Morning Bells (18 Jan 13)

Good Morning Friends.

RISK is my life, POSSIBLE is my hope, IMPOSSIBLE is my enemy, DANGEROUS is my game. It’s MG, and I am like that only.

Govt. is continue with its further agenda. Market players will be happy but the overall citizens to face the disadvantages of such decisions. Some of you would have remember my post on MoneyControl when Mr. P.Chidambaram was appointed as FM – view was clear, he’s master mind in creating taxes, even with such a move which general man can’t imagine and can understand at the time of announcement.

Well, The Indian stock market recovered smartly to end the day with gains despite a weak start. The main reason for this recovery and healthy gain was deregulation of diesel prices, the government y’day authorized Oil Marketing Companies (OMCs) to raise diesel prices by a small amount periodically. The OMCs are free to raise prices, technically as early as midnight. They could continue raising prices till they cover their present per liter loss of Rs 9.60. With measures like this, the Street anticipates a lot more reformist policies coming during the Union Budget. 

Also, Gov.t will not factor the impact of diesel price hike by oil companies while computing the oil subsidy bill for the current fiscal, Finance Minister P Chidambaram said today.

Govt. has told state fuel retailers to raise diesel prices by 0.40 rupees to 0.50 rupees a litre every month to gradually align them with market rates.

To compensate the move Govt. reportedly hiked the cap on subsidised LPG cylinders from 6 to 9. Reports said that Consumers will get a quota of five subsidised cylinders between September 2012 and March 2013 and from April 1, 2013, they will be entitled to nine cylinders per annum. There will be no change in LPG and kerosene rates, Oil Minister M Veerappa Moily reportedly said.

My View – Since govt. don’t want to be blamed and to face strong oppose by citizen its passes the control to OMCs, and still OMCs will still seek signals from government for any price hike. It shows political incapability to take any tough decision. So don’t get too excited by decision right now, reason is simple one - When petrol was deregulated, OMCs had no courage to increase the price and always looked at Govt. to give signals for an increase. But yes its well planned and well decided roadmap for next inning i.e. next Govt. will take benefit from these announcements/decisions.

The Union Finance Minister P. Chidambaram said that the fiscal consolidation roadmap for Centre has been laid out and the Government will not breach the Fiscal Deficit limits. The Union Finance Minister highlighted the challenges that economy is facing today and the urgency of reform measures needed to address these challenges.

India Ratings says that the 2013 Outlook on both public and private sector oil and gas companies is Stable despite issues like high gross under recoveries (GUR) of public sector companies (PSCs) and a still uncertain global macro-economic environment.

The December factory output is likely to remain in the positive territory and in the range of two-three percent but in the months to come it is expected to remain "subdued", global research firm Dun & Bradstreet says.

Gainers – RIL, Wipro, TCS, Infosys, Tata Power, Dr Reddy’s Lab, SBI, Tata Steel, Tata Motors, Bharti Airtel, NTPC, Sterlite Inds, Gail India were among gainers in Sensex and Nifty.

Losers - Sun Pharma, Hero MotoCorp, BHEL, Bajaj Auto, M&M, ICICI Bank, L&T, HDFC were among losers in Sensex and Nifty.

Sectoral - FMCG, Consumer Durables, Bankex, PSU, Power, Realty, Metal, IT, Auto, Oil and gas indices are the gainers while Healthcare, Capital Goods indices are the losers.

On Global front –

Asian markets were lower ahead of key Chinese economic data including fourth-quarter GDP, December industrial output, retail sales and house price on Friday.

US stocks hit a five-year high at the open on Thursday after better-than-expected results from online marketplace eBay and as data showed first-time claims for unemployment benefits dropped to a five-year low.

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

It’s a blockbuster Friday today because industry heavyweight like ITC, Wipro, HDFC Bank & RIL (Fri 18 Jan) will post their quarterly no.s and I am expecting no one of them will disappoint.

