Morning Bells (03 July 13)

Good Morning Friends.

When one door of happiness closes, another opens. But we look so long at the closed door that. We don’t see the one which is opened for us.

Profit booking gripped the benchmark indices Y’day after three days of wonderful rally. Y’day many time the bulls tried to bounce back, a deluge of selling pressure stemmed their tide. Negative vibes from the European equity market also proved to be a dampener.

Gainers –

Ranbaxy, Lupin, GAIL India, Bharti Airtel, BHEL, ACC, IDFC, Sesa Goa, HCL Technologies, ICICI Bank and JP Associates were among the gainers.

Losers -

Jindal Steel, DLF, Axis Bank, Reliance Infrastructure, Tata Power, Punjab National Bank, NMDC, NTPC, Maruti and ONGC were among the major losers.

Sectoral –

Realty, auto, oil and gas, capital goods and banking stocks were under pressure, among mid and small caps also seen selling pressure.

Domestic Front –

Global Front –

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

Now week all eyes will be on ECB meet on interest rates and unemployment data from the US and Eurozone will be tracked closely. 

As discussed during the day, I was expecting a sudden bout of selling pressure after 2 and same took place. Now question is whether it was a correction? Most of experts feel that Tuesday’s correction can be considered as consolidation after such a big upmove in 3 days.

This means bias for the short-term remains positive. This also means uptrend could be revived this week, so let’s swim with flow.

Actually the positive outlook for the market has been further strengthened by decisions made by the government, which is the hike diesel price. 

The INDIA VIX on NSE was up by 0.66% and ended at 18.21 against previous close of 18.09.

FNO PCR was 0.94 against previous close 1.00.

Indian Rupee – Rupee declined by 14 paisa and was trading at 59.66 against its previous close of 59.52.

S&P 500 (US) was trading at 1618.98 up 04.02 than its previous close at the time of writing M Bells.

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

As per y’day suggestion finally Nifty seen some decline when it attempt to breach 5900. Now DMAs have been changed. Now Nifty had to struggle around 5935 and trend changer level comes to 5975 around level. So if there’s nothing major bad news we may see some more positive moves.

Opening – Can continue y’day’s decline, but soon bulls can make attempt to turn it positive.

========================  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.)

Telecom Sector : New booster injection is here –

Telecom Commission, an inter-ministerial body, on Tuesday approved to hike foreign direct investment limit for telecom sector to 100 percent from 74 percent currently. (-CNBC TV18)

Department of Telecommunication (DoT) is likely to soon move a cabinet note for 100 percent FDI in telecom services.

At present, FDI limit in the sector is 74 percent and 49 percent can be invested through automatic route. But to take it upto 74 percent, Foreign Investment Permission Board (FIPB) nod is required. In case 100 percent FDI is approved, 49 percent investment would still be allowed through automatic route.

The idea behind increasing FDI limit in telecom sector is to help industry get fresh funds to lower financial burden. Reacting to the news of increase in FDI limit KPMG said that 100 percent FDI will help telecom companies to bring down debts. However the research firm does not see improvement in valuation of telecom companies on this regard. (-MoneyControl.com)

Rcom –

On Monday the mobile carrier said it had repaid foreign currency loans worth about USD 1.2 billion.

Falling debt levels and two recent separate deals to share mobile towers and fibre optic with Reliance Industries Ltd's telecom unit have boosted Reliance Communications shares.

Looking at the change in outstanding positions one should expect more upside in stock.

HDFC –

The Government of Singapore Investment Corp (GIC), investment firm Temasek and Oman's State General Reserve Fund have committed to invest USD 200 million in a real estate fund run by Indian mortgage lender HDFC , a source with direct knowledge of the matter told Reuters.

The investment is in a USD 500 million real estate private equity fund launched late last year by HDFC Property Fund, founded by Housing Development Finance Corp (HDFC), India's biggest mortgage lender, the source said, speaking on condition of anonymity as the information is not public.

HDFC Property Fund declined to comment, GIC and Temasek did not respond to an email and State General Reserve Fund could not be contacted immediately. (-MoneyControl.com)

New Banking Licence : 10 companies are hopeful to get nod from RBI –

With 26 public and private sector companies applying for bank licences, Finance Minister P Chidambaram has said that there was no ceiling on the number of entities which can be permitted to operate a bank.

"I don't think there is a ceiling. I don't think there is a number in mind. It all depends upon how many applicants are eligible applicants. The fact that somebody applies doesn't mean he is an eligible applicant," he told PTI in an interview.

Top Contender -

Following are the top contender – JM Financial, Bajaj Financial Services, L&T Fin. Holdings, Reliance Capital, LIC Housing Finance, Religare Enterprise, PFC, Aditya Birla Nuvo, IDFC, SREI Infra,

Among above all companies like L&T Finance Holdings , IDFC  have a good chance of getting the licence as these are extremely respectful names in terms of governance and experience, says experts.

Interesting to know –

The Foreign Institutional Investors (FII) ownership in consumer companies has risen steadily in the past three years and now it is at an all-time high.

Jubilant FoodWorks  -  almost 42%, Marico – above 30%, Godrej Consumer, Dabur, TTK Prestige, Colgate, United Spirits in all this companies FII stake is more than MSCI weight while in United Breweries, HUL and in Asian Paints FII ownership compared to the MSCI weight is substantially lower, in HUL, it is 10 percent lower. In ITC its also much lower.

In short, FII can affect above stocks where its exposure is higher and can affect less where its weight is lower.

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

Today’s Call –

Buy IDFC 140CE around/below 3 SL 2.25 TG 5+ (remember market sentiment should be positive else don’t enter)

TRACK –

ICICI, JPA, Yes Bank, RCom

=============== 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 58,800)

Since most of you haven’t entered CG, GAIL & BOI Calls, I am not considering it under Blog PL while trio made approx 25K profit in past 3 days.

Billionaire Club from Jan 13 to June 13 (Total 1,25,600)

Today’s MG Mantra –

Book at least part profit on longs and wait for Nifty to break 5935.

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.