Morning Bells (23 Sept 13)

Good Morning Friends.

Ek woh waqt tha jab hum sochate the ki hamara bhi waqt aayega… aur ek yeh waqt he ki… hum sochate hain ki… woh bhi kya waqt tha.

It was a shocker wave on Friday when RBI unexpectedly increased the repo rate by 25 points.

The Reserve Bank of India (RBI) in its monetary policy statement kept the CRR (cash reserve ratio) unchanged at 4%, while it hiked the repo rate by 25 bps (basis points) to 7.5% and consequently the reverse repo rate stands at 6.5%.

The central bank has reduced daily CRR requirement to 95% from 99% and maintained MSF (marginal standing facility) rate to 75 bps to 9.5%.

According to RBI, timing of more action on liquidity depends on stable rupee. Further action on liquidity growth may pick up in October-March if infra projects are on stream, the central bank added.

The Sensex which crashed over 700 points pared its losses after the RBI governor clarified that the central bank's measure was effectively to bring down the cost of borrowings for banks.

Well, come to home ground, as told last week FII buying seen in market and that was the main reason Nifty rallied again 20% in past 20 days. The massive 20 percent rally seen in Indian indices in the last 20 days is because many investors are moving back to a very oversold asset class which is emerging markets and India is just part of that theme.

MARKET OUTLOOK –

Sensex has gone up 20 percent in past 20 days, but the real money has started coming in only in the last five or seven sessions. So, still a lot of people might yet scramble to get into a trade having missed out. Some of the Exchange-Traded Funds (ETF) put in money to work, but a lot of people have not caught this trade. Therefore the latecomers might come and fan the flames a bit more and markets could go up a bit more, say 3 to 5 percent from here, I guess and could be after expiry. This is also month MFs and MF allocation is round the corner and that can give some strength here.

Here need to remember which is already discussed and informed we are entering into overbought zone, on fundamental ground nothing has changed, so moving ahead can be harmful, so be cautious with market and your positions as there are also rumours that Ben Bernake can move in October and that could happened through special press conference.

So if it comes to trade in the current series now 6200 seems difficult at the moment and ahead of expiry market seems weakened.

MG’s Nifty trading range –

R - 6142 - 6180 - 6230

S - 6045 – 5990 - 5780

STOCK OUTLOOK -

(Stock that can see some good moves either side)

CALL LOG –

Keep eye on – Wipro, Rcom, RelCapital

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