Morning Bells (18 Oct 13)

Good Morning Friends.

God’s guidance is like a small lamp in a dark forest, it doesn’t show everything at once… but it gives enough light for next step to be safe.

As feared about slag minutes we saw it after 2PM when market turned positive to 49 points down. Market ended in the negative terrain for the second consecutive trading session on Thursday. First it was fear about any unexpected outcome and secondly main reason for negative sentiment was as the World Bank on Wednesday scaled down India's GDP growth estimate to 4.7% from its earlier projection of 5.7% for 2013-14. The World Bank also pegged the current account deficit (CAD) at 4.1% of GDP in 2013-14, significantly higher than the 3.7% hoped by the ministry.

The decline was led by the selling pressure in the IT, telecom, capital goods, auto, realty and the power stocks. On the other hand, only the consumer durables, oil and gas and FMCG stocks bucked the negative trend. Surprisingly even the mid-cap and the small-cap indices ended with marginal gains.

OMCs on Petrol Price cut

Indian oil marketing companies (OMCs) like IOC , HPCL and BPCL have decided to hold back on a petrol price cut.

Sources in OMCs have confirmed that there is a cushion of almost Re 1 per litre, and that the decision of refraining from passing on the benefit was taken in light of the upcoming assembly elections in five states. Despite the fuel being de-regulated, owing to political reasons, OMCs may not be allowed to revise petrol prices around that time.

Currency-

Rupee strengthened against the US Dollar and was approximately trading at Rs 61.44 compared with previous close of Rs 61.85 per dollar on Tuesday.

Moody’s Analysis on Indian Economy –

The Indian economy has bottomed out and the recovery is on the anvil although the days of 8 percent growth are "gone", Moody's Analytics said y’day.

"The economy is nearing the bottom of the current cycle and there is recovery in sight as investment should improve from the fourth quarter, as the government has been actively trying to restart stalled investment projects, both from the public and private sectors," senior economist at Moody's Analytics Glenn Levine said in a note.

"Yet the recovery will be modest, as weak business sentiment will take time to turn around. We expect fixed investment to grow 3.5 percent in 2014 after being flat in 2013," he added.

The former coal secretary today said, “Prime Minister could have overruled my decision; everyone was equally responsible in the matter”, adding that he was not sure why the CBI had named him.

Global Front –

US Shutdown –

The just-ended fiscal crisis undermined US credibility abroad and slowed economic growth at home, President Barack Obama said Thursday.

The day before, Obama signed a compromise deal passed by the House and Senate after weeks of bickering. It extended the debt ceiling until Feb. 7 and reopened the government by approving funding only until Jan. 15, lifting what he described as the "twin threats to our economy" for now.

"There are no winners here — these last few weeks have inflicted completely unnecessary damage on our economy," he said. "We don't know yet the full scope of the damage, but every analyst out there believes it slowed our growth."
(-MoneyControl)

INTERESTING: FACT ABOUT US SHUTDOWN -

If you remember my statement about US shutdown last week as well as y’day. I had view 99% US govt. will announce resolution for crisis, why? Then what was happening since past 2 weeks, here’s a clue for that –

Look for a short term view, when US will announce resolution EU and US market will cheer and the reason for this cheer - Slower the recovery in the US economy, longer will the Fed take to wind down its monetary stimulus. And that means party in global markets could go on for a while, despite the gloomy outlook on global growth.

MARKET OUTLOOK –

I am really enjoying this Nifty moves because when you know (or guess) about ups/downs levels you can play for volatility. It was on card that Nifty to decline above 6115 and then it will find support near 6040 and Nifty closed just around the level.

On technical part Nifty has been forming higher tops and higher bottoms on the daily chart and good supports are there, so if its believed on charts then Nifty is set to touch 6200-6230 marks. While downside it will find support 6020-5980-5940-5900. So we can clearly see supports are placed within tight range unless there’s no bad news for free fall.

Be cautious at levels 6100-6115 / 6200-6235 and nothing harm in taking precautions, max to max you will lose few rupee earning but any mishap can prevent you from big loss.

