FAIRE GROWTH MEANS..... TO MAKE GROWTH
Tuesday, June 26, 2012
Ex dividend company stocks on 28-06-2012
Ex dividend company stocks on 28-06-2012 – ADCINDIA, Ajanta Pharma, Banaras Beads, DCM, DLINK IND, Dr Reddys Lab, HDFC Bank, Hindustan Zinc, IDFC, Kesoram Inds, Kovai Medical, LG Balakrishnan, Sarda , nergy , Sonata Soft, Sterling Tools, Sundaram Fin, Visaka Inds, Wipro, XPRO India.
Sunday, June 24, 2012
WEEKLY REPORT
Key developments during the week
•India Apr CPI farm labourer inflation 7.84% vs 6.84% Mar
•Govt hikes General Provident Fund rate to 8.8% from 8.6%
• Govt ups Special Deposit Scheme interest rate to 8.8% from 8.6%
• Rupee falls to new all‐time low of 56.27 vs 56.15.
• Goldman Sachs cuts India FY13 GDP forecast to 6.6% from 7.2%
• India adds 6.49 mln GSM mobile users in Apr vs 6.87 mln Mar
• HCL Tech to provide production, content mgmt svcs to UBM Canon
• GAIL signs gas purchase agreement with Turkmenistan
• NTPC commissions unit 5 of Rihand super thermal power plant
• Dabur to foray into sun protection cream mkt with Uveda Sun Block
• Havells' Europe arm ties up 77.5 mln euro to refinance term loan
• Delhi HC reserves judgement in Indraprastha Gas vs PNGRB case
• NMDC inks pact with Rashtriya Ispat for pellet unit at Vizag
• Source says Kavveri Telecom in exclusive talks to acquire US co
• Tech Mahindra launches 1 more delivery, development centre in Noida
• ScotiaMocatta official sees India gold imports dn 20‐25% in 2012
Domestic events week ahead
• May 31: GDP estimates for Jan‐Mar and revised estimates for 2011‐12, by CSO.
• May 31: Government finances for 2011‐12 (Apr‐Mar) and April, by CGA.
• May 31: CPI for industrial workers for April, by Labour Ministry.
• Jun 1: Manufacturing PMI for May, by HSBC.
• Jun 1: Trade data for April, by commerce and industry ministry.
• Jun 1: Automobile sales data for May, by SIAM.
• Jun 1: Cement production, despatches in May, by CMA.
Global events week ahead
• May 29 : German Prelim Consumer Price Index (CPI) m‐o‐m
• May 30 : Retail PMI of Europe
• May 31 : German Retail Sales m‐o‐m, Prelim GDP q‐o‐q, Crude Oil Inventories & Unemployment Claims of US
• June 1 : Final Manufacturing Purchasing Managers' Index of Europe, Unemployment Rate of Europe, Unemployment Rate & ISM Manufacturing PMI of US
Weekly Sector Outlook and Stock Picks
Auto sector ‐ Down this week; Tata Motors, M&M results eyed
Auto stocks are likely to remain flat‐to‐weak in the next five trading sessions. The recent steep hike in petrol prices and weakening of the rupee against dollar is likely to weigh on shares of automobile companies this week. On Wednesday,state‐owned oil marketing companies hiked petrol prices by 11.5%, or 7.54‐7.98 rupees per ltr. The auto counter will also take cues from the earnings of two major automakers in the coming week, with Tata Motors Ltd reporting its Jan‐Mar earnings on May 29 and Mahindra & Mahindra announcing quarterly earnings on May 30. "The sales numbers for May due on Friday will also determine the trend for the stocks.
Pharma sector – Seen volatile this week on May F&O expiry
Shares of pharmaceutical stocks are seen remaining volatile this week as the May series of derivates expiry on Thursdaywould keep the broad market fickle. Pharmaceutical counters will also track the movement of rupee. Taro Pharmaceutical Industries Ltd, the Israeli subsidiary of Sun Pharmaceutical Industries Ltd, has reported a net profit of $47.3 mln in the quarter‐ended March, up 84% from a year ago. Besides Taro's success, Sun Pharma's US business is seen getting a major
boost from sales of high‐margin cancer drug, generic Lipidox, in the quarter gone by. Sun Pharmaceutical Industries will declare its Jan‐Mar earnings on May 29. The stock is also likely to get upbeat following the approval for generic Azelastine hydrochloride from the US Food and Drug Administration. For other major pharmaceutical companies, apart from the broad market's drive, the movement will be news driven. Also, the Group of Minister's decision on the National
Pharmaceutical Pricing Policy would impact pharmaceutical counters. The GoM seeks to regulate prices of 348 essential drugs and its combinations sold across the country. The panel had earlier met in April‐end, but had deferred its decision on capping the prices of essential medicines due to lack of consensus among stakeholders and the ministries concerned. Also, a recent report said around 500 pharmaceutical companies, which were sent notice by the Department of
Pharmaceuticals to furnish the overcharged amount of drugs as per their estimates, might have to pay a collective penalty
Capital Goods sector ‐ Seen volatile in line with market
Shares of capital goods and engineering companies are likely to remain volatile in the week in line with the market, where traders are likely to roll over positions to the June derivatives series from the May series ahead of the latter's expiry Thursday. Shares of Suzlon Energy Ltd will be in focus as the company posted a higher‐than‐estimated net loss of 300 cr rupees. Although trading in these shares is seen choppy in the next few sessions. of 40 bln rupees for not responding to the notices.
FMCG Sector ‐ To regain value as broad market seen weak
Shares of fast‐moving consumer goods companies are seen regaining value in the week ahead, as investors are seen returning to the FMCG category owing to continued broad market weakness. In the past week, all major FMCG shares, except for Marico, lost 0.7‐3.2% value. Even the BSE's FMCG index lost 2.3% at a time when broader markets managed to remain more or less flat, with the National Stock Exchange's Nifty index and the BSE's Sensex gaining 0.6% and 0.4%,
respectively. The fundamental demand for FMCG products continues to be strong; companies having a dominant portfolio in the foods segment are seen growing more than those having exposure to home and personal care products owing to favourable macroeconomic factors such as demography and under‐penetration of products.
Cement Sector ‐ Seen range‐bound this week; sales data eyed
Shares of major cement companies are seen trading range‐bound this week amid lack of any sector‐specific triggers.Investors will wait for monthly despatch data on Friday to take further view on the sector. There may be a negative bias inanticipation of price cuts by cement companies in the coming week as monsoon sets in. Cons truction activity in the country typically halts during the rainy season. Prices in north have declined by 5‐20 rupees per (50‐kg) bag led by subdued demand on account of disruption in the supply of construction materials and shortage of labour. Cement makers are also likely to get hit due to a sand mining ban by Punjab and Haryana from Apr 1. Street is also likely to keep a close eye on the government's decision on fuel pricing. A rise in prices of diesel is viewed as negative for the sector, as it will increase the transportation cost for cement companies. Additionally, shares of cement makers are likely to remain under pressure on expectations that the Competition Commission of India, which is investigating allegations of price rigging by companies, may announce its order soon. As such, shares of cement companies have taken a beating.
IT Sector ‐ Seen range‐bound this week; global cues eyed
Shares of major information technology companies are likely to trade range‐bound this week amid lack of strong sectorspecific triggers. There may be a negative bias, as investors remain cautious after negative global news that came in last week. California‐based IT major, Hewlett Packard Co, Thursday raised concerns over the business outlook in Europe and the US. HP has cut its full‐year guidance for revenue per share to at least $4 per share from $4.84 earlier. It also plans to
lay off around 27,000 employees by the end of 2014. Additionally, software exporters, which were rejoicing with every fall in the rupee against the dollar, are now a worried lot as the extreme volatility in the rupee makes it difficult for them to plan for the future. "Rupee's depreciation is beneficial for information technology companies. Most major Indian IT companies get around 70% of their revenue from the US.
Oil Sector ‐ PSU retailers may move in narrow range this week
Shares of state‐owned oil marketing companies are seen moving in a narrow range this week as better‐than‐expected Jan‐Mar earnings will support the stocks even as the initial euphoria over the sharp hike in petrol prices fizzles out. Petrol accounts only for a fraction of sales of the oil marketing companies and more than half of the revenue loses are incurred on sale of diesel. The announcement of highest‐ever hike in petrol prices—7.50 rupees for a litre‐‐had raised hopes of a
similar move by the government on prices of regulated fuels. However, the meeting of an empowered group of ministers that was to take place last week to consider a revision in prices in diesel and cooking gas, was cancelled as key allies of the United Progressive Alliance opposed any hike in prices of the politically‐sensitive fuels. If diesel prices are not hiked in the near term it will result in higher consumption of the fuel as petrol is 80% costlier, and compound the revenue losses of the oil retailers in the long term. Meanwhile, crude prices continue to soften and the rupees, too, has made some recovery after hitting an all‐time low of 56.37 for a dollar on Thursday.
Telecom Sector ‐ To take cues from Telecom panel meet on Sat
Telecom stocks this week will take cues from the outcome of the second round of the Telecom Commission meet on Saturday, which will take a final view on the revised recommendations of the Telecom Regulatory Authority of India. The Telecom Commission, which met on Thursday, last week, deliberated part of the recommendations by the regulator on spectrum auction norms. The commission in its meeting decided that minimum of 10 Mhz of spectrum should be made available for auction, against 5 Mhz recommended by TRAI. The commission also favoured the liberalisation of spectrum. TRAI has suggested a reserve price of 36.22 bln rupees per 1 Mhz of spectrum in the 1800 MHz band at a pan‐India level, which has been termed as exorbitantly "high" by telecom service providers. Bharti Airtel had gained 6% in the last two trading days last week after the company announced that it has acquired 49% stake in Qualcomm's AP's India entities. Bharti Airtel has made an initial investment of approximately $165 mln to acquire 49% interest in Qualcomm AP's India entities that hold broadband wireless licences in Delhi, Mumbai, Haryana, and Kerala. The broad market this week is expected to be volatile on account of the expiry of the May futures and options contracts series Thursday.
Steel Stocks Outlook ‐ Seen rangebound; SAIL Jan‐Mar earnings eyed
Shares of major steel companies are likely to trade in a range with a positive bias this week. Investors will eye the Jan‐Mar earnings of state‐owned Steel Authority of India Ltd. SAIL will report its fourth quarter earnings on Tuesday May 29th . However, Steel Minister Beni Prasad Verma has not been very happy with SAIL's performance. He said there has been a drop in the company's sales and even expansion plans are not on track. SAIL hopes to reach 19 mln tn production capacity by March. The company has embarked on a 720‐bln‐rupee expansion to take its steel‐making capacity to 24 mln tn by 2013‐14 (Apr‐Mar). The steel industry continues to remain under pressure due to slowdown in domestic and global demand. Steel prices, which had gained during Jan‐Mar this year, have also started falling due to lacklustre demand. The
macroeconomic picture globally remains gloomy, with uncertainty over the European political scenario and slowdown in China. The Indian scenario is bleak too, with industrial production for March falling by 3.5%.
Bank sector‐ Subdued; F&O position rollovers on Thu eyed
Bank stocks are expected to remain subdued in the coming week with investors keeping a close eye on rollovers in May futures and options on Thursday, looking for leads on market appetite for long positions in bank stocks. Although rollovers from May to June derivatives positions are expected in broad market led by Nifty, investors are seen cautious in rolling over bank stock positions. There is a concern that the Reserve bank of India's ability to reduce policy rates has been hindered by the petrol price hike, which is expected to fuel inflation levels and limit growth.
Market Range for Week 4800‐ 5180
NIFTY
Resistance – Nifty facing Resistance level @4950 level above this level it may go up to @5050 &@ 5150 level.
Support ‐ Support comes for market @4880 level for Nifty; below this level Nifty next support @4850 and @4800 will be the major support for Market.
