Morning Bell (7 Feb 13)

Good Morning Friends.

Circumstances can change at any time. Don’t devalue or hurt anyone in this life. You may be powerful today but time is more powerful than you.

Finally market started again range bound sessions, the Indian equity indices ended at the same point where it started in morning, almost unchanged. Markets opened with a positive gap tracking strong global cues in early trades amid better than expected economic data from the US and the Euro-zone. However, like previous trading sessions benchmark indices were unable to hold on to their gains amid offloading seen in the Capital Goods, Power, Banking and the Oil & Gas stocks.  

Market hailed the food ministry’s proposal to deregulate sugar sector, after which sugar stocks rallied. Shree Renuka Sugars was up 5%, Bajaj Hindusthan traded higher by 5.2%, Dwarikesh Sugar up by 5% and Balrampur Chini Mills gained 6.8% in the day’s trade on BSE. 

The rupee retreated from an over three-and-a-half month high to end marginally lower on Wednesday as continued weakness in local stocks and oil refiner demand to meet crude payments outweighed dollar inflows ahead of the government's stake sale in a state-run utility.

Onshore dollar premiums rose to their highest in 14 years as foreign funds hedged their spot inflows in the forwards markets as the country gears up to raise around USD 2.25 billion in a share sale in NTPC Ltd on Thursday.

Gainers – Infosys, TCS, Tata Power, Bharti Airtel, Dr Reddys Lab, Maruti Suzuki, Jindal Steel, HDFC, ITC, Tata Steel and Hindalco Inds were among gainers in Sensex and Nifty.

Losers - RIL, Wipro, SBI, ICICI Bank, Sun Pharma, BHEL, NTPC, HUL, Hero MotoCorp, Gail India, HDFC Bank and M&M were the major losers in Sensex and Nifty.

Sectoral – Capital Goods, Power, Banking and the Oil & Gas were among the top losers.

52 Week High - Kotak Mah Bank, Surya Roshni, Shree Cement, Bombay Cycle and Hind Syntex.

On Domestic Front –

n fresh trouble to Sahara group, the Supreme Court today said that SEBI is free to freeze accounts and seize properties of its two companies for defying
court orders by not refunding Rs 24,000 crore to investors.

 The apex court also pulled up SEBI for not taking action against the companies--Sahara India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation (SHIC)--as per its August 31, 2012 order which had asked it to attach properties and freeze bank accounts of the companies.

 It issued notice to the group to respond within four weeks why contempt action should not be initiated against the companies for not complying with its order.

Cheques would be chargeable - Recently, the RBI floated a discussion paper on ‘Disincentivising Issuance and Usage of Cheques' thereby seeking to discourage usage of cheques and cash withdrawal, by levying a charge on such transactions.

Death knell for OMCs?? - Finance Ministry's move to drastically change the way petrol and diesel are priced may sound the death knell for some of the domestic oil refineries, an industry association has warned.

The Finance Ministry wants auto fuel to be priced at export parity by abolishing 2.5 per cent customs duty on petrol and diesel to save up to Rs 18,000 crore in annual subsidy outgo.

The Petroleum Federation of India (Petrofed), an apex body of entities in hydrocarbon sector, on January 28 wrote to Finance Minister P Chidambaram saying removing duty protection on products would render "some inland refineries sick" while private refiners like Reliance Industries and Essar Oil may resort to exporting their full production.

On Global front –

The last few weeks witnessed a thin rally in European markets and it has now entered a period of consolidation.  Certain political uncertainties in Italy and Spain may weigh on the markets but, the main worry remains the euro.

=====================  MARKET OUTLOOK  =====================

Indicators are indicating that 5950 is holding. We saw an intraday dip but it bounced back, which indicates that support levels are holding. So probably a three-day correction is over if Nifty hold 5935 today too, but will be confirmed only above 6000 mark. Interestingly, some mid caps are slowly showing signs of life and can be main participant to Nifty to move once again above 6000 to 6100. 

Here I would like to say that over last couple of months market is running ahead of fundamentals. So trading purely based on fundamentals or technical would not give you much result, especially when it comes to take short positions.  

In the very short-term we might see some pressure. 6040-6050 on the upside of the Nifty is certainly resistance and will find support around 5935.

Now focus is shifted to budget which is probably schedule from 21-28 Feb 13. More clear view in coming days.

The INDIA VIX on NSE was down 2.40% and ended at 14.26 against previous close of 14.61.

FNO PCR is 0.78 against previous close 0.82.

Indian Rupee against USD was almost flat and weakened by 2 paisa and was trading at 53.16 against its previous close 53.14.

S&P 500 (US) was trading at 1512.39 up 1.10 then its previous close at the time of writing M Bells.

=======================  NIFTY OUTLOOK  ========================

Now immediate Nifty range is 5900 – 6200 but on downside could be more on profit booking at higher levels as its till date is liquidity driven rally.

Nifty is in range of 5900-5960-6040-6150-6190 for current series.

Resistance – 6020 – 6005 – 5982 and Support – 5944 – 5930 - 5908

Opening - seems down approx 10 points but probably can recover fast.

========================  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.)

United  Spirit –

Shares of United Spirits surged 2% after Diageo was given the nod by SEBI to go-ahead with an open offer to acquire 26% stake in UB group’s UB spirits. The permission would pave the way for Diageo to inch closer on its Rs.111.67bn potential takeover of majority stake in United Spirits. Stock ended at Rs1891 up by 44.25. It touched a day’s high of Rs. 1929.90 and a low of Rs. 1836.50 in early morning session of today’s trade at BSE. Total traded quantity on the counter stood at over 5.67 lakh shares.