MG’s Nifty trading range –

R – 6094 – 6140/45 – 6230

S – 6020 – 5980 - 5840 – 5900- 5762 - 5670 – 5610 – 5552 - 5516

Nifty swing band is 5600-6100 (+125) and 4900-5600

ECONOMIC EVENTS / RESULT CALENDAR –

17 Oct – US senate voting decision, Result – Axis Bank, HCL Tech.

18 Oct – Result – L&T

19 Oct – Result – Fedral Bank, Ultratech Cement

21 Oct – Result – KTK Bank, Asian Paints, Tata Coffee, ZEEL

22 Oct – Result – Cairn India, IBR, Wipro, Yes Bank

STOCK OUTLOOK -

(Stock that can see some good moves either side)

HCL

HCL Technologies announced that it posted revenues of Rs79.61bn in the first quarter ending September 30, up 31% than a year earlier. The company made a net profit of Rs14,16bn , up 64% on a year-ago basis. The stock plunged by 7% to close at Rs1078.

Titan (Result 31 Oct) –

Titan is expected to move up from here. Here’s report for that –

The government has reduced the import tariff value of gold and silver to $418 per 10 gram and $699 per kg, respectively, according to reports.

Report said that the  tariff value, stood at $436 per 10 grams for gold and $702 per kg for silver during the last fortnight.

Trading tips –

As weekly chart one can place SL 237.4 for TG 248.5 / 254 / 260

ITC –

Among FMCG pack ITC showing good strength, infact I have initiated call from 336, still steam left and can be traded with SL 339 for TG 354 / 363

MBC PL –

Oct PL = -1000 + 250 = -750 – 1250 = -2K

Open Call –

Ashokley 17.5CE @0.7 SL Hold/0.45 TG- 18.5 in Cash

Cairn 330CE @5.2 SL 4 TG 9+

Regarding MBC calls –

I know some of you have made some loss on past 2-3 calls, here I would like to say that mostly I do swing trade so even if 3-4 calls hit SL need not to worry because 1 or 2 jackpot calls will recover all your losses and again you will be in handsome profit. But you just need to follow MBC calls because we don’t know in which bag jackpot is. Secondly you also need patience else we may burn fingers.

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Morning Bells (16 Oct 13)

Good Morning Friends.

Thought of the day – Relations never dies a natural death. It is always murdered by Attitude, Ego, and Behaviour or Ignorance.

It was day of taking some profit at higher level and before holiday in truncated week. On Tuesday Nifty closed down 23 points, overall it was 75 point swing from 40+ positive to 35-.

Well on day of holiday Asian market ended lower while US and EU were trading positive. Today is the day of US shutdown progress, since process will take after market hours I would like to say be cautious specially in slag hours and if there’s any news on further development before market close then market is set to move higher for sure.

On Tuesday sentiment was dampened by RBI FIR in which KM Birla was accused in coal blocks and after enjoying gains for five consecutive trading sessions, the Indian equity market took a breather on Tuesday. Sentiment was also dampened by HDFC bank which reported quarterly profit was lowest in last ten years. This was the first time in a decade that HDFC Bank's net profit has fallen below 30%. Net profit rose to Rs19.8bn in the quarter ended September 30 from about Rs15.6bn a year earlier.

Domestic Front –

Even as corporate India reacts with shock and horror over the Central Bureau of Investigation (CBI) naming industrialist Kumar Mangalam Birla as an accused in an alleged faulty coal block allotment to his company Hindalco, former bureaucrat PC Parakh, who is the co-accused, hit out on the matter saying the responsibility was with Prime Minister Manmohan Singh too.

The former coal secretary today said, “Prime Minister could have overruled my decision; everyone was equally responsible in the matter”, adding that he was not sure why the CBI had named him .

Global Front –

World Bank cur India forecast –

Close on the heels of the IMF, the World Bank today slashed India's economic growth forecast for the current financial year to 4.7 percent from an earlier projection of 6.1 percent.

"The report (India Development Update) expects real gross domestic product (GDP) to expand by 4.7 percent (at factor cost) this fiscal year before accelerating to 6.2 percent in FY2015," said Martin Rama, the World Bank's chief economist for South Asia.

