Morning Bells (17 Apr 13)

Good Morning Friends.

Alphabet 'O' stands for 'OPPORTUNITY' which is absent in YESTERDAY, but available once in T'O'DAY and thrice in T'O'M'O'RR'O'W - so never lose hopes.

Wow! Wat a recovery, as discussed during the session that if Nifty breaks 5630 then there are high chances for Nifty to move above 5700, and it almost crossed. Now its seen technically that Nifty may see some hurdle between 5720-5750 or more precisely be cautious above 5700, better to book profit or atleast part profit.

Well, Indian equity market staged a rally y’day, more of a relief rally actually. Well main reason behind the rally was - Media reports stated that LIC’s exposure in the equity markets may be increased up to 25%. Another booster was a report that tax residency certificate would get deferred by two years.

Now today is the day of TCS –

India's largest software services exporter Tata Consultancy Services will report fourth quarter results today. Infosys disappointed the street last week, forecasting FY14 US Dollar revenue growth much lower than what industry body NASSCOM expects. So all eyes will now be on TCS performance, especially since it has been outpacing its Bangalore-based rival over last several quarters now.

TCS had said last year its growth in FY13 will be ahead of what NASSCOM had forecast. It has earlier said it expects 2013 to be a better year than 2012, even as Infosys has warned of challenges. The Tata group company doesn't issue specific guidance like Infosys. So all eyes will be on management comments on the road ahead.

Also day of HCL –

Software services exporter HCL Technologies is expected to clock 2-4 percent quarter-on-quarter US Dollar revenue growth in Jan-March, its third quarter, and guide for strong demand environment going ahead.

Infosys disappointed the street last week, when it forecast US Dollar revenue growth for FY2014 , much lower than what industry body NASSCOM expects. However, HCL Tech, which surprised the street, beating analysts expectations at both profit and revenue levels in Oct-Dec, is expected to continue the momentum going.

Gainers –

IDFC, Axis Bank, IndusInd Bank, Maruti, M&M, ACC, Dr Reddy’s Labs, ONGC and HDFC Bank were among the major gainers in Sensex and Nifty. 

Losers –

Infosys, Cairn India, HCL Tech and Lupin were among the major losers in Sensex and Nifty.

Sectoral –

The rally was led by the interest rate sensitive stocks. The S&P BSE Bankex index was the top gainer, up 3% followed by S&P BSE Auto index up 2.5% and S&P BSE Realty index up 2.2%. Even the Mid-Cap and the Small-Cap stocks were in demand. On the other hand, the S&P BSE IT and S&P BSE Teck index was down 0.50% and 0.10% respectively.

Domestic Front –

RBI Policy –

Now everyone is talking about rate cut during RBI policy on May 3^rd. But as per data at 5.96%, the wholesale price index-based inflation for March has grown at the slowest rate in more than three years. It is significantly lower than the 7.69% recorded in March last year and 6.84% in February 2013.

Based on this data, Care Ratings feels the Reserve Bank will be constrained from pursuing a rate cut in its forthcoming Monetary Policy meet on May 3.

Global Front –

WPI –

The annual rate of inflation, based on monthly WPI, stood at 5.96% (provisional) for the month of March, 2013 (over March, 2012) as compared to 6.84% (provisional) for the previous month and 7.69% during the corresponding month of the previous year.

Build up inflation rate in the financial year so far was 5.96% compared to a build up rate of 7.69% in the corresponding period of the previous year.

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

Well now y’day was the day of RIL, RIL also helped to pull Nifty up. Now today is the day of TCS.

As per most of experts, though RIL result is inline but it would be a non event for market and wont cheer the market.

The INDIA VIX on NSE was down 2.17% and ended at 16.25 against previous close of 16.61.

FNO PCR is 1.04 against previous close 1.00.

Indian Rupee – Rupee gained smartly and was trading at 54.14 against its previous close of 54.63.

