FAIREGROWTH: Monday, April 16, 2012

Key developments during the week
•  RBI says India Feb services exports $11.23 bln, imports $6.75 bln
•  Source says oil min OKs RIL‐BP integrated survey plan forKG‐D6
•  India Feb IIP below estimate at 4.1%; error slashes Jannumber
•  Minister says Cabinet OKs Neyveli JV for 1,980MW Uttar Pradesh project
•  Aviation minister says FDI in sector not discussed by Cabinet
•  IDBI Bank raises 110 mln Swiss francs via bonds
•  Maruti Suzuki launches 7‐seater Ertiga at 589,000 rupees ex Delhi
•  Mitsui Sumitomo to buy 9.37% in Max New York Life from Max India
•  Reliance Broadcast JV inks pact with Dish TV for BIG CBS Spark
•  Bharti Airtel launches 4G svcs in Kolkata; Bengaluru launch in a mo
•  Govt says approval not needed for FII invest in commodity bourses
•  India Mar car sales up 19.7% on yr, FY12 sales up 2.2%
•  India Feb exports up 4% on year, imports rise 21%
•  PNGRB cuts Indraprastha Gas network, compression fees;shr plunges
•  TTK Prestige, Swiss co in pact for water purification devices
•  Godrej Prop in pact for redevelopment project at Byculla,Mumbai
•  Somany to buy 26% in Commander Vitrified for 32.5 mln

Domestic events week ahead
• Apr 16: WPI inflation for March, by commerce and industry ministry.
• Apr 17: RBI to detail Annual Policy Statement for 2012‐13 (Apr‐Mar).
• Apr 18: CPI Combined, Urban and Rural for March, to be detailed by CSO.
• Apr 20: CPI for farm, rural labourers for March, by Labour Bureau.

Global events week ahead
• Apr 16: Core Retail Sales m‐o‐m of US.
• Apr 17: Consumer Price Index y‐o‐y & Zentrum fur Europaische Wirtschafts forschung Economic Sentiment of Europe, Industrial Production m‐o‐m of US.
• Apr 18: Crude Oil Inventories of US.
• Apr 19: Unemployment Claims & Philly Fed Manufacturing Index of US, Trade Balance of Japan.
• Apr 20: German Producer Price Index m‐o‐m.

Weekly Sector Outlook
Pharma sector ‐ To follow broad market with negative bias
Shares of pharmaceutical companies are seen taking cues from the broad market this week with a negative bias. The
broad market would eye inflation data for March, Reserve Bank of India's annual monetary policy review Tuesday, and
corporate earning announcements. On Monday, the inflation data will be keenly eyed, as it will set the tone for the RBI's
policy the next day. According to a poll, the headline inflation rate is seen at 6.62% in March compared with 6.95% in
February.

Capital Goods sector ‐ To underperform market
Shares of capital goods and engineering companies are likely to underperform the market over the next five sessions in
the absence of any positive triggers. The Street would keenly watch for a cut in the repo rate in the Reserve Bank of India's
annual policy statement due Tuesday.

FMCG Sector ‐ Seen outperforming main indices in this week
Shares of fast‐moving consumer goods companies are seen outperforming the broader indices in this week, as investors
may look for safety while parking their money in these stocks. FMCG companies provide a relative certainty of
performance, and therefore, the rush towards these stocks is expected to continue in the near term. Besides the defensive
buying, investors will also watch out for the Jan‐Mar earnings of these companies for cues. While Hindustan Unilever Ltd
will declare its earnings on May 1, Dabur India Ltd and Godrej Consumer Products Ltd will detail their earnings on Apr 30.
Street expects the FMCG companies to witness some strain in volume growth, especially in categories such as personal
care products, owing to the price hikes. However, the stocks will still remain a safe bet in spite of these factors.

Bank sector‐ Profit sales likely; eye on RBI policy Tue
Bank shares are likely to remain subdued this week due to profit booking following the uptick in the stocks earlier this
month. It is expected that the Reserve Bank of India reduce the repo rate by 25 basis points as industrial growth has
remained weak while inflation is now close to the central bank's immediate comfort level of 7%. Data released Thursday
last week revised India's industrial growth for January to 1.1% from a seven‐month‐high of 6.8%. In February, industrial
output recorded a sluggish growth of 4.1%. Release of Wholesale Price Index‐based inflation figures for March on Monday
will also likely influence the short‐term trend of equity markets

Auto sector ‐ To take cues from RBI monetary policy
Automobile stocks are likely to take cues from the Reserve Bank of India's monetary policy on 17
th Apr. It is expected that the central bank would slash its repo rate, the rate at which it lends to other banks, by at least 25 basis points. A repo rate cut would translate into lower loan rates, which would augur well for the automobile sector as most vehicles in India are bought on credit. Government raised general excise duty by 200 basis points in its Budget for 2012‐13 that forced automanufacturers to revise product prices upwards. So, a repo rate cut would provide some respite for prospective buyers. Beyond the monetary policy, investors would watch out for the Jan‐Mar earnings, which is largely expected to be a mixed bag with raw material cost pressures remaining in the fourth quarter. Margins for two‐wheeler manufacturers are expected to remain stable

