Morning Bells (11 Dec 12)

Good Morning Friends.

You may not be perfect in many things, but many things cannot be perfect without you… stay special in your own little ways.

The day started as per expectations and remains choppy throughout the day and Nifty closed almost unchanged. Now its turn for the Mid-Cap and the small-Cap banking stocks to be in focus as after winning the FDI battle for Retail in Parliament, now Govt. plans to introduce the Banking Act Amendment Bill. Contracts regulation act bill, Companies bill and the pension fund bill are also in the list of winter session.

The BJP-led Opposition has stormed Rajya Sabha after lobbying disclosure report was filed by Walmart that revealed it had spent a massive $25 mn lobbying to get entrance into India and demanded that the Govt. respond.

Foreign Institutional Investors (FIIs) met Economic Affairs Secretary Arvind Mayaram and discussed ways to improve inflows into the capital market, according to reports. Report stated that FIIs made suggestions on reducing withholding taxes for wider array of instruments and also sought clarification on QFIs.

FIIs want cut in withholding tax to 5% across the board including government securities and all corporate bonds, long-term infrastructure bonds as well, report says. (IIFL.com)

On Global front, In Asia, major stock markets ended mostly higher on Monday after market participants cheered better-than-expected U.S. employment figures and upbeat data over the weekend in China.

Patrick Legland, global head research, Societe Generale, says that there was a good rebound in most European emerging markets but we might see some corrections in next few weeks. Investors are still too much underweighted in European assets and then a switch from emerging market to European assets is likely. (MoneyControl.com)

Reserve Bank Governor D Subbarao last week said he is expecting inflation to trend down starting the fourth quarter (of the fiscal year ending March 31, 2013).

So now need to be cautious at this point as investors typically sell stocks to cut their losses at year end.

Industrial Production No. on – 12 Dec 12

Wholesale Price Inflation on -  14 Dec 12

MARKET OUTLOOK –

So market remained choppy as told y’day that investor may go for some profit booking. This sentiment may continue for today at least first half, now index of industrial production (IIP) and inflation data can move the market. Expert expecting nos. positive and if comes according to expectation then we may see Nifty attempting/breaking much awaited physiological level of 6000.

Now keep a close watch on strong resistance levels of 5,950-5,980, if broken then 6040 would be next strong resistance zone, so any big rally from current levels is unlikely at the moment.

So we need to be cautious this week as it could be a disappointing or choppy week.

Market uptrend is intact (at least for few more sessions) and participant eagerly waiting for breakout of 6000, but it may not be that much easy. The winning streak on FDI will give a lot of courage to Govt. to go ahead quicker, maybe during the session or post session, with a lot of things, which are still incomplete, to revive the economy back into action

In the last two decades, the last month of the year has generated returns between 0.7% and 15.7%, which has given birth to the December phenomenon theory. Only four times in the last 20 years -1994, 2000, 2001 and 2011 - December has generated negative returns, states a recent Morgan Stanley report.

The INDIA VIX on NSE was down 3% and ended at 14.51 and FNO PCR is up at 0.87.

The rupee was trading at 54.69 against previous close 54.68 as per NSE data.

FII DERIVATIVES STATISTICS FOR 10 Dec 2012
	BUY		SELL		OPEN INTEREST AT THE END OF THE DAY		Difference
	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores
INDEX FUTURES	20919	622.77	17429	519.67	387598	11365.57	103.10
INDEX OPTIONS	354999	10499.80	358342	10608.02	1489927	44068.61	-108.22
STOCK FUTURES	33271	954.15	44904	1352.94	1113783	32427.94	-398.78
STOCK OPTIONS	35736	1009.17	38086	1080.38	68637	1912.93	-71.21

FII bought 3,490 contracts worth Rs. 103.10 Cr. and OI decreased by 7450 contracts signalling that FII booked profit on shorts.

NIFTY OUTLOOK –

As expected profit booking seen in Index and main indices. Nifty will remain choppy at least today first half and then Nifty can surprise in second half. Investors will also keep close eye for IIP no.s on 12^th and the Inflation figure on 14^th and then RBI Monetary policy review on 18^th. Parliament session is also there which is ending next week so investor will also eye on some more pending reform bills.

Historical data shows that Dec seems a month for 3%-4% gain, but situation are different a bit from past.

Nifty will face resistance at / in the range of 5950 & 5980 while 5785 is the SL for longs for short term trend.

So for short term view Nifty seems in the range of 5785 – 6000.

