Morning Bells (03 Oct. 13)

Good Morning Friends.

There are two reasons why we don’t trust some people. First – we don’t know them. Second – we know them.

So was a relief for a day y’day. Well now we are into Oct. and this is month of earning no.s and specially of auto sector so keep eye on major auto players and make some profit before Dasara. Month is started on positive note and as its bounced back from 5700 level and closed above 5750 tempting for another 100 points. 5880 would be a crucial level and remember it.

On global front after 17 years, the US Federal government started its first partial shutdown on Monday night as Congress failed to authorise any federal spending for fiscal 2014, which begins on October 1.

Y’day’s recovery was led by the interest-rate sensitive stocks like the banking, realty and the auto.

On Monday the Reserve Bank of India announced that the current account deficit (CAD) increased to 4.9% of GDP to US$21.8bn in the April-June quarter of the current fiscal. CAD was 4.4% or US$16.9bn in the same quarter of last fiscal, 2012-13.

PMI –

Operating conditions across the Indian manufacturing sector deteriorated for the second consecutive month in September. However, both output and new orders contracted at slower rates. Still, faced with fewer projects, companies reduced their workforce numbers for the first time since February 2012.

Up from 48.5 in August to 49.6 in September, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index™ (PMI™) indicated a marginal and slower deterioration of business conditions in India. However, the PMI quarterly average for Q3 was the lowest since Q1 2009.

Currency Moves –

Rupee weakened further by 44 paisa and was trading at 62.51/dollar.

MARKET OUTLOOK –

Nothing great at the moment, Nifty bounced back from 5700 mark which was physiological level, so if my wave is correct then it will move a bit further and then either around 5880 or 5960 we may see a sharp decline. So keep eye on these 2 levels and exit longs and wait for further direction.

And if today again it start moving back to 5700 mark on shutdown of US govt. then 5610 journey seems coming true.

Mainly market will behave this week on Q2 earnings, so no.s from major player will also play a significant role. So lets hope for the best and see how its going on.

MG’s Nifty trading range –

R – 5753 – 5796 - 5831 – 5880 - 5960 (5880 & 5960 can be act as crucial resistance and trend chaner)

S – 5700 – 5670 – 5610 – 5552 - 5516

Nifty swing band is 5600-6100 and 4900-5600

DMA – 100DMA – 5814, 200DMA - 5841

Technical Trend changer supports – 5715 – 5580 – 5535 – 5250 - 5120

EVENTS –

3 Oct – Hexaware OFS

17 Oct – US Senate voting.

STOCK OUTLOOK -

(Stock that can see some good moves either side)

FMCG –

Second half of this financial year, one is going to see fair bit of buoyancy in rural economy because of monsoons, better agricultural prices and election related spending, that is an important pack to be in.

So FMCG pack which has significant revenues coming in from rural India.

Media Sector & Telecom –

Keep eye on these sectors where reforms are happening in a relatively silent manner. If one looks at the media sector where because of digitization now spreading from four cities to another 38 cities, one is going to see significant pickup in subscription revenues. In addition to that- FDI related news on telecom sector makes it a good candidate to outperform. On the whole, a handful of these sectors could continue to outperform the broader markets.
Auto Sector –

A surprise increase in interest rates and rising car prices in September have tempered hopes for a turnaround in India's struggling autos sector, with some analysts pushing back forecasts for a sustained recovery to next financial year. Car sales in India have fallen nearly 6 percent so far in the current financial year to August, according to the Society of Indian Automobile Manufacturers, as high ownership costs in a slowing economy have prompted consumers to postpone purchases.

Auto sales for September 2013 were better than expectations for segments such as two-wheelers, tractors and passenger cars. However, UV sales continued to remain weak. Going ahead, macro concerns such as rising fuel prices, lower incomes and high interest rates would continue to weigh on the volume outlook. We expect two-wheelers to post a relative outperformance in H2 FY14 owing to better than normal monsoons which will drive rural demand. One can bet on HeroMoto on this occasion and M&M can to show some strength.

M&M -

Mahindra and Mahindra’s auto sector sales dipped 10% in September 2013 compared to the same month last year mainly on account of a 21% decline in the sales of its passenger vehicles (UVs and Verito). The company’s total domestic sales stood at 43,289 units versus 48,342 units, while exports at 2,719 units represented a decline of 12%. Shares of M&M closed flat at Rs831.

Maruti –

reported 11.7% increase in total sales in September at 1,04,964 units as against 93,988 units in the same month last year. The company said its domestic sales increased by 1.8% during the month to 90,399 units as against 88,801 units in September last year. Shares of Maruti gained by 2% to close at Rs1382.

TM –

Tata Motors’ total sales (including exports) of Tata commercial and passenger vehicles in September 2013 were 50,427 vehicles. The company’s domestic sales of Tata commercial and passenger vehicles for September 2013 were 45,998 nos.  

The company's sales from exports were 4,429 nos. in September 2013. Cumulative sales from exports for the fiscal were 25,035 nos.

OMCs –

The Oil marketing companies dropped the petrol prices by Rs. 3.05 per litre and increased the diesel price by 50 paise per litre (excluding local taxes and VAT). This has been for the first time since May this year, the Oil Marketing companies have reduced the prices of petrol, while the diesel prices have been continuously increased since government partially de-controlled the diesel prices.

MBC PL –

Oct PL = -1000

Yes Bank 340CE @18 SL 308 in cash – stopped out at 16

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