Morning Bells (26 Feb 13)

Good Morning Friends.

When I care for people they think I am buttering and now when I stopped caring they call it ATTITUTE… kya duniya he.

So, finally Nifty ended flat but as informed y’day in MB and again during day that there could be possibility for small bounces which can take Nify around 5900 mark, Nifty jumped approx 50 points from our announcement on blog but this bounce of didn’t help most of indices to gain healthy and finally Nifty erases all its gains and ended flat.

After opening with a positive gap, benchmark indices came under pressure and erased early gains after the Mid-Cap and the Small-Cap stocks witnessed a sudden sell off. Stocks in the broader indices nose-dived on speculation that the pledged shares of some companies were being offloaded.

India’s economic confidence has got a major boost primarily due to declining inflation rate for the fourth consecutive month, at 6.62 per cent in January and positive investor confidence, according to a report by global research firm Ipsos.

According to the “Ipsos Economic Pulse of the World” survey, India's economic confidence shot up by 8 points to 68 percent in the month of January 2013 compared to the month of December 2012, making it the second most economically confident country in the world after Saudi Arabia.

Global ratings major Standard & Poor's (S&P), which has threatened to downgrade the country's sovereign rating to junk, today said it sees economic growth improving to 6.4 percent next fiscal.
    
The agency also retained its growth forecast for the current fiscal at 5.5 percent, half-a-percentage-point above the readings by the Central Statistical Organisation.
    
"The increased government welfare spending because of the next general elections, improvement in private consumption, lower interest rates and a better show by agriculture will lead to the growth number going up to 6.4 percent in FY14," agency's credit analyst Geeta Chugh said.

Gainers – Infosys, Wipro, TCS, ICICI Bank, Bajaj Auto, Sun Pharma, Maruti Suzuki, SBI, Tata Motors, BHEL, HDFC, Mahindra & Mahindra were among gainers in Sensex and Nifty.

Losers - RIL, Bharti Airtel,  ONGC, Hero MotoCorp, Dr Reddys Lab, Coal India, HUL, ITC, Cipla, Tata Steel, NTPC, Hindalco Inds were the major losers in Sensex and Nifty.

Sectoral – The IT stocks were the top performers, the index gained ~2%. Infosys gained by 3%, TCS gained 1.7% and Wipro added 0.4%. Among the other top gainers was, BSE Teck, and BSE Auto index gaining 1.3% and 0.8% respectively. On the other hand, BSE realty index was the top loser, down 2.4% followed by BSE Capital Goods and Metal index losing by 16% and 1% respectively.

BUDGET –

Railway Budget 2013-14 will be presented by the Railway Minister Pawan Kumar Bansal in the Parliament on February 26, 2013.

Reports stated that Bansal’s maiden Rail Budget may announce the introduction of about 100 trains, including AC double deckers, new passenger services and extension of services to cater to the demands of various states in the Rail Budget 2013-14.

The announcement will be made for manufacturing of 4200 new coaches including 600 LHB coaches in the Rail Budget, report said.

Railways had  increased fares across the board by 21% on 22 January, aiming to mop up an additional revenue of Rs 66bn.

Jim Walker of Asianomics warns against holding high hopes from the government this Budget season. In an interview to CNBC-TV18, he says that expecting miracles or a big bang Budget could be a dangerous thing. However, he is hopeful that the government will deliver on its promises of the last four-six months.

“We hope that we will actually hear about plans to bring down government expenditure, reducing the subsidy element in the expenditure side of the Budget and on how it is going to, on medium-term basis, improve the fiscal position,” he said.

On Domestic Front –

The Reserve Bank may not issue more than five new bank licences as the central bank wants to be very selective initially, analysts said.

"We do not expect the RBI to issue more than five licences. We believe the probability of a public sector entity obtaining a banking licence is low," Standard Chartered said in a report.

RBI has discouraged groups with high broking or realty revenues from applying, it said.

Bank of America Merrill Lynch is also of the view that RBI may initially give out 4-5 new bank licences even as restrictions on real estate or brokerage business have been removed in the final guidelines. "We do think the new set of banks (post RBI licences) will find it more difficult to grab market shares in the same manner as the current private banks are aggressive and also employ the best technology," Bank of America Merrill Lynch said.