Fitch warns to cut US credit rating -

Fitch Ratings warned on Tuesday it could cut the sovereign credit rating of the United States from AAA citing the political brinkmanship over raising the federal debt ceiling. "Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a US default," the firm said in a statement.

MARKET OUTLOOK –

As soon as Nity crossed our range of 6115 it seen selling pressure. Overall market is not in mood of any sharp correction and hopefully US will sort out its current shutdown problem. To my personal view – yes its almost impossible that US govt. will fail to come on any resolution and may be many experts will also thinking the same and that is the reason bears are sideline.

Still I would say be cautious in second half specially in slag minutes, because participant will wait till last movement to hear some positive, and if not then light heart people will go to take off some cash.

Be cautious at levels 6100-6115 / 6200-6235 and nothing harm in taking precautions, max to max you will lose few rupee earning but any mishap can prevent you from big loss.

MG’s Nifty trading range –

R – 6194 – 6140/45 – 6230

S – 6020 – 5990 - 5840 – 5762 - 5670 – 5610 – 5552 - 5516

Nifty swing band is 5600-6100 and 4900-5600

ECONOMIC EVENTS / RESULT CALENDAR –

17 Oct – US senate voting decision, Result – Axis Bank, HCL Tech.

18 Oct – Result – L&T

19 Oct – Result – Fedral Bank, Ultratech Cement

21 Oct – Result – KTK Bank, Asian Paints, Tata Coffee, ZEEL

22 Oct – Result – Cairn India, IBR, Wipro, Yes Bank

STOCK OUTLOOK -

(Stock that can see some good moves either side)

Hindalco

Shares of Hindalco plunged sharply in early trades after report stated that The Central Bureau of Investigation filed a first information report against Kumar Mangalam Birla, chairman of the Aditya Birla group, as well as Hindalco Industries in the case related to the allotment of captive coal blocks between 1993 and 2010. However later during the day the stock erased all its intra-day losses to end with smart gains, up 2% and closed at Rs112.

Idea: 600Cr Penalty –

Report said that the telecom department committee has recommended penalty of Rs 600 crore on Idea Cellular for its merger with Spice Communications.

Four-member committee headed by member, technology, Anil Kaushal, had been set up to review telecom department's previous decision of issuing show-cause notices of Rs 300 crore for merging six of Spice's telecom permits with Idea Cellular, says media reports.

According to the committee,  Idea Cellular went ahead with the proposed merger with Spice despite the telecom department's clear instructions in January 2010.

Despite its permits, Idea Cellular acquired a 41.09 per cent stake in Spice, the committee has concluded.

RInfra will add to Nifty 50 –

Shares of Reliance Infrastructure Ltd was down 0.11% after report said that National Stock Exchange added the infrastructure and power utility company to its Nifty Midcap 50 index with effect from Nov. 29.

The stock is currently trading at Rs417, down Rs0.45. The stock has hit a high of Rs426 and a low of Rs416.

Report said that Reliance Infrastructure will replace Vijaya Bankin the Midcap index.

MBC PL –

Oct PL = -1000 + 250 = -750 – 1250 = -2K

Open Call –

Ashokley 17.5CE @0.7 SL Hold/0.45 TG- 18.5 in Cash

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Morning Bells (15 Oct 13)

Good Morning Friends.

Good people change themselves according to situation, but only the smart people change the situation according to them.

So as expected Nifty seen some pressure y’day and now today it may enjoy RIL Q2 NO.s but soon US senate voting fire will catch up. Overall it could be a volatile day or a day like y’day. So let see how market pan out today.

Positive news for market is that participant ignored higher inflation kept Nifty above 6000 mark, September wholesale price inflation (WPI) hitting an eight-month high.

WPI for the month of September 2013 came in at of 6.46%; it was at 6.1% in August and 5.85% in July. Here one should learn that a massive increase in food prices was a major driver of wholesale price inflation.

Today is also day of industry heavyweights TCS and HDFC Bank and from both good Q2 nos. are expected.

