Morning Bells (16 July 13)

Good Morning Friends.

Attitudes are like wrist watches… every watch shows different time than other… and everyone thinks his watch is showing right time.

The Indian equity market started off the week with smart gains. The Nifty managed to sustain above the 6,000 mark for the second consecutive trading session.

The markets opened gap down, tracking weak macro-economic data released post market hours on Friday. Inflation, based on the Wholesale Price Index, rose to 4.86% in June against 4.7% in May. It was driven mainly by rising food prices.

Sentiment improved on expectations of a rate cut as Reserve Bank Governor D Subbarao’s meets with Finance Minister P Chidambaram and Prime Minister Manmohan Singh later today.

However, there was a knee-jerk reaction after RBI imposed monetary penalty on 22 banks for violating know-your-customer and anti-money laundering norms.

RBI Fines 22 Banks –

The Reserve Bank of India (RBI) on Monday slapped penalty of nearly Rs 50 crore among 22 banks for violation of Know Your Customer (KYC) or anti money laundering (ALM) norms following its investigation. Moreover, it warned seven more banks by issuing cautionary letters.

The minimum amount of fine was at Rs 50 lakh imposed on Ratnakar Bank while the Indian Overseas Bank will have the maximum amount of Rs 3.002 crore. India's largest lender the State Bank of India ( SBI ) will pay a fine of Rs 3 crore. Other large to meddium size state-owned banks including Bank of Baroda  (BoB), Bank of India , Central Bank of India will fork out similar quantum of monetary penalty each.

Among private sector lenders, RBI found violations of regulatory instructions (in terms of KYC and ALM) in Yes Bank  (fined Rs 2 crore), Kotak Mahindra Bank (Rs 1.501 crore), ING Vysya Bank (Rs 1.50), Federal Bank (Rs 3 crore), Development Credit Bank or DCB (Rs 1 crore), Dhanlaxmi Bank (Rs 2 crore), Lakshmi Vilas Bank (Rs 2.50 crore) and Jammu & Kashmir Bank (Rs 2.501).

Gainers –

Punjab National Bank, Bank of Baroda, Cairn India, JP Associates, Hindalco, Sesa Goa, Bharti Airtel, M&M, IDFC and Bajaj Auto were among the top gainers.

Losers -

Coal India, NTPC, Tata Steel, Infosys, BHEL, Tata Power, Tata Motors, BPCL and Asian Paints lost out in trade Y’day.

Sectoral –

Among sectors, FMCG, healthcare , banks, IT, consumer durables, realty, auto, metal, capital goods, and oil and gas gained while power was the sole loser.

Domestic Front –

Global Front –

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

Economic slowdown is substantial in the cyclicals whether they are autos, infrastructure, capital goods and that slowdown will reflect in the results too. So next quarter, things are not going to change. So, the large story remains the same IT, FMCG, pharma remains the leader. Banking remains under concern because of the stressed assets value.

The INDIA VIX on NSE was up by 0.54% and ended at 18.79 against previous close of 18.69.

FNO PCR was 1.25 against previous close 1.21.

Indian Rupee – Rupee declined further by 33 paisa and was trading at 59.89 against its previous close of 59.56.

S&P 500 (US) was trading at 1683.54 up 3.35 than its previous close at the time of writing M Bells.

Buzz Q1 Nos –

18 July – Axis Bank Q1 No.s

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

2 successive close above 5935 would act as trend changer for immediate short term while Nifty need to close above 5970-5990 to sustain the rally and then Nifty can head towards 6000 and then for a year’s new high. While downside support seems 5840/5750/5700

Opening – Opening seems again a bit under pressure. Longs were build on the hope of rate cut but later RBI imposes fine on banks made it a bit jittery. So market would see for clarification further on rate cut hopes. Overall sentiment seems on long side.

========================  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.)

Tata Motors -

During the 15th annual general meeting of Tata Global Beverages, Tata Group chairman Cyrus Mistry reported "We have never left West Bengal and we will never leave,"

Cyrus Mistry was replying to a shareholder's query about group's failed plan to roll out Nano car in Hooghly district's Singur, says report.

The Tata Motors Group global wholesales in June 2013, including Jaguar Land Rover, were 84,458 nos. Cumulative wholesales for the fiscal were 247,501 nos.

Global wholesales of all commercial vehicles – Tata, Tata Daewoo and the Tata Hispano Carrocera range -- were 41,577 nos. Cumulative commercial vehicles wholesales for the fiscal were 120,206 nos. 

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

JPA 57.5CE - @1.1 SL 0.6 TG 2+ (1 lot)

TRACK Today –

L&T (up), M&M (under pressure), Rpower (up), RIL (up)

=============== 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 June 13 (Total 58,800)

July 13 = -500 + 3500 = +3000

(Booked profit 2K in Idea CE and 1500 in UBI CE = +3500)

Billionaire Club from Jan 13 to June 13 (Total 1,25,600)

July 13 - +2000 + 4500 = +6500

(Booked profit 6.5K in Idea CE and loss 2K in HDIL CE = +4.5K)

Today’s MG Mantra –

One can expect around 40 point dip in Nifty and then can start thinking to go long.

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.