Tuesday 4 June 2013

Morning Bells (05 June 13)



Good Morning Friends.

Give Love and Care as loan to everyone… these are the only things which come back with the highest interest.

Once again bear took the grip and market witnessed selling on third session, benchmark indices ended near the day’s low amid heavy selling in rate sensitive. Selling pressure gripped IT and metal stocks too.

In a major step, the Reserve Bank said foreign investors can subscribe to the newly launched inflation-linked bonds.  This will result in a diversion of funds from equities to bond markets.

Gainers –
Wipro, Larsen & Toubro, Mahindra & Mahindra, NTPC, Bajaj Auto, Tata Steel, Bharti Airtel, Hero MotoCorp and Dr Reddy’s Laboratories were among the major gainers in Sensex & Nifty.

Losers -
Reliance Industries, Infosys, Tata Motors, Sun Pharmaceutical, ONGC, Hero MotoCorp, ITC, BHEL, HDFC, Coal India, Maruti Suzuki, SBI and Tata Power were among the major losers in Sensex & Nifty.

Sectoral –

Domestic Front –
Monsoon –
Monsoon advances to Goa and parts of south central maharashtra. Also advances to telangana, south coastal andhra pradesh. Covers entire south interior karnataka and rayalseema, said Indian Metrological department (IMD).  

Inflation Indexed Bonds –
Institutional investors fully subscribed the first tranche of inflation indexed bonds (IIBs) worth Rs 1,000 crore auctioned by the Reserve Bank of India (RBI) on Tuesday. The central bank set a real yield at 1.44 percent for those 10-year government securities maturing in 2023. 

However, retail investors could not participate in the auction. The government had earmarked 20 percent (Rs 200 crore) of bond sales for non-competitive bidders including retail and select institutional investors (like non-banking finance companies and others). The rest 80 percent is for large institutions, which will be engaged in the bidding process.

Non-competitive bidders can buy those bonds at the notified cut-off price while institutions have to bid higher price over and above that in a particular auction. Currently, non-competitive bidders can buy government securities to the tune of 5 percent of notified amount.

Global Front –

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

Now next big triggers CPI, WPI Inflation on 12 and IIP on 14 or 15 and then RBI monetary policy review on 17th.

The INDIA VIX on NSE was almost unchanged, down 0.03% and ended at 17.26 against previous close of 16.29.

FNO PCR was 0.98 against previous close 0.xx.

Indian Rupee – Rupee strengthen further by 32 paisa and was trading at 56.44 against its previous close of 56.76.

S&P 500 (US) was trading at 1635.33 down 5.09 then its previous close at the time of writing M Bells.

=======================  NIFTY OUTLOOK  ========================
Nifty breached the neckline of a head and shoulder pattern in intra-day trades which indicates that selling could intensify further. Now only hope is that Nifty to hold 5915 as physiological level while 5860 could act as support as this is the 100DMA level.

If weakness continue then rate sensitive stocks will lead, specially banks will be on sellers radar.

Opening – Seems flat and under pressure as Nifty is just around the physiological level of 5915.

========================  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
The company's domestic sales of Tata commercial and passenger vehicles for May 2013 were 45,430 nos.

Data released by most automakers over the last few days shows sales across two-wheelers, passenger vehicles and commercial vehicles remained weak in May.

Infy –
Founder Narayana Murthy is back at the helm of affairs at Infosys, hoping to turnaround the IT bellwether's dwindling fortunes. This fuelled the stock rally. It ended up 4% erasing early gains.

The brokerage house IIFL has a 12-month price target of Rs. 2,683, which is an 11% upside from its current market price of Rs. 2,412 per share.

Dr. Reddy -
Dr Reddy's scrip was up 2.5% after Fujifilm Corporation decided to enter into an exclusive partnership for generic drugs.

Idea Cellular –
Idea Cellular ended up 3.5% on reports that the firm is in talks with its second-largest shareholder – Axiata -- to sell its towers to the Malaysian company. The company is looking to divest 9,400 towers to raise funds for capital expenditure.

Reliance Power -
Reliance Power clarified an earlier announcement dated June 03, 2013 regarding compliance with minimum Public Shareholding requirement, Reliance Power Ltd has now informed BSE that the number of shares off loaded by the promoters is 4,50,000 equity shares and not 5,00,000 equity shares as incorrectly stated, which is 0.02 % of the present holding and thus meeting with the minimum Public shareholding requirement of 25 %

BhartiAirtel –
Bharti Airtel, along with consortium partners, has submitted final technical bid for a telecom licence in Myanmar, media report said.

According to reports, Myanmar had called bids for two mobile licences and short-listed 12 international consortia.

Vodafone and China Mobile dropped out of the race last week.

The winner is expected to be declared by June 27 this year, says report.

Hindalco –
Hindalco Industries  plans to raise Rs 5,000 crore to refinance high cost debt, for which State Bank of India ( SBI ) may be appointed as lead manager, exclusive sources told CNBC-TV18. Currently, the aluminium maker has a debt of around Rs 13,000 crore.

Of the total, the company will raise Rs 2,000 crore by issuing bonds which will hit the market by September quarter. It will borrow loans of about Rs 3000 crore to repay high cost debt at its Utkal Alumina. The Aditya Birla group company plans to double capacity to three million tonne at this unit.

Bata India –

In light of the Motilal Oswal report on Bata India , Gautam Sinha Roy of Motilal Oswal  says that Bata is one of the favourite consumer discretionary stocks in India. "Going by valuations, there has been some sort of discount to the broader sector in general. I expect the stock to offer strong returns on underpenetration and strong dividend growth for a sustained period of time."

New Banking Licence -
Rajiv Takru, financial services secretary, told CNBC-TV18 that the number of banking licenses to be issued could be clear only after the first committee of the Reserve Bank of India (RBI) does an interim scrutiny by September-October. He added that the clarifications issued by the RBI on Monday were clear and the regulator had been as fair as possible.

On non banking financial companies (NBFCs) finding it tough to comply with the norms on reserve requirements and priority sectors, he said that there would be no compromise on the lending to such sectors. He added that if the companies found it difficult to meet norms, they could reconsider their decision to apply for licenses.

On the new bank-licence clarifications announced by the RBI on Monday and the stocks that might be impacted, Roy expects a few of the non-banking financial companies sponsored by corporate houses to be strong contenders for banking licences."The stocks that might be affected include Mahindra and Mahindra (M&M), Tata Capital and L&T Finance . On the PSU side, NBFCs sponsored by state-owned units such as the Power Finance Corporation (PFC) or Rural Electrification Corporation (REC) have a good chance of getting bank licences. However, since the process is long-drawn it is not a very near-term trigger. But when the licences are issued, it will be a big positive for those that do get the licences."

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

Union Bank – 230CE @4.75 TG 7+ SL 2 (Max 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 Fronm Jan 13 to April 13 (Total 58,800)
June 2013 = 00

Billionaire Club from Jan 13 to April 13 (Total 1,22,200)
June 2013 = 00

Today’s MG Mantra
Nifty to hold 5915 if not then 5860. After breach of 5915 a 75-100 point fall is on card, so be carefull.

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.

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