Morning Bells (3 Dec 12)

Good Morning Friends.

Excellent definition of friend – A friend is a gift given to you by your own behaviour.

After excellent 250+ rally in Nifty now would be interesting to see whether market will take rest ahead of FDI voting or will continue its bullish journey till 6000.

So now FDI will remain key point of discussion everywhere in the market and markets will closely track the issue of FDI in multi-brand retail, Lok Sabha which will have a discussion on December 4 and 5 while ajya Sabha has decided to have a discussion on December 6 and 7 on the issue under a rule that entails voting.

Key note on FDI discussion is - If government is able to push through some of the important reform initiatives, the markets will gain further and we can see some good strength especially in the sectors which beaten down like infrastructure, capital goods, public sector banks.

Market has also entered into a week which seems full of excitement as will react sharply on FDI discussion and imminent voting. Today also markets are expected to see stock-specific movements as investors react to monthly sales data for auto and cement companies.

On global front - later on today, European finance ministers will meet to try and approve the latest aid payment to Greece, after failing to agree last week with the IMF over those conditions. And according to experts global investors will also focus on continued negotiations over the so-called 'US fiscal cliff’.

More on global front, this week will see three market-moving data releases in the US -- ISM Manufacturing Index (Dec 3), Jobless Claims (Dec 6) and Employment Situation (Dec 7).

The outcome of the ECB governing council meeting in Frankfurt on Thursday will also keep investors on the edge.

So, overall, as said this week is full of excitement and traders need to be cautious as we have very important events as well as data this week which will influence the market for further move either side.

MARKET OUTLOOK –

Nifty has closed at a 19-month high level and now there are high chances of profit booking ahead of an eventful week.

Investments by FIIs in the Indian stock market have crossed Rs 1 lakh crore (net inflow of Rs 1,03,272 crore i.e. USD 19.78 billion, according to the Sebi data.) so far in 2012, marking a huge turnaround from net outflows reported in 2011. This was the second highest net inflow by FIIs in a single calendar year since their entry into Indian capital markets in 1992. In 2010, FIIs had made net investment of Rs 1,33,266 crore (USD 29 billion.

In the last two decades, the last month of the year has generated returns between 0.7% and 15.7%, which has given birth to the December phenomenon theory. Only four times in the last 20 years -1994, 2000, 2001 and 2011 - December has generated negative returns, states a recent Morgan Stanley report.

The INDIA VIX on NSE down 1.4% and ended at 15.15 and Index PCR is 0.97.

The rupee gained 0.93% and traded at 54.59 against previous close 55.10 as per NSE data.

FII DERIVATIVES STATISTICS FOR 30 Nov 2012
	BUY		SELL		OPEN INTEREST AT THE END OF THE DAY		Difference
	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores
INDEX FUTURES	81295	2294.01	57669	1697.81	372031	10869.76	596.20
INDEX OPTIONS	421591	12224.14	365512	10679.81	1280223	37653.88	1544.33
STOCK FUTURES	92218	2569.96	90663	2582.92	1059181	29938.34	-12.96
STOCK OPTIONS	44748	1244.35	46150	1289.95	31897	879.29	-45.61

FII bought 23,626 contracts worth Rs. 596.2 Cr. and OI increased by 40,536 contacts in Index Futures.

NIFTY OUTLOOK –

Nifty has formed double bottom and giving negative divergence, so here one can expect a small correction in Nifty. Bulls will try to ceiling 5800 for bears and 5785 will act as strong support for short term traders, So for short term view Nifty seems in the range of 5785 – 6000.

Now Nifty will face resistance at / in the range of 5650 & 5980 while 5785 is the SL for longs for short term trend.

As told Nifty giving signal for correction and seems under pressure, so one should need to opt cautious approach and should wait for FDI discussion result, this will be a key signal to move market either side.

An interesting observation - Its either co-incidence or whatever but MA 20 is 5653 and MA 50 is 5654 - whenever it comes so close it shack the market.

Resistance comes to 5900 - 5930 – 5958 - 5990 and Supports comes to 5842 - 5808 – 5785.

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.)

Coal & Mining –

The government has decided to deallocate two coal blocks -- one each of Chhattisgarh Mineral Development Corporation and Odisha Mining Corporation-- for delaying production from the mines.

