Morning Bells (20 Sept 13)

Good Morning Friends.

Its really very difficult to understand the people in this world as we are living in such a world where Artificial Lemon flavour is used for welcome drink and Real Lemon is used in finger bowl.

Ganapati Bappa Morya – Dollar is weakening and Rupee is gaining, Rupee now at one month high and trading at 61.77 against its previous close of 63.37.

It’s been a pleasant surprise for equity markets across the globe after Fed Chairman Ben Bernanke refrained from reducing its massive economic stimulus. If you look at the series of action you will find it was a sure outcome. Have look to RBI governor Subbarao’s exit, he didn’t take risk and leave the challenges for new Governor, you can consider same in case of FOMC.

And one great catch was from Rahul Singh – as per Rahul, Obama need EU’s support against Syria tragedy so they can’t disappoint EU market right now.

Well this outcome is more beneficial for India as compared to other global market and that was the reason BSE Sensex registered it biggest single day gains in absolute e terms since May 2009. 

So in the sequence, first reason was FOMC, second Rupee gained and third and another major reason for rally specially in rate-sensitives like banks, auto and realty stocks with hopes that the emergency measures put in by the Reserve Bank of India and the finance ministry may be rolled back, specially I have mentioned 2 days back about liquidity, current measures which are curbing liquidity. If it is then rate sensitive to rally for one more session.

Another good news for banking sector is - Financial Services Secretary Rajiv Takru said that very soon now, now that markets are more or less, I see certain amount of confidence in the market and things appear to be stabilising. So anytime now (decision on capital infusion) within the next week, 10 days or fortnight. The government has earmarked Rs 14,000 crore for capital infusion in the public sector banks during the current fiscal.

Also I feel that now after today’s RBI announcement some of the completely beaten down sectors, investment related sectors can start to rally.

MARKET OUTLOOK –

Finally Nifty break physiological level of 6010. Now what next is big question everybody has in mind. Well I can just say for time being there is no point talking about fundamentals when a strong gush of liquidity sweeps the market.

Now all eye on today’s RBI policy outcome, if RBI gives some sign of relief then Nifty to move higher from here but it wouldn’t be like y’days rally after FOMC outcome.

MG’s Nifty trading range –

R - 6142 - 6180 - 6230

S - 6045 - 5780

EVENTS –

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

STOCK OUTLOOK -

(Stock that can see some good moves either side)

Tata Steel –

The board of Tata Steel has appointed Mr. T V Narendran as MD- Designate, India and South East Asia and has inducted him as Additional Director on the Board. On reaching superannuation on 31 October 2013, Mr. H M Nerurkar MD Tata Steel India and South East Asia will step down from the Board of Tata Steel and will be succeeded by Mr. T V Narendran w.e.f. 1 November 2013.

RIL –

According to reports, Reliance and BP ended on positive note with the regulator over fields worth $10 bn, after meeting with the top brass of the oil ministry.

"The meeting with senior ministry officials of the ministry of petroleum and natural gas is positive step to resolve long drawn issues in the KG-D6 block," companies reportedly said in a joint statement.

Petroleum Secretary Vivek Rae Rae said that the government wanted to resolve matter  so that gas could be produced quickly.

"We would like to resolve them as quickly as possible instead of importing gas at $14 (per unit)," he said. "

CALL LOG –

Keep eye on – Wipro, Rcom, Airtel, Hexaware, Jain Irrigation – all are expected to give good returns in view of short to mid term.

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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.

MARKET OUTLOOK –

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

EVENTS –

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 OUTLOOK -

(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.

CALL LOG –

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Morning Bells (17 Sept 13)

Good Morning Friends.

In 3 words I can sum up everything about life – I learned about life: “It goes on”, I learned about Love: “It doesn’t last” and I learned about people: “They change fast”

After a strong start, the Indian equity market ended in the red erasing all its early gains after the WPI inflation rose at the fastest pace for six months in August, driven by an 18% jump in food prices. The inflation surged to 6.1% in August against 5.79% in July.

Markets had opened with a gap up following overnight gains in the US and the Asian markets after Lawrence Summers withdrew from consideration as Federal Reserve chairman, paving the way for Janet Yellen, which would favor a slower reduction of stimulus. However the early upswing was very short lived amid rising inflation.

Currency –

After Rajan’s effect finally rupee coming and stabilizing below 63 levels and currently trading at 62.83.

Fed and RBI: MG’s view –

Now everyone is talking about Feb tapering and feared about it but when look to global market it give me another picture so I think that Fed will have a smooth communication in terms of tapering and that could be a positive sign and global market may continue to rally.

Same case is for RBI meet also where nobody is expecting anything from RBI right now but giving full faith in Rajan that he will deliver something better in forthcoming days. But right now Indian market is facing its domestic challenges so if something positive in global market is not giving that much boost to Nifty but if there’s something wrong then definitely we will get penalty for that.

Also as per global experts Lawrence Summers' pulling out from the race for the next Fed chairman is positive news for the markets and leading contender for the title, Janet Yellen, has a good working experience in Europe and is well-known by the markets.

