Morning Bells (15 Apr 13)

Good Morning Friends.

Lord BUDDHA was a prince who left his palace in search of PEACE and we all BUDDHUS, are searching for a palace at cost of our peace.

Oops… Friday was completely disaster for Infy, I haven’t seen any heavyweight fell down like that. Well the was on the name of Infy, I had some clue when in the evening of Thursday I saw that LIC reduced its holdings in Infy and that was the reason instead of buying in other counters didn’t help Nifty to recover.

Investors continue to tread cautiously amid persistent headwinds for the domestic economy. FII flows have turned negative in April after three months of strong inflows. Also Infosys' Q4 FY13 results came in materially below estimates with dollar revenues, operating margin and FY14 revenue guidance disappointing significantly. Management commentary too was negative in terms of ramp-ups, pricing, margin outlook and client discretionary spending. Even better than expected IIP number of 0.6% for February was unable to restore the weak sentiment.

Index stocks witnessed sharp cuts as FIIs continue to pull out money from India-dedicated funds. Global fund managers have been pulling out funds from emerging market equities and deploying the same in US and Japanese markets.

In the coming week, corporate earnings and management commentary will be keenly analysed for clues on meaningful improvement in business sentiment. In terms of data points, watch out for the latest Indian inflation numbers, Import-Export data and jobless claim report in US besides of course corporate numbers. 

 Gainers –

Up on weekly basis - Tata Motors  (up 7.8%), Ambuja Cements (up 6.8%), DLF  (up 6.3%), Reliance Infra (up 4.9%) and Cipla  (up 4.8%) were among the major gainers in Sensex and Nifty. 

Losers –

Down on weekly basis Infosys (down 19.9%), Wipro (down 15.6%), Tata Steel (down 3.1%), Ranbaxy Labs (down 1.9%) and Hero Motocorp (down 1.8%) were among the major losers in Sensex and Nifty.

Domestic Front –

IIP –

The Quick Estimates of Index of Industrial Production (IIP) The Quick Estimates of Index of Industrial Production (IIP) with base 2004-05 for the month of February 2013 have been released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation.

The General Index for the month of February 2013 stands at 176.2, which is 0.6% higher as compared to the level in the month of February 2012. The cumulative growth for the period April-February 2012-13 over the corresponding period of the previous year stands at 0.9%.

CPI –

The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation releases Consumer Price Indices (CPI) on base 2010=100 for all-India and States/UTs separately for rural, urban and combined every month with effect from January, 2011. 

Provisional annual inflation rate based on all India general CPI (Combined) for March 2013 on point to point basis (March 2013 over March 2012) is 10.39% (slightly higher than rural and urban rates of March 2013 due to rounding) as compared to 10.91% (final) for the previous month of February 2013.

Global Front –

Moody’s Analysis IIP –

According to Moody IIP is weaker than expected. A rise in business investment (and the associated employment lift) is the key to an upturn in the Indian economy, says Glenn Levine of Moody’s Analytics.

Crude Oil –

Brent crude oil fell to a nine-month low near USD 101 a barrel on Friday as a broad investor sell-off in commodities triggered a fall as much as $3 a barrel, but the global oil benchmark pared losses in afternoon New York trade as bargain hunters emerged.

The cross-commodity rout started in gold on Friday after the precious metal fell below USD 1,500 an ounce for the first time since July 2011. An unexpected contraction in US retail sales added to pressure on oil, grains and metals as investors moved into cash.

Brent found some support in the afternoon as traders started buying the global benchmark while selling US crude oil, traders said, on news of a large increase of Canadian crude oil flows into Cushing, Oklahoma, delivery point.

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

As told many times, 5600-5630 range seen decline, second time Nifty back from it. So lets see whether Infy push Nifty above it or again turn to 5500-5550.

The INDIA VIX on NSE was down 3.06% and ended at 16.45 against previous close of 16.97.

FNO PCR is 1.00 against previous close 0.90.

Indian Rupee – Rupee ended flat and was trading at 54.52 against its previous close of 54.51.

S&P 500 (US) was trading at 1588.85 down 4.52 then its previous close at the time of writing M Bells.

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

Technically if you see to charts, Nifty has final support 5545-35 on daily charts, next small stop seems around 5335 and then good stop seems around 5215. Weekly chart also confirm same, while monthly chart confirm 5215 only. It also show reverse of HNS making pattern till 5215. Stay away from market and wait for clear indication, which down now, just hope is 5545, if broken then next support seems around 5200-5250.

