Pre Open Thoughts: Testing Times Ahead!!

Pre Open Thoughts: Testing Times Ahead!!

Ø No one can build his security upon the nobleness of another person. The intentions of the Government may be noble but nothing seems to be happening really. Things have turned a little sour for Indian equity markets in March. Key indices on a mostly downward spiral.

Ø The Nifty has been tumbling and is currently placed at 5381, The support zone of 5320-5300 remains a critical point; below this the slide could get accentuated. In the near-term, all eyes are likely to be on the 5300 level. The upside, if any is expected to be capped between 5500-5600. Whether it re-tests the recent lows of 5000 in the short-term is anybody's guess.

Ø We expect a positive opening for Indian indices. The focus will continue to be on important events that are lined up over the next few weeks some of which are expected to have a major bearing on the market.

Ø Volatility has been high and is likely to stay that way for a while. In case of a deeper fall, one may selectively go for cherry picking in quality stocks for a medium- to long-term. Hopefully, pending reforms on this front will be expedited.

Ø The FIIs were net sellers of Rs1.26 bn in the cash segment on Thursday while the domestic institutional investors (DIIs) were also net sellers at Rs 99.9mn, as per the provisional figures released by the NSE.

India Market Wrap

* INDICES: Sensex -169 at 17584 (-0.95%), NIFTY -45 at 5340 (-0.84%), CNXMIDCAP -42 at 7664 (-0.54%)

* SECTORAL PERFORMANCE: BANKEX -1.2%, AUTO -0.9%, CAPITAL GOODS -1.62%, HEALTHCARE 0.25%, Metal -0.85%, OIL & GAS -0.95%, IT -0.6%, FMCG -0.51%, PSU -0.73%, REALTY -3.29%, Consumer Durables -0.57%, POWER -0.41%

* MARKET BREADTH: 166 Advances, 327 Declines (BSE 500)

* VOLUMES: BSE $0.57bn (-16.17%), NSE $2.69bn (-16.25%), F&O $19.79bn (-3.01%)

* TODAY'S GAINERS: MSIL 4.8%, RELI 2.74%, RPWR 2.64%, ACEM 2.24%, CAIR 2.14%

* TODAY'S LOSERS: DLFU -5.5%, MM -3.96%, IDFC -3.25%, NTPC -2.54%, ICICIBC -2.52%

MARKET COMMENTARY:

As expected investors were watchful and vigilant as uncertainties abound and volatility prevailed on the Indian benchmarks as the weak trade continued. The street witnessed absence of buying as investors lacked conviction to open fresh positions amid increasing uncertainty over the global outlook. Traders were seen piling up positions in Health Care sector while selling was witnessed in Realty, Capital Goods and Bankex sector. In addition, the weak manufacturing PMI data which indicated that factory activity slowed in February from the previous month when it had accelerated at its fastest pace in eight months, weighed on investors’ mood. DLF from Realty counter was seen trading with cut of around more than six percent weighing heavily on the market on reports that there were no takers for the company’s Mumbai land parcel. On the global front, Asian markets were trading in red barring KLSE Composite while the European markets were trading on a mix note. The market breadth was in favor of declines.

NEWS ON TODAYS MOVERS:

Ø MTNL surged 4.98% after there were reports that the company is considering closing down its CDMA operations.

Ø Fertilizers stocks FACT, National Fertilizer, RCF and Coromandel International were seen trading firm on reports that government has approved fixing nutrient-based subsidy rates for fertilizers

Ø IFCI was traded in positive zone on reports that the financial secretary panel may okay strategic partner for the company.

Ø BGR Energy Systems lost nearly 5.27% on profit taking after two-day 25.6% rally after the company said it will receive orders worth about Rs 10000 crore from NTPC for 660 megawatts boilers and 800 megawatts turbine generators

Ø Bata India lost nearly 1%, after net profit soared 31% to Rs 45.06 crore on 21.1% rise in net sales to Rs 430.93 crore in Q4 December 2011 over Q4 December 2010.

Ø Tata Communications surged nearly 0.15% on reports the company is eyeing Cable & Wireless Worldwide Plc, a London-listed telecom giant

Ø Sun Pharmaceutical Industries traded flat and in green for most part of the day ,after the company said it has secured approval from US Food and Drug Administration for generic version of Zyprexa Zydis, Olanzapine Orally Disintegrating tablets.

Ø JSW Steel lost nearly 4.00% on profit taking after surging 6.52% in the prior two trading sessions.

Ø Bajaj Auto fell nearly 1.52%, on profit booking after gaining 5.13% in the prior two trading sessions.

Ø Maruti Suzuki India advanced nearly 4.80%, after total sales rose 6.5% to 118,949 vehicles in February 2012 over February 2011.

Ø ONGC lost close to 1.71%, as the government stake-sale in the firm through auction route saw dull response.

Ø Tata Communications rose close to 1.09% after the company in clarification to media speculation confirmed it is evaluating a possible cash offer for Cable & Wireless Worldwide Plc, a London-listed telecom giant

Ø Bank of Baroda (BOB)rosed 2.29% after company commented to enter into a memorandum of understanding (MOU) with Credit Analysis and Research (CARE) under which the micro, small and medium enterprises (MSME) customers of the bank will obtain credit ratings from CARE and bank will utilize CARE’s ratings for evaluating its existing as well as potential MSME clients.