RBI Monetary Policy –

After weak WPI & CPI no.s now many experts start talking about a possibility of 25 bps repo rate hike in the forthcoming monetary policy.

MARKET OUTLOOK –

Today could be a day of cheers as TCS and HDFC Bank both are expected to come with good nos. But tomorrow is holiday and next day is the day for which global market is waiting since past 2 weeks and till now no further development seen. US debt ceiling resolution voting on 17^th. Many other heavyweights will announce their Q2 nos. during the week –Bajaj Auto, Axis Bank, HCL Technology, L&T, Ultratech, Bajaj Auto are few of them.

I see some pressure at higher levels and cautious approach ahead of important data and Q2 earnings.

Be cautious at levels 6100-6115 / 6200-6235 and nothing harm in taking precautions, max to max you will lose few rupee earning but any mishap can prevent you from big loss.

MG’s Nifty trading range –

R – 6194 – 6140/45 – 6230

S – 5840 – 5762 - 5670 – 5610 – 5552 - 5516

Nifty swing band is 5600-6100 and 4900-5600

ECONOMIC EVENTS / RESULT CALENDAR –

15 Oct – HDFC Bank, TCS

16 Oct – Bajaj Auto

17 Oct – US senate voting decision, Result HCL Tech.

21 Oct – Result – KTK Bank

STOCK OUTLOOK -

(Stock that can see some good moves either side)

RIL

RIL second quarter (July-September) net profit grew 2.6 percent quarter-on-quarter (up 1.5 percent on yearly basis) to Rs 5,490 crore, supported by strengths in its petrochemical and refining businesses.

Net sales of the company rose 18.4 percent to Rs 1,03,758 crore in the September quarter, compared to Rs 87,645 crore in June quarter.

However, oil & gas EBIT grew marginally to Rs 356 crore from Rs 352 crore Q-o-Q, which was far lower than analysts’ expectations of Rs 390 crore.

So lets see whether market cheer up RIL Q2 nos or give a sell call on poor earning on Oil & Gas.

IOC –

Indian Oil Corporation Ltd has announced on Monday that subsequent to the invitation of financial bid for disinvestment of 39.99% equity shares of Haldia Petrochemicals Limited (HPL) held by West Bengal Industrial Development Corporation Limited (“WBIDC”) and 100% preference shares of Haldia Petrochemicals Limited held by WBIDC, West Bengal Industrial Infrastructure Development Corporation Limited (“WBIIDC”) and West Bengal Industrial Development Finance Corporation Limited (“WBIDFC”) being disinvested by Government of West Bengal (“GoWB”), Indian Oil Corporation Limited has been announced by the GoWB, as the selected bidder, in line with the process laid in the Request for Proposal.

ONGC –

ONGC Videsh today said that it has signed definitive agreements to acquire 12% participating interest (PI) in Block BC-10, Campos Basin, Deep Offshore Brazil as part of the sale of 35% share made by Petrobras.
ONGC Videsh had earlier acquired 15% PI in the block in 2006. The other partners in the block were Shell, Operator with 50% PI and Petrobras with 35% PI. In August 2013, Petrobras entered into a Sales Transaction with Sinochem for disposal of their 35% PI in BC-10 for USD 1543 million. This agreement was subject to Pre-emption rights of the partners Shell and ONGC Videsh. A pre-emption notice was served on 17th September 2013 by Shell and ONGC Videsh to jointly acquire 35%, in which 12% PI corresponds to ONGC Videsh.

TCS –

India's largest software services exporter Tata Consultancy Services (TCS) will declare its July-September quarter (Q2FY14) results on Tuesday evening. A CNBC-TV18 poll shows analysts on an average expecting profit after tax to rise 19.25 percent sequentially to Rs 4,527 crore in second quarter.

HDFC –

HDFC Bank will announce its July-September quarter (Q2FY14) results on Tuesday. Analysts on an average expect profit after tax to rise 26 percent on yearly basis to Rs 1,963 crore in the quarter gone by.

MBC PL –

Oct PL = -1000 + 250 = -750 – 1250 = -2K

Open Call –

Ashokley 17.5CE @0.7 SL 0.45 TG- 18.5 in Cash

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