After disappointing statement of RBI governor today Govt. tried to fuel the market and market recovers in late trade.

The INDIA VIX on NSE remained flat and ended at 14.01 against previous close of 13.99.

FNO PCR is 0.92 against previous close 0.93.

Indian Rupee gained smartly around 30 Paisa against USD y’day and was trading at 54.39 against its previous close 54.79, highest level in more than a month.

S&P 500 (US) was trading lower at 1479.79 up 7.16 then its previous close at the time of writing M Bells.

Now next trigger is RBI policy on 29 Jan 12. Here please remember I am expecting to cut the repo rate by 25bps in the upcoming monetary policy and no rate cut.

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

Once again Nifty closed above/in the range of 6030-6040. Now it would be interesting to see whether buying comes in the range of 6030-6070 or will see profit booking once again. As told trend turning slowly to sell at higher levels till 6070 is not taken out on closing basis, then Nifty will switch to 6050-6150 band. For longs 5935 is SL and 6085 for bears.

Buying in selective stock will continue.

FII sold 3276 contracts of Nifty & Bank Nifty futures worth Rs. 103.06Cr. with net OI increased by 9254 contracts indicating FII have booked profit in longs. Volume also suggesting lake of participation at higher levels.

Nifty is in range of 5835-5885-5990-6040-6090 for current week.

Resistance – 6055 – 6091 – 6130 and Support – 6000 – 5961 -5935

Opening seems a bit positive (12-15+) after diesel price hike and momentum remain positive ahead of industry heavyweight but a volatile session is expected.

=========================  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.)

OMC –

Now analyst get enough time to analyze the Govt. decision. Its good in long term but for short term its remain subdued, so profit booking is not ruled out in OMCs

RIL –

Declining KG-D6 volumes and muted gross refining margins (GRMs) are likely to impact Reliance Industries '(RIL's) December quarter earnings.

Analysts on an average expect a 17% year-on-year jump in net profit to Rs 5,200 crore. Revenues may grow around 6% to Rs 90,000 crore

Banking –

After statement of RBI governor now view is neutral on banking stock. But I believe that the public sector banks are still plagued with non-performing assets (NPA) and therefore, they would like to stay away from this sector at the moment.

HDFC Bank –

India's second largest private sector lender HDFC Bank is likely to report a robust growth of 29% year-on-year in its third quarter (October-December) net profit in 2012-13. Net interest income or the difference between interest earned and paid out, would grow 25% y-o-y on the back of strong credit expansion, suggested an analyst poll estimate by CNBC TV18.

Telecom –

Govt. approves 50% cut in CDMA spectrum reserve price.

Finalisation of Revised Reserve Price for the Auction of Spectrum in 800 MHz band (CDMA) for all service areas, since no bids were received during auctions held in November, 2012

Tata Motors –

Tata Motors was slipped y’day as its global sales decreased 13.88% in December 2012 to 98,968 units over the same period in the previous year.

But today it back on track when TM announces Jaguar Land Rover India, confirms it reached wholesales of 2393 cars in 2012, compared to 1813 cars in 2011, up 32%.

Hero Moto –

Hero MotoCorp missed street expectations by a wide margin as high costs and increased advertising and promotional spends to boost sluggish growth dragged third quarter net profit down 20 percent year-on-year to Rs 488 crore.

The India's largest two-wheeler maker's net sales for the Oct-Dec quarter were up 3 percent to Rs 6,151 crore.

Analysts on an average were expecting net profit at Rs 608 crore on revenue of Rs 6,142 crore, according to a CNBC-TV18 poll.

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

Wait is the winning key in stock market, don’t get impatience.

