Morning Bells (1st Oct. 12)

Good Morning Friends.

A lesson taught in IIM – Start working to fulfil your dream otherwise someday someone will put you in work to fulfil his dreams!

Please remember market will remain closed on Tuesday, on account of Mahatma Gandhi Jayanti, so one short day in this week. China market will be closed for whole week and HongKong market will remain closed on 1&2 Oct.

Well today market is set either to cheer or react sharply on GAAR. The Parthasarathi Shome panel is likely to submit its final report to Finance Minister P Chidambaram on Monday. The committee in its draft report had recommended postponement of the controversial tax provision by three years and abolition of capital gains tax on transfer of securities. Govt. had already postponed implementation of GAAR by a year to April, 2013. The proposal was introduced in Budget for 2012-13 by the then Finance Minister Pranab Mukherjee.

Well, traders can go for profit booking this week after current rally and market may move up in-line with further announcements on core reforms. As already told that now its time to see progress on reform announcement, expectation for further reform announcement and more importantly market will wait for September inflation numbers as they will play a part in the RBI's rate decision in its next policy review meeting,.

This week Auto and Cement stocks will remain in focus as companies from these two sectors will announce their monthly sales volume data for September.

Another hope has come from RBI Deputy Governor Anand Sinha, he’s hopes that India can recover from global economic slowdown faster than China. Both are affected by the global economic slowdown but India being a domestic consumption driven economy could recover faster. (Source MoneyControl.com)

So once again, fresh start and again market is set to react sharply on announcement. October series is full of promises and various actions globally. This is also month of corporate earnings so market will remain full of thrill. On global front any move from China to support its economy will be an added positive, particularly for commodities.

So next stimulus could be from China, Markets are now focusing on whether China will inject more stimulus by way of more infrastructure spending or a rate cut.

MARKET OUTLOOK –

Once again market is ready to react on Supreme Court’s relief to Govt. The Supreme Court clarified in response to a Presidential Reference by the government that all natural resources did not have to be allocated through a public bidding process and that public good was more important than revenue maximization.

Good news is that – FII has pumped more than Rs 19 K crore (USD 3.5 billion) in the Indian stock market in September, the highest monthly inflow in seven months, was the reaction of bold economic reform initiatives taken by the Govt.

Bad news is Current account deficit came 3.9% of GDP while expectation was 3.3%.

So probably Oct series is going to remain in 200 pts range, First attempt could be close above 5740 then Nifty will enter to crucial range 5740-5775, I will say watch it carefully and if something comes boosting then we can head 5850-5900 else market can take back from this range to test below 5600 mark even 5550-5500. So development in upcoming days will confirm the mood of market. But as far as I see it’s a around 200 pts series.

NIFTY –

Vix is down to 16.16 which will be sign of weakness in coming sessions. PCR 0.97.

Resistance 5740 – 5782 - 5820 and Supports 5707 – 5679 - 5627.

Opening seems positive say around/above our first resistance level.

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 can decide stock move either side.)

KFA – Failed to assure its lenders with any 'concrete' solution for restructuring of debt in a meeting held on Thursday in Bangalore. The consortium of banks now decided to hold a meeting by the end of October. Company has total loans of around Rs 7,000 crore. But I could be good bet for Mid to Long term. So just wait for small correction and then start accumulating.

There’re also media reports saying Air India should be partly privatised while Civil Aviation Minister Ajit Singh recently ruled out any move to privatise Air India as Govt. was pumping in Rs 30,000 Cr. for its restructuring

CoalGate – CBI today started probe against 24 companies and public officials in connection with alleged irregularities in coal block allocations between 1993 and 2004, including during the NDA regime. Now this game going to be interesting, so keep close eye on development, could be a good gain if you closely watch development in CBI probe.

The Coal Ministry has written to public sector firms, which were alloted mines, to present their case before the IMG on October 9 and 10.

Banks – Govt. has decided to give interest subsidy of 2% a year to all state owned banks for farm loans upto Rs 3 lakh in 2012-13. Finance Minister proposed to continue the interest subvention scheme for providing short term loans to farmers at 7% p.a in FY13. Public sector banks (PSBs) generally charge 9% rate of interest on farm loans. Lenders can now claim for 2% back from the government of India while disbursing such loans at 7%.

Keep eye on Dhanalaxmi Bank and YES bank for short to midterm bet.

RIL – Reliance Industries will also remain in focus and so market will too react on RIL’s development, recently RIL has sought approval for a proposal to triple its KG-D6 gas prices from April 1, 2014 after the current below market rate. So keep eye on development as RIL may benefit investors in mid to long run.

IT – Investors are entering to mid-cap IT industries on expectation that it will outperform in near future while large cap seen some pressure y’day while IT heavyweight seems under pressure.

Infy - is in talks with the West Bengal government for setting up a campus and hope for result is positive. This will also help WB in change over its image as IT business hub. (Reports PTI)

PFC - Keep eye on PFC, its moves so fast and was under consolidation for 2 days. It can again move to 200 lvls.

Insurance and Pharma – FII now eying on further reforms in sectors like insurance and pharma, so next big earnings can come into both sector.

OPEN CALLS –

Nifty 5900CE - @31 for TG 55+ SL 20

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, Relax and plan your next move carefully. Small gains are the Mantra for first week of fresh series.

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.