Snapping a two-day downtrend, the rupee on Tuesday rose by a staggering 48 paise to end at a one month high level of 54.14 against US dollar on robust FII inflows and hopes of lower CAD due to falling oil prices.

A sluggish dollar overseas also helped the rupee mark its best gain in 3 months today as brent crude oil fell below USD 100 a barrel for the first time since July.

S&P 500 (US) was trading at 1572.81 up 20.45 then its previous close at the time of writing M Bells.

RESULT CALNEDER –

16 Apr – RIL

17 Apr – HCL, TCS, Yes Bank

18 Apr – Essar Ports, IndusInd Bank,

19 Apr – Oberoi Realty, Wipro

22 Apr – Cairn India

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

As discussed in few MBs, above 5630 there are high chances to move Nifty in the range of 5700-5800. Now its seen technically that Nifty may see some hurdle between 5720-5750 or more precisely be cautious above 5700, I strongly feel after a 100 point rally nothing harm in booking profit or atleast part profit.

Intraday Resistance – 5883 – 5791 – 5740 and Support – 5596 – 5504 – 5453 (Pivot 5648)

Opening – Seems flat and then market will go for cautious approach, as most of RIL Q4 is already priced in y’day and now today two heavyweight TCS, HCL along with Yes Bank on board. Market can cheers TCS Q4 no.s if it comes inline or above expectations because since past 2 days there were lake of participation in TCS after a shocked Q4 by Infy.

========================  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.)

Stocks which hit a 52-week low during the week were Banco Products, SAIL, Ferro Alloys, Godfrey Phil, Hind Zinc and Sesa Goa.

Tata Steel –

Shares of Tata Steel gained by 1.7% after Fitch Ratings affirmed the Long-Term Foreign Currency Issuer Default Rating the company at 'BB+. The agency has also affirmed Tata Steel UK Holdings Limited at 'B+'.

ITC -

Shares of ITC surged by over 2.2% to close at ~Rs306 after the company today officially hiked cigarette prices across select brands to the tune of 15% to 20%.

RIL –

RIL Q4 net up 32%

Reliance Industries Ltd has posted a net profit of Rs. 55890 mn for the quarter ended March 31, 2013 where as the same was at Rs. 42360 mn for the quarter ended March 31, 2012.

Total Income is Rs. 864410 mn for the quarter ended March 31, 2013 where as the same was at Rs. 874770 mn for the quarter ended March 31, 2012.

The Company has posted a net profit of Rs. 210030 mn for the year ended March 31, 2013 where as the same was at Rs. 200400 million for the year ended March 31, 2012.

Total Income is Rs. 3682950 million for the year ended March 31, 2013 where as the same was at Rs. 3360960 mn for the year ended March 31, 2012.

“RIL results were in-line with expectations. Turning around of retail business and increased profit contribution of shale gas business are positives to be taken away from the consolidated results. Positive developments around the E&P business such as gas price hike, new discoveries in KG basin, etc will improve the sentiment for the stock,” says Prayesh Jain, AVP-Research, IIFL.

BPCL –

Bharat Petroleum Corporation Ltd has reportedly said that it is planning to invest Rs 325bn to expand its refining capacity to 47.5 mt in the next three-four years.

The company will invest Rs 100bn on its Numaligarh refinery to expand its capacity from three mt to nine mt, says report.

BPCL owns 61.65% in the Numaligarh Refinery.

In Mumbai refinery, the capacity would go up from 12 mt to 14 mt through change of its crude oil distillation unit.

Titan Industries –

Shares of Titan Industries fell as much as 5% on Monday on fears that slumping global gold prices would hit earnings, according to reports.

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

(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 = +5750

(We booked small profit in TCS call but since most of you haven’t taken position I am not considering it in PL)

Billionaire Club Since Jan 13 (Total 1,09,350) + Apr = +7900

(We booked small profit in TCS call but since most of you haven’t taken position I am not considering it in PL)

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.