Morning Bells (14 Sept. 12)

Good Morning Friends,

So finally Govt. declared hike in diesel prices by Rs 5 per ltr effective from midnight last night, and kept petrol, kerosene and LPG rates untouched. This can be considered as bold move by expert and is aimed to control the country's heavy fiscal deficit and to send strong message to Grading institution who were threatening for to downgrade India rating for investment to junk.

Well y’da evening cabinet committee, headed by the Prime Minister, agreed to raise diesel prices by Rs 5 per litre, secondly they restricted sales of subsidised LPG cylinders to six per consumer annually, and kept petrol and kerosene prices unchanged. But to give relief to oil companies the excise duty on petrol has been cut by Rs 5.50 per litre. Petrol was suppose to hike of Rs 6 per litre to reduce oil-marketing companies’ under recoveries by Rs 20,300 crore but the government offset that by reducing excise duty from existing rate of Rs 14.78 per litre.

Today there’s another round of CCAP to discuss few more reforms, which includes National Policy on Information Technology,  the new Information Technology Policy, which aims to make at least one individual in every household e-literate among other objectives. The policy aims to help increase revenues of the Indian IT and ITeS industry from USD 88 billion to USD 300 billion by 2020 and ramp up exports from USD 59 billion to USD 200 billion by 2020. (Reports MoneyControl.com)

Agenda also include decision on disinvestment of PSUs to achieve disinvestment target of Rs 30,000 crore in the current fiscal, the government can consider the proposal of stake sale in five state-owned companies including (proposed by The Department of Disinvestment (DoD)) Hindustan Copper, Oil India (10%), Nalco (12.15%) and stack sale in Neyveli Lignite (5%) and MMTC. Meeting to also consider initial public offering (IPO) in the Rail India Technical and Economical Services (RITES) - (Reports MoneyControl.com)

Now there's uncertainity for proposal to allow FDI in aviation sector will be approved by the committee on Friday. Well amid uncertainty shares of Jet Airways gained 2.4% while KFA rose 6.3%. While Shoppers Stop and Pantaloon retails seen selling pressure.

Now all eyes on Fed for further easing, Asian markets closed mixed European stock closed lower y’day, as investors turned cautious ahead of the outcome of a two-day monetary policy meeting in the US.

MARKET OUTLOOK -

As told in past 2 days, now all news is in favor of market, So overall its sentiment booster, cheers the rally till it continue, just remember today is Friday so just take precaution in later half specially around closing time.

Still there's a catch - allies will have strong oppose, opposition is set to protest while cancellation of 4 coal blocks can also play a role to dismiss the rally in coming sessions. 

Inflation data which will be announced today can also play role of breaker to current rally.

A gap up opening is expected. And seems volatile afterward, as day will pass market can strongly reacts on news flow.

NIFTY –

All is in favour of market at the moment. Huge longs were created in 5600 calls, arpx 13 lac shares added y'day and now 5600 calls has highest OI on long side while aprx 7 lacs share were too also added to 5700 call. On downside aprx 13 lac shares were added to 5400 put (same trick before ECB, this time for Fed, but Govt.'s move disappointed bears), so as told y’day now 5400 mark will act as base till expiry. But there’s also a point not to ignore is still 5300 put is holding highest OI which is above 1 crore give sense of weakness in coming sessions or say from Nifty around 5550-5600 mark. Now Nifty will face resistance at 5500 (if opened below) then at 5545 & strong resistance at 5600 while downside will find support 5473 & 5448. Now Nifty seems in the range of 5400-5600.

STOCK OUTLOOK -

Banks – Rally would support banks.

One can also keep eye on stocks which I have mentioned for disinvestment could be a good bet for midterm.

TM- In past 6 sessions TM climbed from 228 to 264 so there was profit booking and fear was obvious. Resistance has comeup to 267 & 272 while support comes to 254 & 249. Would be interesting to see how market reacts on diesel price hike and how its going to affect auto sector specially diesel vehicle makers.

OPEN CALLS –

Will find call and will announce on board.

Cox&Kings - (TG 148, SL 121) its below its good support 129, will wait for mkt and then will think to average our buying levels.

Note – One can also find Morning Bells at MudraGuru.blogspot.in (every time to find it on single click rather than to scroll here) One can also find live calls during market hours here.

Today’s MG Mantra –

Enjoy the ride with precaution. Don’t go against market sentiment as many of you were asking me to create short positions.

Have a Profitable day – MG

Disclaimer – I have shared my view as per my limited knowledge; please use your own skills before making a wise decision.