Morning Bells (15 May 13)

Good Morning Friends.

Opportunities are like an ICE, if you think more about it, it melts – I learned in past 3-4 days.

So today was the day for WPI, but as suggested during the day it would not have that much effect and it indeed followed the lines. The wholesale price index (WPI) in April rose 4.89 percent, at its slowest pace since November 2009. 

The wholesale price index, India's main inflation measure, rose an annual 5.96 percent in March.

As per official data released today, WPI inflation in the manufactured items category declined to 3.41 per cent in April from 4.07 per cent in March.

Also, inflation in food articles category, which has a 14.34 per cent share in the WPI basket, came down to 6.08 per cent. Inflation in this category was at 8.73 per cent in March.

The RBI will take into account the declining inflationary trend while unveiling its mid-quarter policy review on June 17.

The wholesale provisional inflation data for February was revised higher and as told market participants seemed to have already factored in the steep decline in April inflation data.

Gainers –

Ranbaxy Laboratories, Sun Pharmaceuticals, Bank of Baroda, Power Grid, ONGC, Bharti Airtel, GAIL (India), Punjab National Bank, Tata Motors, Asian Paints and HDFC were among the major gainers in Sensex & Nifty.

Losers -

Dr Reddy’s Laboratories, Bajaj Auto, HCL Technologies, BHEL, JP Associates, DLF, Tata Steel, HDFC Bank and M&M were among the major losers in Sensex & Nifty.

Sectoral –

Domestic Front –

Rupee Phenomena –

The rupee edged lower on Tuesday as a sharp easing in wholesale price inflation raised optimism the central bank would cut interest rates to boost economic growth, but gains were short-lived as the dollar remained well bid in the local market.

Headline inflation fell below 5 percent in April, dropping within the Reserve Bank of India's (RBI) comfort zone for the first time in more than three years and fuelling hopes it would continue its easing campaign.

However, the rupee still remains constrained by other factors, including concerns the current account deficit will widen after data on Monday showed a spike in the trade deficit due to a jump in gold and oil imports.

"The inflation data was a huge positive and prompted foreign banks to sell the dollar. Later there was some small demand (for dollars) coupled with a short market which pushed the rupee off highs," said Ashish Barua, a senior forex dealer at IndusInd Bank.

"The rupee should continue to trade in a range in the near-term, 55 to 55.10 should be capped on the topside while 54.25-54.30 will be the floor for USD/INR," he added.

(MoneyControl.com)

RBI Restricted Gold imports –

Gold buying in India, the world's biggest buyer of the metal, came to a halt on Tuesday, a day after the central bank restricted gold imports on consignment basis and jewellery sellers saw a sharp rise in festival sales.

On May 13, the Reserve Bank of India (RBI) banned gold imports through consignment, and traders awaited for more clarity from the central bank. Gold and silver imports rose 138 percent in value terms to $7.5 billion, data from the trade ministry showed, increasing pressure on the current account balance.

Global Front –

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

As the wholesale index, retail inflation and trade deficit numbers are out, the market will now eye January-March Gross Domestic Product (GDP) as the next big trigger. 

KEY DATA TO WATCH THIS WEEK -

Mon: Consumer price inflation

Tues: Wholesale price inflation

Wed: Money supply data

Fri: Bank credit and forex exchange reserves data

The INDIA VIX on NSE was down 1.94% and ended at 17.17 against previous close of 17.51.

FNO PCR was 0.97 against previous close 1.01.

Indian Rupee – Instead of easing inflation Rupee declined further on the account of weakness in Yen or say dollar gain against yen, Rupee declined 8 paisa and was trading at 54.81 against its previous close of 54.73.

S&P 500 (US) was trading at 1646.30 up 12.53 then its previous close at the time of writing M Bells.

RESULT CALENDER –

Probably this week following results are expected –

Bank of India, Bank of Baroda, Reliance Power, Rashtriya Chemical, Tata Coffee, Tata Tele, Dr Reddy’s lab, Reliance Infra, United Bank, Adani Ports and J&K Bank.

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

Now immediate range says – 5950 would be a trend changer on down side and then Nifty can head towards 5820 levels while for further upside Nifty need to close Friday’s high 6115. Till then Nifty seems consolidating between 5970-6030. Range bound session would be really difficult for option traders.

Opening – Seems a bit positive as inflation easy and now GDP is the key data to watch. Further it may be a bit volatile.

========================  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.)

TM

TM followed the trend and closed below 301, but it can not be considered as the regular close as not single stock there which is not lost in this free fall. So if mkt remains flat or rebound, TM to rebound on previous levels.

DLF –

DLF shares have been bought by mostly foreign institutional investors (FII).  In fact, when last week DLF decided that they wanted to go ahead with this institutional placement programme, they had already got a pretty healthy order demand . The company was trying to go ahead with the programme last week itself, but it wasn’t able to file the prospectus in time, among other things. 

One investor alone has placed an order for almost half the book at USD 165 million. There are three investors who have placed orders for USD 100 million each. The floor price is about Rs 222 per share. This institutional placement programme is to pare DLF’s debt to meet Sebi guidelines of having a 25 percent minimum float by the month of June.

Fresh equity of 8.1 crore shares is on offer. According to sources, DLF will announce the response to the issue at 4 pm to the stock exchanges, which of course is the practice.

But the order book has been covered about 1.2-1.5 times at Rs 225 per share, which is higher than floor price of Rs 222. But overall, it has got a subscription of over two times so far.

View – So as told most probably DLF to rebound or at least hold around the levels, yes if Nifty now don’t play any panic. Nifty 5820 is also on card.

Banking Sector -

The recent Reserve Bank forensic report on Cobrapost's money-laundering revelations continued to haunt the banking pack with major scrips witnessed selling pressure on every rise.

FNCG -

FMCG have good run in recent so avoid fresh buying on this counter, it need a correction now.

==================== 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)

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

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

MG Blog Fronm Jan 13 to April 13 (Total 56,050)

May 2013 - +3000 + 1500 TV18 profit – 1750 DLF loss = +2750

Billionaire Club from Jan 13 to April 13 (Total 1,10,950)

May 2013 - +6000

Today’s MG Mantra –

A cautious approach is suggested, as Monday’s panic sell is not over yet, it may again surprise.

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Have a Profitable day – MG