The Reserve Bank of India cuts key rates

The RBI (Reserve Bank of India) has cut the repo rate by 50 bps to 5% and the reverse repo rate by 50 bps to 3.5% with immediate effect. The RBI is trying to help the economy grow, specially the housing and the construction sectors, by cutting key rates. This would force the banks to reduce interest rates. You should expect some small upward movement in stocks of realty and construction companies tomorrow. You should also expect the Indian markets to stabilize tomorrow. There could be a minor upward movement too.

Tata Steel

I would still like to stick to my recommendation of Tata Steel. Tata Steel announced its recent quarter results recently and it surprised the markets with a rise in net profits. There were apprehensions and market speculations that Tata Steel could have gone into the red because of losses at Corus UK. However, Tata Steel has managed to buck the trend. This is inspite of the meltdown and the falling prices of steel the world over. Demand from China has slown considerably. Tata Steel is presently available at Rs. 155 ($3) per share and it is available at a very attractive price. I am still bullish on the stock.

Reliance Communications: Buy

Reliance Communications is available at Rs. 155. The year high/low is 610/147 and the stock had crossed Rs. 750 in the last 18 months. This is India's fastest growing mobile company and it is growing in both CDMA and GSM segments.

From a 2-3 year perspective, I expect the stock to deliver more than 100% returns. In the short run, in another six months, I expect the stock to deliver 30% returns.

A sure pick.

Buying DLF

I would suggest buying shares of DLF Limited at Rs. 157 for a short term target of Rs. 220. It looks good for the long term too.