Morning Bells (6 Feb 13)

Good Morning Friends.

Confident walking is more successful than confused Running. Follow no one but learn from everyone.

It was again surprised, we predicted on Monday that Nifty will test 5940 this week and y’day Nifty was almost there in opening trade.

The NSE Nifty closed at 5,957 down 30 points over the previous close. It earlier touched a day’s high of 5,970 and a day’s low of 5946. It opened at 5,948.

The Indian equity market extended its losing streak for the fifth straight trading session on Tuesday led by weakness in the global markets. After opening with a negative gap, benchmark indices struggled throughout the trading session and were unable to float in positive terrain.

Gainers – TCS, Bajaj Auto, Sun Pharma, Gail India, Maruti, SBI, Hindalco Inds and NTPC were among gainers in Sensex and Nifty.

Losers - RIL, Infosys, Wipro, Bharti Airtel, ONGC, BHEL, ICICI Bank, Mahindra & Mahindra , Tata Steel, Hero MotoCorp, Tata Motors and HDFC were the major losers in Sensex and Nifty.

Sectoral – Barring the BSE Healthcare index, all the other BSE sectoral indices ended in the red. Among the top losers were, BSE FMCG, Power, Consumer Durables, Metals and the Oil & gas index. Even the BSE Mid-Cap and BSE Small-Cap index lost 1% and 0.7% respectively.

On Domestic Front -

Inflation - Brokerage house Nomura expects core inflation to start rising next quarter onwards as it feels an uptick in demand will coincide with a shortage in production capacity.

"In our view, this demand-supply mismatch will lead to manufacturers exerting pricing power. Hence, we believe the expected moderation in core (non-food manufactured) WPI inflation in Q1 2013 will be unsustainable, and that it will begin to rise from Q2 2013 (April-June)". – MoneyControl.com

Cheques would be chargeable - Recently, the RBI floated a discussion paper on ‘Disincentivising Issuance and Usage of Cheques' thereby seeking to discourage usage of cheques and cash withdrawal, by levying a charge on such transactions.

Death knell for OMCs?? - Finance Ministry's move to drastically change the way petrol and diesel are priced may sound the death knell for some of the domestic oil refineries, an industry association has warned.

The Finance Ministry wants auto fuel to be priced at export parity by abolishing 2.5 per cent customs duty on petrol and diesel to save up to Rs 18,000 crore in annual subsidy outgo.

The Petroleum Federation of India (Petrofed), an apex body of entities in hydrocarbon sector, on January 28 wrote to Finance Minister P Chidambaram saying removing duty protection on products would render "some inland refineries sick" while private refiners like Reliance Industries and Essar Oil may resort to exporting their full production.

On Global front –

Reports said that Wal-Mart has been lobbying with the US lawmakers on dozens of issues every quarter, whose disclosures it is mandatorily required to make under the American regulations.

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

In the very short-term we might see some pressure. 6040-6050 on the upside of the Nifty is certainly resistance. We will test 5940 sometime down this week.

Now focus is shifted to budget which is probably schedule from 21-28 Feb 13. More clear view in coming days.

The INDIA VIX on NSE was up 1.88% and ended at 14.61 against previous close of 14.34.

FNO PCR is 0.82 against previous close 0.98.

Indian Rupee against USD was strengthen by 15 paisa and was trading at 53.14 against its previous close 53.29.

S&P 500 (US) was trading at 1509.30 up 13.59 then its previous close at the time of writing M Bells.

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

Now immediate Nifty range is 5900 – 6200 but on downside could be more on profit booking at higher levels as its till date is liquidity driven rally.

Nifty is in range of 5900-5960-6040-6150-6190 for current series.

Resistance – 5992 – 5981 – 5958 and Support – 5945 – 5934 - 5922

Opening - seems flat as y’day global market recovered and we may see some strength in first half.

========================  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.)

Here are some top stories -

United  Spirit –

Shares of United Spirits surged 2% after Diageo was given the nod by SEBI to go-ahead with an open offer to acquire 26% stake in UB group’s UB spirits. The permission would pave the way for Diageo to inch closer on its Rs.111.67bn potential takeover of majority stake in United Spirits. Stock ended at Rs1891 up by 44.25. It touched a day’s high of Rs. 1929.90 and a low of Rs. 1836.50 in early morning session of today’s trade at BSE. Total traded quantity on the counter stood at over 5.67 lakh shares.

Sun Pharma –

Shares of Sun Pharma surged higher by 4% after USFDA granted its subsidiary an approval for its Abbreviated New Drug Application (ANDA) for generic version of Doxil®, Doxorubicin HCl Uposome Injection USP. Stock closed at Rs751 up by Rs 27.35. It touched a day’s high of Rs. 752 and a low of Rs. 727 in early morning session of today’s trade at BSE. Total traded quantity on the counter stood at over 1.2 lakh shares.

Escorts -

Shares of Escorts surged 4% after the engineering company posted robust Q1 results. Escorts' profit after tax (PAT) rose by 49% q-o-q as expected, to Rs 0.28bn in Q1 of FY2013. EBITDA was up by 14% QoQ to Rs 0.5 bn while operating profit margin fell to 5.1%, a drop of 50bps q-o-q, in the first quarter. Stock ended at Rs69.50 up by 3.70. It touched a day’s high of Rs. 70.80 and a low of Rs. 67.55 in today’s trade at BSE. Total traded quantity on the counter stood at over 7.75 lakh shares.

NTPC –

he big daddy of divestment NTPC   will hit the market on February 7, Thursday. The government is divesting 9.5% stake to raise Rs 12,000 cr via the offer for sale route. The floor price will be disclosed tomorrow.

"The EGoM has approved 9.5 per cent stake sale in NTPC. The stake sale will be made on February 7," Disinvestment Secretary Ravi Mathur told reporters.

The Empowered Group of Ministers (EGoM) on disinvestment is chaired by Finance Minister P Chidambaram. When asked how much would be raised through the sale, Mathur said, "it would be as planned around Rs 12,000 crore".

MG’s Note - The price could be between Rs 140 and Rs 145. NTPC's last follow on issue was highly priced and investors haven't made any money. So, the track record is not good for NTPC . Things have improved on ground for NTPC.

Ultratech Cement –

rebounded 1.7% after the stock took a hit on Friday after because of a technology trading glitch form a brokerage firm.  Stock is trading down at Rs.1893 up by 32. It touched a high of Rs. 1910 and a low of Rs.1880 in the day’s trade at BSE. Total traded quantity on the counter stood at 0.12lakh. 

==================== 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.

=============== 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 –

Be on board for next clue.

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

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

MG Blog Jan Series Total Profit = +25,650 (Cash +9,650.00 & FNO = +16,250)

Billionaire Club Jan Series TOTAL Profit = +51,000

Today’s MG Mantra –

Don’t go against market sentiment. Market creating base around 5950.

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.