============ INVESTMENT BASKET ============

(Stock in this section is with view of 3 months to 1 year)

Mahindra Holiday – @334 TG 375+ (Active from 15 Dec 12) CMP – 330 (Gain -1%)

Satyam Computer – @103 TG 130+ (Active from 15 Dec 12) CMP – 115 (Gain +11%)

On Mobile – @44 TG 60+ SL 41 Qty 2K (Active from 01 Jan 13) CMP – 45 (Gain +2.5%)

============ HOT SHOT ============

Keep eye on following stocks, if Nifty shows strength then these stocks can give you reasonable return in very short term –

============ PL Sheet (started from Jan 2013) ============

(If someone find any error in PL, please draw our attention)

MG Blog (Total 25,650) –

Cash = +9,650.00

FNO = +11,500 + 4,500 = 16,000

Billionaire Club

TOTAL = +29,750.00 + 14,750 = 44,500

Today’s MG Mantra –

Still one need to remain cautious on higher levels till 6070 is not taken out on closing basis.

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.

Morning Bells (17 Jan 13)

Good Morning Friends.

RISK is my life, POSSIBLE is my hope, IMPOSSIBLE is my enemy, DANGEROUS is my game. Don’t surprised, it’s me, your MG.

Congratulations to all blog visitors & members - in just 2-3 days we are going to cross 1 Lakh visitors in just 4 months, its all possible only because of your love & inspirations.

I am sorry but I have noticed that some of you are not taking this MBells seriously, they come to blog only for calls and they overlook important discussion in MB, so sad. Think that whatever you are reading is just a summary of 2-3 line text of 1 page news in each statement. I just want to clear you that I work hard for preparing this MB, just to give you all direction of market in comings days and to make your trade experience profitable. But if you are habitant to overlook important points highlighted in MB, I can just say – you will be loser in stock market, sooner or later.

Oops, so finally as discussed, profit booking comes in several counter between 6050-6100. We were discussing it since longs that whenever Nifty will attempt to range 6050-6100 first bears will give a strong fight to resist and secondly profit booking will come on higher levels. Same has happened y’day, as Nifty tried to move higher investors prefer to book profit on higher levels. Auto and Metal stocks were among the prominent losers.

Well, RIL is the top Sensex gainer, up over 2% on reports that the oil ministry may take the Rangarajan panel's recommendations of mandating a price of about $8-8.5 for natural gas, to CCEA or EGoM for approval.

Nifty was still balanced but RBI governor Subbarao’s statement fuelled the fall, in a statement he said that inflation was still high is being viewed as a signal that the stock market cannot take a interest rate cut on January 29 for granted.

Gainers – Reliance Industries, Dr Reddys Lab, TCS, NTPC, ITC, Sterlite Inds, Gail India, Cipla were among gainers in Sensex and Nifty.

Losers - Hindalco Indus., JP Associates, Maruti Suzuki, Tata Motors, Reliance Infra, Jindal Steel, Maruti Suzuki, Mahindra & Mahindra, SBI, Tata Steel  were  among losers in Sensex and Nifty.

Sectoral - Oil and gas indices is only the gainer while FMCG, Consumer Durable, Healthcare, Bankex, PSU, Power,Realty, Metal,  Capital Goods, IT, Auto indices are the losers.

Some other Domestic news are –

The government is planning to increase import duty on gold, according to reports. Reports said that the basic customs duty on gold and platinum could be raised to 6% from 4%.

Findings are revealed in the paper, ’Convergence with Divergence’, which analyses how household spending in China, India, Mexico, Turkey and South Africa will change in comparison to the USA and UK over the next three years

For the first time, economic forecaster The Economist Intelligence Unit has teamed up with Mintel, the consumer market expert to predict key trends for the future of different Fast Moving Consumer Goods (FMCG) categories in emerging markets, including India.

·        Household products are expected to continue booming – particularly in washing up liquids as cheap labour supply makes domestic help more economical than using dishwashers

·        Consumers continue to shift gradually away from home cooked food – demand for breakfast cereals is increasing as lifestyles become busier

·        India is already the world’s biggest packaged tea and whisky market by volume, although spending growth potential remains in both sub-sectors.

