Morning Bells (30 Apr 13)

Good Morning Friends.

Thought of the Day - Problem means absence of ideas but not absence of solutions.

Y’day I was expecting a small dip but exactly that time HUL came up with above expectation no. and market moved up.

After pausing on Friday, the indices resumed their upswing today. This time around the rally was led by FMCG major Hindustan Unilever (HUL). The index heavyweight shot up over 6.5% after the company posted a 15% year-on-year increase in its Q4 FY13 net profit at Rs7.87bn versus IIFL's estimates of Rs7.60bn. Sales rose 10.4% to Rs63.67bn in the quarter under review as against estimates of Rs62.5bn.

Gainers –

HUL, Wipro, Hero Motocorp, Sterlite Industries and ITC, up between 2-7 percent.

Losers -

Jindal Steel, Coal India, Sun Pharma, HDFC and Tata Steel, down 1-4 percent. 

Sectoral –

The consumer durables index was the top gainer, up 2.5%, followed by realty, power and IT up 1.6%, 1.1% and up 1.5% each. The metal index ended a tad weaker, down 0.9%.

Domestic Front –

Logjam to end on Tuesday –

The Opposition once again raised a ruckus on Monday over Chinese incursion and the Coalgate issue forcing the Parliament to be adjourned. Both the houses were adjourned just minutes after the day began.

The Parliament was first adjourned till noon and later till 2 pm even as opposition created a ruckus with BJP raising slogans: 'pradhan mantri isteefa do' and 'Koyley ki dalali hai puri congress kali hai.' CBI’s affidavit on the alleged coal allocation scam report is being cited as the reason for PM’s resignation.

However, the logjam ended after the Speaker Meira Kumar convened an all party meet in which it was decided that crucial Finance Bill will be tabled in the parliament tomorrow.

As Lok Sabha began the session on Monday, BJP members stormed the well of the house demanding the resignation of Prime Minister. 

Petrol Prices to fall by 2.5Rs -

According to reports, OMCs may reduce petrol price by around Rs 2.50 a litre.

While Essar Oil is also planning to reduce diesel at its retail outlets by little over Rs 3 a litre.

The price of petrol has come down by Rs 4.65 a litre, to a little over Rs 66 in Delhi, says media report.

The revenue loss on diesel for OMCs is over Rs 4 a litre, while in case of PDS Kerosene and domestic LPG, under-recoveries for April remain at Rs 30.49 a litre and Rs 434.52 a cylinder, respectively, report said.

Global Front –

ECB Monetary Policy -

With signs of a slower economy mounting, the near-term outlook for US stocks isn't rosy, but investors may find comfort next week from the world's major central banks.

The Federal Reserve will meet on Tuesday and Wednesday, with the report of weaker-than-expected, first-quarter growth could reinforce expectations the Fed will keep purchasing bonds at a pace of USD 85 billion a month.

Low interest rates and ample liquidity provided by the Fed and other central banks have buoyed global equity markets because low borrowing costs for businesses and consumers lead to richer corporate profits. Major US stock indexes hit record highs earlier this month.

The ECB is constrained essentially in terms of monetary policy they will keep interest rates low, monetary policy will continue to be loose, according to experts.

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

A Reuters poll shows 37 of 42 economists expect the central bank to cut the repo rate by 25 basis points on May 3. The Reserve Bank of India's (RBI) guidance on future policy stance will be key for direction in the near-term post the policy outcome.

According to a CNBC-TV18 poll, the central bank is likely to cut rates by 25 basis points (bps). Around 20 percent of the respondents see a cash reserve ratio (CRR) cut and nearly 80 percent expect banks to pass on the cut this time.

To my personal view - We have had a very strong rally, so people are looking for any trigger for profit-taking, so don’t take longs around RBI.

The INDIA VIX on NSE was up 3.24% and ended at 14.33 against previous close of 13.88.

FNO PCR was 1.07 against previous close 1.05.

Indian Rupee – Rupee gain 15 paisa and was trading at 54.23 against its previous close of 54.38.

S&P 500 (US) was trading at 1596.28 up 14.04 then its previous close at the time of writing M Bells.

RESULT CALENDER –

29 April – HUL, Exide Industries, Sterlite Industries,

30 April - Infrastructure output data for March due around noon, Fiscal deficit data for March

Result – Dabur India, Petronet LNG, TVS Motors,

1 May – Market closed for Maharashtra Day, Result IDFC

2 May – RBI to release macro-economic review at 17.00 IST

Result - Bharti Airtel, Canra Bank, Kotak Bank

3 May- RBI Monetary Policy Review decision at 11.00 IST

4 May – JP Associate

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

5760 is a good support level at the moment, Nifty may attempt 6000 level ahead of RBI policy but as told you earlier 5965 is still a hurdle.

So keep eye on 5965-6000 range, if one sees the calls of May series, the maximum build-up that one can be seeing is a 5900 Call option. It is quite possible that market may go a bit higher than 5900, and change the consensus that it is losing the steam. We might probably touch 6,000 figure also and from there the correction may happen and if closed above then 6160 is possible.

So in short as I have been saying for the past few days, we are heading or near the top and moving beyond this requires a big trigger, regarding RBI, market has already discounted a 25 basis point (cut), so now it need bigger rate cut than 25 bps. Next trigger is Monsoon which quite far away. So from these levels I am expecting some amount of correction. Also historically May isn’t good for health of stock market.

Intraday Resistance – 5975 – 5947 – 5925 and Support – 5875 – 5847 – 5825 (Pivot 5897)

Opening – Seems on positive bias as results are coming good and also today participant will await Infra output data.

========================  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.)

TM –

My View – As suggested earlier TM may continue its onward journey and now TM is next price band which is 291-305, one can hold TM with SL 286 and book PP in the range of 302-305.

Tata Steel –

Tata Steel slipped in trade today after news emerged that the steel major had warned the British government of plans to shut down two research and development facilities in the country. It plans to shift these jobs overseas to countries like India which will result in 300-400 job cuts in the UK. The stock closed at Rs 302.4, down Rs 2.65 or 0.8%..

Hero MotoCorp -

Hero MotoCorp scrip accelerated on Monday on better-than-expected Q4 FY13 earnings. The scrip ended Monday up 2.7% at Rs 1640.

FT -

Financial Technologies closed higher on news that MCX Stock Exchange will introduce F&O trading on its flagship SX40 from May 15. The stock ended at Rs 842.15, up Rs 22.3 or 2.7%.

Hexaware Technologies -

Hexaware Q1 PAT stood at Rs792mn, up 19% QoQ.

While Q1 forex gains was at Rs22.5mn. Its Q1 sales was at Rs5.08bn.

“The Q-o-Q improvement in volume, utilization, onsite-offshore ratio enabled robust improvement in Gross Margin and Operating Margin. We expect margins to expand further in the coming quarter”, said Atul Nishar, Chairman, Hexaware Technologies Limited.

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

TV18 – Bought @28.5 TG 34+ SL 25.5 (Qty 1K)

Infy 2300CE – Bought @30 TG 45+ Updated SL 15 (Qty 2 Lots)

=============== INVESTMENT BASKET ===============

(Stock in this section is with view of 3 months to 1 year)

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

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

MG Blog Since Jan 13 (Total 56,050)

Billionaire Club Since Jan 13 (Total 1,10,950)

Today’s MG Mantra –

Be cautious around closing today as we have holiday tomorrow and some investors can prefer to take home some profit.

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Have a Profitable day – MG