MARKET OUTLOOK –

After exit news of Lawrence Summers global market gained but Nifty erases all its gain due to higher than expected WPI but finally managed to close around physiological level of 5850.

So I guess WPI effect has gone and now market is ready to move up on positive cues from global market.

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.

I see some longs building up ahead of both events and then pressure build up around the event day.

MG’s Nifty range for trading –

R - 5880 - 5930 - 5950 - 5990 – 6020

S - 5830 - 5780 - 5740 – 5720

EVENTS –

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 OUTLOOK -

(Stock that can see some good moves either side)

Ranbaxy –

Ranbaxy Laboratories stock plunged 30% on reports that USFDA has issued an import alert for drugs manufactured at its plant in Mohali.

CALL LOG –

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Morning Bells (16 Sept 13)

Good Morning Friends.

Circumstances can change at any time, don’t devalue or hurt anyone in this life. You may be powerful today but time is more powerful than you.

News is not coming in the favour of market. IIP and CPI which came unexpected, most of experts argues that its misleading and that was the reason market doesn’t cheer it.

In another news, stage is setting for Fed outcome scheduled on 17&18 Sept and months of anticipation will come to an end on these dates.  Feb’s move has flooded financial markets with some USD 2.75 trillion over the past five years. So finally central bank doesn't surprise with the size of its move or shock in some other way.

The only saviour could be that the Fed has telegraphed its intentions to pare back its monthly purchases of USD 85 billion in bonds at its two-day meeting that ends next Wednesday. The scale of the tapering and what Fed Chairman Ben Bernanke might say at his press conference are key here, but the steady messaging in the last few months means next week probably won't see carnage in the markets.

Investors have already done a lot of work in absorbing the Fed's message. Benchmark bond yields are now hovering near two-year high.

The Fed has said it would wind down its program if it is confident that the economy is improving, particularly that the jobless rate is heading lower. If it delays any action, it could raise concerns that it fears economic growth is going to be too anemic without the Fed's help.

Well on Friday – It was a choppy day of trade with global cues mostly lower. The action seemed to be more outside the market with attention on the announcement of Narendra Modi as BJP’s prime ministerial candidate expected later in the day.

Petrol Price hike –

IOC has hiked petrol prices by Rs 1.63 per litre effective midnight. The price hike is exclusive of the value added tax (VAT). IOC has quoted reasons of a steep fall seen in the Indian rupee in the recent days as well as a surge in global crude prices.

It added that the company is facing a revenue loss of Rs 14.50 per litre on the sale of diesel and the FY14 revenue loss on subsidised fuel is seen at Rs 82,000 crore.

Currency –

The rupee gained marginally and ended at 63.49/50 to the dollar versus 63.50/51 last close.

DOMESTIC FRONT –

In important political development, Narendra Modi is set to be named as Bharatiya Janata Party's Prime Ministerial candidate. According to reports, LK Advani informed Sushma Swaraj and Rajnath Singh that he will not be interested in working for the party if Modi is projected as the party's prime ministerial candidate for the 2014 Lok Sabha elections.

MARKET OUTLOOK –

A big event is slated this week and that’s investors have been taking steps to reduce risks ahead of such an important announcement and buying PUTs to reduce the risk.

Market to go in consolidation phase here say between 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 announce tapering on its bond buying program then we may see sharp reaction and all global market will be part of it, even currency too.

I see some longs building up ahead of both events and then pressure build up around the event day.

MG’s Nifty range for trading –

R - 5880 - 5930 - 5950 - 5990 – 6020

S - 5830 - 5780 - 5740 – 5720

EVENTS –

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 OUTLOOK -

(Stock that can see some good moves either side)

Media Sector –

Broadcast regulator TRAI is considering initiating a dialogue on issues related to the present mechanism of pricing TV channels after broadcasters raised their concerns about "flaws" in the system.

Step could be positive for media sectors, keep watching movement in this regard.

Power Grid –

State-run Power Grid Corp of India said on Friday that the ministry of power has sought the federal cabinet's approval for a secondary share sale, which will include the government divesting 4 percent of its stake.

The company will also issue 601.9 million new shares, or 13 percent of its existing paid-up capital, as part of the follow-on share sale, Power Grid said in a statement to the Bombay Stock Exchange. The government's divestment of a 4 percent stake in the company is part of New Delhi's plan to raise Rs 40000 crore through sale of its shares in state companies in the current fiscal year ending March 2014.

Real Estate –

Factors like tighter monetary policies by RBI, depressed domestic economic conditions, exodus of private equity funds, outflow of money from the property market for impending elections are converging after a decade setting a stage for a deep correction in Indian real estate.

DLF –

Leighton Welspun Contractors, part of the Leighton Asia, India and Offshore Group, has been awarded the main contract to build the super luxury residential development ‘The Camellias’ for India’s leading developer, DLF at DLF5, Gurgaon, India, valued at Rs14.5 Billion (US $250 Million).

CALL LOG –

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