·        In the clothing market, male expenditure on clothes outstrips that of women, although this is expected to ease out in the coming years

On Global front –

merging economies are set to grow faster than the developed economies over the next four decades and India is likely to become one of the three largest economies by 2050, estimates a PwC report.  

MARKET OUTLOOK –

Nifty closed at 6002, down 85 points after Reserve Bank of India (RBI) governor stated that the inflation is still high and the market cannot take an interest rate cut on January 29 for granted.

Maybe that correction can make the Nifty to correct to about 5950. I see this weakness likely to continue till tomorrow.

Good news is that some good FIIs turned bullish on Indian economy and said that ndian 'elephant' to turn 'tiger' in 2013; ups BSE Sensex target to 22,200 versus 21,600 earlier and Nifty target to 6,900 points as against 6,600 previously.

As discussed in past 3 days, 2-3 good earning result will give strength to market, cheered by Inflation figure and GAAR today RBI governor messed the sentiment.

Now all eye will be on Friday blockbuster Wipro, HDFC Bank & RIL (Fri 18 Jan) and I am expecting no one of them will disappoint except RIL and will help Nifty to hold its current levels.

As discussed Nifty is on the lower end of range and buying momentum to come above 6030-6040, if Nifty crossed levels decisively then Nifty will switch to 6050-6150 band.

Now trend is turning sell on rise till 6070 (As we discussed, profit booking on higher levels) is not taken out on closing basis. For longs they can hold ill 5915 is safe. Next trigger RBI policy on 29 Jan. In between triggers could be announcement on Diesel price hike, and some more triggers would be announcement of good quarterly nos from 2-3 good high beta.

The INDIA VIX on NSE rose 2% and ended at 13.90 against 13.58.

FNO PCR is 0.92 against previous close 0.89.

Indian Rupee declined further 0.18 Paisa against USD y’day and was trading at 54.79 against its previous close 54.61.

S&P 500 (US) was trading lower at 1471.13 down 1.21 then its previous close at the time of writing M Bells.

NIFTY OUTLOOK –

After 2 days green formula finally Nifty loosed steam y’day after crossing its physiological level of 6000 mark. We had discussion since past 3-4 days that Nifty will see some pressure once it will reach in the range of 6050-6100, and same proved y’day itself. If someone noticed, still Nifty is not breaking our weekly range and trading in the range, which give us good idea to trade better and maximize our profits.

Buying in selective stock will continue and overall Nifty remain in pressure todayl.

FII sold 12901 contracts of Nifty & Bank Nifty futures worth Rs. 343.3Cr. with net OI decreased by 4663 contracts indicating FII have booked profit in longs. Volume also suggesting lake of participation at higher levels.

Nifty is in range of 5835-5885-5990-6040-6090 for current week.

Resistance – 6041 – 6080 – 6105 and Support – 5977 – 5952 -5913

Opening seems flat, buying can be seen in selective high beta stocks, and rest – market may remain range bound.

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.)

OMC –

After such a disappointing news now Rate-sensitive sectors constitute one of the key themes for the year as interest rates are to fall in the medium-to-long term and growth is set to recover on continued liquidity levels and positive corporate earnings.

RIL –

RIL is the top Sensex gainer, up over 2% on reports that the oil ministry may take the Rangarajan panel's recommendations of mandating a price of about $8-8.5 for natural gas, to CCEA or EGoM for approval.

So today, it can be hero of market once again.

Banking –

After statement of RBI governor now view is neutral on banking stock. But I believes that the public sector banks are still plagued with non-performing assets (NPA) and therefore, they would like to stay away from this sector at the moment.

Rcom –

Asix bank & Yes bank fell today ahead of RBI governor’s statement instead of good no.s, further to news Axis Bank has picked JPMorgan Chase & Co and Citigroup Inc for a share sale to raise up to USD 1 billion, three sources with direct knowledge of the deal said on Wednesday.

