Morning Bells (30 Jan 13)

Good Morning Friends.

Insan ko insan dhoka nahi deta bulki insan ko uski who UMEEDE dhoka de jaati he jo who dusaro se laga rakhata he.

So finally most hyped, most awaited event took place y’day, RBI cut Interest Rate & CRR by 0.25 basis points and as expected investors went for profit booking in rate sensitive stock at high. I had informed you that profit booking will take place at higher levels. Now coming 2 days also seems choppy with a bit volatility ahead of F&O expiry.

Also the main reason for y’day profit booking was simple – RBI outcome was already factored after Dec disappointment and experts were confident about rate cut. Yes we could seen a sharp decline if rate cut was not there.

Well, After 9 months, RBI has finally announced a Repo cut which could be the beginning of further cuts this year. RBI governor Dr. Subbarao delivered the much sought after rate cut for the first time in 9 months on Tuesday. The RBI cut repo rate by 25 bps to 7.75% which was inline with market expectations. The CRR cut by 25 bps to 4% was also done.

The Indian equity markets ended with losses as market participants seemed to discount the event. In fact the market gave away all its intra-day gains amid selling pressure in Realty, Auto, Oil & Gas and the Auto sectors. The mid-cap and the small-cap stocks also witnessed selling pressure. Only the FMCG sector saw some defensive buying with stocks like ITC and HUL featuring among the gainers.

Importantly RBI governor has also stated that market can see more rate cuts in coming months. The Reserve Bank of India (RBI) would roll out easy monetary policies if the rate of inflation coupled with the current account deficit softens below its expected level in the coming quarters, said D Subbarao, the central bank governor.

"There will be more room for monetary policy actions if inflation eases further and the current account deficit moderates further. If it (both inflation and CAD) goes as usual, the scope is limited for rate cuts," the governor told reporters here in Mumbai.

Finance Minister P Chidambaram has also given sign for a relief in budget, y’day he said - general elections are 15 months away and the Budget to be presented next month will be “responsible". Addressing global investors, on the fourth leg of his overseas roadshows that began last week, he said the government will implement many of the decisions and changes in the run-up to the polls.

Most Important –

Now focus is shifted to general Budget next month. In the backdrop of high twin deficits, moderation in inflation would only provide a ‘limited space’ for monetary easing, as per RBI. While the stance of monetary policy has shifted more decisively towards addressing growth risks, the central bank clearly wants to see more structural action from the government towards managing the fiscal and current account deficits. In this context, the upcoming budget (especially steps that would revive private investments) would be critical in determining the possibility of another rate cut in the March policy review.

Gainers – Tata Power, HDFC, Coal India, L&T, ICICI Bank, Hero MotoCorp, Jindal Steel were among gainers in Sensex and Nifty.

Losers - RIL, TCS, Infosys, Wipro, NTPC, SBI, Tata Steel, Sun Pharma, ONGC, Dr Reddys Lab, Hindalco Inds were the major losers in Sensex and Nifty.

On Domestic Front -

Indian consumers are more worried than they were a year back, according to brokerage firm Credit Suisse's consumer survey, which shows a continuing decline in consumer optimism. Reasons: high inflation and a slowing economy.

On Global front –

Union Finance Minister of India P Chidambaram will launch a new promotion campaign here from Monday to woo European investors to India as the government struggles to reverse an economic slowdown, rein in fiscal deficit and avert a possible downgrade by the rating agencies.

Chidambaram will attend a roadshow on investment opportunities in India hosted by Deutsche Bank and Barclays Bank in Germany's financial centre and will hold discussions with leading representatives of European companiesand institutional investors.

=====================  MARKET OUTLOOK  =====================

As informed profit booking took place at higher levels. Market also seems choppy in coming 2 days with a bit volatility ahead of F&O expiry. Bull will try to pull Nifty above 6100 while bears will try to take advantage of profit booking and will try to drag Nifty 6000. Only leading companies Q3 no.s can support market before expiry.

Now all eyes will be on Q3 Nos from ICICI Bank, Lupin and Punjab National Bank on Thursday and BHEL on Friday. Auto and cement stocks will also remain in focus as companies from these two sectors will unveil monthly sales data for January on Friday.

The INDIA VIX on NSE was down 4.67% and ended at 14.47 against previous close of 15.17.

FNO PCR is 1.00 against previous close 0.97.

Indian Rupee against USD was trading at 53.76 against its previous close 53.91.

S&P 500 (US) was trading higher at 1505.51 up 5.33 then its previous close at the time of writing M Bells.

(MG’s Note – Closely watch S&P as to my personal view S&P above 1500 a bit risky for global market.)

=======================  NIFTY OUTLOOK  ========================

The outlook for the near term remains a bit cautious. If The Nifty cracks below the 6000 psychological mark and stays there for a considerable period of time it is likely to see a bearish movement. 

Y’day’s fall told us that market seems fatigue and hesitating to move up but still its not time for making short The short positions should be built below 6000 because still market holding its psychological level of 6000. And after a breather right now market can move up only on liquidity which will alone drive the market.

Nifty is in range of 5935-5990-6040-6090-6150 for current week.

Resistance – 6163 – 6137 – 6093 and Support – 6024 – 5998 -5954

Opening - seems flat and then one can expect a bit choppy movements ahead of F&O expiry.

========================  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 will help you in taking positions.)

New Bank Licence Guidelines in Final Stage –

The RBI is close to finalising the guidelines for new bank licences, Duvvuri Subarao, the governor of the Reserve Bank of India said on Tuesday.

