WEEKLY REPORT

Key developments during the week

•  India Apr HSBC composite PMI up marginally at 53.8 from53.6 Mar

•  India Apr HSBC manufacturing PMI inches up to 54.9 from 54.7 Mar

•  Moody's puts ratings of Axis Bank, HDFC Bank, ICICI Bank on review

•  Cabinet likely to take up FDI in aviation only after Budget Session

•  HC adjourns Indraprastha Gas plea vs regulator order to May 8

•  Shiv‐Vani Oil gets 2‐year order for offshore drilling, buys rig 
•  Abbott inks pact with Biocon arm for nutrition R&D centrein India

•  M&M April tractor sales 16,797 units, down 9.35% on year

•  Subex gets RBI clearance for restructuring $131‐mln FCCB

•  Alstom T&D completes balance of plan work for Essar's power project

•  Reliance Broadcast, RTL group JV plan action channel by Jun end

•  TCS gets order from Botswana's Letshego for core banking software

•  Telenor warns TRAI proposals may force it to skip 2G auction

•  Alstom T&D India gets 840‐mln‐rupee order from Chhattisgarh co

•  Vikas WSP begins building 38,400‐tn plant in Jodhpur

Domestic events week ahead

•May 11: Index of Industrial Production for March, by CSO.

Global events week ahead

• May 7 : G7 Meetings, Monetary Policy Meeting Minutes of Japan

• May 8 : German Industrial Production m‐o‐m

• May 9 : Crude Oil Inventories of US

• May 10 : Trade Balance of Britain, Trade Balance, Federal Budget Balance & Unemployment Claims of US

• May 11 : Producer Price Index (PPI) m‐o‐m & Prelim University of Michigan Consumer Sentiment

Weekly Sector Outlook and Stock Picks

Pharma sector ‐ Market to eye Cipla, Ranbaxy Jan‐Mar earnings

Movement in shares of pharmaceutical companies in the coming week is likely to be stock‐specific, as corporate earningsfor the quarter‐ended March will lend direction. Broader market developments too could impact pharmaceuticalcompanie’s shares, generally considered a safer bet in turbulent times. Ranbaxy Laboratories Ltd will declare its earningsfor the fourth quarter on 9th May and Cipla Ltd on 10th May. The broader market is expected to remain weak as sentimentis likely to remain subdued. Investors will await clarity on taxation issues as the Finance Bill will be tabled in the Parliamentthis week. Also, weakening of the rupee and election outcomes in the four European countries, France, Italy, Greece, and Germany, may determine the course of action.

Capital Goods sector ‐ To trade with a negative bias

Shares of capital goods and engineering companies are likely to trade with a negative bias in line with the broad marketthat will witness weak sentiment. Any action would be stock‐specific, with the Street specifically eyeing ABB Ltd and Thermax Ltd's Jan‐Mar earnings due May 9 and May 11. Last week, most capital goods and engineering shares were among the worst performing stocks on the National Stock Exchange and BSE. Larsen & Toubro Ltd lost 4.5%, while Bharat Heavy Electricals Ltd lost 4.9%. The BSE Capital Goods index lost 5.32% even as NSE and BSE ended down nearly 2% each.

Auto sector ‐ Stock‐specific news to lend direction to shares

Only stock‐specific action is expected in the automobile space in the coming week. No automobile manufacturer isreporting its Jan‐Mar earning in the coming week. However, the market is likely to take cues from the expected results of auto companies due later in the month. Other than the corporate results, no major trigger is expected. Ashok Leyland Ltd will declare its Jan‐Mar earnings on May 14 and Mahindra & Mahindra Ltd on May 30. Auto stocks have been outperforming the market and there is no prime premise or macroeconomic trigger for them in this week based on which the shares are likely to trend.