Axis Bank's share offering to institutional investors is likely to be launched in two to three weeks depending on market conditions, two of the sources said, declining to be named as the details of the deal are not public yet.

Rcom –

Reliance Communications and Alcatel-Lucent enter long term billion dollar contract to further improve network performance and customer experience to offer Next Generation telecom solutions across multiple devices and platforms.

AirTel –

Sanjay Kapoor, CEO (India and South Asia) has resigned from the company and Gopal Vittal will take over as the head of its Indian operations with effect from March 1, 2013.

"After almost 15 years of illustrious innings at Bharti Group, Sanjay Kapoor, CEO (India and South Asia), Bharti Airtel, has decided to pursue his future aspirations outside of Bharti," the company said in a statement, announcing some top level changes.

HCL –

India's two largest software services providers Tata Consultancy Services and Infosys have already topped street expectations in Oct-Dec and all eyes will be now on HCL Technologies  , which will report its earnings on Thursday.

The Gurgaon-based information technology company is expected to report a net porfit of Rs 840 crore, down 5 percent quarter-on-quarter, while revenue is seen up 2 percent at Rs 6,207 crore, according to a CNBC Awaaz poll.

Bajaj Auto –

Shares of Bajaj Auto was down 2% despite company has posted 3% profit for Q3.

The main reason for fall in stock was MD said in a statement that Bajaj Auto will miss its forecast of 5 million (50 lakh) unit sales for the current financial year as demand for two-wheelers continues to remain sluggish, especially in the domestic market, Rajiv Bajaj, MD said on Wednesday.

Tata Motors –

Tata Motors slipped as its global sales decreased 13.88% in December 2012 to 98,968 units over the same period in the previous year.

Hero Moto –

Sluggish volume growth and margin pressures are expected to weigh on India's top two-wheeler maker Hero MotoCorp , which reports earnings for Oct-Dec on Thursday. Bajaj Auto on Wednesday reported third quarter results in-line with street expectations.

The maker of Splendor and Passion motorcycles is expected to report a net profit of Rs 580.14 crore, down 5 percent year-on-year, while net sales are likely to rise 1.5 percent at Rs 6,124.5 crore, according to a CNBC Awaaz poll.

Deccan Chronicle –

NSE will stop business in scrip from Jan 23.

KFA –

Vijay Mallya-owned Kingfisher Airlines today approached the Supreme Court challenging the Karnataka High Court's order directing it to deposit around 185 crores with the Income Tax Department as tax deducted at source (TDS) from its employees' wages.

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

Wait is the winning key in stock market, don’t get impatience.

============ INVESTMENT BASKET ============

(Stock in this section is with view of 3 months to 1 year)

Mahindra Holiday – @334 TG 375+ (Active from 15 Dec 12) CMP – 330 (Gain -1%)

Satyam Computer – @103 TG 130+ (Active from 15 Dec 12) CMP – 115 (Gain +11%)

On Mobile – @44 TG 60+ SL 41 Qty 2K (Active from 01 Jan 13) CMP – 45 (Gain +2.5%)

============ HOT SHOT ============

Keep eye on following stocks, if Nifty shows strength then these stocks can give you reasonable return in very short term –

============ PL Sheet (started from Jan 2013) ============

(If someone find any error in PL, please draw our attention)

MG Blog (Total 25,650) –

Cash = +9,650.00

FNO = +11,500 + 4,500 = 16,000

(Gain from Bajaj Auto 3000 + Gain from TCS 1500 = 4500)

Billionaire Club

TOTAL = +29,750.00 + 14,750 = 44,500

(Gain from Axis Bank future 5250 (@1389 sold 1410) + Tata Steel future 6500 (@ 423.5 sold 430) + Bajaj Auto 3000 (@28 sold 40) = 14,750)

Today’s MG Mantra –

Go with rate sensitive stocks and OMCs. Also its not bad idea to book partial profit at higher levels just to keep safe your investment.

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.