Morning Bells (3 Sept 13)

Good Morning Friends.

Thought - Word and emotion don’t have teeth but they still BITE hard.

So it was another green day on D-street. Lets start with IIP.

IIP - The Eight Core Industries have a combined weight of 37.90% in the Index of Industrial Production (IIP).  The combined Index of Eight Core Industries stands at 156.4 in July, 2013, which was 3.1% higher compared to the index of July, 2012.

PMI – falls for first time in over 4 years. Business conditions in the Indian manufacturing sector deteriorated during August for the first time in over four years, with both output and new orders falling at faster rates. Export orders also declined, ending an 11-month sequence of growth.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index™ (PMI™) fell from 50.1 to 48.5 in August, indicating a moderate deterioration of business conditions. The latest index reading was the lowest in four-and-a-half years and the first sub-50.0 reading since March 2009.

Currency –

The rupee weakened on Monday because of weak GDP numbers which was announced on Friday.

The rupee was trading at Rs 65.95 per dollar compared with previous close of Rs 65.71 per dollar.

The GDP for the first quarter stood at 4.4% compared with 4.8% for the fourth quarter of the previous fiscal. 

It has posted its biggest monthly fall in at least 18 years. The rupee is down nearly 19% so far this year.

MARKET OUTLOOK –

Market outlook remain same for some time till we don’t enter into any specific range. For me trend is still on downside because on all fronts say on the economy front, on corporate earnings front, on liquidity front nothing is there to stabilize the market and the newslfow seems to be worsening every day.

Market outlook remain same as per our previous view, Nifty to find support at 5440 and resistance at 5510-20 and a small resistance at 5550. Next resistance comes to 5650 (mid term and believes that would tough for this series) and finally 5710 (mid-long run). On downside if Nifty closes below 5440 then again chances are high to see 5150 and then 4900.

So what could be strategy is to sell on rise with SL 5650 / 5710 for a target of somewhere 5450 / 5150 and if broken and close below then 4900 is possible. And above 5510 take some longs for TG 5650 with SL 5450.

MG’s view – Don’t confuse with relief rallies, my mid term view is still on downside for few simple reasons, we see inflation shooting up, input cost going up and news wont stabilize the market we need some serious steps specially to stop FII outflow and to recover CAD.

KEY DATA-

For medium term or next series, outlook is still negative till Nifty doesn’t close above 5504. 20DMA is 5646 and 40DMA is 5710.

STOCK OUTLOOK (Stock that will see good volume this week) –

JSPL -

Shares of Jindal Steel & Power plunged 9% to close at Rs221 on Friday. The board approved buy-back at a price not exceeding Rs 261 a share, up to an aggregate amount not exceeding Rs 10bn from the open market through the stock exchanges, provided that such buy-back shall be equal to or less than 10% of the company's total paid-up equity capital and free reserves.

REC –

Rural Electrification Corp is planning to raise Rs50bn through issue of taxfree bonds. The issue opens on August 30 and closes on September 23, says report. REC will use the capital raised through this bonds for lending purposes.

Report said that the lead managers to the issue are ICICI Securities, A K Capital Services, Axis Capital and Edelweiss Financial Services, says report.

Idea –

The DoT may soon issue new telecom licences to Idea Cellular which had earlier refused to accept guidelines related to 3G roaming pacts in the unified license, sources said. The new licence agreement between DoT and Idea may also incorporate certain clauses proposed by Idea, they added.

The Department had said that it was illegal for telecom operators to sell 3G services in areas where they do not have spectrum. Telecom companies Airtel , Vodafone and Idea Cellular had contested the DoT's point and the matter is now sub-judice.

Q1 NOs. –

Tata Motors –

Tata Motors’ total sales (including exports) of Tata commercial and passenger vehicles in August 2013 were 49,611 vehicles. The company’s domestic sales of Tata commercial and passenger vehicles for August 2013 were 44,717 nos.   

Bajaj Auto –

The total sales stood at 3.12lk units in Aug 13, down 9%

Maruti Suzuki –

The company has posted domestic sales at 76,018 units, up 51%.

RInfra –

(RInfra), part of  the  Reliance Group,  announced completion of  widening of the entire 136 km Salem-Ulundurpet road in Tamil Nadu through its Special Purpose Vehicle (SPV) - SU Toll Road Pvt. Ltd. 

Built at a cost of Rs. 1,061 crore,  the SU corridor connects major tourist destinations, industrial zones  in Salem district  and the Chennai international airport.  The popular hill station Yercaud in Tamil Nadu will also be easily accessible through this corridor.

L&T –

The Water & Renewable Energy Business of L&T Construction, a leading player in the water infrastructure and renewable energy sectors in India, has secured new orders worth Rs1141 Crores in August’13 in various business segments.

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