Morning Bells (18 Sept. 12)

Good Morning Friends,

“Do not expect the circumstances to be always in your favor, because this world has not been created for you alone!”

Well, the day will remain on the name of M3 – Mamta, Mulayam & Maya. TMC holding meeting today and will take decision on support to UPA Govt. So Market seems highly volatile and under pressure.

Amid uncertainty of political development on various front FM told that decisions taken will not be rollback, PM too clarified his stand on this conveying strong message to Mamta to consider all this (we have options) before making any hard decision.

The RBI did not cut interest rates and it did not surprise the market as this was already priced in. Indices closed firm but off day's highs.

Govt. raises diesel prices to reduce widening fiscal deficit and to boost investor sentiment, but it seems a bit difficult when we try to have a look on it. On Monday FM P Chidambaram also discussed on GDP and fiscal deficit, he told India would be lucky if it manages to hold country's fiscal deficit at 5.1% of the GDP. However, several economists do not agree with the Govt.’s fiscal deficit projection of 5.1% and predict that it could reach 6% or more.

There is a also a fear that some roll back may happen and most probably Govt. can increase the number of LPG cylinder supply to ten from six in a year.

On FDI part, decision will not boost investment sentiment aggressively as there’s some uncertainty. Investor will keep a slightly modest approach as without a change in the mindset about the State’s role in the economy it seems difficult. In other hand key cities like Banglore, Chennai, Ahmedabad and Kolkatta are out of the ambit of FDI in retail because of opposition from the respective state governments. FDI in aviation too may be a non-starter because of the structural problems facing the industry, and lack of majority stake for the foreign players.

So overall, now its watch for inning for balling team i.e. all who were trying to attack the Govt.

MARKET OUTLOOK –

Well as told y’day that we will see consolidation whenever Nifty will reach in the range of 5650-5685 same has happened but finally bull got success to close above 5600.

As discussed, market cheered the FDI decision but on ground part it has miles to go and that’s after a spike in FDI affected stock we have noticed some cool off in those equities.

Market is expected for correction or for consolidation, it may take place today. So its not right time to initiate fresh longs except few select stocks.

NIFTY –

FII have initiated fresh longs in Nifty & Bank Nifty, bought Index Futures aprx 1122crores. So bulls will try to defend 5600 which seems difficult for them as we also have holiday on Wednesday to welcome Bappa, so profit booking can take place, also global market ended lowered that will too discourage the boosted sentiment.

PCR has reduced to 1.03 and Vix 17.78. Now Resistance has come up to 5620 - 5650 – 5685 and Supports has come to 5585 & 5550. So close below 5550 will favour bears in next few sessions.

Opening seems subdued and market may go volatile & under pressure after opening.

STOCK OUTLOOK -

FDI in Aviation –

FDI in Aviation has different meaning for individuals, have look –

Kingfisher Airlines- rose 20%, sharpest among all its listed peers on hopes that the company will be able to rope in a strategic investor, some media report says they are already in talks with a foreign carrier who will pick up stakes in the carrier.

Jet- has aprx 13,000 crore debt on its books, and they needs Rs 1500- 2000 crore for working capital and is in talks with banks to raise funds.

Spice – Stock rose 15%. As I had already told you earlier, to my view it will be one of the top pick if FDI get through. My view was on the basis - company could be best pick for foreign investor - comfortable debt levels, improving market share, operational efficiencies. Also Mr. SL Narayanan, Group CFO and promoter of the company has told to CNBC TV18 that the airline may close an FDI deal by the year end thereby lifting investor confidence.

FDI in Retail -

Sector would remain in worry as already told one of the main reasons above and that’s retail stocks off their day’s high. Moody has commented on FDI in Retain in India - "Therefore, the credit benefit of the announcement can only be recognized when a major multi-brand retailer actually receives all regulatory approvals to invest," said in a note on Monday. (source MoneyControl.com)

Coal Blocks –

Reports stated that IMG has recommended forfeiting of the bank guarantees of the two companies. JSW Steel is likely to lose its mining licence for a coal block held jointly with Himachal EMTA, according to reports, there are also reports that IMG, however, did not recommend any action against the coal blocks owned by Tata Steel and Reliance Power. Source MoneyControl.com.

Banks – SBI will remain volatile and will rebound after consolidation.

DiD – Stock will remain in news & on buyers RADAR - Hindustan Copper, Oil India, Nalco, Neyveli Lignite, MMTC and Rail India Technical and Economical Services (RITES) due to IPO planning.

TM- Global sales increased 13% in August to 97,225 units and as tradition it may remain under pressure, Resistance 286-295-300 while it will get support 266-257. Stock may also hover for long between 271-280

OPEN CALLS –

Cox&Kings - Bought 138 & 127, TG 148, SL 121

Today’s MG Mantra –

Market is expected for correction so trade with strict SL is suggested and don’t set big TGs.

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.