FMCG Sector ‐ Seen up on positive earnings momentum

Fast‐moving consumer goods companie’s shares are likely to gain in the coming sessions as Jan‐Mar results reflect good earnings momentum. Hindustan Unilever reported a 20.59% growth in net sales for Jan‐Mar, Godrej Consumer Products' Jan‐Mar net profit was up 36% and net sales were up 31%, Dabur India's Jan‐Mar performance, with a 16% growth in consolidated net profit, and 23% rise in sales. Jan‐Mar earnings of FMCG companies have been satisfactory, and sales volume and margin growth trajectory ahead looks good, so investor confidence could return to the sector.Last week, the BSE FMCG index lost 1.5% in value but Nifty and the Sensex lost over 2%. Caution ahead of elections in four key European countries and poor economic data from the US also weighed on indices.

Cement Sector ‐ Seen down this week as sector enters weak season

Shares of major cement companies are likely to decline this week as the sector enters its seasonally weak period whenthere is no demand due to a halt in construction activity during monsoon.Prices of the commodity have already startedcorrecting, with cement makers cutting prices in Gujarat and Delhi. After posting strong year‐on‐year growth in cement despatches for a few months, off take in April slowed, reflecting a likely slump in demand. This trend is likely to continue in the coming months.

IT Sector ‐ In thin range this week; Cognizant earnings eyed

Shares of major information technology companies are likely to move in a narrow range this week, and may take cuesfrom the earnings of the NASDAQ‐listed Cognizant Technology Solutions. The US‐based company will detail its earningsMonday. Guidance from Infosys and Wipro was disappointing while TCS (Tata Consultancy Services) and HCL (Technologies) posted decent results. Due to this, there is no clarity on whether the issue is with the (information technology) sector or if it is company‐specific. Perhaps guidance for Q2 (Apr‐Jun) and Q3 (Jul‐Sep) by Cognizant will make the picture clear. Infosys, India's second‐largest software exporter, guided for revenue growth of 8‐10% in 2012‐13 (Apr Mar) against NASSCOM's outlook of 11‐14% growth in the industry. This is worrisome as Infosys's revenue growth usually tops that of the industry. Wipro had no balm to offer investors either. The company expects its performance to be weak in

Apr‐Jun amid slowdown in its Indian operations. Tata Consultancy Services, however, seems confident it will grow faster than the industry.

Oil Sector ‐ Oil marketing companies seen rangebound this week

Shares of state‐owned oil marketing companies are likely to remain rangebound this week amid softening crude prices and weakening rupee along with a buzz of hike in petrol prices soon. There is no clear direction for the stocks in the immediate term and the movement in the shares of Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd will reflect movement in rupee‐dollar and crude. Some reports last week quoted the Organisation of Petroleum Exporting Countries as saying that it is working hard to bring down oil prices and is pumping much more oil than its official target as output from Iran has been dwindling. Softening of crude prices will benefit oil marketing companies as the government is unlikely to raise prices of diesel, kerosene, and cooking gas soon because of political compulsions. However, the treet

was abuzz with talk that the government may soon allow these companies to increase petrol prices. At current prices, the companies are losing almost 8 rupees on a litre of petrol and 14 rupees onm sale of a litre of diesel.

Telecom Sector ‐ Seen down this week on regulatory uncertainty

Bearishness in telecom stocks is seen continuing this week on account of prevailing regulatory uncertainties. Telecom stocks have remained subdued in the last few sessions after the Telecom Regulatory Authority of India recommended high reserve price for the auction of spectrum. The high reserve price and TRAI recommendations on spectrum refarming have been termed as "destructive" for the industry by major telecom operators. Weakness in the broad market will also keep the telecom stocks under pressure.

Steel Stocks Outlook ‐ Down this week; to track trend in market

Shares of major steel companies are likely to fall further this week tracking the bearish trend in the market. Weak outlook on the Indian economy and the steel sector is weighing on the market. Also, there are concerns over the government reviewing India's tax treaty with Mauritius, and weakness in the rupee against the US dollar. Last week, NMDC, the country's largest iron ore miner, hiked prices by 10%. This is likely to add to the cost burden of steelmakers such as JSW Steel, Rashtriya Ispat Nigam, and Essar Steel. While some steelmakers have decided to pass on this hike in costs to customers, some others have not. Rashtriya Ispat Nigam has increased the prices of its long and flat steel products 0.2‐ 3.3%. JSW Steel has decided to maintain prices, and Essar Steel is still contemplating a hike. As demand remains weak,some steelmakers will not be able to pass on the input cost hike to consumers, which may add to their cost pressures.

