Morning Bells (19 Feb 13)

Good Morning Friends.

When it comes to choose Friends & Books, then be careful, because Friends influence our Character and Books influence our Thoughts.

Once again it was a subdued day on D-Street; however market closed with slim gains (Nifty 10 points up) but failed to close above 5900 mark for the second consecutive trading session. After opening on a flat note, the benchmark indices struggled for any specific direction throughout the day and remained choppy with a slight upward bias as many stocks bounced back as they were in oversold zone.

Prime Minister Manmohan Singh has appealed to the Central Trade Unions to withdraw their call for a countrywide General Strike on 20 and 21 February, 2013. 

"Such a strike would lead to avoidable loss to our economy and inconvenience to the public through disruption of services. While some of the issues raised by the Trade Unions are already being acted upon and others are at various stages of consideration, "the PM stated. 

Oil Minister M Veerappa Moily today ruled out a roll back in the Rs 1.50 a litre hike in petrol and 45 paisa per litre increase in diesel rates saying only a small raise has been passed on to consumers. "No, No," was he refrain when asked if the government will consider rolling back last week's increase.

"Our country imports 73-75 per cent of oil. We need to pay Rs 7 lakh crore for the imports. Where do we find that kind of money," he said. The first hike in petrol price in over three-and-a-half months and the second rise in diesel rates in one month exclude local sales tax or VAT, making the cost for consumers even higher. Petrol price in Delhi went by Rs 1.80 to Rs 69.06 per litre from February 16. Diesel rates went up by 51 paise to Rs 48.16 a litre.

In another report - The government today cancelled Rs 12,000 crore bond auctions, lowering its market borrowing programme for the current financial year in its bid to contain the fiscal deficit at 5.3 per cent.

With this, the total market borrowing by the government in the current fiscal would come down to Rs 5.58 lakh crore from Rs 5.70 lakh crore as envisaged in the 2012-13 Budget. (MoneyControl.com)

Gainers – DLF, JP Associates, Tata Steel, PowerGrid, Reliance Infra, Hindustan Unilever, Cairn, Larsen & Turbo, BHEL, Sesa Goa were among gainers in Sensex and Nifty.

Losers - JindalStel, Coal India, TCS, Bajaj-Auto, Ultra Cem, ONGC, Bharti Airtel, Dr Reddy, Axis Bank and Asian Paint were the major losers in Sensex and Nifty.

Sectoral - Realty, Capital Goods, Power, and the Metals stocks were among the top gainers. While the IT, Telecom and the Consumer Durables stocks were among the top laggards.

BUDGET –

According to various experts market is optimistic about the Budget as of now given the promises made by the government in the last few months, it will be watching the event closely to see if the finance minister will deliver on these commitments.

Also, the country needs capital inflows and so there could be a concerted efforts in the Budget on reviving equity inflows, a move which would definitely buoy the market. On the other hand, a largely populist Budget could have a negative impact if the market believes that it could derail the process of fiscal consolidation over time.

MG’s view on Budget -

Most of experts are hoping for their gains i.e. market friendly budget but my sense is that this budget would be more for common man & basically will be focussed on pending reforms, yes as general election is there in 2014 and this would be last budget where Govt. can announce reliefs for common people.

Surprisingly Mid-Caps have fallen 10-40% in last two weeks. (Blue chips are drifting lower but second line shares went down much sharper.) Street has been expecting a lot from the Budget both in terms of policies and reforms and probably India the Budget is overhyped.

On Domestic Front –

1. National Stock Exchange is planning to transfer the scrip of three firms to restrictive trade segment to safeguard investors, according to reports.

The exchange reportedly said that Bodhtree Consulting Ltd, Abhishek Corp and Ashco Niulab Industries Ltd would be shifted to trade-to trade category or "T" group from rolling settlement.

The changes would be effective from February 22,says report.

 

2. Experts are expecting that UPA Government and the Finance Minister needs to give the right signals to investors in the warehousing and cold chain infrastructure space through an integrated package of measures to be announced in the Budget.

On Global front –

1. Many experts believe that its not right time to judge equity market at the moment. They have some thoughts that while many global economies may have averted a default here and a decline there, the crisis is far from over. Don’t judge prematurely!