Sesa Goa -

Shares of NRI billionaire Anil Agarwal-led Sesa Goa  jumped a 7-8 percent ahead of the Central Empowered Committee (CEC) report on allegations of illegal mining in Goa tomorrow.

Sesa Goa's investors are hoping that there would be some kind of good news . Now good news can come in two forms. 1) A partial withdrawal on the mining ban in Goa or 2) there can also be a resumption of the transportation of iron ore that they already have. In September 2012, there was a complete blanket mining ban in Goa. Sesa Goa has already been suffering as their Karnataka operations have come to a standstill for the past 15 months. The company was dependent on its Goa operations over the past 15 months.

PVR – Cinemax Deal -

The Board of Directors of PVR Limited (PVR) y’day announced that it has entered into Definitive Agreements to acquire 69.27% stake in Cinemax India Limited (Cinemax), a Kanakia Group entity that operates movie exhibition business in India.

PVR currently has 46 operational properties, with 213 screens. This acquisition is being carried out through its wholly owned subsidiary, Cine Hospitality Pvt. Ltd. (CHPL). CHPL would be acquiring 69.27% stake owned by the promoter group of Cinemax at a price of Rs 203.65 for an all cash consideration of Rs 395 crores. The acquisition shall be followed by an open offer to the public shareholders of Cinemax India Limited for an additional 26% stake for cash, as per SEBI takeover regulations.

Jet Airways -

The much talked about Jet-Airways-Etihad  deal may be structured in two tranches and will be signed within three months, exclusive sources told CNBC-TV18.  The deal is still at a due diligence stage, it is learnt. 

Jet Air and Etihad have not confirmed the stake sale news but sources say, the deal may be a combination of fresh issue and secondary sale of shares.

Promoter Naresh Goyal is likely to sell 15% directly in first tranche and Etihad will increase its stake further via a fresh issue. . Etihad is likely to hold up 23-24% stake post the completion of the deal since the Middle East-based carrier is not eyeing a majority stake in company.

Proceeds of the stake sale will be used to retire Rs 12,000 crore debt, Jet has on its books.

Realty Sector & Infta –

Change in long term outlook - The real estate sector will continue to remain an attractive investment destination with the possibility of prices in residential areas appreciating by 91 to 145 per cent in select cities over the next five years, according to report prepared by Knight Frank.

Keep eye on DB Realty, Peninsula Land & Anant Raj Industries.

Life Style Segment –

There’s news of good salary hikes and signal of increasing life style expenses. One can keep eye on Mahindra Holidays & Thomas Cook.

Telecom Sector –

Bharti Airtel is planning to raise Rs50bn via IPO. The Issue will be opened for subscription on December 11, 2012. The price band has been fixed between Rs210 to Rs240 per share.

OPEN CALLS –

# Please remember when I make special remark with any position then one should need to take care of that else you can make loss instead of profit.

# Be with strict SL and don’t hesitate to book profit if Nifty doesn’t shows strength.

IMPORTANT NOTICE – Market may react sharply on FDI voting result, so if it falls down during voting then one needs to keep strict SL (8-10% from CMP) on all open position, as then we may see a deep correction in Nifty and mid caps will be key sector which will be most target most.

KP IT - @127 for TG 140+ SL 117

Dish TV - @78 for TG 84+ SL 72

DB Realty - @128 for TG 145+ SL 107

Dishman - @118 for TG 130+ SL 107 (Has given buy signal and may see some move in this series)

Jindal Photo - @145 for TG 160+ Updated SL 126 (126 on closing basis, volatility SL 123)

ITC – Shorted @298 for TG 290+ SL 303

TODAY’S PICK (Intraday to 1-2 sessions) –

WILL UPDATE DURING MARKET HOURS, AS NEED TO CHECK MARKET SENTIMENT

(A) Nifty 5900PE & 5800PE looks attractive once Nifty reach above/between 5900-5930 range. Will update during mkt hours for more cues.

Today’s MG Mantra –

To all blog members & visitors, though there’s no big worry seems but market will react sharply on FDI, so if it fall down during voting then one need to keep strict SL (8-10% from CMP) on all open position.

Have a Profitable day – MG

Disclaimer –

1. I have shared my view as per my limited knowledge; please use your own skills to make a wise decision before execution of trade or consult your financial advisor.

2. Those that don’t have patience and are not willing to book loss also in cases don’t enter this market.