Technical – Last week Nifty opened at 4888 & it made a high of 4956.Last week we have seen some volatile trade with in a range in the market. Nifty made a low of 4803 & closed at 4920.Last week Nifty gain 153 points from its low & on weekly basis it closed at 29 point’s higher. Sensex made a weekly high of 16366 & a low of 15847 almost it gain 519 points in the week from its low.So overall last week we have seen some volatile trade with in very narrow range.
For the coming week the market range we expect 4800‐5180.
Weekly View –
Last week we had expected market range (4750‐5150) & market made a high of 4956 & made a low of 4803, so overall it hold over both side range. In last week report we had mentioned, on daily chart market was below short term moving averages, but osilator was in oversold position.On weekly chart market was below downward sloping line, but it was above 200WMA & long term trendline, because of all that we had mentioned we can see some oversold rally & major
resistacne will be 4950‐4960 & all we have seen same. Now on daily chart nifty made a “Morning Star” formation & osilator showing some oversold position, but facing resistance on lower channel line.On weekly chart taking support around 200WMA & still holding long term trendline, so overall if market close above 4950‐4960 we can see some upside movement in the market up to 5050‐5080‐5120 & downside 4850‐4800 can act as a good support.Next week F&O expiry
is also there so we can see some volatility in the market
On Friday, the Dow lost 75 points, or 0.6%. The S&P500 slid 03 points, or 0.2%. The Nasdaq fell 02 points, or 0.1%. Despite the weakness on Friday, all three indexes posted gains for the week, snapping a three‐week losing streak. The Dow gained 0.7%, the S&P500 rose 1.7% & the Nasdaq added 2.1%.
Market Commentary-
The market may remain volatile as traders roll over positions from the near‐month May 2012 series to June 2012 series.The May 2012 derivatives contracts expire on Thursday, 31 May 2012
The government will announce Q4 March 2012 gross domestic product (GDP) data on Friday, 31 May 2012. The Indian economy expanded 6.1% in the October‐December quarter from a year earlier, the weakest pace of expansion in more than two years, hurt by slower growth in manufacturing output and a contraction in mining production.
Automobile and cement shares will be in focus as companies from these two sectors will start unveiling monthly sales volume data for May 2012 from Friday, 1 June 2012.
HSBC's monthly purchasing managers' index (PMI), which indicates the health of the manufacturing sector, is likely to be released next week. The HSBC India PMI, compiled by Markit, rose to 54.9 in April from 54.7 in March.
Important Results ‐ Balramchin, Fortis, Coalindia, IOC, NFL, NMDC, ONGC, Auropharma, GMRInfra, SAIL, Tatamotors, Colpal, DLF, Gail, KFA, M&M, RCF, Mphasis.
•India Apr CPI farm labourer inflation 7.84% vs 6.84% Mar
•Govt hikes General Provident Fund rate to 8.8% from 8.6%
• Govt ups Special Deposit Scheme interest rate to 8.8% from 8.6%
• Rupee falls to new all‐time low of 56.27 vs 56.15.
• Goldman Sachs cuts India FY13 GDP forecast to 6.6% from 7.2%
• India adds 6.49 mln GSM mobile users in Apr vs 6.87 mln Mar
• HCL Tech to provide production, content mgmt svcs to UBM Canon
• GAIL signs gas purchase agreement with Turkmenistan
• NTPC commissions unit 5 of Rihand super thermal power plant
• Dabur to foray into sun protection cream mkt with Uveda Sun Block
• Havells' Europe arm ties up 77.5 mln euro to refinance term loan
• Delhi HC reserves judgement in Indraprastha Gas vs PNGRB case
• NMDC inks pact with Rashtriya Ispat for pellet unit at Vizag
• Source says Kavveri Telecom in exclusive talks to acquire US co
• Tech Mahindra launches 1 more delivery, development centre in Noida
• ScotiaMocatta official sees India gold imports dn 20‐25% in 2012
Domestic events week ahead
• May 31: GDP estimates for Jan‐Mar and revised estimates for 2011‐12, by CSO.
• May 31: Government finances for 2011‐12 (Apr‐Mar) and April, by CGA.
• May 31: CPI for industrial workers for April, by Labour Ministry.
• Jun 1: Manufacturing PMI for May, by HSBC.
• Jun 1: Trade data for April, by commerce and industry ministry.
• Jun 1: Automobile sales data for May, by SIAM.
• Jun 1: Cement production, despatches in May, by CMA.
Global events week ahead
• May 29 : German Prelim Consumer Price Index (CPI) m‐o‐m
• May 30 : Retail PMI of Europe
• May 31 : German Retail Sales m‐o‐m, Prelim GDP q‐o‐q, Crude Oil Inventories & Unemployment Claims of US
• June 1 : Final Manufacturing Purchasing Managers' Index of Europe, Unemployment Rate of Europe, Unemployment Rate & ISM Manufacturing PMI of US
Weekly Sector Outlook and Stock Picks
Auto sector ‐ Down this week; Tata Motors, M&M results eyed
Auto stocks are likely to remain flat‐to‐weak in the next five trading sessions. The recent steep hike in petrol prices and weakening of the rupee against dollar is likely to weigh on shares of automobile companies this week. On Wednesday,state‐owned oil marketing companies hiked petrol prices by 11.5%, or 7.54‐7.98 rupees per ltr. The auto counter will also take cues from the earnings of two major automakers in the coming week, with Tata Motors Ltd reporting its Jan‐Mar earnings on May 29 and Mahindra & Mahindra announcing quarterly earnings on May 30. "The sales numbers for May due on Friday will also determine the trend for the stocks.
Pharma sector – Seen volatile this week on May F&O expiry
Shares of pharmaceutical stocks are seen remaining volatile this week as the May series of derivates expiry on Thursdaywould keep the broad market fickle. Pharmaceutical counters will also track the movement of rupee. Taro Pharmaceutical Industries Ltd, the Israeli subsidiary of Sun Pharmaceutical Industries Ltd, has reported a net profit of $47.3 mln in the quarter‐ended March, up 84% from a year ago. Besides Taro's success, Sun Pharma's US business is seen getting a major
boost from sales of high‐margin cancer drug, generic Lipidox, in the quarter gone by. Sun Pharmaceutical Industries will declare its Jan‐Mar earnings on May 29. The stock is also likely to get upbeat following the approval for generic Azelastine hydrochloride from the US Food and Drug Administration. For other major pharmaceutical companies, apart from the broad market's drive, the movement will be news driven. Also, the Group of Minister's decision on the National
Pharmaceutical Pricing Policy would impact pharmaceutical counters. The GoM seeks to regulate prices of 348 essential drugs and its combinations sold across the country. The panel had earlier met in April‐end, but had deferred its decision on capping the prices of essential medicines due to lack of consensus among stakeholders and the ministries concerned. Also, a recent report said around 500 pharmaceutical companies, which were sent notice by the Department of
Pharmaceuticals to furnish the overcharged amount of drugs as per their estimates, might have to pay a collective penalty
Capital Goods sector ‐ Seen volatile in line with market
Shares of capital goods and engineering companies are likely to remain volatile in the week in line with the market, where traders are likely to roll over positions to the June derivatives series from the May series ahead of the latter's expiry Thursday. Shares of Suzlon Energy Ltd will be in focus as the company posted a higher‐than‐estimated net loss of 300 cr rupees. Although trading in these shares is seen choppy in the next few sessions. of 40 bln rupees for not responding to the notices.
FMCG Sector ‐ To regain value as broad market seen weak
Shares of fast‐moving consumer goods companies are seen regaining value in the week ahead, as investors are seen returning to the FMCG category owing to continued broad market weakness. In the past week, all major FMCG shares, except for Marico, lost 0.7‐3.2% value. Even the BSE's FMCG index lost 2.3% at a time when broader markets managed to remain more or less flat, with the National Stock Exchange's Nifty index and the BSE's Sensex gaining 0.6% and 0.4%,
respectively. The fundamental demand for FMCG products continues to be strong; companies having a dominant portfolio in the foods segment are seen growing more than those having exposure to home and personal care products owing to favourable macroeconomic factors such as demography and under‐penetration of products.
Cement Sector ‐ Seen range‐bound this week; sales data eyed
Shares of major cement companies are seen trading range‐bound this week amid lack of any sector‐specific triggers.Investors will wait for monthly despatch data on Friday to take further view on the sector. There may be a negative bias inanticipation of price cuts by cement companies in the coming week as monsoon sets in. Cons truction activity in the country typically halts during the rainy season. Prices in north have declined by 5‐20 rupees per (50‐kg) bag led by subdued demand on account of disruption in the supply of construction materials and shortage of labour. Cement makers are also likely to get hit due to a sand mining ban by Punjab and Haryana from Apr 1. Street is also likely to keep a close eye on the government's decision on fuel pricing. A rise in prices of diesel is viewed as negative for the sector, as it will increase the transportation cost for cement companies. Additionally, shares of cement makers are likely to remain under pressure on expectations that the Competition Commission of India, which is investigating allegations of price rigging by companies, may announce its order soon. As such, shares of cement companies have taken a beating.
IT Sector ‐ Seen range‐bound this week; global cues eyed
Shares of major information technology companies are likely to trade range‐bound this week amid lack of strong sectorspecific triggers. There may be a negative bias, as investors remain cautious after negative global news that came in last week. California‐based IT major, Hewlett Packard Co, Thursday raised concerns over the business outlook in Europe and the US. HP has cut its full‐year guidance for revenue per share to at least $4 per share from $4.84 earlier. It also plans to
lay off around 27,000 employees by the end of 2014. Additionally, software exporters, which were rejoicing with every fall in the rupee against the dollar, are now a worried lot as the extreme volatility in the rupee makes it difficult for them to plan for the future. "Rupee's depreciation is beneficial for information technology companies. Most major Indian IT companies get around 70% of their revenue from the US.
Oil Sector ‐ PSU retailers may move in narrow range this week
Shares of state‐owned oil marketing companies are seen moving in a narrow range this week as better‐than‐expected Jan‐Mar earnings will support the stocks even as the initial euphoria over the sharp hike in petrol prices fizzles out. Petrol accounts only for a fraction of sales of the oil marketing companies and more than half of the revenue loses are incurred on sale of diesel. The announcement of highest‐ever hike in petrol prices—7.50 rupees for a litre‐‐had raised hopes of a
similar move by the government on prices of regulated fuels. However, the meeting of an empowered group of ministers that was to take place last week to consider a revision in prices in diesel and cooking gas, was cancelled as key allies of the United Progressive Alliance opposed any hike in prices of the politically‐sensitive fuels. If diesel prices are not hiked in the near term it will result in higher consumption of the fuel as petrol is 80% costlier, and compound the revenue losses of the oil retailers in the long term. Meanwhile, crude prices continue to soften and the rupees, too, has made some recovery after hitting an all‐time low of 56.37 for a dollar on Thursday.
Telecom Sector ‐ To take cues from Telecom panel meet on Sat
Telecom stocks this week will take cues from the outcome of the second round of the Telecom Commission meet on Saturday, which will take a final view on the revised recommendations of the Telecom Regulatory Authority of India. The Telecom Commission, which met on Thursday, last week, deliberated part of the recommendations by the regulator on spectrum auction norms. The commission in its meeting decided that minimum of 10 Mhz of spectrum should be made available for auction, against 5 Mhz recommended by TRAI. The commission also favoured the liberalisation of spectrum. TRAI has suggested a reserve price of 36.22 bln rupees per 1 Mhz of spectrum in the 1800 MHz band at a pan‐India level, which has been termed as exorbitantly "high" by telecom service providers. Bharti Airtel had gained 6% in the last two trading days last week after the company announced that it has acquired 49% stake in Qualcomm's AP's India entities. Bharti Airtel has made an initial investment of approximately $165 mln to acquire 49% interest in Qualcomm AP's India entities that hold broadband wireless licences in Delhi, Mumbai, Haryana, and Kerala. The broad market this week is expected to be volatile on account of the expiry of the May futures and options contracts series Thursday.