Steel Sector ‐ In range this week ahead of Jan‐Mar earnings
Shares of major steel companies are seen trading in a narrow range this week ahead of Jan‐Mar earning announcements.Shares of steel makers such JSW Steel and Kalyani Steel had jumped last week on reports that iron ore mining will resume,albeit in limited manner, in Karnataka. The Supreme Court last week accepted recommendations of its Central Empowered Committee, which will in effect lead to resumption of mining operations in the state with an annual cap of 30 mln tn. However actual commencement of mining could take 3‐4 months, industry officials indicated. Steel stocks will mainly follow companies Jan‐Mar earnings that are expected to be relatively better than in the previous quarter mainly driven by

higher steel prices and robust demand growth. Long steel product prices have risen by close to 4,000 rupees/ton during the last 3 months, driven by strong demand and production problems faced by smaller steelmakers. Steel demand growth has remained robust at close to 10%, which should lead to strong volumes for steelmakers. Jan‐Mar is usually a better quarter for steel makers as construction demand revives during this period. However JSW Steel's volumes are expected to remain under pressure at 2 mln ton as the iron ore shortage scenario has persisted and the company was not been able to ramp up further from last quarter.

Cement Sector ‐ Bias positive; ACC, Ambuja Cements eyed
Shares of major cement manufacturers are seen trading with a positive bias this week, as investors expect companies from the sector to report robust Jan‐Mar earnings. The Street will take cues from the earnings of sector majors ACC and Ambuja Cements who will announce their results Thursday Apr 19th
. It is expected that Jan‐Mar may be the best quarter for cement companies in the last two years, backed by improved realisations, higher sales volumes, and strong pricing. The last two years have been tough: demand has been weak, costs have been rising and investigations on price collusion continue. Despite the positive sentiment, shares of cement companies took a beating this week on reports that Competition Commission of India, which is investigating alleged price manipulations by cement companies, was likely to levy heavy fines on most sector majors.

IT Sector ‐ In range; HCL Technologies' comments eyed
Shares of information technology companies are likely to move in a narrow band in the next five sessions, with HCL Technologies' outlook on growth eyed for more clarity on the industry in 2012‐13 (Apr‐Mar). Last week , Infosys disappointed the market with weak dollar revenue growth guidance for 2012‐13. HCL Technologies will Wednesday April 18 th announce earnings for the year ended March. Infosys, India's second‐largest software exporter, known to clock a faster growth rate than the industry, guided for a 8‐10% on year growth in revenue in the current financial year at $7.553 bln‐$7.692 bln against industry body NASSCOM's outlook of 11‐14% growth for the entire sector. Disappointing Infosys guidance has already dragged information technology stocks down last week and so a further damage to it (stocks) is likely
only if there are some negative comments from other companies.

Oil Sector ‐ Seen up this week on softening crude prices
Shares of state‐owned oil marketing companies are seen recovering this week as the price of Indian basket of crude eased significantly last week. The market nearly ignored the fall in crude prices because of overall gloomy sentiment following the tsunami scare, and poor February industrial production data. In the week ahead, investors will mostly eye rate and inflation‐sensitive sectors considering the Reserve Bank of India's annual monetary policy review is due Tuesday 17th April.The government is likely to announce within the next few weeks the final subsidy figure for the oil marketing companies towards revenue loss incurred on sale of subsidised fuel in 2011‐12 (Apr‐Mar). Usually these companies report better profits in the last quarter because the government announces maximum compensation to them in this quarter. Likely positive results due to this reason will protect the downside in oil stocks. Market is also expecting that the government
may soon be forced to take a call on raising petrol and diesel prices as under‐recoveries on these fuels have increased significantly.

Technical – Last week Nifty opened at 5282 & it made a high of 5306.Last week we have seen rangebound market withsome downside. Nifty made a low of 5185 & closed at 5207.Last week Nifty drag 121 points from its high & on weekly basis it closed at 115 point’s lower. Sensex made a weekly high of 17407 & a low of 17027 almost it drag 380 points in the week from its high.So overall last week we have seen some rangbound market. For the coming week the market range we expect 5050‐5400.

Nifty view–
Last week we had expected market range (5200‐5450) & market made a high of 5306 & made a low of 5185, so overall it hold over both side range only last day of the trading it broke lower side range, but it manage to close above 5200.In last week report we had mentioned, on daily chart market was not able to cross 50DMA & facing resistance at upper trendline, on weekly chart it was fail to cross 100WMA we had also mentioned that 5420‐5450 will be major resistance & all we have seen that market fail to cross that level & from higher level we have seen selling in the market.Now on daily chart last week market again fail to cross 50DMA & upper trendline, also close below short term moving avg (5&20). On weekly chart last week again market fails to cross 100WMA but close near to 50WMA & upper trendline. On weekly chart
osilator not showing positive cross over, so overall again 5180‐5140 will be major support because 200DMA led at (5140) close below that we can see some more downside & upper side still 5320‐5350 will be major resistance for market.U.S stocks stumbled Friday, following a two day rally, closing lower for a second straight week with the worst decline of the year. The Dow tumbled 1.6% while the S&P500 sank 2% & the Nasdaq lost 2.3%. On Friday, Dow dropped 137 points, or 1.1%, while the S&P500 shed 17 points, or 1.3% & Nasdaq lost 44 points, or 1.5%.

Monday, April 16, 2012

India Mar WPI inflation rate 6.89% vs 6.95% Feb

16-04-2012

Weekly Market Sector Outlook