Pre Open Thoughts: Obstacles Remain!!!

Pre Open Thoughts: Obstacles Remain!!!

Ø  A great obstacle to happiness is the expectation of too great a happiness. India has lost its charm among investors due to its burgeoning economic problems paralyzed by the government's inaction , sticky inflation, and a sliding rupee which is eroding FII investments in shares and debt.

Ø  The overall undercurrent still remains shaky and fragile. FIIs don’t appear to be too excited to pour in a lot of money into India. Retail participation is negligible. This week is devoid of any major domestic event, barring of course the ongoing results. US stocks recovered from session lows, but European indices slipped on downbeat data. All eyes will be on the ECB policy meet later today. Asian markets are mostly in red.

Ø  Most investors understand the political problems in India, they are aware of the taxation issue and really want a positive or negative but a clarification on that at some point in coming days.

Ø  The Nifty is likely to be in a trading zone of 5200-5400 in the immediate future. A breakout above 5400 could take the Nifty towards 5600 But, it will face selling pressure along the way.

Ø  On the down side a break below 5150 will take nifty to slide to 5000 levels. Overall, the trend may remain range bound and sideways in the near-term amid a mix of local and overseas headwinds.

Results Today: Aventis Pharma, Finolex Cables, Great Eastern Shipping, Gujarat Pipavav Port, Ingersoll Rand India, KEC International, Marico, NDTV, Piramal Healthcare and Nitco.

Global Data Watch: UK Nationwide Housing Prices (Apr), UK Purchasing Manager Index Services (Apr), EU Producer Price Index (Mar), ECB Interest Rate Decision, ECB President Draghi’s speech, US Initial Jobless Claims (Apr 28), US Continuing Jobless Claims (Apr 21), US Nonfarm Productivity (Q1), US Unit Labor costs (Q1), US ISM Non-Manufacturing (Apr), US Fed’s William Dudley’s speech, US Fed’s Lockhart’s speech and US Philadelphia Fed’s Plosser’s speech.

India Market Wrap

Ø  INDICES: Sensex -17 at 17302 (-0.1%), NIFTY -9 at 5239 (-0.17%), CNXMIDCAP -27 at 7444 (-0.37%)

Ø  SECTORAL PERFORMANCE: BANKEX 0.27%, AUTO -1.72%, CAPITAL GOODS -0.94%, HEALTHCARE 0.04%, Metal -0.36%, OIL & GAS -0.58%, IT 0.97%, FMCG 0.21%, PSU -0.56%, REALTY 0.04%, Consumer Durables 2.41%, POWER -1.25%

Ø  MARKET BREADTH: 194 Advances, 294 Declines (BSE 500)

Ø  VOLUMES: BSE $0.34bn (6.51%), NSE $1.81bn (7.65%), F&O $13.17bn (4.84%)

Ø  TODAY'S GAINERS: DLFU 3.16%, BHARTI 2.4%, PNB 1.98%, CIPLA 1.94%, SAIL 1.85%

Ø  TODAY'S LOSERS: TTMT -3.81%, RPWR -2.99%, MSIL -2.84%, TPWR -2.41%, GRASIM -2.21%

MARKET COMMENTARY:

As mentioned in our morning note the Indian benchmarks  witnessed a sluggish movement moving in a narrow range in the absence of participation of foreign institutional investors. Further  gains were trimmed in the late afternoon session as investors have started booking profits in the frontline blue chip counters. Few traders were seen piling up position in Consumer Durables, and IT sector while selling was being witnessed in Auto, Power and Capital Goods sector.  In the scrip specific development, cable companies including Hathway and WWIL rallied in the session after Telecom Regulatory Authority of India (TRAI)’s notification on digitizing cable TV distribution which recommended a mandatory 'carriage fee' - or, the money that broadcasters have to pay to cable companies for them to carry their channel.  On the global front, all the Asian markets were trading in green while the European markets were trading mixed. Investors added positions with conviction ahead of a slew of economic reports due out from the Euro-zone later in the day. On the home turf, overall the market breadth was neutral.

NEWS ON TODAYS MOVERS:

Ø  Titan Industries surged 4.48% after net profit jumped 72.2% to Rs 144.28 crore on 28.3% growth in net sales to Rs 2281.42 crore in Q4 March 2012 over Q4 March 2011.

Ø  Hindustan Unilever gained 1.77% after net profit rose 20.63% to Rs 686.61 crore on 15.66% rise in net sales to Rs 5660.48 crore in Q4 March 2012 over Q4 March 2011.

Ø  Tata Motors lost ground by nearly  3.81% after total sales including exports of Tata commercial and passenger vehicles fell 7% to 60,086 vehicles in April 2012 over April 2011

Ø  JSW Energy surged nearly 2.55% after consolidated net profit rose 9.5% to Rs 225.32 crore 43.1% growth in net sales to Rs 2036.07 crore in Q4 March 2012 over Q4 March 2011.

Ø  Bharti Airtel rose 2.40% after the company reported good operational figures for the Q4 and year ended March 2012 over previous corresponding period a year ago. .

Ø  Bajaj Auto fell nearly 1.99% after total sales rose 4% to 381,590 units in April 2012 over April 2011.

Ø  Shoppers Stop fell 1.51% after consolidated net profit fell 87.6% to Rs 0.96 crore on 25.4% growth in net sales to Rs 816.57 crore in Q4 March 2012 over Q4 March 2011.

Ø  Mahindra & Mahindra rose 0.77% after auto sales rose 27% to 40,719 units in April 2012 over April 2011.