Steel Stocks Outlook ‐ Seen rangebound; SAIL Jan‐Mar earnings eyed
Shares of major steel companies are likely to trade in a range with a positive bias this week. Investors will eye the Jan‐Mar earnings of state‐owned Steel Authority of India Ltd. SAIL will report its fourth quarter earnings on Tuesday May 29th . However, Steel Minister Beni Prasad Verma has not been very happy with SAIL's performance. He said there has been a drop in the company's sales and even expansion plans are not on track. SAIL hopes to reach 19 mln tn production capacity by March. The company has embarked on a 720‐bln‐rupee expansion to take its steel‐making capacity to 24 mln tn by 2013‐14 (Apr‐Mar). The steel industry continues to remain under pressure due to slowdown in domestic and global demand. Steel prices, which had gained during Jan‐Mar this year, have also started falling due to lacklustre demand. The
macroeconomic picture globally remains gloomy, with uncertainty over the European political scenario and slowdown in China. The Indian scenario is bleak too, with industrial production for March falling by 3.5%.
Bank sector‐ Subdued; F&O position rollovers on Thu eyed
Bank stocks are expected to remain subdued in the coming week with investors keeping a close eye on rollovers in May futures and options on Thursday, looking for leads on market appetite for long positions in bank stocks. Although rollovers from May to June derivatives positions are expected in broad market led by Nifty, investors are seen cautious in rolling over bank stock positions. There is a concern that the Reserve bank of India's ability to reduce policy rates has been hindered by the petrol price hike, which is expected to fuel inflation levels and limit growth.
Market Range for Week 4800‐ 5180
NIFTY
Resistance – Nifty facing Resistance level @4950 level above this level it may go up to @5050 &@ 5150 level.
Support ‐ Support comes for market @4880 level for Nifty; below this level Nifty next support @4850 and @4800 will be the major support for Market.
Technical – Last week Nifty opened at 4888 & it made a high of 4956.Last week we have seen some volatile trade with in a range in the market. Nifty made a low of 4803 & closed at 4920.Last week Nifty gain 153 points from its low & on weekly basis it closed at 29 point’s higher. Sensex made a weekly high of 16366 & a low of 15847 almost it gain 519 points in the week from its low.So overall last week we have seen some volatile trade with in very narrow range.
For the coming week the market range we expect 4800‐5180.
Weekly View –
Last week we had expected market range (4750‐5150) & market made a high of 4956 & made a low of 4803, so overall it hold over both side range. In last week report we had mentioned, on daily chart market was below short term moving averages, but osilator was in oversold position.On weekly chart market was below downward sloping line, but it was above 200WMA & long term trendline, because of all that we had mentioned we can see some oversold rally & major
resistacne will be 4950‐4960 & all we have seen same. Now on daily chart nifty made a “Morning Star” formation & osilator showing some oversold position, but facing resistance on lower channel line.On weekly chart taking support around 200WMA & still holding long term trendline, so overall if market close above 4950‐4960 we can see some upside movement in the market up to 5050‐5080‐5120 & downside 4850‐4800 can act as a good support.Next week F&O expiry
is also there so we can see some volatility in the market
On Friday, the Dow lost 75 points, or 0.6%. The S&P500 slid 03 points, or 0.2%. The Nasdaq fell 02 points, or 0.1%. Despite the weakness on Friday, all three indexes posted gains for the week, snapping a three‐week losing streak. The Dow gained 0.7%, the S&P500 rose 1.7% & the Nasdaq added 2.1%.
Market Commentary-
The market may remain volatile as traders roll over positions from the near‐month May 2012 series to June 2012 series.The May 2012 derivatives contracts expire on Thursday, 31 May 2012
The government will announce Q4 March 2012 gross domestic product (GDP) data on Friday, 31 May 2012. The Indian economy expanded 6.1% in the October‐December quarter from a year earlier, the weakest pace of expansion in more than two years, hurt by slower growth in manufacturing output and a contraction in mining production.
Automobile and cement shares will be in focus as companies from these two sectors will start unveiling monthly sales volume data for May 2012 from Friday, 1 June 2012.
HSBC's monthly purchasing managers' index (PMI), which indicates the health of the manufacturing sector, is likely to be released next week. The HSBC India PMI, compiled by Markit, rose to 54.9 in April from 54.7 in March.
Important Results ‐ Balramchin, Fortis, Coalindia, IOC, NFL, NMDC, ONGC, Auropharma, GMRInfra, SAIL, Tatamotors, Colpal, DLF, Gail, KFA, M&M, RCF, Mphasis.
Saturday, June 16, 2012
Weekly Report
Key developments during the week
• Govt likely to decide cable TV digitisation deadline next wk
• Source says DGH pulls up Cairn India for Barmer oil output shortfall
• Govt exempts tax on rupee payments for crude imports from Iran
• Ratan Tata buys 425,000 shares of Tata Motors Thu
• GE India to set up $200 mln plant in Maharashtra; begin ops 2013
• Passenger car sales drive Tata Motors' global sales in May
• India Apr industrial growth 0.1% vs 5.3% year ago
• India May WPI inflation rises to 7.55% from 7.23% Apr
• India May exports down 4% on year at $25.68 bln; trade gap narrows
• S&P says India could be first BRIC nation to lose invest grade rtg
• Alstom T&D gets two orders worth 2.25 bln rupees from Power Grid
• Zicom, arm buy 49% in Qatar‐based Phoenix International for $15 mln
• Govt says asked Saudi Arabia for 5 mtpa more crude oil
• Oil min source says HPCL keen to partner ONGC for Barmer refinery
• Infosys in pact with Israel to enhance R&D cooperation
• Source says GAIL plans to enter LNG Shipping business
• Wipro in pact with US‐based Kony Solutions for mobile application
• SEBI to auction FII invest limits in gilts, corporate bonds Jun 20
• RComm gets Singapore Exchange's nod to list undersea cables arm
• Welspun Energy to invest 56.75 bln rupee in Karnataka wind projects
• HCL Tech implements first phase of IT solution at Sharda University
Domestic events week ahead
• Jun 18: RBI to release mid‐quarter policy review.
• Jun 18: CPI for rural, urban areas, and combined for May, by CSO.
• Jun 20: CPI for rural and farm labourers for May, by labour ministry.
Global events week ahead
• Jun 19: Europe Zentrum fur Europaische Wirtschaftsforschung Economic Sentiment.
• Jun 20: German Producer Price Index m‐o‐m, Unemployment Rate of Britain, Crude Oil Inventories of US.
• Jun 21: French Flash Manufacturing & Services PMI , German Flash Manufacturing & Services PMI , Europe Flash Manufacturing & Services PMI , US Unemployment Claims & Philly Fed Manufacturing Index .
Weekly Sector Outlook and Stock Picks
Auto sector ‐ Focus on RBI policy, diesel car tax proposal
With the Reserve Bank of India scheduled to announce its mid‐quarter review of monetary policy on Monday, the central bank's stance on policy rates will set the direction for automobile shares, as well as the broad market this week. While a cut in rates will cheer the market, any decision otherwise may prove to be a drag on the automobile stocks as vehicle purchases in India are largely driven through loans. Society of Indian Automobile Manufacturers presented data on investment and diesel cars sales to the finance ministry that will now take a call on whether to introduce a special tax on diesel vehicles as proposed by the petroleum ministry.
Tata Motors today reported a 12% rise in global vehicle sales for May. Global sales of Jaguar Land Rover rose 35% on year to 30,094 units.Bajaj Auto is likely to launch new vehicles this year and this may support its share price.
Pharma sector – In range this week; may eye RBI policy Mon
Pharmaceutical stocks are likely to trade in a narrow range with a positive bias this week. The broad market is currently testing one of its lows, pharmaceutical stocks, being defensive in nature, are likely to gain this week. Investors are also likely to take cues from the Reserve bank of India's monetary policy review on Monday. The dismal industrial production data released last week has reaffirmed the need for a quick response by the RBI. In April, the index of industrial production grew a mere 0.1% after having contracted 3.2% a month ago. Pertaining to specific events and news, some movement might also be seen in certain stocks. Cadila Healthcare is likely to see some highs this week as the US Food and Drug Administration's approval to the company's Gujarat plant is seen coming in shortly.
Capital Goods sector ‐ To track mkt; RBI credit policy eyed
Shares of capital goods and engineering companies, in early trade on Monday, are likely to track the broad market, which in turn will take cues from the outcome of elections in Greece. Investors will also keenly watch the Reserve Bank of India's mid‐quarter monetary policy review on Monday for direction.
FMCG Sector ‐ Seen gaining ground on improved sentiment
Shares of fast moving consumer goods companies are seen gaining ground this week on improvement in investor sentiment. On Friday, shares of FMCG companies gained, with index heavyweights Hindustan Unilever and ITC rising 4.7% and 3.7% respectively. The BSE FMCG Index gained 3.4% in a week when the broader indices, BSE's Sensex and National Stock Exchange's Nifty, gained 1.4% each. The strong business outlook of FMCG companies is attracting buyers to their shares, as demand for FMCG products continues to grow with most leading companies in the sector posting nearly 9‐10% growth in sales volume in the Jan‐Mar quarter.
Cement Sector ‐ To track broad market this week
Shares of major cement companies are seen taking cues from the broad market this week amid lack of any sectorspecific triggers. There are no sector‐specific triggers that may have an impact on shares of cement companies this week. There will be an across‐the‐board upside if the Reserve Bank of India cuts rates in line with street expectations, and that will also benefit cement stocks. The central bank is scheduled to announce its mid‐quarter review of monetary policy on Monday. The RBI is widely expected to cut repo rate by 25 basis points to 7.75%. The broad market will also track global developments. According to sources in the tax department, UltraTech Cement paid 1.10 bln rupees as advance tax in the first quarter of the financial year ending March, nearly 175% higher than 400 mln rupees a year ago. Ambuja Cements paid 20% higher tax at 600 mln rupees, and ACC paid 12.5% higher tax at 450 mln rupees. For the last three quarters, cement makers' advance tax payments have been higher on a year‐on‐year basis due to a low base effect. Also, cement makers have seen an improvement in pricing and demand since October, and stability in raw
IT Sector ‐ To take cues from global developments this week
Shares of major information technology companies may take cues from global developments this week, such as outcome of elections in Greece, the Group of 20 nations' summit, and US Federal Open Market Committee meet, Most Indian IT companies get nearly 85% of their revenue from the US and UK. The IT sector is directly linked to global markets and investors will take cues from what is happening there. Any good news on the global front may lead to a rally in IT shares. Movement in shares of IT companies may also be linked to the broad market this week due to the lack of any sector‐specific triggers. Shares of Tech Mahindra and Satyam Computer may continue with the positive movement. On Mar 21, the respective boards of Tech Mahindra and Satyam Computer had approved the merger with shareholders of the Hyderabad‐based company getting two Tech Mahindra shares for every 17 held. The merger will be effective from Apr 1, 2011.
material prices over the past three quarters, which have benefited earnings
Oil Sector ‐ Focus on petrol price review
Shares of the three state‐owned oil marketing companies‐‐Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd‐‐could be under pressure this week, as the companies are soon expected to announce another cut in the prices of petrol. After the highest ever price hike of around 7 rupees per ltr in May, oil companies announced around 2‐rupee per ltr cut in prices of petrol on Jun 3. Price of the Indian crude oil basket has fallen to under $96 per barrel now from $98.49 per barrel at the beginning of the month, while the dollar‐rupee exchange rate has remained
rangebound leading to talks to cut in petrol prices. The state‐owned companies review prices and revenue loss on the sale of fuels every fortnight. However, in case the Reserve Bank of India announces a rate cut, as expected, on Monday, the shares of oil marketing companies may just be able to offset losses from the possible petrol price cut. BPCL may outperform its peers this week as the company Monday announced a third gas discovery in an offshore block in Mozambique, where it hold 10% stake
Telecom Sector ‐ To track mkt trend, eye EGoM meet this week
In the initial sessions this week, shares of telecommunications companies will track the broad market, which will take cues from the outcome of the Reserve Bank of India's mid‐quarter policy review on Monday. In the latter half of the week, telecom stocks will eye the meet of the empowered group of ministers on spectrum auction norms. The panel is likely to meet Friday to finalise spectrum auction norms. Telecom Regulatory Authority of India, in its recommendations
dated Apr 23, had proposed a reserve price of 36.22 bln rupees per 1 MHz of spectrum in the 1800 MHz band at a pan‐India level. The reserve price set by the regulator has been termed as exorbitantly high by the industry. The regulator had also given its recommendations on spectrum mortgage, spectrum liberalisation and deferred payment.
