Morning Bells (12 July 13)

Good Morning Friends.

One should have well wisher – who at times could be MIRROR and at times your SHADOW… because mirror don’t lie and shadows never leave you.

It was a rock solid day for market y’day, after a long time Nifty ended above 5,900 marks. No change in the Federal Reserve’s bond-buying program, which has kept long-term interest rates low and encouraged more borrowing and spending, prompted this rally. Chairman Ben Bernanke reserved his comments for July 17-19 when he will address the House of Representatives Financial Services Committee and Senate Banking Committee. Meanwhile, the minutes from the Fed's June meeting showed many of the 12 Fed voting officials saying they need to see further improvement in the job market before mulling winding down the stimulus program.

In domestic cues, the rupee strengthened against the dollar in early trade. It appreciated above the 60 per dollar mark but huge dollar demand saw the Indian unit rally below the psychological level.

RBI Monetary Policy, Bankers demand for a CRR cut -

Y’day banking segment was the limelight - In run-up to the first quarter monetary policy announcement by RBI on July 30, bankers on Thursday strongly  pitched for a reduction in the cash reserve ratio (CRR) as they feel a cut in the short-term lending rate looks unlikely given the rupee volatility.

"We have requested the central bank to cut CRR as we don't think a repo rate cut is possible given the shape of the rupee. We have also told them if the CRR cannot be reduced at least we should be paid interest on our deposits with the RBI, as that can also enable us to bring down our lending rate," Punjab National Bank chairman KR Kamath told reporters at RBI headquarters in Mumbai.

Kamath, also chairman of Indian Banks Association, was talking to the media after the customary pre-policy meeting with the RBI brass. RBI governor D Subbarao was not present in the meet as he was in Indore.

WPI –

The sharp depreciation of the rupee has raised upside risks to wholesale inflation. Rating agency Crisil estimates that if the rupee averages Rs. 58 per dollar in FY14, average WPI inflation in could rise to 6% compared to its baseline call of 5.3%. "This leaves little room for monetary easing despite the sharp slowdown in GDP growth."

Wholesale price-based inflation (WPI) fell sharply within a short span of three months – to 4.7% in May from 7.3% in February. The recent sharp depreciation of the rupee (around 12% since the beginning of May 2013) has, however, once again raised concerns over the future trajectory of inflation. Will inflation go up again sharply? Is the lowest point of inflation behind us now? Will demand-side pressures on inflation – as measured by CRISIL Core Inflation Indicator – rise again? (IIFL)

Gainers –

Losers -

Sectoral –

Rally was led by metals, banks, realty, capital goods and oil and gas stocks. Even midcap and smallcap stocks saw some buying momentum. Consumer durables bucked the trend, ending in the red.

Domestic Front –

Global Front –

China Slowdown –

As the world's second largest economy suffers a deepening slowdown, neighbouring rival India could be a major benefactor from China's lackluster performance, say economists.

According to experts - India will be less exposed to the trend of a China slowdown, due to limited trade linkage with China, and will likely gain from lower commodity prices and improvement in terms of trade

China accounted for 53 percent to 111 percent of the total increase in global demand for various commodities in 2012, according to Morgan Stanley. Hence a decline in demand should put some downward pressure on prices, the bank said, a positive for net commodity importer India.

Commodities account for a large portion of India's current account deficit, with the country importing close to 80 percent of its overall crude oil requirements, for example.

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

Since this range-bound volatility makes it difficult to find any concrete direction in this market and take a call so it is better not initiate fresh positions till it moves out of the range. 

This area is not tradable and the best thing we can do is to keep quiet if we have positions. We maintain them, and don’t initiate new ones.

Buying levels comes when Nifty will close above 5935 for 2 successive days. (my old suggestion)

The INDIA VIX on NSE was down by 5.46% and ended at 18.89 against previous close of 19.98.

FNO PCR was 1.05 against previous close 1.00.

Indian Rupee – Rupee gained further by 2 paisa and was trading at 59.68 against its previous close of 59.70.

S&P 500 (US) was trading at 1669.28 up 16.66 than its previous close at the time of writing M Bells.

Buzz Q1 Nos –

12 July – Result from Infy & Syntex

18 July – Axis Bank Q1 No.s

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

2 successive close above 5935 would act as trend changer for immediate short term while Nifty need to close above 5970-5990 to sustain the rally and then Nifty can head towards 6000 and then for a year’s new high. While downside support seems 5840/5750/5700

Opening – As told y’day Nifty can attempt 5970-5990, so today could be that day.

========================  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.)

Unitech -

Unitech Corporate Parks (UCP), which is listed on the Alternative Investment Market (AIM) and 40% owned by Unitech, has put one of its IT SEZs in Gurgaon on the block.

UCP plans to raise about Rs 3,000 crore from this exercise. Sources say 11 bidders have expressed interest, including Blackstone, GIC, etc. Of the Rs 3,000 crore, Unitech will get Rs 1,100-1,200 crore on account of its 40% stake in UCP. The company is hoping to finish the entire process in about 10-15 days once the bids are in place, sources say.

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

TRACK Today –

Banking sector, specially ICICI, HDFC Bank and HDFC too.

=============== 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 - 3500 = -500 (Booked loss on Nifty CE on Tuesday)

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

July 13 - +8500 – 5500 = +2000 (Booked loss on Nifty CE & Rcap 380CE on Tuesday)

Today’s MG Mantra –

As per expectation Nifty just closed at 5935 Mark, for which we were talking since long. Now it would be interesting to see whether Nifty is going to close above 5935 today too. Just take care of 5935/5970 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.