CORPORATE NEWS:

Ø  MOEF disagrees with MCFL’s feed stock project

Ø  Century Textiles Q4 net loss at Rs23.89 cr

Ø  Syndicate Bank launches jewel loan maha mela

Ø  BGR Energy bags Rs1,855 cr order

Ø  Bajaj Auto records highest sales in April

Ø  Alstom T&D India bags substation order worth Rs84 Cr

Ø  OMCs suffer losses on fuel sale

Ø  Exports falls 5.7% to $28.7 bn in March

Ø  L&T to finalise vendors for Hyderabad Metro

Ø  RIL buys back shares of Rs538.56 crore

Ø  KFA employees may move Labour Court over salary dues

Ø  Hero MotoCorp April sales up 7%; hits 52-week high

Ø  TVS Motor April domestic sales up 7%

Ø  Tata Motors April sales decline 7%

Ø  M&M sales jumps 27% in April

Ø  Bharti Airtel Q4 cons net profit declines by 28%

Ø  Maruti domestic sales up 3% in April

Ø  Bharti appoints Huawei to manage 4G network in Karnataka

Ø  EGoM OKs start of spectrum auction process

Ø  India top court refuses to stay essar-loop case at lower court3

ECONOMIC NEWS:

Ø  India’s april gold imports at 30-35 tons vs 90 tons year ago

Ø  India coal mine strike by union opposing mainly privatization

Ø  Labor union to call 1-day strike at indian coal mines june 10

Ø  India sugar output oct-april at 25.1 mln tons: isma

Ø  India’s rupee falls past 53 a dollar for first time since jan 5

Mid Market Wrap

Market Commentary:

Ø  Asian stocks rose, led by Taiwan and mainland China, while regional bond risk fell after data showed improved manufacturing in the U.S. and China, the two biggest economies. The yen slid against all of its 16 major peers.

Ø  Back home, after a small gap-up opening the Indian market was able to hold on to early morning gains. Key indices extended gains after a monthly survey showed pace of growth in manufacturing sector inched up in April 2012.  Nifty was holding 5250 mark, slowly and steadily inching towards 5300.

Ø  Stocks in Focus:

v  Hindustan Unilever: FMCG giant scaled record high after strong Q4 results.

v  KPIT Cummins Infosystems jumped 20% after consolidated net profit rose 6.4% to Rs 43.71 crore on 26.7% growth in net sales.

Ø  The rupee today strengthened by six paise to 52.67 against US dollar largely on the back of a higher opening at the stock market amid selling of the American currency by exporters.

Ø  For Nifty May Futs, we expect intra-day high (5301.70) made so far to reamin intact. On the break below 5270, it can slide upto 5220-25.

Ø  INDICES: Sensex +67 at 17386 (0.39%), NIFTY +20 at 5268 (0.37%), CNXMIDCAP +21 at 7492 (0.28%)

Ø  SECTORAL PERFORMANCE: BANKEX 0.83%, AUTO -0.69%, CAPITAL GOODS 0.06%, HEALTHCARE 0.47%, Metal 0.41%, OIL & GAS -0.3%, IT 1.06%, FMCG 0.78%, PSU 0.11%, REALTY 0.3%, Consumer Durables 1.85%, POWER -0.25%

Ø  MARKET BREADTH: 311 Advances, 181 Declines (BSE 500)

Ø  TODAY'S GAINERS: HUVR 2.6%, SAIL 2.11%, BHARTI 1.93%, HCLT 1.86%, DLFU 1.82%

Ø  TODAY'S LOSERS: TTMT -1.91%, MSIL -1.71%, BPCL -1.5%, RPWR -1.49%, BJAUT -1.09%

Pre Open Thoughts: Sluggish Movement!!!

Pre Open Thoughts: Sluggish Movement!!!

Ø  To succeed you need to find something to hold on to, something to motivate you, something to inspire you. Although the start to May series of derivative contract  hasn’t been good to hold , we still have a long way to go in the summer. The market could consolidate in a sideways fashion in the near term.

Ø  Most participants won’t want to take a chance till they find any clarity on the GAAR issue from the government. The start today is likely to be circumspect. Asian markets are positive  after taking cues with a positive finish on Wall Street overnight. Key European markets though ended in red.

Ø  Keep an eye on FII flows, which lately have been tapered. The Small-Cap and Mid-Cap stocks have corrected much more than the Large-Cap peers in the past two sessions. They had out-performed the frontline shares prior to this week's pullback. One must exercise caution and restraint while dealing in these shares.

Ø  Over all to cut the long story short we might see sluggish movement in key indices as market players remain cautious.

Ø  Trading in the remainder of the week will be underpinned by results and data (local and global). The Nifty has been moving in a narrow range for the past few sessions in the absence of participation of foreign institutional investors.

Ø  As written in our previous notes we on Nifty 5180 is the level to watch . Decisive break below this level might take nifty upto 5000-5050 levels.

Ø  HUL and FMCG stocks will be in focus after the sector bellwether announced strong Q4 earnings. Auto stocks will also be in the spotlight after companies reported March sales.

Ø  Bharti Airtel and Hero MotoCorp will announce their Q4 numbers today.

Results Today:

Bharti Airtel , Hero Motocorp, Birla Corp, Kansai Nerolac Paints, Esab India, Timken India , SPARC, Orient Paper & Industries ,Century Textiles & Industries, Century Enka & VIP Industries.

Global Data To Watch:

China HSBC manufacturing PMI, Germany manufacturing PMI, Germany unemployment rate, Eurozone manufacturing PMI, UK M4 money supply, UK construction PMI, Eurozone unemployment rate, US ADP employment report, US factory orders and speech by the Richmond Federal Reserve Bank President Jeffrey M. Lacker.