Ø Tata Power Company’s surged nearly 1.13% ,it first 800-MW unit of its flagship 4,000 MW Mundra Ultra Mega Power Project (UMPP) has achieved full capacity utilization and commercial date of operation of the unit will be declared shortly. The 4,000 MW Mundra plant in Gujarat is the country’s first UMPP. Mundra UMPP will have five units, each having a capacity of 800 MW.

Ø Vijaya Bank traded with loss of 0.49% on reducing interest rate on MSME loans

CORPORATE NEWS:

Ø Elder citizens ask 50% travel concession in Budget

Ø Glenmark Generics gets US nod for 2 new drugs

Ø KFA promoters may convert Rs1500 cr loans into equity

Ø Coal Min to outsource bidding process for auction of 50 coal blocks

Ø Vijaya bank cuts interest rate on MSME loans from today

Ø UTV Software to be suspended for trading on NSE from Mar 9

Ø SBI plans to bid ONGC shares

Ø Honda Motorcycle launches new edition of CBR 250R

Ø Vijaya bank cuts interest rate on MSME loans from today

Ø Coal Min to outsource bidding process for auction of 50 coal blocks

Ø Glenmark Generics gets US nod for 2 new drugs

Ø KFA promoters may convert Rs1500 cr loans into equity

Ø JSW Steel to finish $275-m fund raising in March

Ø ACC to set up plant in Chhattisgarh

ECONOMIC NEWS:

Ø India’s Trade Deficit increases to $14.7 billion in Jan 2012

Ø India's Jan exports surge 10%

Ø Ministers defer decision on power gear import duty

Ø Cabinet allows state cos to buy back shares

Ø Cabinet approves PSUs to buy back shares

Mid Market Wrap

Market Commentary:

Ø Asian stocks fell, while the Australian dollar rose and gold rebounded from the biggest drop in three years after better-than-expected data on Chinese manufacturing boosted speculation that the nation will refrain from additional steps to ease monetary policy.

Ø Back home, Losses have widened at Dalal Street as market men preferred to go short on their position after two consecutive sessions of gains in the wake of forthcoming budget, regional elections and rise in oil prices. The market continued to trade lower, weighed down by index heavyweights Reliance, ICICI Bank and Infosys. L&T, BHEL, SBI and Bharti too were under pressure while Maruti accelerated smartly post February sales numbers.

Ø The market breadth, indicating the overall health of the market, was negative. The only gaining sectoral index on the BSE was Health Care up by 0.54%.

Ø The rupee opened lower on Thursday, tracking weaker euro and on expected dollar demand from domestic oil refiners.

Ø For Nifty Mar Futs, 5320 is the level to watch on Intra-day basis, we can see support coming at that level. If 5320 is broken , we expect it to slide to 5280. On upside it can face resistance at 5415.

* INDICES: Sensex -199 at 17554 (-1.12%), NIFTY -60 at 5325 (-1.12%), CNXMIDCAP -44 at 7661 (-0.58%)

* SECTORAL PERFORMANCE: BANKEX -1.46%, AUTO -0.22%, CAPITAL GOODS -1.68%, HEALTHCARE 0.34%, Metal -0.7%, OIL & GAS -1.19%, IT -1.07%, FMCG -0.75%, PSU -0.07%, REALTY -2.22%, Consumer Durables -1.34%, POWER -0.8%

* MARKET BREADTH: 197 Advances, 288 Declines (BSE 500)

* TODAY'S GAINERS: MSIL 4%, RPWR 1.26%, HMCL 1.21%, CAIR 1.04%, SUNP 1.02%

* TODAY'S LOSERS: DLFU -3.58%, BHEL -2.57%, ICICIBC -2.56%, WPRO -2.3%, AXSB -2.22%

Pre Open Thoughts: Watchful & Vigilant!!!

Pre Open Thoughts: Watchful & Vigilant!!!

Ø Learn from yesterday, live for today, hope for tomorrow.. If you had gone to sleep worrying about the headwinds in store, this morning comes with an air of hope. You can take some comfort from the fact that the Indian indices have been showing resilience, the trend is likely to stay intact this morning.

Ø Older the wine, better it is!!! Nifty for FEB Closed - 5385. Jan'12 Closing - 5199. Historically it is observed that 9 out of 10 times whenever January High was crossed during the same year, indices gave a big up move during that year. And hurray Nifty/Sensex both crossed Jan'12 highs & also sustained well above the previous months high. If History repeats this is going to be the D-Year for investors.

Ø We would though suggest to be watchful and vigilant as uncertainties abound and volatility is likely to prevail. While external factors are beyond our control, we could see some improvement in overall scenario.

Ø The short-term sentiment will be driven by the outcome of important events that are lined up over the next few weeks some of which are expected to have a major bearing on the market. Among the crucial ones include: outcome of UP elections, RBI policy meeting, Union Budget and domestic economic data like IIP and inflation

Ø ONGC will remain in the spotlight as the Government will auction a 5% stake in the state-owned energy major. A panel of ministers has fixed a floor price of Rs 290 per share for the share sale in ONGC.

Ø On the other hand , noticeable short-covering can be expected if the Nifty closes above 5550, which may eventually lead the index to move towards 5700 levels. The comforting factor for the markets is FII flows are still on the positive side.

Ø The Nifty is likely to trade in a range of 5300 and 5600. We could see a choppy session with intraday gyrations possibly peaking in the afternoon.

Ø The FIIs were net buyers of Rs 5.79 bn in the cash segment on Wednesday while the domestic institutional investors (DIIs) were net sellers at Rs 4.31 bn, as per the provisional figures released by the NSE.