Morning Bells (09 July 13)

Good Morning Friends.

Best reply from a successful man to a man who fails most the time in his attempts – Its not that I am smart, its just that I stay with problems longer.

Once again Indian equity market started the week off on a negative note with the Nifty once again shutting shop below the 200 Daily Moving Average. Weakness in Asian markets prompted Nifty to open gap down.

Sentiment further got dampened as the Indian currency hit yet another lifetime low on Monday, slipping past the psychological resistance level of 61 against the dollar. The rupee opened weak and plummeted to a record low of 61.20 against the dollar, surpassing its previous record low of 60.76 touched on June 26.

Positive unemployment data in the US has fuelled concerns that the Federal Reserve may rollback its stimulus programme earlier than expected. This resulted in equity and currency markets trading weak.

The Indian unit has lost more than 10% of its value this year and is the worst performing currency against all major emerging economies.

In commodity news, June gold imports fell 80.56% to 31.5 tonne month-on-month. This indicates that the government's measures to curb imports of hiking the import duty are working.

Rupee outlook is not positive in near term –

The rupee would continue to remain volatile and might weaken further against the dollar during the next quarter if downside risks accruing from high current account deficit and dwindling of FDI flows remain unaddressed, according to the ‘Survey on Variation of the Indian Rupee’, conducted by the Confederation of Indian Industry which captures the industry expectations on the movement of the rupee against the dollar in the near term.

The survey demonstrated a subdued outlook of the rupee with most respondents (around 56 percent) expecting the rupee to trade above the Rs. 59 to a dollar mark by end- September. Another 15 percent of the respondents expect the currency to remain in the vicinity of Rs. 58-59 to a dollar as weak sentiments would continue to drive down the rupee.  Around 22 percent displayed cautious optimism with the rupee rising marginally to 57-58 to a dollar while only 7 percent of respondents expect it to bounce back to Rs 56-57 to a dollar range by September end. None of the respondents expected the rupee to move up beyond the 56-57 range in the coming quarter.

Gainers –

Losers -

Sectoral –

FMCG, telecom and the IT stocks bucked the negative trend in trade today. On the other hand, the major laggards were oil and gas, PSU, realty, auto, metals and banking stocks.

Domestic Front –

NSE Launch LIX 15 Index –

The National Stock Exchange is pleased to announce the launch of ‘LIX 15’ Index. The index shall be disseminated online, from Monday, the July 08, 2013.

‘LIX 15’ Index is designed to provide exposure to the liquid stocks while making the index easily replicable and tradable.

In order to make the index easily replicable and tradable, the index includes limited number of stocks and selection criterion is based on the minimum turnover ratio and free float market capitalization.

The index includes 15 stocks, which are available in the F&O segment. Currently these stocks represent 9 industries, 22% of turnover in Cash Segment and 34% of single stock derivatives turnover in F&O segment on NSE in previous 6 months. The weight of single stock in the index is capped at 15%.

The methodology and values of the index will be available on www.nseindia.com

Global Front –

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

All of sudden global market turned negative and fall under fear, specially for our market many factors are working simultaneously. Y’day market tanked along with emerging markets on fear that quantitative easing rollback could come faster than anticipated following strong US job growth data.

Market would continue to remain under pressure as not only rupee has worsened against dollar but rising crude price is also now worrying investors.

All hopes of lower current account deficit are now fading.

The INDIA VIX on NSE was up by 3.59% and ended at 19.34 against previous close of 18.67.

FNO PCR was 0.94 against previous close 1.08.

Indian Rupee – Rupee declined by 39 paisa and was trading at 60.61 against its previous close of 60.22.

S&P 500 (US) was trading at 1638.36 up 6.47 than its previous close at the time of writing M Bells.

Buzz –

12 July – Infy Q1 No.s

18 July – Axis Bank Q1 No.s

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

As I was hoping 5920-35 would act as strong resistance but it seems Nifty is declining at 5900. And my suggestion for immediate support at 5840 and then 5750. 5840 is for day traders and 5750 for short term.

Its time for wait and watch mode. 2 successive close above 5935 would act as trend changer and then Nifty can head towards 6000 and then for a year’s new high. While its again true that if Nifty slips below then horror of 5485 is also on card.

Opening – Seems flat or small gap up.

========================  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.)

Epic TV is all set to create history –

There’s a niche entertainment channel coming up next month and it’s sure to create history given the kind of investors involved. First, the channel ‘Epic TV’ was in the news last year when ex-Walt Disney’s Mahesh Samat set up the company in October 2012.

Samat, an alumnus of IIM-Calcutta, in May this year had revealed that a few high profile investors including Mahindra Group’s Chairman Anand Mahindra had invested in his venture.

The latest is that Mukesh Ambani too has invested a similar amount as Anand Mahindra in Epic TV. Reports state that Mahindra and Ambani each have a 25.8% stake in the company adding that these investors would have probably committed around Rs 100 crore. Samat has a 48.5% stake in the venture.

A report in ET quoting a Reliance spokesperson mentioned that Mukesh Ambani’s investment is being made in his personal capacity and is routed through Reliance Ports and Terminals.

BhartiAirtel –

The telecom space was in action today. Telecom major Bharti Airtel cleared its Rs. 67.96bn or over 10% debt by using proceeds it received by selling 5% stake to Qatar Foundation Endowment last month. Bharti Airtel had reported a net debt of Rs. 638.39bn as on March 31, 2013. The stock however ended weak 1%.

Zambia v/s BhartiAirtel

Zambia Information and Communications  Technology  Authority (ZICTA) has instituted criminal proceedings  against  all  three  mobile  phone  service  providers  namely  Airtel Networks  Zambia Ltd, MTN Zambia Ltd and Zambia Telecommunication Company Ltd (Zamtel),  for failure to meet minimum  standards of quality  of service.

The Authority (ZICTA) has resolved to take remedial measures relating to enforcement of quality of service in order  to protect public  interest in pursuant  of the Information and Communication Technologies  Act No. 15 of 2009, according to a statement.

The deteriorating levels of Quality  of Service has made communication difficult and resulted  in increased  public  outcry  and negative  impact  on ease of doing business in Zambia, the statement added.

RCom –

Peer Reliance Communications too hit an over 30-month high after it announced the demerger of its real estate business. The company continues its focus on asset monetization to reduce its balance sheet debt.

Reliance Communications (RCOM) announced that its Board of Directors has in-principle decided on a demerger of the real estate held by RCOM into a separate unit, Reliance Properties Ltd., to unlock substantial value for the benefit of its approx. 2 million institutional and retail shareholders.

CG –

Crompton Greaves, a part of the Avantha Group, closed at Rs. 87.10, down Rs. 1.25 or 1.4%, after it bagged a 3.5mn euro contract from Nordex and H2air for setting up a wind farm sub-station at the 75 MW Seine Rive Gauche Nord windfarm in France.

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

M&M 920PE –@16 SL 12 TG 23 (2 lot)

(Booked at 22, profit 3K)

Nifty 6000CE –@42 SL 5840 Nifty spot TG 55/60 (4 lot)

(Though SL hit but risk takers are holding with updated SL 5750 Nifty spot)

TRACK Today –

GMR Infra (up), AB Nuvo (Weak), Tata Global (up)

=============== 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 June 13 (Total 58,800)

July 13 - +3000 (profit in M&M PE)

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

July 13 - +8500 (Shorted ABNuvo @1055 booked at 1020)

Today’s MG Mantra –

Just take care of 5900/5935 and 5840/5750, you can make good money.

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.