Pre Open Thoughts: No Seasonal Strategies!!!

Pre Open Thoughts: No Seasonal Strategies!!!

Ø  We cannot command Nature except by obeying her. The nature of the market is such that no seasonal strategies will work. There may be some adjustments to make especially during the initial hour. If you followed the Sell in May adage, you may be right for few months and there are years when people came back from May holidays only to find the indices racing ‘while they were away.’

Ø  Meanwhile India is forecast to receive average monsoon rains this year, that's the third straight year without drought. Rains during the June-September season are likely to be 99  percent of the long-term average. Though one has to keep in mind that initial forecasts have gone wrong in many ways.

Ø  As far as the S&P outlook is concerned, it does not aid sentiment in anyway but it was something that was expected. As far as GAAR is concerned, there has been much uncertainty on the modalities and the FII community cannot afford to be taken up the wrong way. The market's recent resistance will be tested if the Government continues to dither on reforms in the name of coalition compulsion. The cloudy outlook can improve if there is some movement on reforms in the coming days. The sooner clarity comes in, the better it is.

Ø  Govt  must understand that India is dependent on foreign capital for our markets and for other things and there is no reason why we should upset people who put in their savings and investments in this country.

Ø  We have to live with this and this morning doesn’t look very pleasant to begin with. The indices have been week for most part this week and the Nifty came down almost a percent as monthly derivatives contracts expired. The opening is likely to be subdued. The Nifty is hovering around its 200-DMA support levels.

Ø  Expect a range-bound day as investors should adopt a defensive strategy in view of the result season.

Ø  The FIIs were net sellers of Rs 3.76bn in the cash segment on Thursday while the domestic institutional investors (DIIs) were net buyers of Rs 634.9mn, as per the provisional figures released by the NSE.

Ø  Banking stocks will be in focus as The Indian cabinet has cleared banking laws (Amendment Bill 2011), and approved raising voting rights of stakeholders in private banks to 26 percent from 10 percent, in a long-awaited boost for the banking sector.

Results Today

ICICI Bank, Jindal Steel & Power , Axis Bank, Siemens  Hexaware Technologies, Hindustan Construction, Indiabulls Financial Services, Thomas Cook (India), Mahindra Lifespace Developers, Delta Corp, Kalindee Rail Nirman, State bank of Travancore, Kajaria Ceramics.

Global Data Watch:

Bank of Japan Interest Rate Decision, Japan CPI, Japan industrial production, Japan retail sales, Japan unemployment rate, Japan household spending, Japan housing starts, US annualized GDP (Q1), US Real Personal Consumption Expenditures (QoQ) (Q1), US Reuters/Michigan Consumer Sentiment Index (Apr), UK Nationwide Housing Prices (MoM) (Mar) and Germany Gfk consumer confidence.

India Market Wrap

Ø  INDICES: Sensex -21 at 17131 (-0.12%), NIFTY -13 at 5189 (-0.25%), CNXMIDCAP -41 at 7389 (-0.55%)

Ø  SECTORAL PERFORMANCE: BANKEX -0.43%, AUTO -0.84%, CAPITAL GOODS -0.24%, HEALTHCARE -0.3%, Metal 0.05%, OIL & GAS -0.06%, IT 0.22%, FMCG 0.25%, PSU -0.57%, REALTY -0.89%, Consumer Durables -0.06%, POWER -1.46%

Ø  MARKET BREADTH: 198 Advances, 295 Declines (BSE 500)

Ø  VOLUMES: BSE $0.45bn (14.04%), NSE $2.33bn (16.92%), F&O $36.2bn (-4.34%)

Ø  TODAY'S GAINERS: KMB 3.13%, Coal 2.83%, ACC 2.02%, TCS 2.02%, JSP 1.65%

Ø  TODAY'S LOSERS: BPCL -3.68%, GAIL -3.6%, TPWR -3.49%, PNB -3.39%, HMCL -3.3%

MARKET COMMENTARY:

Stock markets in India showed a lackadaisical movements in the today’s session as investors lacked conviction to open fresh positions on the April series futures and options contract expiry day. The frontline equity indices traded in an extremely tight range hardly budged from the psychological 5,200 (Nifty) and 17,150 (Sensex) levels. The benchmarks exhibited sideways kind of movement since the start of trade & traded with a negative bias amid uncertain market conditions. Market participants chose to consolidate their positions around previous closing levels a day after rating agencies like S&P’s and Moody’s voiced their concerns over India’s economic outlook, citing problems like policy paralysis, slow progress on its fiscal situation, as well as deteriorating economic indicators. On the global front though, the overnight US markets rallied on the back of unexpectedly strong quarterly earnings announcement from Apple Inc and US Federal Reserve’s FOMC meeting outcome. Asian markets showcased mixed trends after Fed statement highlighted that the world’s largest economy is likely to expand at a slightly higher rate than forecasted in January while the Fed also remained entirely prepared to take further quantitative easing steps if the US economic recovery falters. The European markets too failed to give any direction to local markets as they opened on a mixed note ahead of a slew of quarterly earnings announcement from European majors like Deutsche Bank, Barclays and Bayer. Back home, investors were seen covering short positions in the badly beaten down IT and TECH counters which gained over half a percent each and supported the frontline gauges by capping their losses. However, the rate sensitive Automobile, Realty and Bankex pockets were among the prominent losers in the sectoral space which along with the PSU and Power counters capped the upside chances for domestic bourses. Moreover, the broader market breadth was in favor of declines.

NEWS ON TODAYS MOVERS:

Ø  Sterlite Industries (India) fell nearly 2.45% after consolidated net profit fell 33.66% to Rs 1276.89 crore on 6.65% growth in total income to Rs 11522.41 crore in Q4 March 2012 over Q4 March 2011.

Ø  Oberoi Realty rose 1.79% after consolidated net profit rose 5.1% to Rs 143.59 crore on 3.7% decline in net sales to Rs 252.98 crore in Q4 March 2012 over Q4 March 2011.

Ø  Bharat Electronics fell 1.44% after net profit fell 25.5% to Rs 333.84 crore on 3.3% decline in net sales to Rs 2232.11 crore in Q4 March 2012 over Q4 March 2011

Ø  JSW Steel declined 1.43% despite company saying its crude steel production rose 26% to 2.07 million tonnes in Q4 March 2012 over Q4 March 2011.

Ø  Indiabulls Real Estate rose 2.70% after consolidated net profit surged 159.8% to Rs 56.03 crore on 27.1% decline in net sales to Rs 440.99 crore in Q4 March 2012 over Q4 March 2011.

Ø  Yes Bank fell nearly 2.29% on reports that  Rabobank, the largest retail bank in the Netherlands, has sold a part of its holding in the bank through bulk deals on BSE today, 26 April 2012.

Ø  Multi Commodity Exchange of India fell 1.39% after the stock turned ex-dividend today, 26 April 2012, for an interim dividend of Rs 18 per share for the year ended 31 March 2012.

CORPORATE NEWS:

Ø  Adhunik Metaliks to sell arm Neepz V Forge ltd

Ø  Supreme Inds Q4 net profit up by 24.96%

Ø  Wipro consumer goods arm to invest in deodorant plant

Ø  M&M launches new range of UPS and inverter batteries

Ø  BEL Q4 net profit declines by 25%

Ø  GMR gets OK to hike charges at New Delhi airport

Ø  ICICI Bank stake in KFA slips to 2.9%

Ø  Nestle India Q1 net profit marginally up

Ø  Federal Bank cuts lending rate by 0.20%

Ø  Aurobindo gets USFDA's OK for olanzapine tablets

Ø  Mangalore refinery re-start of units of refinery  

Ø  Strides arcolab 1q net loss 281.6 mln rupees      

Ø  MRF 2q profit 1.5 bln rupees

ECONOMIC NEWS:

