way the scenario is emerging both fundamentally as well as technically, we don’t see a major reaction even in the short term. But from our perspective we are looking at India from a longer-term perspective and the way things are actually moving and even the government focus on infrastructure, increasing the gross domestic product (GDP), I think we are headed for some decent days ahead for India.

Trading ideas on specific stocks:

Sudarshan Sukhani, Technical Analyst:

One stock which I have been referring to is Hindalco. It has come through a very good correction, at this point there is a buying opportunity with a target of somewhere around Rs 105 or Rs 110. Now if the investment does not work out, which means there is a correction that continues downwards, you either get out with a Nifty stop loss of 4,200 or you add more to the stock, somewhere around 3,800 for the Nifty or Rs 70 for the share.

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(Reuters) - U.S. banks will be briefed by regulators as early as Friday on how they performed in government "stress tests," before the results are made public later, The Wall Street Journal reported, citing government officials.


Reuters - The Wall Street entrance to the New York Stock Exchange is pictured March 27, 2009. REUTERS/Eric Thayer ...
Some estimates of likely losses that were used in the stress tests were tougher than expected, the newspaper said.

"Under a more adverse scenario, which assumes a 10.3 percent unemployment rate at the end of 2010, banks would have to calculate two-year losses of up to 8.5 percent on their first-lien mortgage portfolios, 11 percent on home-equity lines of credit, 8 percent on commercial and industrial loans, 12 percent on commercial real estate loans, and 20 percent on credit card portfolios," the paper said, citing a confidential document from the Federal Reserve.

On Tuesday, Treasury Secretary Timothy Geithner said most U.S. banks have enough capital to keep lending, but a pile of bad debts is fostering doubts about their health and slowing a recovery.

An official at the Federal Reserve said last week that results of the tests, designed to see how the nation's 19 largest banks would fare should the U.S. recession prove unexpectedly severe, would be made public on May 4.

The official said regulators will try to prove the rigor of the tests by releasing a document on Friday that explains the underlying assumptions. The document will outline the methodologies employed and serve as a guide on how to interpret the results.

Thanks to http://finance.yahoo.com

Mumbai, Apr 22 (PTI) In high volatility, the Bombay Stock Exchange 30-share Sensex today failed to maintain its initial gains and ended lower by 81 points due to persistent selling pressure in view of political uncertainty and fall in US index futures.
Realty, consumer durables, capital goods and auto were the main losers despite key rate cuts by the Reserve Bank of India yesterday.

Dealers attributed the volatility in the market to investors' cautious approach as also the uncertain political situation because of no clear indication as to who will form the next government.

The Bombay Stock Exchange bellwether Sensex showed signs of recovery in the morning with a jump of 138 points in response to the Reserve Bank's rate cuts yesterday but it failed to maintain its rally in the afternoon session.

The BSE-30 share index resumed higher at 10,968.60 and hovered in a range of 11,036.24 and 10,715.66 before finishing the day at 10,817.54, showing a net loss of 80.57 points or 0.74 per cent from its previous close.

The 50-share Nifty of the National Stock Exchange also fell by 35 points or 1.04 per cent to end at 3,330.30 from its last close.

Foreign institutional investors (FIIs) pulled out Rs 191.01 crore yesterday, as per provisional figures issued by stock exchanges.

Thanks to http://www.ptinews.com

The US markets reversed early losses led by financials, after Goldman posted strong first quarter profit.

Financial stocks had been among the session's worst performing sectors in the first few minutes of action, falling as much as 2.7% as traders took profits following the strong gains that financials registered late last week. However, buyers provided support by buying the dip in financials.

The market was also buzzing about President Barack Obama's press conference on the economy later today. The president is expected to talk about government's recession-busting actions.

However, earlier in the session, shares of General Motors tumbled 16% as the treasury department instructed the auto maker to prepare for a bankruptcy filing by first June deadline. Also Read - How ADRs performed

The Dow Jones Industrial Average slipped 25.57 points, or 0.3%, to 8,057.81. The S&P 500 Index was up 2.17 points, or 0.3%, to 858.73, and the Nasdaq Composite Index rose 0.77 points, or 0.1%, to 1,653.31.

Richard Bove, Financial Strategist, Rochdale Securities said, “The reason numbers are good is because their core business, which is trading did extraordinarily well. You had a whole series of things working in Goldman’s favour. The competition is gone away; all of the firms are no longer in business. Goldman has pricing power because there are so few competitors, or weaker competitors, Goldman has doubled the price of transaction in the first quarter."

In Commodities

Crude prices slipped below USD 50/bbl mark, extending yesterday's 4.2 percent loss, after the international energy agency forecasted that 2009 demand may slump to the lowest level in five years amid the global economic recession.

Copper climbed to the highest in almost six months in London, pacing an advance in industrial metals, as investors sought to catch up on gains made in shanghai and New York.

Futures in China and the US advanced after the Chinese government said it is considering additional stimulus measures to spur economic growth. Government plans to spur growth in the US, Europe, Japan and China helped trigger a 58 percent rally in London prices this year.

Thanks to http://www.moneycontrol.com

After three months of the new board taking over Satyam, Tech Mahindra finally won the high profile race for Satyam. The company bid Rs 58 per share, beating rivals engineering major Larsen & Toubro and private equity (PE) major Wilbur Ross. Tech Mahindra will have to pay Rs 1,757 crore to buy the 31% stake in Satyam. The total acquisition cost will rise upto Rs 2,890 crore once it gets the mandated 51% stake.

Satyam's government-appointed board clarified that Tech Mahindra will take control only when the Company Law Board (CLB) gives its nod for the sale process. They also admitted that the crucial process of restatement of accounts would take a few more months.

Samir Arora, Fund Manager, Helios Capital, feels the model which the government adopted for Satyam could be an operating model for future scams in India. He credits the government for handling the situation deftly and swiftly without loss of jobs, confidence, or clients.

Arora feels the risk going forward will be on Tech Mahindra financing the deal.

However, JR Varma, Former Member, SEBI, said the deal has gone very well for everyone except Satyam's shareholder. "A preferential allotment to Tech Mahindra means the old shareholders of Satyam will receive less. Other than the open offer that is going to be there, they are not going to receive any money. It is not very clear whether they will benefit from the ongoing business as well."

Sudin Apte, Senior Analyst, Forrester, feels questions still persist on how the integration process will pan out. Clients, he feels, are also wondering how a company specializing in telecom will be able to service them. "Also, it is not exactly present in the domain and the lines of services of Satyam." He feels a Tier-I Indian company or a multinational could have been a better option to take over approximately a USD 2 billion company when this fiasco opened up. "I wish there was one top company who was trying to buy this company as it would have been much better for clients." According to Apte, there is going to be a possible 5-6% rationalization of staff at Satyam based on how its clients ramp up.

Also Read:

Restatement of co's accounts will take few months: Satyam

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Thanks to http://www.moneycontrol.com