Steel Stocks Outlook ‐ In range; RBI policy, Greece elections eyed
Shares of major steel companies are expected to trade rangebound this week tracking key indices, which will take direction from the Reserve Bank of India's decision on interest rates Monday, and Greece's elections. At its mid‐quarter monetary policy review, the RBI is expected to cut the repo rate by 25 basis points to 7.75%, which will boost local shares.
Greece's elections will also lend cues to local shares. Shares may gain if parties that support austerity measures are elected as then the country may accept a bailout, allowing it to remain in the Eurozone. Back home, seasonal slowdown in demand due to the onset of monsoon could pressurise prices of steel companies' shares.
Bank sector‐ Tad up; RBI policy review, Greece eyed
Shares of most banks may move with an upward bias early Monday, anticipating the Reserve Bank of India to ease its monetary policy at the mid‐quarter policy review, which will be released at 1100 IST. The central bank's decision on interest rates and the underlying tone of the review may lend direction to bank shares for most part of this week. A 25‐ basis‐point rate cut has already been factored in the stocks. In the absence of a rate action, bank stocks may fall sharply lower. More than a repo rate cut, a CRR reduction would augur well for banks as the move will directly inject funds into the banking system and help banks lower their cost of funds, the benefit of which can be passed on to borrowers.
Market Range for Week 4950‐ 5350
Resistance – Nifty facing Resistance level @5150 level above this level it may go up to @5220 &@ 5300 level.
Support ‐ Support comes for market @5105 level for Nifty; below this level Nifty next support @5050 and @4980 will be the major support for Market.
Technical – Last week Nifty opened at 5096 & it made a high of 5146.Last week we have seen some volatility in the market. Nifty made a low of 5015 & closed at 5139.Last week Nifty gain 131 points from its low & on weekly basis it closed at 78point’s higher. Sensex made a weekly high of 16967 & a low of 16553 almost it gain 414 points in the week from its low.So overall last week we have seen some volatility with upside movement.
For the coming week the market range we expect 4950‐5350.
Weekly View –
Last week we had expected market range (4950‐5200) & market made a low of 5015 & made a high of 5146, so overall it hold over both side range
In last week report we had mentioned, on daily chart market was close above 200DMA & short term moving avg (5&20) was showing positive crossover.On weekly chart it had made”Engulfing Bull” candle & it was close above upper channel line, because of all that we had mentioned if market close above 5070‐5080 then we can see some upside & all we have seen same.Now on daily chart market still trading above 200DMA & holding upper downward slopping line.On weekly chart market close above “Engulfing Bull” high which was (5084) & close above upper channel line & osilator also showing positive crossover, so overall 5050‐5000 can act as a good support for market & close above 5150‐5160 can see some more upside in the market.Apart from that on Monday there is RBI policy which can also decide the market direction.
On Friday, the Dow rose 115 points, or 0.9%. The S&P500 gained 14 points, or 1%. The Nasdaq was up by 36 points, or 1.3%. All three indexes ended higher for a second straight week.The Dow & S&P500 jumped 1.7 % & 1.3% respectively for the week, & the Nasdaq gained 0.5%.
Market Commentary ‐
Outcome of a parliamentary election in Greece, Reserve Bank of India's mid‐quarter monetary policy review, progress of the monsoon rains, a two‐day meeting of the Federal Open Market Committee on US interest rates and G20 summit will decide the near‐term trend on the bourses.
The Reserve Bank of India is seen cutting its key policy rate viz. the repo rate by 25 basis points at mid‐quarter monetary policy review on Monday, 18 June 2012. Easing of core inflation, falling crude oil prices, weak industrial production data for April 2012, sharp deceleration in GDP growth in Q4 March 2012 and latest data showing decline in exports in May 2012 have raised expectations that the central bank will cut interest rates to revive economic growth
Greek voters return to the polls on Sunday, 17 June 2012, after the splintered results of a May 6 parliamentary election left no party able to put together a government. The poll could potentially decide whether the nation will remain in the euro zone.
The European Central Bank stands ready to provide support to the euro‐zone system, said its President, Mario Draghi, in prepared statements at a speech on Friday, 15 June 2012. "The Eurosystem will continue to supply liquidity to solvent banks where needed," he said at the ECB Watcher's conference. His comments come amid reports that central bankers are ready to take measures to keep liquidity flowing in international markets should the results of Sunday's Greek
elections trigger a credit crunch.
A key summit of the European Union is scheduled on 28 and 29 June 2012 to discuss the ongoing European debt crisis.The 7th group of 20 industrial and developing nation’s summit is scheduled to be held in Los Cabos, Mexico on 18 and 19 June 2012 to discuss current affairs such as poverty, youth unemployment and environmental issues. The leaders are also likely to discuss the.
• Govt likely to decide cable TV digitisation deadline next wk
• Source says DGH pulls up Cairn India for Barmer oil output shortfall
• Govt exempts tax on rupee payments for crude imports from Iran
• Ratan Tata buys 425,000 shares of Tata Motors Thu
• GE India to set up $200 mln plant in Maharashtra; begin ops 2013
• Passenger car sales drive Tata Motors' global sales in May
• India Apr industrial growth 0.1% vs 5.3% year ago
• India May WPI inflation rises to 7.55% from 7.23% Apr
• India May exports down 4% on year at $25.68 bln; trade gap narrows
• S&P says India could be first BRIC nation to lose invest grade rtg
• Alstom T&D gets two orders worth 2.25 bln rupees from Power Grid
• Zicom, arm buy 49% in Qatar‐based Phoenix International for $15 mln
• Govt says asked Saudi Arabia for 5 mtpa more crude oil
• Oil min source says HPCL keen to partner ONGC for Barmer refinery
• Infosys in pact with Israel to enhance R&D cooperation
• Source says GAIL plans to enter LNG Shipping business
• Wipro in pact with US‐based Kony Solutions for mobile application
• SEBI to auction FII invest limits in gilts, corporate bonds Jun 20
• RComm gets Singapore Exchange's nod to list undersea cables arm
• Welspun Energy to invest 56.75 bln rupee in Karnataka wind projects
• HCL Tech implements first phase of IT solution at Sharda University
Domestic events week ahead
• Jun 18: RBI to release mid‐quarter policy review.
• Jun 18: CPI for rural, urban areas, and combined for May, by CSO.
• Jun 20: CPI for rural and farm labourers for May, by labour ministry.
Global events week ahead
• Jun 19: Europe Zentrum fur Europaische Wirtschaftsforschung Economic Sentiment.
• Jun 20: German Producer Price Index m‐o‐m, Unemployment Rate of Britain, Crude Oil Inventories of US.
• Jun 21: French Flash Manufacturing & Services PMI , German Flash Manufacturing & Services PMI , Europe Flash Manufacturing & Services PMI , US Unemployment Claims & Philly Fed Manufacturing Index .
Weekly Sector Outlook and Stock Picks
Auto sector ‐ Focus on RBI policy, diesel car tax proposal
With the Reserve Bank of India scheduled to announce its mid‐quarter review of monetary policy on Monday, the central bank's stance on policy rates will set the direction for automobile shares, as well as the broad market this week. While a cut in rates will cheer the market, any decision otherwise may prove to be a drag on the automobile stocks as vehicle purchases in India are largely driven through loans. Society of Indian Automobile Manufacturers presented data on investment and diesel cars sales to the finance ministry that will now take a call on whether to introduce a special tax on diesel vehicles as proposed by the petroleum ministry.
Tata Motors today reported a 12% rise in global vehicle sales for May. Global sales of Jaguar Land Rover rose 35% on year to 30,094 units.Bajaj Auto is likely to launch new vehicles this year and this may support its share price.
Pharma sector – In range this week; may eye RBI policy Mon
Pharmaceutical stocks are likely to trade in a narrow range with a positive bias this week. The broad market is currently testing one of its lows, pharmaceutical stocks, being defensive in nature, are likely to gain this week. Investors are also likely to take cues from the Reserve bank of India's monetary policy review on Monday. The dismal industrial production data released last week has reaffirmed the need for a quick response by the RBI. In April, the index of industrial production grew a mere 0.1% after having contracted 3.2% a month ago. Pertaining to specific events and news, some movement might also be seen in certain stocks. Cadila Healthcare is likely to see some highs this week as the US Food and Drug Administration's approval to the company's Gujarat plant is seen coming in shortly.
Capital Goods sector ‐ To track mkt; RBI credit policy eyed
Shares of capital goods and engineering companies, in early trade on Monday, are likely to track the broad market, which in turn will take cues from the outcome of elections in Greece. Investors will also keenly watch the Reserve Bank of India's mid‐quarter monetary policy review on Monday for direction.
FMCG Sector ‐ Seen gaining ground on improved sentiment
Shares of fast moving consumer goods companies are seen gaining ground this week on improvement in investor sentiment. On Friday, shares of FMCG companies gained, with index heavyweights Hindustan Unilever and ITC rising 4.7% and 3.7% respectively. The BSE FMCG Index gained 3.4% in a week when the broader indices, BSE's Sensex and National Stock Exchange's Nifty, gained 1.4% each. The strong business outlook of FMCG companies is attracting buyers to their shares, as demand for FMCG products continues to grow with most leading companies in the sector posting nearly 9‐10% growth in sales volume in the Jan‐Mar quarter.
Cement Sector ‐ To track broad market this week
Shares of major cement companies are seen taking cues from the broad market this week amid lack of any sectorspecific triggers. There are no sector‐specific triggers that may have an impact on shares of cement companies this week. There will be an across‐the‐board upside if the Reserve Bank of India cuts rates in line with street expectations, and that will also benefit cement stocks. The central bank is scheduled to announce its mid‐quarter review of monetary policy on Monday. The RBI is widely expected to cut repo rate by 25 basis points to 7.75%. The broad market will also track global developments. According to sources in the tax department, UltraTech Cement paid 1.10 bln rupees as advance tax in the first quarter of the financial year ending March, nearly 175% higher than 400 mln rupees a year ago. Ambuja Cements paid 20% higher tax at 600 mln rupees, and ACC paid 12.5% higher tax at 450 mln rupees. For the last three quarters, cement makers' advance tax payments have been higher on a year‐on‐year basis due to a low base effect. Also, cement makers have seen an improvement in pricing and demand since October, and stability in raw
IT Sector ‐ To take cues from global developments this week
Shares of major information technology companies may take cues from global developments this week, such as outcome of elections in Greece, the Group of 20 nations' summit, and US Federal Open Market Committee meet, Most Indian IT companies get nearly 85% of their revenue from the US and UK. The IT sector is directly linked to global markets and investors will take cues from what is happening there. Any good news on the global front may lead to a rally in IT shares. Movement in shares of IT companies may also be linked to the broad market this week due to the lack of any sector‐specific triggers. Shares of Tech Mahindra and Satyam Computer may continue with the positive movement. On Mar 21, the respective boards of Tech Mahindra and Satyam Computer had approved the merger with shareholders of the Hyderabad‐based company getting two Tech Mahindra shares for every 17 held. The merger will be effective from Apr 1, 2011.
material prices over the past three quarters, which have benefited earnings
Oil Sector ‐ Focus on petrol price review
Shares of the three state‐owned oil marketing companies‐‐Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd‐‐could be under pressure this week, as the companies are soon expected to announce another cut in the prices of petrol. After the highest ever price hike of around 7 rupees per ltr in May, oil companies announced around 2‐rupee per ltr cut in prices of petrol on Jun 3. Price of the Indian crude oil basket has fallen to under $96 per barrel now from $98.49 per barrel at the beginning of the month, while the dollar‐rupee exchange rate has remained
rangebound leading to talks to cut in petrol prices. The state‐owned companies review prices and revenue loss on the sale of fuels every fortnight. However, in case the Reserve Bank of India announces a rate cut, as expected, on Monday, the shares of oil marketing companies may just be able to offset losses from the possible petrol price cut. BPCL may outperform its peers this week as the company Monday announced a third gas discovery in an offshore block in Mozambique, where it hold 10% stake
Telecom Sector ‐ To track mkt trend, eye EGoM meet this week
In the initial sessions this week, shares of telecommunications companies will track the broad market, which will take cues from the outcome of the Reserve Bank of India's mid‐quarter policy review on Monday. In the latter half of the week, telecom stocks will eye the meet of the empowered group of ministers on spectrum auction norms. The panel is likely to meet Friday to finalise spectrum auction norms. Telecom Regulatory Authority of India, in its recommendations
dated Apr 23, had proposed a reserve price of 36.22 bln rupees per 1 MHz of spectrum in the 1800 MHz band at a pan‐India level. The reserve price set by the regulator has been termed as exorbitantly high by the industry. The regulator had also given its recommendations on spectrum mortgage, spectrum liberalisation and deferred payment.