So what has led to the clamour of the past few weeks? The US has narrowly averted teetering on the brink of disaster with a compromise on the debt ceiling. In Europe, too, good news keeps gushing forth. Despite the pre-election farce in Italy and the rumblings of discontent in Madrid, bond yields in both countries are close to a 52-week low. With banks across Europe starting to repay the emergency funding they received a year ago from the European Central Bank, investors need no further confirmation that the crisis is behind them.

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

Union Budget 2013 will be closely watched as this would be the present UPA Government's last full Budget before general elections. This Budget would be presented by P Chidambaram, who returned as head of the Finance Ministry after a gap of about four years.

As suggested short term trend is down. Now one can expect some fireworks with the Budget coming up towards the end of the month that may offer opportunities for the market to breakout of this range hopefully on the upside. But if the Budget proposals are not up to the market’s expectation, then there could be a breakdown as well. So probably that will be time when market will come out from narrow trading range to either side.

Nifty range - one can watch these levels on downside, 5840 & 5780-5800-5820, trio levels can be watched carefully and one can initiate fresh longs in this range, as all seems good support and hopefully market can bottom out from here. They can keep SL 5870 itself. On upside seems Nifty wont close above 6000 mark till expiry, though some small bounce could be there which will be mainly due to short covering.

The INDIA VIX on NSE was up 6.89% and ended at 16.29 against previous close of 15.24.

FNO PCR is 0.82 against previous close 0.80.

Indian Rupee – gained a bit against USD and closed 3 paisa higher and was trading at 54.19 against its previous close of 54.22.

S&P 500 (US) was trading at 1519.79 down 1.59 then its previous close at the time of writing M Bells.

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

Technically, Nifty faced stiff resistance at the 50 DMA which was placed at 5960 mark. The near term support for the index is seen at the 5820 mark, which is also the 100 DMA. On the upside the 50 DMA could emerge as strong resistance zone near 5960 levels.

Nifty is in range of 5780 – 5820 (100 DMA) - 5840 - 5900-5950-6040-6150-6190 for current series.

Resistance – 5945 – 5928 – 5913 and Support – 5880 – 5863 - 5848

Opening – Seems flat to a bit positive.

========================  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.)

HUL –

Hindustan Unilever gained 1.9% after the FMCG major timed its announcement of investing €50mn to set up its first Asian aerosol deodorant manufacturing facility in Khamgaon, Maharashtra, with the visit of UK Prime Minister David Cameron to its center in Mumbai. The British PM started his 2 day visit to India with Mumbai. The Prime Minister also made several encouraging statements on his first day of the three day visit.

Jet Airways -

Jet Airways’ stock hit turbulence after Abu-Dhabi based Etihad Airways’ Chairman said that the airline needs time to evaluate Jet thoroughly before buying a stake in the Indian carrier. Sheikh Hamed bin Zayed al-Nahayan of Abu-Dhabi said that they need to revise the deal to buy a stake in the Indian carrier and it was too soon to say when a final agreement between the two carriers would be struck. The stock ended at Rs572 slipping sharply by 7.3%.

Wipro -

Wipro Infotech has won a 10 year contract from Mumbai International Airport Ltd (MIAL) for providing IT (information technology) services for the new integrated terminal T2.

It will be responsible for providing managed services across the entire IT landscape at MIAL and delivering high availability and operational efficiency across all the critical airport processes, the software services provider said on Monday.

Tata Motors’ domestic business –

Tata Motors  ' consolidated profits have sky rocketed in recent years since the turnaround of its British luxury Jaguar Land Rover unit. However, its domestic business has been a drag this year and plunged to a wider-than-expected loss of Rs 458 crore in the third quarter.

The standalone operations account for a fraction of the India's largest truck and bus maker's overall earnings. However, the huge loss on the back of slow sales dragged down the consolidated profits by half in Oct-Dec.

To be fair, the overall commercial vehicle and passenger car industry in India is as such going through a slowdown, which has hurt many companies. India's second largest CV maker Ashok Leyland too reported a loss in the third quarter (excluding exceptional gain).

==================== 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.

Be on board after 11AM for new calls.

=============== 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)

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

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

MG Blog (Jan+25,900) + Feb Ser. = +6500

Billionaire Club (Jan +51,000) + Feb Ser. = +11,500 + 2000 = 13,500 (ZEEL)

Today’s MG Mantra –

Market remain in a range, only hope for short covering ahead of budget, so one can enjoy the small bounce which can be used to book profit and lighten up your portfolio on safe side.

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.