Tuesday, 17 September 2013

Morning Bells (18 Sept 13)

Good Morning Friends.

Ganapati Bappa Morya – Please bless all our friends and followers with your auspicious blessings.

Well today I am not in market as need to go for Visarjana.

It was yet another choppy day of trade as the indices ended on a flat note on Tuesday. Market participants preferred to remain cautious ahead of the Federal Reserve Open Market Committee meet on September 17-18. The meet would be key in terms of any announcement regarding the tapering of US$85bn monthly bond purchases.

In an important development, The Reserve Bank of India has tightened rules for finance companies which lend against gold, in line with the recommendations of an internal panel.

In another action – Govt. pushed import duty on gold jewellery from 10 to 15 percent, the finance ministry said on Tuesday, setting it higher than raw gold duty in a move aimed more at protecting the domestic jewellery industry than stemming bullion imports. India imported gold jewellery worth USD 137.57 million in the four months from April to July this year -- a fraction of overall bullion imports, which were USD 2.9 billion in July alone.

Fed and RBI: MG’s view –
(Also read y’day’s view)
Well now everywhere talk about FOMC and then focus will be RBI.

Well to my view on FOMC I think it would be soft, the key reason is - the recovery that the US economy is experiencing is built entirely on the foundation of housing and stock-related wealth, and any aggressive tapering will bring the end for such wealth and may be once again US may head for economy crisis.

So here idea could be to start tapering in a soft way say a slow reduction in bond buying program which is currently standing at USD 85mn, they either go to pass it for next meet or may announce reduction of 5-10mn.

Caution - Any tapering announcement will be knee jerk for global market and all will fall in sync. Even a small reduction would be harmful for global markets in a view of short term.

Once again Nifty managed to close around physiological level of 5850.

Current market range is 5750-6000. Here you need to remember that upside for Nifty seems 5950-6000 so fresh buying will come once Nifty will close above 6010 while downside comes to 5750-5600. So upside is limited and downside is much from here so better either sit on cash or trade intraday only.

If Fed announces tapering on its bond buying program then we may see sharp reaction and all global market will be part of it, even currency too.

In short – no specific view ahead of FOMC and its better for small investors to sit aside rather than to burn finger or go for call straddle.

MG’s Nifty range for trading –
R - 5880 - 5930 - 5950 - 5990 – 6020
S - 5830 - 5780 - 5740 – 5720

Raghuram Rajan's maiden RBI monetary policy on September 20 will be closely watched by investors.

Fed policy meeting next week (17&18 Sept) is also another important event to be watched out for next week as the US Federal Reserve is set to make public its further plans on US$85bn monthly bond-buying programme.

(Stock that can see some good moves either side)

Ranbaxy –
Shares of Ranbaxy Laboratories recovered and ended higher by 4%. The Company received communication from the US FDA that the regulator has imposed an import alert on Ranbaxy’s Mohali facility. The stock had tumbled over 30% on Monday as the third Ranbaxy plant in India was hit by U.S. import ban over quality concerns.


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