Steel Stocks Outlook ‐ In range; RBI policy, Greece elections eyed
Shares of major steel companies are expected to trade rangebound this week tracking key indices, which will take direction from the Reserve Bank of India's decision on interest rates Monday, and Greece's elections. At its mid‐quarter monetary policy review, the RBI is expected to cut the repo rate by 25 basis points to 7.75%, which will boost local shares.
Greece's elections will also lend cues to local shares. Shares may gain if parties that support austerity measures are elected as then the country may accept a bailout, allowing it to remain in the Eurozone. Back home, seasonal slowdown in demand due to the onset of monsoon could pressurise prices of steel companies' shares.
Bank sector‐ Tad up; RBI policy review, Greece eyed
Shares of most banks may move with an upward bias early Monday, anticipating the Reserve Bank of India to ease its monetary policy at the mid‐quarter policy review, which will be released at 1100 IST. The central bank's decision on interest rates and the underlying tone of the review may lend direction to bank shares for most part of this week. A 25‐ basis‐point rate cut has already been factored in the stocks. In the absence of a rate action, bank stocks may fall sharply lower. More than a repo rate cut, a CRR reduction would augur well for banks as the move will directly inject funds into the banking system and help banks lower their cost of funds, the benefit of which can be passed on to borrowers.
Market Range for Week 4950‐ 5350
Resistance – Nifty facing Resistance level @5150 level above this level it may go up to @5220 &@ 5300 level.
Support ‐ Support comes for market @5105 level for Nifty; below this level Nifty next support @5050 and @4980 will be the major support for Market.
Technical – Last week Nifty opened at 5096 & it made a high of 5146.Last week we have seen some volatility in the market. Nifty made a low of 5015 & closed at 5139.Last week Nifty gain 131 points from its low & on weekly basis it closed at 78point’s higher. Sensex made a weekly high of 16967 & a low of 16553 almost it gain 414 points in the week from its low.So overall last week we have seen some volatility with upside movement.
For the coming week the market range we expect 4950‐5350.
Weekly View –
Last week we had expected market range (4950‐5200) & market made a low of 5015 & made a high of 5146, so overall it hold over both side range
In last week report we had mentioned, on daily chart market was close above 200DMA & short term moving avg (5&20) was showing positive crossover.On weekly chart it had made”Engulfing Bull” candle & it was close above upper channel line, because of all that we had mentioned if market close above 5070‐5080 then we can see some upside & all we have seen same.Now on daily chart market still trading above 200DMA & holding upper downward slopping line.On weekly chart market close above “Engulfing Bull” high which was (5084) & close above upper channel line & osilator also showing positive crossover, so overall 5050‐5000 can act as a good support for market & close above 5150‐5160 can see some more upside in the market.Apart from that on Monday there is RBI policy which can also decide the market direction.
On Friday, the Dow rose 115 points, or 0.9%. The S&P500 gained 14 points, or 1%. The Nasdaq was up by 36 points, or 1.3%. All three indexes ended higher for a second straight week.The Dow & S&P500 jumped 1.7 % & 1.3% respectively for the week, & the Nasdaq gained 0.5%.
Market Commentary ‐
Outcome of a parliamentary election in Greece, Reserve Bank of India's mid‐quarter monetary policy review, progress of the monsoon rains, a two‐day meeting of the Federal Open Market Committee on US interest rates and G20 summit will decide the near‐term trend on the bourses.
The Reserve Bank of India is seen cutting its key policy rate viz. the repo rate by 25 basis points at mid‐quarter monetary policy review on Monday, 18 June 2012. Easing of core inflation, falling crude oil prices, weak industrial production data for April 2012, sharp deceleration in GDP growth in Q4 March 2012 and latest data showing decline in exports in May 2012 have raised expectations that the central bank will cut interest rates to revive economic growth
Greek voters return to the polls on Sunday, 17 June 2012, after the splintered results of a May 6 parliamentary election left no party able to put together a government. The poll could potentially decide whether the nation will remain in the euro zone.
The European Central Bank stands ready to provide support to the euro‐zone system, said its President, Mario Draghi, in prepared statements at a speech on Friday, 15 June 2012. "The Eurosystem will continue to supply liquidity to solvent banks where needed," he said at the ECB Watcher's conference. His comments come amid reports that central bankers are ready to take measures to keep liquidity flowing in international markets should the results of Sunday's Greek
elections trigger a credit crunch.
A key summit of the European Union is scheduled on 28 and 29 June 2012 to discuss the ongoing European debt crisis.The 7th group of 20 industrial and developing nation’s summit is scheduled to be held in Los Cabos, Mexico on 18 and 19 June 2012 to discuss current affairs such as poverty, youth unemployment and environmental issues. The leaders are also likely to discuss the.
Thursday, June 14, 2012
14-06-2012
Markets opened on a subdued note traded in a narrow range throughout the day to close marginally in green. On the sectoral front Capital Goods, FMCG ended with decent gains whereas Auto and Realty ended on the losing side. The advance decline ratio was in favour of advancing counters (Advances = 1403/ Declines=1301).
Pattern Formation: On the Daily chart, after a breakout from the downward sloping channel we are observing a Doji candlestick pattern. This reflects indecisiveness prevailing at current level.
Future Outlook: In view of the above formation it is evident that markets a circumspect at current level. However, the hourly chart is still maintaining a higher top highs bottom formation. In coming trading session if nifty for first hour trades and sustain above 5145 level then it may test 5200 – 5220 level. On the downside 5060 – 5020 may act as support for the day. Since inflation data is going to be announced today we are likely to witness volatile session.
Data Alert From India –
• WPI inflation for May, to be detailed by commerce and industry ministry.
Data Alert From Overseas -
• Core Consumer Price Index m-o-m of US at 6.00 pm.
• Unemployment Claims of US at 6.00 pm.
Domestic Sector News –
• BANKING: Government may exempt state-owned banks from paying dividend as part of its move to set up a single holding company to meet their capital requirements.
• CAPITAL GOODS: Government will soon restrict import of used plant and machinery to safeguard the productivity and competitiveness of Indian manufacturers.
• COAL: Coal ministry has said it would review the output of coal companies on a monthly basis instead of once every two months.
• FERTILIZERS: Cabinet Committee on Economic Affairs will discuss the proposal to hike urea price by 10%. Domestic Stock Specific News -
• CARBORUNDUM UNIVERSAL: Has entered into a technical collaboration with UK-based Sheffield Refractories and Anderman Ceramics to manufacture and supply refractory solutions and aerospace components
• COAL INDIA: Company's arm, South Eastern Coalfields has suspended supply to Unit-2 of LANCO INFRATECH's Amarkantak power project in Chhattisgarh, on the ground that the company has not signed any long-term power purchase agreement with any state distribution company.
• HOTEL LEELAVENTURE: Lenders have approved company's 43-bln-rupee loan restructuring package.
• MOSER BAER INDIA: Is seeking restructuring of its foreign currency convertible bonds worth $150 mln, which are due for maturity on Jun 21.
International News -
• In May 2012, consumer prices in Germany were up 1.9% on May 2011.
• Moody's Investors Service cut Spain's debt rating by three notches to Baa3.
Securities in Ban For Trade Date 14-06-2012
ABAN, ABGship, Coreedutec, Suzlon, Jetairways.
Today’s Result –
Atharv Enter, Cigniti Tech .
EX- Dividend + Board Meeting -
EX- Dividend - Axis Bank, Bank of Maharashtra, BOB, Canara Bank, ING Vysya Bank, JSW energy, Nakoda, PNB, Punjab & Sind Bank, Torrent Power, United Bank, Videocon Inds. Board Meeting (Purpose) – Jayant Merc (Increase in Authorised Capital), Valiant Comm (General).
Pattern Formation: On the Daily chart, after a breakout from the downward sloping channel we are observing a Doji candlestick pattern. This reflects indecisiveness prevailing at current level.
Future Outlook: In view of the above formation it is evident that markets a circumspect at current level. However, the hourly chart is still maintaining a higher top highs bottom formation. In coming trading session if nifty for first hour trades and sustain above 5145 level then it may test 5200 – 5220 level. On the downside 5060 – 5020 may act as support for the day. Since inflation data is going to be announced today we are likely to witness volatile session.
Data Alert From India –
• WPI inflation for May, to be detailed by commerce and industry ministry.
Data Alert From Overseas -
• Core Consumer Price Index m-o-m of US at 6.00 pm.
• Unemployment Claims of US at 6.00 pm.
Domestic Sector News –
• BANKING: Government may exempt state-owned banks from paying dividend as part of its move to set up a single holding company to meet their capital requirements.
• CAPITAL GOODS: Government will soon restrict import of used plant and machinery to safeguard the productivity and competitiveness of Indian manufacturers.
• COAL: Coal ministry has said it would review the output of coal companies on a monthly basis instead of once every two months.
• FERTILIZERS: Cabinet Committee on Economic Affairs will discuss the proposal to hike urea price by 10%. Domestic Stock Specific News -
• CARBORUNDUM UNIVERSAL: Has entered into a technical collaboration with UK-based Sheffield Refractories and Anderman Ceramics to manufacture and supply refractory solutions and aerospace components
• COAL INDIA: Company's arm, South Eastern Coalfields has suspended supply to Unit-2 of LANCO INFRATECH's Amarkantak power project in Chhattisgarh, on the ground that the company has not signed any long-term power purchase agreement with any state distribution company.
• HOTEL LEELAVENTURE: Lenders have approved company's 43-bln-rupee loan restructuring package.
• MOSER BAER INDIA: Is seeking restructuring of its foreign currency convertible bonds worth $150 mln, which are due for maturity on Jun 21.
International News -
• In May 2012, consumer prices in Germany were up 1.9% on May 2011.
• Moody's Investors Service cut Spain's debt rating by three notches to Baa3.
Securities in Ban For Trade Date 14-06-2012
ABAN, ABGship, Coreedutec, Suzlon, Jetairways.
Today’s Result –
Atharv Enter, Cigniti Tech .
EX- Dividend + Board Meeting -
EX- Dividend - Axis Bank, Bank of Maharashtra, BOB, Canara Bank, ING Vysya Bank, JSW energy, Nakoda, PNB, Punjab & Sind Bank, Torrent Power, United Bank, Videocon Inds. Board Meeting (Purpose) – Jayant Merc (Increase in Authorised Capital), Valiant Comm (General).