The central bank has responded to the government's recommendations, and is awaiting New Delhi's response on the points raised by the RBI, Subbarao said.

ICICI Bank – (Result on Friday 31 Jan 13)

ICICI Bank touched a 52 week high and ended at 1201 rising 1%. It touched a high of Rs.1228 and a low of Rs. 1181 in today’s trade. Total traded quantity at the counter stood at 5.56lakh.

Axis Bank –

Axis Bank also touched 52 week high and ended higher by 4%. Stock closed at 1473 up by Rs67 on BSE. It touched a high of Rs.1503 and a low of Rs. 1418 in today’s trade. Total traded quantity at the counter stood at 11.2lakh.

Sterlite Industries –

Sterlite Industries (India) Ltd has posted a net profit after taxes, Minority Interest and Share of Profit of Associate of Rs. 11914.10 mn for the quarter ended December 31, 2012 as compared to Rs. 9135.20 mn for the quarter ended December 31, 2011.

Total Income has increased from Rs. 111132.70 mn for the quarter ended December 31, 2011 to Rs. 115964.80 mn for the quarter ended December 31, 2012.

HDFC –

Mortgage lender HDFC today raised Rs 500 crore through non-convertible debentures (NCDs) for general corporate requirements.

   
Non-Convertible Debentures are loan-linked bonds issued by a company that cannot be converted into stock and usually offer higher interest rate than convertible debentures.

   
According to sources, one-day NCD issue closed for Rs 250 crore with a green shoe option to raise another Rs 250 crore

Idea Cellular –

Idea Cellular Ltd posted a net profit after tax of Rs. 2285.70 mn for the quarter ended December 31, 2012 as compared to Rs. 2009.80 mn for the quarter ended December 31, 2011.

Total Income has increased from Rs. 50308.20 mn for the quarter ended December 31, 2011 to Rs. 55785.80 mn for the quarter ended December 31, 2012.

Bharati Airtel –

Bharti Airtel , India's top mobile phone operator, has bid for a telecoms licence in Myanmar as part of plans to expand in overseas markets, two sources with direct knowledge of the matter said.

The Myanmar government earlier this month invited expressions of interest for two mobile phone licences - a first step towards increasing mobile penetration from 5-10 percent to 80 percent in three years.

The deadline for submitting bids was last Friday.

MSX-SX (with Financial Technology) –

MCX-SX, India's new stock exchange, will begin trading of cash equities and equities derivatives on February 11, according to a statement on Monday.

MCX-SX has been gearing up to launch equities trading since last year, and will compete against more established rivals Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE).

Stocks that can show good strength in coming days –

GMR –

Availability of coal and gas to fire extant and upcoming power projects, (2) monetization of Mumbai airport’s real estate and (3) sale of some of its assets can help to meaningfully reduce leverage (Rs 15300 crore debt against Rs 13300 crore of equity in 1HFY13).

GVK Power & Infrastructure –

Increased availability of gas could help to improve plant load factors (PLFs), revenues and profits of its power segment, (2) monetization of real estate at the Delhi airport and (3) entry of investment partners (or buyers) of some of the operating road projects can help GVK to reduce its consolidated debt burden of Rs 15500 crore (1HFY13) and increase its equity valuation

Adani Power –

A small increase in A tariff hike of Rs 0.50/kWh to offset costs in the Mundra power plant could add Rs 37 to current estimated fair value of Rs 111. We do not think a review of the PPA may be feasible. Nonetheless, reduction in fuel costs by around 20% through higher blending of low-cost coal could accrue Rs 26 to our fair valuation.average tariffs (Rs 0.25/kWh) across its projects can add 140% to our current estimated fair value of Rs 33. (2) pooling of coal prices can reduce costs by Rs 400 crore (and increase our estimated fair value to Rs 53) and (3) ramp up of Bunyu coal mine production to 10 mtpa can double the fair value estimate of APL.

Lanco Infratech –

A sustainable merchant tariff of Rs 4.0/kWh could add Rs 6 to our fair value estimate of Rs 12. In addition, allowing cost-plus tariff at Amarkantak could add Rs 3 to fair value estimates; utilization of 90% at Kondapalli could add Rs 2 to our fair value estimate.

==================== 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 even small profit if Nifty doesn’t shows strength.

Reliance Jan Futu – @913 TG 20+ Updated SL Hold (Active from 25 Jan 12)

SL Hit @902, Loss = -2750

=============== INVESTMENT BASKET ===============

(Stock in this section is with view of 3 months to 1 year)

Mahindra Holiday – @334 TG 375+ (Active from 15 Dec 12)

Satyam Computer – @103 TG 130+ SL 112 (Active from 15 Dec 12)

On Mobile – @44 TG 60+ Updated SL 39 Qty 2K (Active from 01 Jan 13)

=============== HOT SHOT ===============

Keep eye on following stocks, if Nifty shows strength then these stocks can give you reasonable return in very short term –

Bumper Prize Call -

Due to some technical reason I was not on board from 12 to almost closing. Hope you would have exited on every move of 50 points on both side.

============ PL Sheet (started from Jan 2013) ============

(If someone find any error in PL, please draw our attention)

MG Blog (Total +25,650) –

Cash = +9,650.00

FNO = +19,000 – 2750 (Loss in Rel Fut) = 16,250

(Rel Fut bought @913 SL hit 902)

Billionaire Club

TOTAL = +51,000

Today’s MG Mantra –

Market is in breather mode, buying in selective stock can be seen, fresh shorts only below 6000.

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.