Ø  Govt to auction 54 coal blocks

Ø  Power Min to introduce short-term power purchase norms next month

Ø  Air India to suffer loss of Rs7,853 cr: Civil Aviation Minister

Ø  RBI hikes hsg loan limit for weaker section to Rs10 lakh

Mid Market Wrap

Market Commentary:

Ø  Asian stocks rose for a second day and bond risk in the region fell after Federal Reserve Chairman Ben S. Bernanke said he’s prepared to do more to stimulate growth if needed. The won strengthened as South Korea’s economy grew at the fastest pace in a year.

Ø  After opening in the green buoyed by supportive global cues, domestic bourses turned flat as investors remained cautious ahead of April F&O series expiry.  Key indices alternately moved between positive and negative terrain near the flat line in morning trade. Auto stocks were down on account of profit booking.

Ø  The rupee today appreciated by 11 paise to 52.43 against the US dollar in, as the American currency fell against other currencies overseas.

Ø  For Nifty Apr Futs, we expect volatility to increase with negative biasas the day progresses. On the downside we expect it to slide up to yesterday's low 5150-60.

Ø  INDICES: Sensex -3 at 17148 (-0.02%), NIFTY -4 at 5198 (-0.09%), CNXMIDCAP -29 at 7401 (-0.39%)

Ø  SECTORAL PERFORMANCE: BANKEX -0.29%, AUTO -0.64%, CAPITAL GOODS -0.33%, HEALTHCARE -0.12%, Metal 0.63%, OIL & GAS -0.29%, IT 0.51%, FMCG -0.16%, PSU -0.68%, REALTY -0.58%, Consumer Durables 0.52%, POWER -0.4%

Ø  MARKET BREADTH: 212 Advances, 268 Declines (BSE 500)

Ø  TODAY'S GAINERS: JSP 2.71%, KMB 1.3%, PWGR 1.24%, ACEM 1.2%, GRASIM 1.2%

Ø  TODAY'S LOSERS: HMCL -2.98%, GAIL -2.56%, JPA -2.38%, PNB -2.05%, DLFU -1.96%

Pre Open Thoughts: Breakdown in Sentiment!!

Pre Open Thoughts: Breakdown in Sentiment!!

Ø  This week’s topsy-turvy ride is set to continue with expectation of a mildly higher opening. The sideways consolidation is likely to persist in the near-term as the earnings season winds down. There is a slight chance of a further breakdown in sentiment but expect value buying to support the indices at lower levels.

Ø  Today being the F&O expiry, intraday gyrations are likely to continue. A sharp drop in Nifty futures OI doesn’t auger well for May, especially with the indices trading close to 200-DMA.

Ø  In the meantime Moody's Analytics have said India is growing but below its potential as politics is weighing on the economy and termed the national government as the "single biggest drag" on business activity.  

Ø  The US markets didn’t react much to the FOMC statement and the Bernanke press conference.

Ø  Softer global conditions, weak investor and business confidence, government paralysis, and tight monetary conditions are all weighing on demand back home. Almost all sectors have slowed, with particular weakness in manufacturing and mining, alongside a worrying contraction in private investment

Ø  The Nifty has violated a key trough of 5200. We remain cautious in the near term as long as the Nifty trades below 5200, which corresponds to a bearish range.

Ø  The FIIs were net sellers of Rs 3.4bn in the cash segment on Wednesday while the domestic institutional investors (DIIs) were net buyers of Rs 407mn, as per the provisional figures released by the NSE.

Ø  Watch GMR Infrastructure as the Delhi Airport tariffs have been raised by 346 percent by sector regulator AERA, compared to an expected hike of 774 percent by the DIAL consortium. 

Results Today

Bata India, Biocon, