Thursday, 28 February 2013

Morning Bells (28 Feb 13)

Good Morning Friends.

From Hitler – Never Try or Beg for support from others, Stand alone & Face life as Race. Then every one will follow you.

Once again Nifty moved as per expected lines, day before y’day we were talking about a sharp recovery (upmove) and y’day Nifty shown approx 50 points upmove.

Now today is expiry day and technical wont work today. So let have look to some key briefs on the day of expiry and main financial budget of Great India.

After previous day’s carnage, the Indian equity market ended with smart gains on Wednesday as the benchmark indices bounced back with vengeance. Sentiment got a boost after the Congress-led UPA government raised the growth projection for fiscal year 2013-14. India's economy may grow at 6.1-6.7% for the year 2013-14, the government forecast in a report.

Mayhem in the mid-cap stocks continued on Wednesday as almost 20 stocks in the mid-cap category fell from 15% to 42% in the day’s trade. The selloff however has gone unexplained lately prompted by which SEBI launched a probe to check the insider trading angle.

Some of the stocks that were the biggest losers in the intra-day trade on the BSE were: Core Projects (-42.3%), Onelife Capital (-20%), PG Electroplast (-19.9%), Plethico (-19.9%), Rushil Décor (-19.9%), Gravita India (-19.97%), Frontline Bsns (-19.95%), JINDALCOTEX (-19.95%), SYNCOM HEAL (-19.58%), Nath Pulp (-16.9%), Hindustan Tin (-15.54%). 

Midcap shares continued to be under pressure as cash-strapped traders unwound their positions, unable to pay the margins required to hold them.

Gainers – RIL, Wipro, SBI, ICICI Bank,  NTPC, Bajaj Auto, Bharti Airtel, Sun Pharma, BHEL, Maruti Suzuki, Tata Steel, ONGC, Hindalco Inds,  Mahindra & Mahindra were among gainers in Sensex and Nifty.

Losers - Infosys, TCS, Dr Reddys Lab, Tata Motors, Hero MotoCorp, Coal India, HDFC Bank were the major losers in Sensex and Nifty.

Sectoral – BSE Capital Goods index up 2.4%, followed by BSE Realty index up 2.1% and BSE Oil & Gas index up 1.1%. On the other hand, BSE IT index was the top loser down 1% and BSE Teck index declined by 0.23%.

It would be highly volatile day.

On Domestic Front –
Indian economy is likely to grow between 6.1% to 6.7%  in 2013-14 as the downturn is more or less over and the economy is looking up. Following the slowdown induced by the global financial crisis in 2008-09, the Indian economy responded strongly to fiscal and monetary stimulus and achieved a growth rate of 8.6 per cent and 9.3 per cent respectively in 2009-10 and 2010-11, but due to a combination of both external and domestic factors, the economy decelerated growing at 6.2% and an estimated 5% in 2011-12 and 2012-13 respectively.

The Economic Survey 2012-13, presented by the Finance Minister P. Chidambaram in the Lok Sabha predicts that the global economy is also likely to recover in 2013 and various government measures will help in improving the Indian economy’s outlook for 2013-14. While India’s recent slowdown is partly rooted in external causes, domestic causes are also important.

On Global front –
Markets are worried about the Italian political environment , the kind of coalition that will emerge and if the upcoming coalition will be stable or not. If the coalition is messy like anti Euro, then there is a possibility that we may see Italy exiting the Euro zone. This also indicates a messy version of risk appetite around the world. 

=====================  MARKET OUTLOOK  =====================
Nothing much to say as two big event – one expiry itself and secondly General Budget 2013-2014. Market may remain flat in opening and then will be highly volatile after 11.00 once budget session will start. Low risk players are suggested to be sideline for today.

The INDIA VIX on NSE slipped 6.5% and ended at 16.23 against previous close of 17.36.
FNO PCR is 0.78 against previous close 0.77.

Indian Rupee – Recovered 0.23 paisa and was trading at 53.86 against its previous close of 54.09.

S&P 500 (US) was trading at 15.12 up 15.89 then its previous close at the time of writing M Bells.

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

For short term now Nifty is in range seems 5700 –5950.

Resistance – 5895 – 5856 – 5826 and Support – 5758 – 5719 - 5689

Opening – Seems a bit on positive note with many speculation, but once budget session will start it would be highly volatile. Upside could be limited say around 50+ points while downside could be 70+ points depending on market expectations with budget.

Overall I see 70-100-150 point volatility in the market.

========================  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.)

Jet Airways –
Shares of Jet Airways were locked at 20% upper circuit after Abu Dhabi based airliner Etihad confirmed of it paying US$70mn to Jet Airways to buy 3 Heathrow slots at the London airport for the Indian carrier. Etihad Airways is to buy 24% stake in Jet for US$400mn. 

L&T -
Shares of L&T ended higher by 3% after the company won orders worth Rs15.04bn across various business segments in February 2013.

Hindalco -
Shares of Hindalco erased early losses and slightly edged higher by 0.5%. The company announced that, due to continuation of illegal strike by workmen at Company's Silvassa plant, the Company is forced to declare a lock-out there. The Company does not expect any adverse impact on the Company's financials due to the lock-out.

TCS hit 52 week high after the company settled a lawsuit related to salary issue of two employees in a US court after agreeing to pay almost US$30mn.

Core Project -
Shares of Core Project further fell by 46%. The company on Monday said that none of the shares that the company has pledged with financial institutions have been sold in the open market.

HDFC Bank-
Country's second largest private lender HDFC Bank today hit the foreign debt markets with a USD 500-million bond issue, according to merchant banking sources.

"HDFC Bank is raising USD 500 million through a five- year US dollar denominated bonds (senior unsecured notes). The final pricing guidance has been fixed at 235 basis points (2.35 percent) above the US treasury," a merchant banking source, who did not wish to be identified, told PTI here.
The bank had on Monday launched a road-show in Hong Kong, Singapore and London for this, the source added.

Meanwhile, global rating agency Standard & Poor's said it has given a BBB- rating to the HDFC Bank senior unsecured notes.

It can be noted that 2013 saw many large corporates like Reliance Industries, ICICI Bank , Exim Bank, PowerGrid, Tata Communications , raising foreign debt.

While on January 7 this year, Exim Bank had raised USD 750 million in a European bond sale at the cheaper ever rate of 4 per cent for a 10-year money, which got an over-subscription of 8.5 times, within a week, the state-run distribution utility Power Grid had raised USD 500 million at 3.87 percent for a 10-year USD issue which received an over-subscription of 19 times.

In the same week, the largest private lender ICICI Bank mopped USD 225 million from a seven-year Singapore bond sale programme on January 10.

The last week of January saw Reliance Industries hitting the market with a USD 800 million perpetual bond issue, the first by a domestic company.

The last week of the past month also saw Tata Communications becoming the first domestic un-rated corporate to tap overseas financial markets by selling bonds worth 250 million Singaporean dollars at a coupon of 4.25 percent, which got an over-subscription of 14 times the offer. This makes the overall fund raising by leading domestic corporates USD 2.525 billion this year so far.

Last Monday, the largest telco Bharti Airtel had hit the overseas market with a road-show to mop up USD 1 billion. Interestingly more and more domestic companies are raising funds from Asia as investors in the region have high regard for Indian debt, say merchant banking sources. Last year, domestic corporates had raised USD 8.15 billion from Asian markets, while the rest of Asia mopped up a record debt of over USD 208 billion through 353 deals.

Also more domestic borrowers are expected to access overseas markets for their funding needs as the rupee funds are still a costly affair.

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

Hexaware – Place order for March 75PE @1 to 1.2 (max 4 lots) first buy 2 lots and then buy another 2 lots at 20 paisa below. SL 0.5 TG 2.5+ (Remember its Positional, Active from 26 Feb 13, not executed yet)

TM March 260PE – Bought @2.75 TG 5+ SL 1.5 (Active from 27 Feb 13)

=============== 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. = +17,200 – 500 = +16,700
(TM Fut + ICICI Fut – Loss 500)

Today’s MG Mantra
Stay away. Watch market and see how premiums are reducing at rocket speed regardless of wither its PE or CE.

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.


  1. TM 260PE, wait till next call. As premiums are just reduced in the hope of budget, so dont buy second lot right now.

    1. Dear Kashyap, as I informed dont buy then why you entered? premiums reduced as people expecting 50+ points rally in market from here. We could have got it at low levels.

    2. sir ji i had placed an market opening order hence cudn't do anything shall i book profit now @ 3.5??

    3. booked 1 lot @ 3.2 holding another lot @ 2.3 thnq u for ur advice sir ji..

    4. OK, thought was just get lots at lower level as it made low of 1.9 and already suggested in call log to buy it below 2. Well if you are in profit its good.

  2. Replies
    1. Budget seems so-so, but details will be available only after mkt hours. So need to wait. Auto & Banks didnt benefited so can see some pressure in coming days. Infra & OMCs get benefited so lets see.

      Wait is good to get clarity on direction.

      Still speech is continue.

    2. Import duty will be increased on luxury cars to 100% from 75%. Custom duty on imported motor vehicles hiked. And major profit for TM is JLR.

  3. On safe side book small profit in TM 260PE around/above 3. Will initiate call once again in fresh series. As for making fresh short operators can pull TM till around 300-304 levels where we can think for fresh shorts.

    1. Place order for 3.5, if didnt execute before 2.30 then exit at CMP.

    2. exited other lot @ 3.4 once again my sincere thanks to u... made 1.9k today(excl commission) ....

  4. Aha - Havells also screwed, had told you all to keep eye on PEs and informed... we missed it.


    1. 5550-5650 was on card, we had discussed it repeatedly, so wait is suggested, may be after such a massacre mkt can take some breather... dont know but I will wait for further direction. As further downside is on card.

  6. Sir
    I have been watching Havells March 620 pe, yesterday the premium was 25(sell price), and today there is still no transaction .

  7. Sir
    At last someone bought one lot hexaware march 75 pe @1.10.I think tomorrow we can get below 1, 80 pe around 1.3