Wednesday 29 May 2013

Morning Bells (04 June 13)

Good Morning Friends.

Someone asked Swami Vivekanand – What did you get by Prayer & Meditation, he politely replied – I gained nothing, in fact I lost Anger, Depression, Jealousy, Irritation & Insecurity.

After a long time your favourite MBells is back.

Well it was a weak start and fall in Indian equities continue for second consecutive day amid fresh selling in oil and gas, power and capital goods and as discussed even midcap stocks were under pressure in trade today. Auto sales data for May jolted sentiment on disappointing numbers. Sales at market leader Maruti Suzuki India declined 13% year-on-year to 77,821 units while Tata Motors’ passenger vehicle sales slipped 44.6% YoY.

On the other hand, IT, realty and metal counters were the only saving grace in today's session.

Gainers –
Infosys, Wipro, Bharti Airtel, Dr Reddy's Laboratories, Tata Steel, Coal India, and Hindustan Unilever were among the major gainers in Sensex & Nifty.

Losers -
Reliance Industries, Tata Motors, Sun Pharmaceutical, ONGC, Hero MotoCorp, ITC, BHEL, L&T, Bajaj Auto, Maruti Suzuki, SBI and Tata Power were among the major losers in Sensex & Nifty.

Sectoral –

Domestic Front –
PMI –
May HSBC Manufacturing Purchasing Managers’ Index sank to a 50-month low of 50.1 from 51 in April. This was its third straight monthly fall.

Operating conditions in the Indian manufacturing economy stagnated during May. The seasonally adjusted HSBC Purchasing Managers’ Index™ (PMI™) – an indicator derived from individual diffusion indices measuring changes in output, new orders, employment, suppliers’ delivery times and stocks of purchases – fell from 51.0 in April to 50.1 and was at a 50-month low.

Global Front –
UK PMI –
The UK manufacturing sector continued its positive start to the second quarter of 2013. After returning to growth in April, May saw operating conditions improve at the fastest pace in over a year, with growth of production and new orders both accelerating. The domestic market was the main driver of new order inflows, although new export business also contributed with a modest increase.

At 51.3 in May, up from a revised 50.2 in April, the seasonally adjusted Markit Purchasing Manager’s Index (PMI) posted its highest reading since March 2012 and remained above the neutral 50.0 mark for the second straight month. The expansion of manufacturing output was broadbased in May, with growth registered by the consumer, intermediate and investment goods sectors. The strongest performance was seen at consumer goods producers. UK manufacturers generally linked higher output to improved new order inflows, successful new product launches and efforts to clear backlogs of work.

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

Now next big triggers are RBI guidelines on 4th, 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 up 1.77% and ended at 17.29 against previous close of 16.99.

FNO PCR was 0.98 against previous close 0.xx.

Indian Rupee – Rupee declined further by 27 paisa and was trading at 56.76 against its previous close of XX.

The rupee continued to haunt traders by hovering around its 11-month low.

There is a widespread concern that the weakness in the rupee could prompt foreign institutional investors to sell Indian shares.
According to experts, there could be some amount of decoupling because some of the dollar strengthening is not because per se emerging market (EM) weakening but it is purely a supply demand tactic. He sees rupee touching 62 over next couple of months.

S&P 500 (US) was trading at 1628.31 down 2.43 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.

So if Nifty hold at least 100DMA then Private Bank, Pharma and FMCG looks attractive.

Opening – Seems flat and some profit booking as well as cool off can be seen after such a wonderful rally.

========================  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.

Today is important for TM as its holding 312, a good support and positive one but after disappointing sales figure it would be interesting to see the effect, if it holds 312 level then there is high chances to touch new high.

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.

RIL -
Reliance Industries slipped 2.3% after output from its eastern offshore KG-D6 dipped below 15 million mmscmd.

Sun Pharma –
Sun Pharmaceutical declined 2.7% in trade today. The Wall Street Journal said the company is in talks to acquire Swedish drugmaker Meda for $5-6bn to boost its generics business in developed markets.

Opto Circuits -
Global Medtech conglomerate Opto Circuits received one of its worst poundings on Friday after it reported 95 percent fall in net profit for the quarter ended March 2013. Shares of Opto Circuits plunged more than 30 percent to touch its 52-week low last week.

Speaking about its fourth quarter numbers, Vinod Ramnani of Opto Circuits  said it was below expectations and the company is taking steps to address working capital issues. "We are trying to unlock valuations of all subsidiaries," he told CNBC-TV18. The stock has partially recovered on Monday. At 10. 25 AM, it was trading at Rs 33.40, up 6.03 percent.

Meanwhile, Ramnani said the company’s order book continues to be healthy and India contributes a significant 25 percent to its overall business.

DLF –
DLF Ltd has guided for pre-sales of 8-10 million square feet worth 60 billion rupees in fiscal 2014, up from 38 billion rupees in fiscal 2013, according to Macquarie Capital Securities India, which cited an analyst conference call.

DLF has also guided for net debt of 170 billion rupees by the end of fiscal 2014, down 20 percent from fiscal 2013 levels, Macquarie said in a note to clients on Monday.

RBI to  kickstart sale of inflation – indexed bond on June 4 -
The Reserve Bank of India will sell Rs 10-20 billion of inflation-indexed bonds on June 4, kickstarting monthly sales of a new type of debt the country is introducing this year.

The Reserve Bank of India (RBI) y’day released on its website, clarifications to queries on the Guidelines for Licensing of New Banks in the Private Sector.

The Reserve Bank of India (RBI) on Monday issued a series of clarifications against 443 queries sent by external parties in relation to new banking licence guidelines that were issued on February 22, 2013. The central bank, however, revised the validity period of in-principal approval for setting up of a bank to 18 months from earlier 12 months.

What’s New: Validity period of the in-principle approval

The validity of the in-principle approval for setting up of the NOFHC / bank was one year from the date of issue and would lapse automatically, thereafter.

RBI has decided to extend the validity period of the in-principle approval from one year to 18 months. It is expected that this would provide sufficient time for the Promoters/Promoter Group to comply with the various stipulations in the guidelines that would be set out while granting the in-principle approvals to successful applicants.

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

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Have a Profitable day – MG