Tuesday, June 12, 2012
APRIL INDEX OF INDUSTRIAL PRODUCTION DATA
April INDEX OF INDUSTRIAL PRODUCTION DATA
April IIP DATA at 0.1 % Vs -3.5% (MoM)
April Sectoral IIP Data (MoM)
Mining Sector Growth at -3.1 % Vs -1.3 %
Manufacturing Sector Growth at 0.1 % Vs -4.4%
Electricity Growth at 4.6% Vs 2.7%
Capital Goods Growth at-16.3 % Vs -21.3%
Consumer Durables Growth at 5.00 % Vs 0.2%
Intermediate Goods Growth at -1.4 % Vs -2.1%
Consumer Non Durables Growth at 5.4 % Vs 1.00%
Basic goods Growth at 2.3 %
12-06-2012
Markets opened up with a gap traded in a narrow band and witnessed selling tin the latter half of the session to close in red. On the sectoral front Capital Goods, Health Care, and Realty led the fall whereas Consumer Durable and FMCG ended up with minor gains. The advance decline ratio was in favour of advancing counters (Advances = 1447/ Declines=1260).
Pattern Formation: On the Daily chart, we are observing that prices breached the downward sloping channel on intraday basis but close marginally below the 200-day SMA (5066).
Future Outlook: After a six days rally we are witnessing a bear candle which has marginally closed 200-day SMA (5066). At present hourly chart are still in a higher top higher bottom formation. In coming trading session 5077 is crucial level for upside momentum to continue .Hence if nifty for first hour trade above 5077 level then it may retest 5100 – 5120 levels. On the downside, 5010 – 4964 may act as support for the day.
Data Alert From India –
• Index of Industrial Production for Apr, by CSO.
Data Alert From Overseas -
• French Final Non-Farm Payrolls q-o-q at 11:0 am.
• US Import Prices m-o-m at 6:00 pm.
• US Federal Budget Balance at 11:30 pm.
Domestic Sector News –
• AUTOMOTIVE: Society of Indian Automobile Manufacturers may downgrade sales growth projections for 2012-13 (Apr-Mar) for the passenger vehicles segment in its quarterly review in July.
• TELECOM: Empowered Group of Ministers on telecom spectrum is unlikely to reduce the reserve price of airwaves in the upcoming second-generation mobile telephony spectrum auctions.
Government may allow incumbent players to bid for only one slot of 1.25 Mhz spectrum in the upcoming second generation mobile telephony spectrum auction, while there will be no such cap on new players.
Domestic Stock Specific News -
• AUROBINDO PHARMA: Promoter P. Suneela Rani has pledged 5 mln shares of the company.
• CMC: Received an order from UK's Forth Ports to provide terminal operations solutions at London Container Terminal
• DLF: Has completed sale of arm DLF Hotels & Hospitality to a Kolkata-based consortium.
• EVERONN EDUCATION: JM Financial Products' stake in the company rises to 5.04% from 4.86% earlier.
• OIL AND NATURAL GAS CORP: Has extended its pact with Hinduja Group's Ashok Leyland Project Services for sourcing liquefied natural gas from Iran and other West Asian countries by another year
International News -
• In April 2012, manufacturing output decreased in volume (-0.7%). It had strongly increased in March (+1.4%). Macro Economic Calendar Date
Securities in Ban For Trade Date 12-06-2012
ABAN, ABGship, Coreedutec, Suzlon
Today’s Result –
Gufic Bio, Shri Dinesh
EX- Dividend + Board Meeting -
EX- Dividend - Indo Rama Syn, Ratnabali Cap. Board Meeting (Purpose) – Gufic Bio (Dividend), Shri Dinesh (Dividend), Zyden Gentec (Consolidation of Shares)
Pattern Formation: On the Daily chart, we are observing that prices breached the downward sloping channel on intraday basis but close marginally below the 200-day SMA (5066).
Future Outlook: After a six days rally we are witnessing a bear candle which has marginally closed 200-day SMA (5066). At present hourly chart are still in a higher top higher bottom formation. In coming trading session 5077 is crucial level for upside momentum to continue .Hence if nifty for first hour trade above 5077 level then it may retest 5100 – 5120 levels. On the downside, 5010 – 4964 may act as support for the day.
Data Alert From India –
• Index of Industrial Production for Apr, by CSO.
Data Alert From Overseas -
• French Final Non-Farm Payrolls q-o-q at 11:0 am.
• US Import Prices m-o-m at 6:00 pm.
• US Federal Budget Balance at 11:30 pm.
Domestic Sector News –
• AUTOMOTIVE: Society of Indian Automobile Manufacturers may downgrade sales growth projections for 2012-13 (Apr-Mar) for the passenger vehicles segment in its quarterly review in July.
• TELECOM: Empowered Group of Ministers on telecom spectrum is unlikely to reduce the reserve price of airwaves in the upcoming second-generation mobile telephony spectrum auctions.
Government may allow incumbent players to bid for only one slot of 1.25 Mhz spectrum in the upcoming second generation mobile telephony spectrum auction, while there will be no such cap on new players.
Domestic Stock Specific News -
• AUROBINDO PHARMA: Promoter P. Suneela Rani has pledged 5 mln shares of the company.
• CMC: Received an order from UK's Forth Ports to provide terminal operations solutions at London Container Terminal
• DLF: Has completed sale of arm DLF Hotels & Hospitality to a Kolkata-based consortium.
• EVERONN EDUCATION: JM Financial Products' stake in the company rises to 5.04% from 4.86% earlier.
• OIL AND NATURAL GAS CORP: Has extended its pact with Hinduja Group's Ashok Leyland Project Services for sourcing liquefied natural gas from Iran and other West Asian countries by another year
International News -
• In April 2012, manufacturing output decreased in volume (-0.7%). It had strongly increased in March (+1.4%). Macro Economic Calendar Date
Securities in Ban For Trade Date 12-06-2012
ABAN, ABGship, Coreedutec, Suzlon
Today’s Result –
Gufic Bio, Shri Dinesh
EX- Dividend + Board Meeting -
EX- Dividend - Indo Rama Syn, Ratnabali Cap. Board Meeting (Purpose) – Gufic Bio (Dividend), Shri Dinesh (Dividend), Zyden Gentec (Consolidation of Shares)
Sunday, June 3, 2012
WEEKLY REPORT
Key developments during the week
• India Jan‐Mar GDP growth 5.3%; FY12 estimate cut to 6.5%
• India govt FY12 fiscal deficit 5.8% of GDP vs 5.9% Budget aim
• India govt FY12 tax mop‐up 8.906 trln rupees vs 9.017 trln aim
• India Apr exports $24.45 bln, up 3.2% on year
• India May HSBC manufacturing PMI flat at 54.8 vs 54.9 Apr
• India Apr core infrastructure sector growth 2.2% vs 4.2% yr ago
• Petronet LNG's Kochi terminal to begin commercial ops in Jan
• GAIL to use French co Axens' technology for Pata 1‐butene unit
• CRISIL to buy UK‐based analytics firm for up to 2.5 bln rupees
• JFE Steel inter‐se transfers entire 16.2% stake in JSW Steel to arm
• Govt cuts base import price of gold by 1%, silver by 2%
• Cabinet OKs new telecom policy; aims at pan‐India free roaming Bharti selects Alcatel‐Lucent as tech partner for faster broadband
• India eases qualified foreign invest norms; expands list of nations
• BHEL commissions 250 MW unit at Uttar Pradesh thermal power plant
• GVK's Alpha coal project gets environment clearance from Australia
• Gujarat NRE arm signs coking coal supply pact with Jindal Steel
• Alstom T&D gets 960‐mln‐rupee order from Maharashtra power utility
• MOIL OKs vertical shaft project at Balaghat mine to up output
• RIL sources say govt needs to make KG‐D6 gas price LNG‐linked
Domestic events week ahead
• Jun 05: Services PMI and composite PMI for May, by HSBC.
Global events week ahead
•Jun 05 : Final Services Purchasing Managers' Index (PMI) & Retail Sales m‐o‐m of Europe
• Jun 06 : Revised GDP q‐o‐q of Europe & German Industrial Production m‐o‐m, Crude Oil Inventories of US
• Jun 07 : Services Purchasing Managers' Index (PMI) of Britain, Unemployment Claims of US
• Jun 08 : Final GDP q‐o‐q of Japan, Producer Price Index Input m‐o‐m of Britain, Trade Balance of US
Weekly Sector Outlook and Stock Picks
Auto sector ‐ Seen flat‐to‐down; to track global markets
Auto stocks are seen flat‐to‐down in this week on subdued May sales numbers, the recent steep hike in petrol prices, andweakening of the rupee against the dollar. However, positive on Mahindra & Mahindra Ltd, which reported a 28% rise in total vehicle sales in May. The market will also look out for any announcement on petrol price cut. There have been speculations that oil‐marketing companies might cut petrol prices by 1.50‐2.00 rupees. Any major development in the global markets could also set the trend for the auto stocks.
Pharma sector – Seen outperforming broad market this week
Pharmaceutical stocks are expected to outperform the broad market this week. Investors are expected to continueoffloading their stakes this week as the broad market currently lacks direction amid global uncertainties and domestic worries. Pharmaceutical stocks, being defensive in nature, will tend to move against the broad market trend.
Sun Pharmaceutical Industries, whose management's 18‐20% sales guidance for the next two years. The company is also likely to announce a few acquisitions outside the US market. Ranbaxy Laboratories is also likely to rise this week as street expect the company to launch its acne‐treating drug as soon as it gets approval from US Food and Drug Administration
Capital Goods sector ‐ To trade with negative bias this week
Shares of capital goods and engineering companies are likely to trade with a negative bias this week in the absence of any positive triggers. Most capital goods shares are seen declining following disappointing gross domestic product growth data, released Thursday. Growth in the Indian economy moderated to 5.3% in the quarter ended March. Poor performance of the industry sector hit economic growth. The industry sector grew 3.4% in 2011‐12 as against 7.2% a year
ago. During the year, mining sector contracted 0.9% from a growth of 5% a year ago. Growth in the manufacturing sector slowed to 2.5% in the year ended March from 7.6% a year ago, while construction sector grew 5.3% during the year, as against 8.0%. These sectors are the key contributors to capital goods and engineering companies' order books. In the past two trading sessions, the BSE Capital Goods index has declined nearly 4%.
High interest rates, delays in government approvals, uncertain external environment and overall weak business sentiments have had a huge bearing on the industrial growth. Even as overall sentiment towards heavy engineering segment continues to remain weak
FMCG Sector ‐ Seen rangebound on defensive play in weak market
Shares of fast‐moving consumer goods companies may move in a narrow range in the week ahead as the weakness in the broad market may prompt investors to stay put in these stocks, which are generally considered a defensive bet in a falling market. The clear demand outlook for products of these companies and their good set of numbers in the Jan‐Mar quarter are also likely to support these stocks. This week, while the BSE's FMCG index remained flat, the National Stock
Exchange's Nifty and BSE's Sensex lost 1.6% each.
Cement Sector ‐ Seen rangebound with negative bias this week
Shares of major cement companies are seen rangebound this week amid lack of sector‐specific triggers. However, the bias is likely to be negative on low demand outlook as the sector enters a seasonally weak period. Demand for cement typically dries by mid‐June, as construction activity slows down during monsoon.
Shares of cement makers are likely to remain under pressure on expectation that the Competition Commission of India,which is investigating allegations of price rigging by companies, may announce its order soon.
IT Sector ‐ Rangebound this week amid lack of triggers
Shares of major information technology companies are likely to trade rangebound this week, and may take cues from the broad market amid lack of any sector‐specific cues. The bias may, however, remain negative this week as global demand for information technology services remains under pressure. Companies are banking on demand revival in the second half of the current financial year, failing which they may not meet their earnings guidance. Most sector majors, except Tata Consultancy Services, have already hinted at tepid growth for 2012‐13 (Apr‐Mar). While industry body NASSCOM expects the sector to grow 11‐14%, sector bellwether Infosys has guided for 8‐10% growth. TCS is the only company to have confidently said it will beat industry growth. Investors are likely to eye the movement of rupee against the dollar. Software exporters are likely to see a strong benefit from the weakness in rupee. Most large Indian IT companies getnearly 70% of their revenue from the US.