Resistance comes to 5923 – 5955 – 5985 - 6020 and Supports comes to 5891 - 5873 – 5859 - 5835.

Opening seems mildly positive as global market closed higher y’day. People who have already initiated longs need not to worry at the moment and can keep SL 5835.

STOCK OUTLOOK -

(Stock outlook needs to watch stock movement carefully and then one can bet after having a look, I tried to put related info which will help you in taking positions.)

Realty, Infra & Power –

Now, with the hopes of the Central Electricity Regulatory Commission (CERC) hearing resuming from December 11.

JPA –

The management has confirmed that their stake sale in the cement division, which is situated in Gujarat for about 4.8 million tonne, is likely to happen in the next three weeks.

Power Grid –

Power Grid Corporation of India Ltd has announced that the Board of Directors of the Company at its meeting held on December 06, 2012 have accorded approval for (a) formation of a Joint Venture Company With Odisha Power Transmission Corporation Ltd for taking up Intra State Transmission projects in the state of Odisha; and (b) formation of a Joint Venture Company with Bihar State Power (Holding) Co. Ltd. for taking up Intra State Transmission projects in the State of Bihar.

The scope of Intra State works is yet to be finalized.

REC –

REC has come out with a tax free bond issue offering 7.72% and 7.88% to the retail investors for a tenure of 10 years and 15 years, respectively. Interest received on the bond is fully exempt from income tax.

Telecom –

FDI in telecom sector is shrinking, inflows plunging to USD 43 million in the April-September period of the current fiscal, had attracted USD 1.9 billion in April-September 2011, according to the latest data of the Department of Industrial Policy and Promotion (DIPP).

According to market experts the sector is facing a lot of problems domestically. Industry is shrinking in terms of margins and profitability and that could be the main reason foreign investors are not participating.

Overall, FDI in India declined by about 33 per cent to USD 12.84 billion in the first half of this fiscal, from USD 19.13 billion in the year-ago period. (MoneyControl.com)

Life Style Segment –

There’s news of good salary hikes and signal of increasing life style expenses. One can keep eye on Mahindra Holidays & Thomas Cook.

Coal & Minings –

NMDC -

The government is likely to sell its 10 per cent equity this week in iron ore miner NMDC , which could fetch the exchequer nearly Rs 6,300 crore at the current market price. The stake sell could happen either on Thursday or Friday, according to sources.

MG’s Note – It could be on sell counter.

KFA –

Looks attractive post Eithad talks and seems Eithad looks serious player and taking things serious to enter Indian market. If it comes to brand recall then KFA has good brand recall value among its competitors.

Auto Sector –

Domestic car sales fell by 8.25% to 1,58,257 units in November this year compared to 1,72,493 units in the same month last year, Society of Indian Automobile Manufacturers reported (SIAM).

Tata Motors -

TM will among those stocks that can get benefit of it. It may move to 287-289 level in coming days and then to 302. Keep SL 262.5 and then 254.

============ OPEN CALLS ============

# Please remember when I make special remark with any position then one should need to take care of that else you can make loss instead of profit.

# Be with strict SL and don’t hesitate to book profit if Nifty doesn’t shows strength.

DB Realty - @128 for TG 145+ SL 107 (plz book profit above 140)

Dishman - @118 for TG 130+ SL 107 (Has given buy signal and may see some move in this series)

Jindal Photo - @145 for TG 160+ Updated SL 126 on closing basis.

DB Corp – @219 TG 240+ SL 201 (1-4 Week)

SBI call spread – 2100PE @11 SL 4, 2400CE @23 SL 10 (hold till next instruction)

Hero MotoCorp – @1820 SL 1800 TG 1875+ (Positional)

============ INVESTMENT BASKET ============

(Stock in this section is with view of 3 months to 1 year)

Mahindra Holiday – @334 TG 375+

Satyam Computer – @103 TG 130+

============ TODAY’S PICK ============

(Intraday to 1-2 sessions) –

Tata Steel – @402 SL 394 TG 415+

Dhana Bank – @71 SL 68 TG 78+

For more update – stay on blog during market hours.

Today’s MG Mantra –

Though Nifty is in uptrend but need to be cautious as Nifty need some rest here and after such good move throughout the year investors can go for some profit booking.

Have a Profitable day – MG

Disclaimer –

1. I have shared my view as per my limited knowledge; please use your own skills to make a wise decision before execution of trade or consult your financial advisor.

2. Those that don’t have patience and are not willing to book loss also in cases don’t enter this market.