Now Nifty seems in a tight range, on downside 5450 around level seems where some domestic buying can come (chances are 40:60), same way 5600-5630 is the range where selling pressure is coming, so in near term probably Nifty should remain in this range. Above 5630 there are chances for a small rally which can pull Nifty between 5700 - 5800 levels.

Intraday Resistance – 5600 – 5572 – 5550 and Support – 5500 – 5473 – 5451 (Pivot 5522)

Opening – Seems a bit shocked and cautious, so Nifty can open around 10 points either side. But will see lake of activity in first hour as participant will wait for further clues.

========================  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.)

Dragged down by IT bellwether Infosys , the combined market valuation of five of top 10 Sensex companies tanked over Rs 45,000 crore in an overall weak stock market last week.

Infosys' market value nosedived by Rs 32,639 crore to Rs 1,31,813 crore, emerging as the biggest loser in the coveted list of top-10 Indian companies.

ONGC, RIL , Coal India and HDFC are the other blue-chips saw fall in their market valuation. On the other hand, TCS , ITC , HDFC Bank, SBI and ICICI Bank made a collective gain of Rs 16,094 crore.

Infy –

History repeats itself after a decade. IT bellwether Infosys nosedived sharply on Friday post its disappointing quarterly earnings. Though its Q4 FY13 net profit numbers came in marginally ahead of estimates, a hit on the other income front dragged the stock lower.

It registered its biggest fall since April 2003 eroding almost Rs 356 bn in market capitalisation. Its market capitialisation on April 11 April was Rs 1,674 bn as compared to Rs 1,318 bn.

In April 2003, the IT bellwether had registered its biggest intra-day fall of around 27% on account of disappointing FY03 numbers. The company missed its fourth-quarter forecasts due to lower prices and higher marketing expenses. Net income increased 23% at Rs 2.59 bn for the three months ended March 31. Stock prices had then closed at an eight-month low eroding almost Rs 44 bn in market value.

Post that dramatic decline in 2003, Infosys turned out to be a multi-bagger. In a decade, it delivered returns of almost 11 times. The stock sky rocketed from Rs 350 per share in April 2003 to an all-time high of around Rs 3484 per share on January 4, 2011.

MG’s View –

So now big question is – will history repeat? For short term, the stock is looking weak on the technical charts as it has broken its long term strong support and 200DMA 2590.

Currently stock is trading at 2295, 2240 is the level from where one can expect a bounce as stock has significant of this level. Lets see.

Bharti Airtel -

Bharti Airtel and 11 other final contenders are in telecom licence in Myanmar.

Myanmar's Ministry of Communications, Posts and Telegraph reported that: the Telecommunications Operator Tender Evaluation and Selection Committee has announced that 12 applicants have been pre-qualified to submit applications for two nationwide telecommunications licences."

Reports stated that pre-qualified applicants will be required to submit their applications to the committee by June 3, 2013, and winner will be declared on June 27.

Watch out for this week is the Supreme Court hearing on Monday the Sunil Bharti Mittal and Ravi Ruia case.

RIL –

With RIL ’s results coming up next week, profit expectations are plus or minus Rs 50 crore of their Q3 PAT figure of Rs 5500 crore, expect SP Tulsian. He is not expecting any kind of negatives from the company. Maybe they have posted a profit after tax (PAT) of Rs 5500 crore for Q3. I am expecting that to be somewhere between plus or minus Rs 50 crore.

L&T –

Larsen and Toubro Ltd (L&T) , India's biggest engineering company, will buy out Komatsu Ltd's 50 percent stake in their joint venture that makes construction equipment and hydraulic components.

After the transaction, L&T-Komatsu Ltd will become a fully-owned L&T subsidiary, it said in a statement on Saturday.

Financial details were not disclosed.

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

ITC 300CE – Bought 2.7 TG 5+ SL 1.75 (Max 2 Lots)

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

(Start exiting from stock if Nifty goes below 5500 mark)

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

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

MG Blog Since Jan 13 (Total 50,300) + Apr 13 = = +3150

Billionaire Club Since Jan 13 (Total 1,09,350) + Apr= +5,300

Today’s MG Mantra –

Don’t follow first our trend, actual trend will be only after that.

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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.