Oil Sector ‐ Oil retailers seen rangebound
Shares of oil marketing companies will track announcement of a possible petrol price cut as well as crude prices and rupee‐dollar movement this week, but may remain mostly in range. With Finance Minister Pranab Mukherjee stressing on efforts to reduce the burgeoning fiscal deficit by cutting government expenditure and subsidies, the market is hoping that government may soon take a call on raising diesel and cooking gas prices.
Currently, the three state‐owned oil marketing companies Indian Oil Corp Ltd, Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Lt are losing revenue worth 4.57 bln rupees daily on sale of fuels at subsidised rates. A cut in petrol prices,due to decline in crude prices, though may have a momentary negative impact on the stocks. The companies are widely expected to announce an over 1.60 rupees per litre cut in the price of petrol soon. Crude oil prices, however, continued to
soften, which eased the pressure on these oil companies.
Telecom Sector ‐ To eye EGoM meet on spectrum auction norms
Shares of major telecom operators will eye the upcoming meeting of the Empowered Group Of Ministers, which is likely to take a decision on the final set of recommendations on spectrum auction norms. The meeting is slated for Tuesday. The Telecom Commission, in its meet on May 26, had kept the spectrum reserve price, recommended by the Telecom Regulatory Authority of India, unchanged and has asked the regulator to submit an analysis of the impact of the proposal
on tariffs. TRAI will submit a circle‐wise impact assessment of the base price on tariffs. TRAI's analysis report, along with the final set of recommendations by the telecom department, will be presented before the ministers' panel. The overall trend in telecom stocks this week is, however, seen remaining weak tracking the bearishness in the broad market.
Steel Stocks Outlook ‐ Seen down this week tracking indices
Shares of major steel companies are likely to trade with a negative bias this week tailing the key indices as slowdown in domestic and global economy will weigh on investor sentiment. The Indian economy grew at 5.3% in Jan‐Mar, its slowest pace in over seven years and was way below consensus estimate of 6.1%. The GDP had expanded 6.1% in Oct‐Dec and 9.2% a year ago. Also, with uncertainty over the European political scenario and slowdown in China, the macroeconomic
picture globally remains gloomy. Last week, SAIL surprised the market by posting better than expected results on better volumes and improved realisations. The public sector steel maker's Jan‐Mar net profit rose 3% on year to 1577 cr rupees.
Bank sector‐ Weak; SBI, Bank of Baroda seen as top picks
Bank stocks are expected to remain slightly weak in line with the rest of the equity market. Comments from the Reserve Bank of India Deputy Governor Subir Gokarn indicating that the slowdown in growth was creating more room for policyeasing is seen as positive for banks. Hopes for a repo ra te cut in June, which were low earlier have now risen after this comment and bank stocks will take comfort from this. So far, banks have cut loan rates with not enough cut in deposit
rates, if repo rate is cut, then deposit rates will also go down substantially. Any reduction in deposit rates will help banks improve their net interest margins and subsequently their profitability.
Citing concerns on as set quality, Fitch Ratings' on Friday revised Indian Bank's outlook to negative from stable, which can lead to selling pressure in the banks' shares.
Market Range for Week 4700‐ 4980
Resistance – Nifty facing Resistance level @4880 level above this level it may go up to @4950 &@ 4980 level.
Support ‐ Support comes for market @4820 level for Nifty; below this level Nifty next support @4780 and @4720 will be the major support for Market.
Technical – Last week Nifty opened at 4931 & it made a high of 5020.Last week we have seen some selling from higher lelvel. Nifty made a low of 4831 & closed at 4841.Last week Nifty drag 189 points from its high & on weekly basis it closed at 79 point’s lower. Sensex made a weekly high of 16544 & a low of 15933 almost it drags 611 points in the week from its high.So overall last week we have seen some profitbooking from higher level.
Weekly Nifty View –
Last week we had expected market range (4800‐5180) & market made a high of 5020 & made a low of 4831, so overall it hold over both side range.In last week report we had mentioned, on daily chart market had made “Morning Star” formation & osilator was in oversold, but it was facing resistance on lower channel line,on weekly chart it was taking support around 200WMA
because of all that we had mentioned above 4950 we can see some up side & market made a high of 5020 & from there we have seen some selling in the market.Now on daily chart short term moving avg.(5‐20)SMA showing negative crossover & osilator showing negative crossover.On weekly chart market taking support at 200 WMA, but still not able to cross upper channel line.So overall still 4950‐4960 will be major resistacne for market & close below 4800‐4780 can see
some more selling pressure in the market, so still should use caution approach at higher level.
On Friday, the Dow plunged 275 points, or 2.2%, the biggest one‐day drop since November.The S&P500 lost 32 points, or 2.5% & the Nasdaq dropped 80 points, or 2.8%.
Market Commentary ‐
News flow from euro‐zone will continue to dictate near term trend on the domestic bourses as risk aversion arising from euro‐zone debt worries rattled global markets in the month just gone by. The barometer index, BSE Sensex, lost 6.35% in May 2012 on euro‐zone debt worries. Concerns about Greece's possible exit from the European Union rattled global equity markets after the splintered results of a parliamentary election on 6 May 2012 left no party able to put together a government. That led the country to call another election on 17 June 2012. Shares of exporters will be in focus as Commerce Minister Anand Sharma unveils the foreign trade policy for 2012‐13 on Tuesday, 5 June 2012. The economic crisis in the US and Europe is hitting India's exports. Both these markets account for about one‐third of country's total shipments. The expansion in the country's merchandise exports, which grew by as much as 82% in July 2011, came down to 3.2% in April 2012 due to the demand slowdown in western markets. Infrastructure and cement stocks will be in focus after Prime Minister Manmohan Singh on Friday, 1 June 2012, approved the setting up of a mechanism that will track the progress of all major infrastructure projects to avoid delays in
their completion. The government will periodically review the progress of projects under the Investment Tracking System to ensure that issues are quickly identified and resolved. All public‐sector projects with an investment of Rs 1000 crore or more will be monitored by the National Manufacturing Competitive Council. The Department of Financial Services will monitor similar‐sized projects of private companies, and the two bodies will report the progress of projects
to the prime minister every quarter.
• India Jan‐Mar GDP growth 5.3%; FY12 estimate cut to 6.5%
• India govt FY12 fiscal deficit 5.8% of GDP vs 5.9% Budget aim
• India govt FY12 tax mop‐up 8.906 trln rupees vs 9.017 trln aim
• India Apr exports $24.45 bln, up 3.2% on year
• India May HSBC manufacturing PMI flat at 54.8 vs 54.9 Apr
• India Apr core infrastructure sector growth 2.2% vs 4.2% yr ago
• Petronet LNG's Kochi terminal to begin commercial ops in Jan
• GAIL to use French co Axens' technology for Pata 1‐butene unit
• CRISIL to buy UK‐based analytics firm for up to 2.5 bln rupees
• JFE Steel inter‐se transfers entire 16.2% stake in JSW Steel to arm
• Govt cuts base import price of gold by 1%, silver by 2%
• Cabinet OKs new telecom policy; aims at pan‐India free roaming Bharti selects Alcatel‐Lucent as tech partner for faster broadband
• India eases qualified foreign invest norms; expands list of nations
• BHEL commissions 250 MW unit at Uttar Pradesh thermal power plant
• GVK's Alpha coal project gets environment clearance from Australia
• Gujarat NRE arm signs coking coal supply pact with Jindal Steel
• Alstom T&D gets 960‐mln‐rupee order from Maharashtra power utility
• MOIL OKs vertical shaft project at Balaghat mine to up output
• RIL sources say govt needs to make KG‐D6 gas price LNG‐linked
Domestic events week ahead
• Jun 05: Services PMI and composite PMI for May, by HSBC.
Global events week ahead
•Jun 05 : Final Services Purchasing Managers' Index (PMI) & Retail Sales m‐o‐m of Europe
• Jun 06 : Revised GDP q‐o‐q of Europe & German Industrial Production m‐o‐m, Crude Oil Inventories of US
• Jun 07 : Services Purchasing Managers' Index (PMI) of Britain, Unemployment Claims of US
• Jun 08 : Final GDP q‐o‐q of Japan, Producer Price Index Input m‐o‐m of Britain, Trade Balance of US
Weekly Sector Outlook and Stock Picks
Auto sector ‐ Seen flat‐to‐down; to track global markets
Auto stocks are seen flat‐to‐down in this week on subdued May sales numbers, the recent steep hike in petrol prices, andweakening of the rupee against the dollar. However, positive on Mahindra & Mahindra Ltd, which reported a 28% rise in total vehicle sales in May. The market will also look out for any announcement on petrol price cut. There have been speculations that oil‐marketing companies might cut petrol prices by 1.50‐2.00 rupees. Any major development in the global markets could also set the trend for the auto stocks.
Pharma sector – Seen outperforming broad market this week
Pharmaceutical stocks are expected to outperform the broad market this week. Investors are expected to continueoffloading their stakes this week as the broad market currently lacks direction amid global uncertainties and domestic worries. Pharmaceutical stocks, being defensive in nature, will tend to move against the broad market trend.
Sun Pharmaceutical Industries, whose management's 18‐20% sales guidance for the next two years. The company is also likely to announce a few acquisitions outside the US market. Ranbaxy Laboratories is also likely to rise this week as street expect the company to launch its acne‐treating drug as soon as it gets approval from US Food and Drug Administration
Capital Goods sector ‐ To trade with negative bias this week
Shares of capital goods and engineering companies are likely to trade with a negative bias this week in the absence of any positive triggers. Most capital goods shares are seen declining following disappointing gross domestic product growth data, released Thursday. Growth in the Indian economy moderated to 5.3% in the quarter ended March. Poor performance of the industry sector hit economic growth. The industry sector grew 3.4% in 2011‐12 as against 7.2% a year
ago. During the year, mining sector contracted 0.9% from a growth of 5% a year ago. Growth in the manufacturing sector slowed to 2.5% in the year ended March from 7.6% a year ago, while construction sector grew 5.3% during the year, as against 8.0%. These sectors are the key contributors to capital goods and engineering companies' order books. In the past two trading sessions, the BSE Capital Goods index has declined nearly 4%.
High interest rates, delays in government approvals, uncertain external environment and overall weak business sentiments have had a huge bearing on the industrial growth. Even as overall sentiment towards heavy engineering segment continues to remain weak
FMCG Sector ‐ Seen rangebound on defensive play in weak market
Shares of fast‐moving consumer goods companies may move in a narrow range in the week ahead as the weakness in the broad market may prompt investors to stay put in these stocks, which are generally considered a defensive bet in a falling market. The clear demand outlook for products of these companies and their good set of numbers in the Jan‐Mar quarter are also likely to support these stocks. This week, while the BSE's FMCG index remained flat, the National Stock
Exchange's Nifty and BSE's Sensex lost 1.6% each.
Cement Sector ‐ Seen rangebound with negative bias this week
Shares of major cement companies are seen rangebound this week amid lack of sector‐specific triggers. However, the bias is likely to be negative on low demand outlook as the sector enters a seasonally weak period. Demand for cement typically dries by mid‐June, as construction activity slows down during monsoon.
Shares of cement makers are likely to remain under pressure on expectation that the Competition Commission of India,which is investigating allegations of price rigging by companies, may announce its order soon.
IT Sector ‐ Rangebound this week amid lack of triggers
Shares of major information technology companies are likely to trade rangebound this week, and may take cues from the broad market amid lack of any sector‐specific cues. The bias may, however, remain negative this week as global demand for information technology services remains under pressure. Companies are banking on demand revival in the second half of the current financial year, failing which they may not meet their earnings guidance. Most sector majors, except Tata Consultancy Services, have already hinted at tepid growth for 2012‐13 (Apr‐Mar). While industry body NASSCOM expects the sector to grow 11‐14%, sector bellwether Infosys has guided for 8‐10% growth. TCS is the only company to have confidently said it will beat industry growth. Investors are likely to eye the movement of rupee against the dollar. Software exporters are likely to see a strong benefit from the weakness in rupee. Most large Indian IT companies getnearly 70% of their revenue from the US.
