Morning Bells (14 May 13)

Good Morning Friends.

People say there’s no difference between “Complete” & “Finish” but when you trust a right person you are complete and when you trust a wrong person you are finished.

After hitting a new calendar year high and surging past the 6100 mark in Saturday’s special trading session, profit-booking gripped the Nifty. It fell sharply in trade today registering its biggest intra-day percentage fall since May 8, 2012.

Higher-than expected trade deficit numbers for April was all that the markets needed to free fall – a sell-off from which it never recovered. Trade deficit in April widened to $17.8bn. Exports increased 1.68% at $24.2bn while imports expanded 10.96% at $41.9bn.

Signs of a recovery in the US economy also made investors jittery as they feel a portion of global liquidity flows could ease as the Federal Reserve starts tightening its monetary policy.

The market is abuzz with news that the Reserve Bank of India’s forensic study into Cobrapost’s money-laundering allegations has unearthed fictitious permanent account numbers, unknown non-resident ordinary accounts and rampant non-compliance of know your customer norms.

Media reports suggest that the apex bank’s probe into private banks like HDFC Bank and ICICI Bank threw up KYC violations and cash transfers from non-resident accounts.

This took a toll on the banking index, which declined 1.6%, with index heavyweights like State Bank of India, HDFC Bank, HDFC, Bank of Baroda, IndusInd Bank, and Punjab National Bank losing out.

The currency too played spoilsport in today’s session. It depreciated sharply and is near striking distance of the 55 per dollar mark.

Gainers –

Aha – hard to say – you guess why.

Losers -

Reliance Industries, Infosys, Tata Consultancy Services, Bharti Airtel, Coal India, Sun Pharmaceuticals, Wipro, Maruti Suzuki, Tata Motors, Larsen & Toubro, Hindalco, Hero MotoCorp, HDFC Bank, Dr Reddy’s Laboratories, State Bank of India, Tata Power, BHEL, Bajaj Auto, ICICI Bank, Cipla, HDFC and Hindustan Univlever.

Sectoral –

Among sectoral indices, the FMCG index was the top loser, declining 3% led by a sharp sell-off in index heavyweight ITC. The cigarette major was down 5% registering its biggest intra-day fall since May 8, 2012. 

The other major laggards included metals, capital goods, autos and oil & gas stocks. Even mid- and small-cap stocks were not spared.

Domestic Front –

A section within the Congress party is keen on replacing Dr Manmohan Singh as Prime Minister, sources said on Monday. According to the sources, the leaders want Singh replaced before the monsoon session of Parliament.

While there is no consensus yet on the alternative name, sources said that defence minister AK Antony and finance minister P Chidambaram could be considered.

Meanwhile, a few leaders are in favour of Rahul Gandhi taking over from Singh.

Sources, however, added that Sonia Gandhi hadn't yet decided on replacing Singh.

(Source: MoneyControl.com)

Global Front –

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

Some key facts about y’day fall –

(1)

As informed 6100-6130 is crucial range where one need to book profit on safe side, becoz this was the highest level in past 2 years, so speculation to move beyond the level was quite low. However, I do not think y’day fall necessarily marks or signals the end of this uptrend.

(2)

Signs of a recovery in the US economy also made investors jittery as they feel a portion of global liquidity flows could ease as the Federal Reserve starts tightening its monetary policy. The Dow and S&P 500 ended at record highs on Friday, and stocks posted a third consecutive week of gains. The S&P 500 is up 14.6 percent for the year.

(3)

Macro economy data does not much support that India is on 'a road to recovery'. There was a belief that India's current account deficit would start improving on the margin with the fall in gold and crude prices. However, April trade deficit leapt to USD 17.8 billion on massive surge in imports of cheaper gold.

(4)

Gold and silver imports were up by 138 percent to USD 7.5 billion last month compared to a year earlier, as retail consumers in the world's biggest gold importer went on a buying spree after global prices fell.

KEY DATA TO WATCH THIS WEEK -

Mon: Consumer price inflation

Tues: Wholesale price inflation

Wed: Money supply data

Fri: Bank credit and forex exchange reserves data

The INDIA VIX on NSE was up 3.98% and ended at 17.51 against previous close of 16.84.

FNO PCR was 1.01 against previous close XXX.

Indian Rupee – Rupee gained later 7 paisa and was trading at 54.73 against its previous close of 54.8.

S&P 500 (US) was trading at 1632.17 down 1.53 then its previous close at the time of writing M Bells.

RESULT CALENDER –

Probably this week following results are expected –

Bank of India, Bank of Baroda, Reliance Power, Rashtriya Chemical, Tata Coffee, Tata Tele, Dr Reddy’s lab, Reliance Infra, United Bank, Adani Ports and J&K Bank.

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

Nifty may see some cautious approach this week and key reason are – we have important data announcement this week, secondly Nifty is reached in the range of 6100-6130 which seems crucial, though market doesn’t seems falling below 6025 and can hold this levels and on upside if this phenomena continues then expiry seems around 6130-40 level.