Sun Pharma –

Shares of Sun Pharma surged higher by 4% after USFDA granted its subsidiary an approval for its Abbreviated New Drug Application (ANDA) for generic version of Doxil®, Doxorubicin HCl Uposome Injection USP. Stock closed at Rs751 up by Rs 27.35. It touched a day’s high of Rs. 752 and a low of Rs. 727 in early morning session of today’s trade at BSE. Total traded quantity on the counter stood at over 1.2 lakh shares.

Escorts -

Shares of Escorts surged 4% after the engineering company posted robust Q1 results. Escorts' profit after tax (PAT) rose by 49% q-o-q as expected, to Rs 0.28bn in Q1 of FY2013. EBITDA was up by 14% QoQ to Rs 0.5 bn while operating profit margin fell to 5.1%, a drop of 50bps q-o-q, in the first quarter. Stock ended at Rs69.50 up by 3.70. It touched a day’s high of Rs. 70.80 and a low of Rs. 67.55 in today’s trade at BSE. Total traded quantity on the counter stood at over 7.75 lakh shares.

NTPC –

The government has set the NTPC   offer for sale (OFS) floor price at Rs 145 per share, 4.5 percent discount to its Wednesday's close. The Empowered Group of Ministers (EGoM) had approved the OFS which will be held on February 7.

The divestment secretary had said that the government is looking to raise a whopping Rs12000 crore from the NTPC stake sale. The government will sell a 783.26 million shares or 9.5 percent stake in NTPC through the single-day auction. Ahead of the share sale, NTPC shares closed at Rs 151.80 on Wednesday, down 2.4 percent on the BSE.

According to experts - "There could be a foreign institutional investor (FII) appetite because the quantity on offer is substantial and at this price, the stock looks reasonably attractive but it is not a great investment opportunity from a trading point of view or an arbitrage point of view where you buy today and sell tomorrow."

Kotak Mahindra Bank –

Kotak Mahindra Bank touched 52 week today and ended up 2.2%. The stock went up after the company declared yesterday that it had acquired the business loans portfolio from Barclay’s India branch and Barclays Investment and Loan (India). 

Maruti Suzuki –

Maruti Suzuki touched 52 Week high too. The stock ended at Rs1628 up by 24.70. It touched a high of Rs.1637 and a low of Rs. 1611 in the day’s trade on BSE. Total traded quantity on the counter stood at over 0.66 lakh shares.

IRB Infra –

IRB Infrastructure Developers Ltd has posted a net profit after taxes and Minority Interest of Rs. 1427.194 mn for the quarter ended December 31, 2012 as compared to Rs. 1313.948 mn for the quarter ended December 31, 2011.

Total Income has increased from Rs. 7796.405 mn for the quarter ended December 31, 2011 to Rs. 9465.741 mn for the quarter ended December 31, 2012. 

Due to strong construction activities, construction revenue increased by 29% in comparison to Q3FY12. Construction segment Operating EBITDA remains strong at around 26% during the quarter.

Toll revenue has increased by around 10% in comparison to Q3FY12 on the basis of moderate traffic growth and higher Wholesale Price Index in comparison to the last year.

Tech Mahindra –

Tech Mahindra, India’s sixth largest software exporter today announced its audited consolidated financial results for the third quarter ended December 31st, 2012.

Financial highlights for the Quarter (INR)
Revenue at Rs1,791 crore; up 24% YoY and 10% QoQ
Operating Profit (EBITDA) at Rs 376 crore; up 61% YoY and 11% QoQ
PAT before share of Associate at Rs 242 crore up 67% YoY and 36% QoQ
PAT including share of Associate at Rs276 crore
Earnings per Share (basic EPS) was Rs 21.6 for the quarter ended December 31st, 2012

Numbers were better-than-expectations on every parameter. Analysts on an average were expecting net profit at Rs 235 crore on revenues of Rs 1,750 crore for the quarter.

Tata Global -

Starbucks today opened its first store in Delhi. CNBC-TV18's Malvika Jain gets John Culver, president, Starbucks Coffee and Avani Sugalani Davda, CEO, Tata Starbucks Ltd. to throw some light on the company's plan of opening up stores in China and Asia Pacific.

==================== 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 even small profit if Nifty doesn’t shows strength.

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

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

Mahindra Holiday – @334 TG 375+ (Active from 15 Dec 12)

Satyam Computer – @103 TG 130+ SL 112 (Active from 15 Dec 12)

On Mobile – @44 TG 60+ Updated SL 39 Qty 2K (Active from 01 Jan 13)

=============== HOT SHOT ===============

Keep eye on following stocks, if Nifty shows strength then these stocks can give you reasonable return in very short term –

Be on board for next clue.

============ PL Sheet (started from Jan 2013) ============

(If someone find any error in PL, please draw our attention)

MG Blog Jan Series Total Profit = +25,900 (Cash +9,650.00 & FNO = +16,250)

Billionaire Club (Jan +51,000) + Feb Ser. = +7500

(Axis bank 1450PE = 3000 + Rel Infra fut 4500 = 7500)

Today’s MG Mantra –

Don’t go against market sentiment. Market creating base around 5950.

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.