Oil Sector ‐ Oil retailers seen rangebound
Shares of oil marketing companies will track announcement of a possible petrol price cut as well as crude prices and rupee‐dollar movement this week, but may remain mostly in range. With Finance Minister Pranab Mukherjee stressing on efforts to reduce the burgeoning fiscal deficit by cutting government expenditure and subsidies, the market is hoping that government may soon take a call on raising diesel and cooking gas prices.
Currently, the three state‐owned oil marketing companies Indian Oil Corp Ltd, Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Lt are losing revenue worth 4.57 bln rupees daily on sale of fuels at subsidised rates. A cut in petrol prices,due to decline in crude prices, though may have a momentary negative impact on the stocks. The companies are widely expected to announce an over 1.60 rupees per litre cut in the price of petrol soon. Crude oil prices, however, continued to
soften, which eased the pressure on these oil companies.
Telecom Sector ‐ To eye EGoM meet on spectrum auction norms
Shares of major telecom operators will eye the upcoming meeting of the Empowered Group Of Ministers, which is likely to take a decision on the final set of recommendations on spectrum auction norms. The meeting is slated for Tuesday. The Telecom Commission, in its meet on May 26, had kept the spectrum reserve price, recommended by the Telecom Regulatory Authority of India, unchanged and has asked the regulator to submit an analysis of the impact of the proposal
on tariffs. TRAI will submit a circle‐wise impact assessment of the base price on tariffs. TRAI's analysis report, along with the final set of recommendations by the telecom department, will be presented before the ministers' panel. The overall trend in telecom stocks this week is, however, seen remaining weak tracking the bearishness in the broad market.
Steel Stocks Outlook ‐ Seen down this week tracking indices
Shares of major steel companies are likely to trade with a negative bias this week tailing the key indices as slowdown in domestic and global economy will weigh on investor sentiment. The Indian economy grew at 5.3% in Jan‐Mar, its slowest pace in over seven years and was way below consensus estimate of 6.1%. The GDP had expanded 6.1% in Oct‐Dec and 9.2% a year ago. Also, with uncertainty over the European political scenario and slowdown in China, the macroeconomic
picture globally remains gloomy. Last week, SAIL surprised the market by posting better than expected results on better volumes and improved realisations. The public sector steel maker's Jan‐Mar net profit rose 3% on year to 1577 cr rupees.
Bank sector‐ Weak; SBI, Bank of Baroda seen as top picks
Bank stocks are expected to remain slightly weak in line with the rest of the equity market. Comments from the Reserve Bank of India Deputy Governor Subir Gokarn indicating that the slowdown in growth was creating more room for policyeasing is seen as positive for banks. Hopes for a repo ra te cut in June, which were low earlier have now risen after this comment and bank stocks will take comfort from this. So far, banks have cut loan rates with not enough cut in deposit
rates, if repo rate is cut, then deposit rates will also go down substantially. Any reduction in deposit rates will help banks improve their net interest margins and subsequently their profitability.
Citing concerns on as set quality, Fitch Ratings' on Friday revised Indian Bank's outlook to negative from stable, which can lead to selling pressure in the banks' shares.
Market Range for Week 4700‐ 4980
Resistance – Nifty facing Resistance level @4880 level above this level it may go up to @4950 &@ 4980 level.
Support ‐ Support comes for market @4820 level for Nifty; below this level Nifty next support @4780 and @4720 will be the major support for Market.
Technical – Last week Nifty opened at 4931 & it made a high of 5020.Last week we have seen some selling from higher lelvel. Nifty made a low of 4831 & closed at 4841.Last week Nifty drag 189 points from its high & on weekly basis it closed at 79 point’s lower. Sensex made a weekly high of 16544 & a low of 15933 almost it drags 611 points in the week from its high.So overall last week we have seen some profitbooking from higher level.
Weekly Nifty View –
Last week we had expected market range (4800‐5180) & market made a high of 5020 & made a low of 4831, so overall it hold over both side range.In last week report we had mentioned, on daily chart market had made “Morning Star” formation & osilator was in oversold, but it was facing resistance on lower channel line,on weekly chart it was taking support around 200WMA
because of all that we had mentioned above 4950 we can see some up side & market made a high of 5020 & from there we have seen some selling in the market.Now on daily chart short term moving avg.(5‐20)SMA showing negative crossover & osilator showing negative crossover.On weekly chart market taking support at 200 WMA, but still not able to cross upper channel line.So overall still 4950‐4960 will be major resistacne for market & close below 4800‐4780 can see
some more selling pressure in the market, so still should use caution approach at higher level.
On Friday, the Dow plunged 275 points, or 2.2%, the biggest one‐day drop since November.The S&P500 lost 32 points, or 2.5% & the Nasdaq dropped 80 points, or 2.8%.
Market Commentary ‐
News flow from euro‐zone will continue to dictate near term trend on the domestic bourses as risk aversion arising from euro‐zone debt worries rattled global markets in the month just gone by. The barometer index, BSE Sensex, lost 6.35% in May 2012 on euro‐zone debt worries. Concerns about Greece's possible exit from the European Union rattled global equity markets after the splintered results of a parliamentary election on 6 May 2012 left no party able to put together a government. That led the country to call another election on 17 June 2012. Shares of exporters will be in focus as Commerce Minister Anand Sharma unveils the foreign trade policy for 2012‐13 on Tuesday, 5 June 2012. The economic crisis in the US and Europe is hitting India's exports. Both these markets account for about one‐third of country's total shipments. The expansion in the country's merchandise exports, which grew by as much as 82% in July 2011, came down to 3.2% in April 2012 due to the demand slowdown in western markets. Infrastructure and cement stocks will be in focus after Prime Minister Manmohan Singh on Friday, 1 June 2012, approved the setting up of a mechanism that will track the progress of all major infrastructure projects to avoid delays in
their completion. The government will periodically review the progress of projects under the Investment Tracking System to ensure that issues are quickly identified and resolved. All public‐sector projects with an investment of Rs 1000 crore or more will be monitored by the National Manufacturing Competitive Council. The Department of Financial Services will monitor similar‐sized projects of private companies, and the two bodies will report the progress of projects
to the prime minister every quarter.
Friday, June 1, 2012
01-06-2012
Markets opened on a gap down note. After that we have seen some volatility because of F&O expiry. On the sectoral front realty, IT and Teck ended on the gainers side whereas auto, bankex and CD ended on the losing side. The advance decline ratio was in favour of declining counters (Advances = 1184/ Declines=1416).
Pattern Formation: On the Daily chart, we are witnessing market still below short term moving averages 5&20 SMA.
Future Outlook: In view of the above pattern formation, market is facing resistance around 4950-4980. On the down side 4900-4880 supports for the day. We maintain our previous view unless market will not close above 4950-4980. One should adopt cautious approach at higher level
FII & DII activity on 31-05-2012 – FII net sellers in index future to the amount of Rs 1251.78 cr , in index options net buyers to the amount of Rs 618.20 Cr, in stock futures net buyers to the amount of Rs 146.10 Cr & in stock options net buyers to the amount of Rs 72.91 Cr. Overall FIIs were net sellers by Rs 414.57 Cr.
Capital Market Segment – FII trading activity net sellers of Rs 665.76 Cr & DII trading activity net sellers of Rs 266.38 Cr.
Data Alert From India –
• Manufacturing PMI for May, by HSBC.
• Trade data for April, by commerce and industry ministry.
• Automobile sales data for May, by SIAM
Data Alert From Overseas -
• Unemployment Rate of Europe at 2:30 pm.
• Unemployment Rate of US at 6:00 pm.
Domestic Sector News –
• AVIATION: State-owned oil marketing companies have cut aviation turbine fuel price by an average 1,427.93 rupees a kL in the four metropolitan cities.
• COAL: Govt has earmarked 16 coal blocks for power sector and 12 for steel industry. The Central Vigilance Commission has recommended Central Bureau of Investigation to probe misuse of coal blocks allotted to some companies.
• FERTILISERS: Indian Farmers Fertilisers Co-operative is setting up a gas-based ammonia-urea plant in Canada and is also scouting for a joint venture partner for Dubai-based subsidiary.
• POWER: Government has notified new guidelines governing short-term electricity purchase of up to one year by power distribution companies.
• STEEL: Long steel prices are up as demand from housing is stronger than that of cars and consumer goods, which use flat steel.
Domestic Stock Specific News -
• India Jan-Mar GDP growth 5.3%; FY12 estimate cut to 6.5%.
• Elecon Engineering: Has received the Letter of Intent from Manikgarh Cement for a 70-mln-rupee order.
• Hinduja Foundries: Defers 1.25-bln-rupees rights issue due to volatile market conditions.
• Pantaloon Retail India: Shareholders have approved the 8-bln-rupee convertible debenture issue to Aditya Birla Nuvo.
International News -
• Retail turnover in April 2012 in Germany decreased 2.0% in nominal terms and 3.8% in real terms compared with the corresponding month of the previous year.
Today’s Result –
AMLSteel, MBECL, Mphasis.
Results Announced on 31-05-2012 -
• BEML Jan-Mar net loss 13.99 cr rupees vs 70.25 cr rupees profit (YoY).
• Kingfisher Airlines Jan-Mar net loss 1151.52 cr rupee vs 355.54 cr rupee loss (YoY).
Pattern Formation: On the Daily chart, we are witnessing market still below short term moving averages 5&20 SMA.
Future Outlook: In view of the above pattern formation, market is facing resistance around 4950-4980. On the down side 4900-4880 supports for the day. We maintain our previous view unless market will not close above 4950-4980. One should adopt cautious approach at higher level
FII & DII activity on 31-05-2012 – FII net sellers in index future to the amount of Rs 1251.78 cr , in index options net buyers to the amount of Rs 618.20 Cr, in stock futures net buyers to the amount of Rs 146.10 Cr & in stock options net buyers to the amount of Rs 72.91 Cr. Overall FIIs were net sellers by Rs 414.57 Cr.
Capital Market Segment – FII trading activity net sellers of Rs 665.76 Cr & DII trading activity net sellers of Rs 266.38 Cr.
Data Alert From India –
• Manufacturing PMI for May, by HSBC.
• Trade data for April, by commerce and industry ministry.
• Automobile sales data for May, by SIAM
Data Alert From Overseas -
• Unemployment Rate of Europe at 2:30 pm.
• Unemployment Rate of US at 6:00 pm.
Domestic Sector News –
• AVIATION: State-owned oil marketing companies have cut aviation turbine fuel price by an average 1,427.93 rupees a kL in the four metropolitan cities.
• COAL: Govt has earmarked 16 coal blocks for power sector and 12 for steel industry. The Central Vigilance Commission has recommended Central Bureau of Investigation to probe misuse of coal blocks allotted to some companies.
• FERTILISERS: Indian Farmers Fertilisers Co-operative is setting up a gas-based ammonia-urea plant in Canada and is also scouting for a joint venture partner for Dubai-based subsidiary.
• POWER: Government has notified new guidelines governing short-term electricity purchase of up to one year by power distribution companies.
• STEEL: Long steel prices are up as demand from housing is stronger than that of cars and consumer goods, which use flat steel.
Domestic Stock Specific News -
• India Jan-Mar GDP growth 5.3%; FY12 estimate cut to 6.5%.
• Elecon Engineering: Has received the Letter of Intent from Manikgarh Cement for a 70-mln-rupee order.
• Hinduja Foundries: Defers 1.25-bln-rupees rights issue due to volatile market conditions.
• Pantaloon Retail India: Shareholders have approved the 8-bln-rupee convertible debenture issue to Aditya Birla Nuvo.
International News -
• Retail turnover in April 2012 in Germany decreased 2.0% in nominal terms and 3.8% in real terms compared with the corresponding month of the previous year.
Today’s Result –
AMLSteel, MBECL, Mphasis.
Results Announced on 31-05-2012 -
• BEML Jan-Mar net loss 13.99 cr rupees vs 70.25 cr rupees profit (YoY).
• Kingfisher Airlines Jan-Mar net loss 1151.52 cr rupee vs 355.54 cr rupee loss (YoY).
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