In continuation of y’day’s view (above) now 5930 i.e. aprx 50 points downside is on card which you can say completion of correction and then again some buying will come in.

Opening – Seems flat and market to wait for further direction. An attempt to go above 6010 or say to hit 6030 is possible.

========================  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

TM followed the trend and closed below 301, but it can not be considered as the regular close as not single stock there which is not lost in this free fall. So if mkt remains flat or rebound, TM to rebound on previous levels.

DLF –

DLF Ltd has announced that the Equity Issuance Committee of the Board of Directors of the Company in its meeting held on May 11, 2013 has finalised May 14, 2013 as the Issue opening and closing date. Further, the Floor Price has been finalised at Rs. 222/- per equity share with Price band of Rs. 222/- to Rs. 233/- per Equity Share.

View – Probably it should hold 228-233 levels, even if it goes down will rebound, as you can see 222 is the base price with range 222-233 so it may remain in the range.

Lupin

North America is the largest pharmaceutical market for the drug firms of the world. And the importance of this market has been highlighted by the quarterly numbers posted by Indian pharmaceutical giants.

For Lupin, revenues from the US market grew a staggering 33 percent  which pushed overall net sales up 35 percent, and led to profits more-than-doubling to Rs 408 crore. And though its Indian business grew 24 percent in FY13, the big boost over the year still came from the US where a 47-percent growth in revenue was driven by the launch of 10 new products.

The stock surged to a 52-week high of over Rs 735 per share especially after the company said the performance was sustainable. Kamal Sharma, MD, Lupin says, "Cumulatively, costs came down by about 3 percent. I hope we will be able to maintain this level and improve further. In this particular quarter and year, our EBITDA margin, which was around 21 percent last year, is over 24 percent this year. The 6-percent improvement on our base of Rs 9,600-crore has resulted in a substantial boost in performance."

Lupin to fall a bit in next 2-3 days say around 785+ levels to again below 765 level then again it can take a pick up.

IndusInd Bank-

On charts it seems to reached in Over Bought zone but it seems can move a bit up more from here a day or two and then probably stock will be corrected. 14 & 15 May is important for this stock. It has strong rally from 390 to 500 in few sessions, so when it comes to correction stock may see around 460-470 level i.e. not a big correction and from these levels one can make long position.

Bank of Baroda -

The Bank of Baroda scrip slipped 1.7% at Rs 691 on Monday after the public sector lender Q4 FY13 net profit declined 32% to Rs. 10.29 billion as against Rs. 15.18 billion in the same period last year. The number came in below IIFL’s expectations of Rs. 10.35 billion.

Reliance Power –

Reliance Power Ltd has posted a net profit of Rs. 5139.30 mn for the year ended March 31, 2013 as compared to Rs. 3108.60 mn for the year ended March 31, 2012.

Total Income has decreased from Rs. 5318.50 mn for the year ended March 31, 2012 to Rs. 2508.50 mn for the year ended March 31, 2013.

For the consolidated period, the Group has posted a net profit after taxes, Minority Interest and share of Profit / (Loss) of Associates of Rs. 10114.60 mn for the year ended March 31, 2013 as compared to Rs. 8667.80 mn for the year ended March 31, 2012.

Total Income has increased from Rs. 27667.80 million for the year ended March 31, 2012 to Rs. 52837.70 mn for the year ended March 31, 2013.

View – If market rebound then Rel Power will also gain, once can bet with 80CE or 85CE, but remember market support is needed else you know ADAG come first when it comes to sell.

Cairn India –

According to reports, Cairn India plans to drill 48 wells at a cost of less than US$ 100 mn on the Mangalaoilfield in the prolific Rajasthan block.

Cairn reportedly told the Management Committee that the drilling programme has been approved by its partner state-owned Oil and Natural Gas Corp (ONGC).

The MC had previously approved a US$ 2.367 bn field development plan for Mangala, to produce a maximum of 150,000 barrels of oil per day (7.5 million tonnes a year) till 2020.

The new wells would be within the approved FDP cost of USD 2.367 bn, media report said.

View – If market support, Cairn to rise gradually, people with short to mid term view can bet for 8-12% rise.

IT Infra Sector –

The Indian IT infrastructure market, comprising of server, storage and networking equipment, will total $2.1 billion in 2013, growing 9.7 percent compared to 2012, according to Gartner, Inc.

Gartner analysts are providing the latest outlook on the Indian data center market during the Gartner Infrastructure, Operations and Data Center Summit, which is taking place here through May 14th.

(Source: IIFL.com)

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

(Exited at 30)

DLF 250CE – Bought @4.25 TG 7.5+ SL 2.5 (Qty 1 Lot)

(SL hit @2.5)

=============== 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 Fronm Jan 13 to April 13 (Total 56,050)

May 2013 - +3000 + 1500 TV18 profit – 1750 DLF loss = +2750

Billionaire Club from Jan 13 to April 13 (Total 1,10,950)

May 2013 - +6000

Today’s MG Mantra –

Wait and watch, Nifty needs to close above 6030 else another 50 point downside is there say around 5930 is on card.

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Have a Profitable day – MG