On Global front –

An earthquake with a preliminary magnitude of 6.2 has jolted eastern Japan, according to reports.

Reports stated that the quake was centred in Tochigi prefecture about 120km from Tokyo at a depth of 10km.

The quake shook buildings in Tokyo, but there were no immediate reports of injuries, says report.

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

The stock market is likely to witness high volatility this week as investors are treading the cautious path ahead of the Union Budget 2013-14, experts say.

Market players said the short-term momentum is clearly negative for the market as market participants are cautious ahead of the Union Budget and are not increasing their positions amid expiry of derivatives next Thursday.

The Railway Budget for this fiscal would be presented to the Lok Sabha on February 26 and the economic survey would be laid in Parliament on February 27, 2013, followed by the Union Budget on February 28.

There could be chances for a small bounce on account of encashment of shorts and just a little hope with budget. So probably Nifty should hold 5820/5780 till main budget day and so these small bounces can help Nifty to test 5900-5930 Mark. And after the Budget it may be a different story if the global markets continue to correct and we have seen the fund flows beginning to reduce significantly. One could think of a bigger correction after the Budget.

The INDIA VIX on NSE was up 0.89% and ended at 16.79 against previous close of 16.94.

FNO PCR is 0.84 against previous close 0.95.

Indian Rupee – Recovered 0.31 paisa and was trading at 53.87 against its previous close of 54.18.

S&P 500 (US) was trading at 1511.69 down 3.91 then its previous close at the time of writing M Bells.

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

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

Resistance – 5933 – 5906 – 5880 and Support – 5827 – 5799 - 5773

Opening – Seems flat and Nifty can show some small bounces ahead of main budget waiting.

========================  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.)

Midcap Carnage –

A dramatic fall in the share prices of about a dozen mid-cap stocks on the same day seems to be now becoming something of an annual feature. Even otherwise, midcap shares are prone to big moves on either side, because of their small equity base.

But the volatility has increased since 2007 when promoters began pledging their shares to raise funds. More often than not, the funds raised through this route were ploughed back into the market to rig the stock price in collusion with market operators. For some reason, if the stock price cracked and promoters were unable to either pledge more shares to make up the shortfall, or repay a part of the loan, the lenders would dump the shares to recover their money. Sale of pledged shares has been one of the major reasons for the steep slide in many a midcap stock in the last few years.

Core Education tanks 60%. Shares of Core Education Ltd slipped 61% after opening at Rs296. The stock has hit a high of Rs296 and a low of Rs103. Total traded quantity on the counter stood at over 11.90 lakh shares.

Market has slipped in to the red in the afternoon trades amid heavy selling in the mid-cap and the small-cap stocks. 

Tata Motors –

Shares of Tata Motors gained 2% after reports came out that auto major is working on a family of low-cost composite cars that is expected to complement the Nano, the automaker's ultra-low-cost car.

Ranbaxy –

Ranbaxy laboratory shot up by 5% after the company said that it would resume the production of generic cholesterol control drug Atorvastatin-a generic version of Pfizer’s Lipitor. Lipitor for sale in the United States after resolving the issues that led to a November recall.

Cairn India -

Following endorsement of the exploration Work Programme for the Rajasthan Block (RJ-ON- 90/1) by the Management Committee less than two weeks ago, Cairn India has  commenced drilling of the first exploration well, after a gap of more than four years, in the prolific Barmer Basin.

This is pursuant to the clarity in policy by the Government of India (GoI), allowing for exploration operations in development blocks. This has enabled Cairn India to commence its planned aggressive exploration drilling programme to help harness the full potential of the Barmer Basin in Rajasthan.

Infosys –

Infosys launches Central processing centre for TDS.

The Income Tax Department (ITD) of India and Infosys announced the launch of a state-of-the-art Central Processing Center for efficient administration and processing of Tax Deducted at Source (TDS).

The TDS facility will process more than 400 million tax deduction submissions filed by nearly 1 million entities annually. India’s Union Minster of Finance, P. Chidambaram dedicated the facility to the nation at a special ceremony today.

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

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

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

MG Blog (Jan+25,900) + Feb Ser. = +10,300

Billionaire Club (Jan +51,000) + Feb Ser. = +20,400

Today’s MG Mantra –

Next trigger for either direction is budget day which is same day of expiry.

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.