9 stocks to watch

State Bank of India: SBI will be announcing its results during the day. The market expectation is that the bank will post a topline of Rs 12,732.5 crore and a profit of Rs 2,922.5 crore for the quarter ending March 31, 2011. The stock has shown weakness and technically the chart will be forming a bearish pattern below Rs 2,610. Being an event-based day, volatility will be high.

Coal India: Analysts across broking houses have maintained a buy rating on Coal India with a caveat that the rating or price target will be revised after the announcement of consolidated results on May 25, 2011. The chart, however, shows good strength and the stock trades close to its all-time high. Selling has been on lower volumes, indicating that not many are selling. A cross above the current top of Rs 396.35 can take the stock to Rs 410.

Bata: Bata has been attempting to cross Rs 474, its all-time high price, for the last five trading sessions. It has seen selling pressure in the Rs 465-474 range. A move above Rs 474 can take Bata to the Rs 500 level. The company, which came out with an excellent set of numbers, has been upgraded by a number of brokers. A fall below Rs 450 will change the bullish sentiment in the short term.

SAIL: Over the last four months, the stock has bounced back from Rs 150 levels four times. It is about to test the level for the fifth time. A breach of the Rs 150 level can take the stock to its next level of Rs 127. Other steel companies like Tata Steel too are trading near important support levels, while the smaller ones have broken all support levels. Thus, the probability of the stock breaking the Rs 150 level is high.

Crompton Greaves: In the last three months, the stock touched Rs 240 for the second time. There has been good buying at these levels over the last five days. Rumours in the market are that the company is going in for a big acquisition. Crompton was very strong in a weak market on Monday, with a spurt in volume over the last five minutes. Probably there is something to the rumour. The stock looks good above Rs 248.

Glenmark: The company announced out-licensing of its products to Sanofi. Glenmark will be getting an upfront payment of $50 million from the deal (Rs 7-8 per share, post-tax) over the next two-three months. The remaining milestone and commercialisation-related payments of $613 million (Rs 90 per share) along with royalties are dependent on the success of the product, which can take five to seven years. The stock has already moved up by Rs 50 on Monday on extremely high volumes. After the initial euphoria, selling was witnessed in the counter. A fall below Rs 291.45 can bring the stock back to Rs 275.

Suzlon: There has been a build-up in the price in anticipation of results. The stock opened very strongly on Monday, but since the opening bell, there has been continuous selling. The stock closed at the low of the day. Selling is expected to continue, given the intra-day pattern. The stock can touch a level of Rs 50.

JSW Steel: The company announced its results in the second half of Monday and held an analysts meeting after close of the market. Analysts say that margins are expected to remain under pressure, especially since its coal contracts are up for renegotiation. The stock touched the previous day’s low and bounced back on Monday. It can fall further if it falls below this low of Rs 908.

Diamines & Chemicals: The company has informed the exchange that it will be holding a board meeting to consider the issue of bonus shares. The stock is expected to react positively to the news and can touch a level of Rs 84 where it can meet some resistance. However, this will depend on the bonus ratio.

RBI hints at more steps

Reserve Bank Governor Duvvuri Subbarao today said April inflation at 8.66% was too high and stressed upon the central bank's resolve to batten it down to a comfortable level, indicating that he will continue with the hawkish monetary stance.

Stating that inflation needs to be brought down to a comfortable level to maintain high growth, the Governor said, "if you try to drive up growth by driving up inflation, what you will get left with is high inflation".

The Government data released today showed a minor dip in headline inflation to 8.66% in April, driven by a moderation food and manufactured items prices.

However, the Government revised upwards the March figure to 9.04%, which was provisionally reported at 8.98%. It also revised upwards the numbers for February to 9.54% from the provisional 8.31%.

Disagreeing with the idea of inflation-growth trade-off, which is gaining currency among a section of economists, Subbarao said, "Nowhere in our history we can prove that we have had high inflation and high economic growth.

Gold futures down due to profit-booking

Gold prices fell by 0.31 per cent to Rs. 22,185 per 10 gram in futures trade today amid profit-booking by speculators and a weak trend overseas. At the Multi Commodity Exchange, gold for delivery in August declined by Rs. 69, or 0.31 per cent to Rs. 22,185 per 10 grams, with a business turnover of two lots.

Similarly, the yellow metal for delivery in June shed Rs. 63, or 0.29 per cent to Rs. 21,898 per 10 grams, with a business volume of a single lot. It had gained 0.20 per cent at Rs. 21,961 per 10 grams in the previous session. Gold for delivery in December also fell by Rs. 65, or 0.28 per cent to Rs. 22,891 per 10 gram, with a trade volume of two lots.

Analysts said besides profit-booking by speculators, a weakening trend overseas as a stronger dollar reduced the appeal of precious metals as an alternate investment.

In the Asian region, gold shed $ 6 to $ 1,489.20 an ounce.

Toyota to resume normal production in India from May 20

Japanese car giant Toyota today said it will resume normal production in India from May 20 after being compelled to slash output by 70 per cent since April 25 due to component supply constraints following the devastating earthquake and tsunami that hit the island nation.

During the period of low operations, production was curtailed by about 10,000 units, translating into a revenue loss of about Rs 650 crore for its Indian entity, Toyota Kirloskar Motor (TKM).

“The parts that we were not getting will start arriving in coming days. That is why we are confident of resuming normal operations earlier than expected,” TKM Deputy Managing Director (Commercial) Shekar Viswanathan told PTI.

In the wake of the disruption in supplies, the company had earlier suspended production on Mondays and Fridays between April 25 and June 4.

“We lost about 10,000 units of production across all models... Because of the production drop, the revenue loss was on an average Rs. 6,50,000 per vehicle,” Mr. Viswanathan said.

On that basis, the overall production loss of 10,000 units translates to about Rs. 650 crore.

TKM currently manufactures models like the Etios sedan, multi-utility vehicle Innova, premium sedan Corolla Altis and SUV Fortuner in India.

At present, the waiting periods for Etios and Fortuner are about four months each, while that of Innova and Corolla Altis are three months and one month, respectively, he said.

“Plans are afoot to recover the loss of production and reduce the waiting period. The plant will function on all weekdays and some of the non-working Saturdays,” the company said.

TKM primarily imports engine and transmissions from Japan and other regions.

The company also said the upcoming launch of its small car, Etios Liva, in India is on track.

“We are now all set to launch the Etios Liva. The launch will be as per schedule in the last week of June,” TKM Deputy Managing Director (Marketing) Sandeep Singh said.

The company’s first facility, which produces the Innova, Corolla Altis and Fortuner, in Bangalore has a production capacity of about 80,000 units per annum.

Asian Currencies Decline

Asian currencies dropped, led by Malaysia’s ringgit and Singapore’s dollar, as demand for emerging-market assets declined on concern Greece’s debt crisis will worsen.

The ringgit fell to its weakest level in almost two months and the Singapore dollar retreated to a one-month low after President Barack Obama said failure to raise the U.S. government debt ceiling by early August might disrupt the global financial system and plunge the world’s largest economy into another recession. Greece will plead today for a boost in its 110 billion-euro ($155 billion) financial lifeline from European governments and the International Monetary Fund