 Market Range for Week 4880‐ 5300

Resistance – 
Nifty facing Resistance level @5150 level above this levelit may go up to @5220 &@ 5280 level.

Support
Support comes for market @5050 level for Nifty; below this level Nifty next support @4980 and @4920 

will be the major support for Market.

Technical – Last week Nifty opened at 5201 & it made a high of 5279.Last week we have seen some selling in the market.Nifty made a low of 5070 & closed at 5086.Last week Nifty drag 209 points from its high & on weekly basis it closed at 123 point’s lower. Sensex made a weekly high of 17432 & a low of 16776 almost it drags 656 points in the week from its high.So overall last week we have seen some selling from higher level in the market.

 For the coming week the market range we expect 4880‐5300.

 Weekly Chart View –

Last week we had expected market range (5050‐5380) & market made a high of 5279 & made a low of 5070, so overall it hold over both side.

In last week report we had mentioned, on daily chart market was near to 100& 200DMA support level, but it was not able to cross 50DMA.on weekly chart it was facing resistance around 100WMA, we had also mentioned market facing resistance around 5350‐5380 & all we have seen market fail to cross that level & from higher level we have seen selling in the market.Now on daily chart market close below 100 & 200DMA & osilator also showing negative crossover.On weekly chart market close below 50WMA & osilator showing negative crossover, only silverline is that market still hold downward sloping line. So overall now 5050 will be important support level if it closes below we can see some more selling pressure in the market & upper side 5250‐5280 will be major resistance for market.

On Friday Dow lost 168 points, or 1.3%. The S&P500 slid 22 points, or 1.6%. The major indexes all ended lower for the week, after posting two consecutive weekly gains.The S&P500 fell 2.3% over the last five trading days. The Dow lost 1.3% & the Nasdaq fell 3.7%.

Market Commentary ‐

Investors are closely watching India Inc's Q4 March 2012 and year ending March 2012 (FY 2012) earnings. Focus is on the guidance provided by the management for the year ending March 2013 (FY 2013) to gauge the earnings outlook. The results announced so far have been mixed.

The current weakness of the rupee against the dollar will benefit exporters and impact importers adversely ‐‐ a weak rupee makes imports costlier. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. A weak rupee will increase the competitiveness of Indian merchandise exports.

The Finance Bill 2012 is scheduled to be debated and passed in Parliament next week. In his Budget 2012‐13, Finance Minister Pranab Mukherjee proposed tax‐avoidance legislation viz. General Anti‐Avoidance Rules (GAAR). He also has proposed to amend the Income Tax Act, 1961 with retrospective effect to bring into tax net overseas mergers and  acquisitions involving domestic assets

India Inc. and multinational companies alike have been complaining about the provision in GAAR that puts the onus of proof that a transaction was not undertaken to avoid tax on the company or investor concerned. GAAR is aimed at curbing tax avoidance by structuring a business or effecting a transaction with the objective of avoiding the tax liability instead of rational commercial considerations. For instance, the creation of a shell company in a tax haven like Mauritius to invest in India will come under the provisions of GAAR. It empowers the tax authorities to distinguish transactions aimed at avoiding tax from those driven by commercial consideration. Foreign institutional investors are also worried that GAAR will override India's tax treaty with Mauritius, which exempts capital gains from being doubly taxed. Most foreign funds invest in the Indian stock markets through the Mauritius route.

Important Results ‐
Andhrabank, Glaxo, HDFC, Bankindia, Glenmark, Rolta, Asianpaint, Centralbk, Hindalco, IDFC,Kotakbank, Denabank, ABB, PNB, Ranbaxy, Unionbank, NTPC, Sintex, Canbk, Cipla, Lupin, Drreddy, Federalbnk, Amtekauto, Bhusanstl, Chamblfert.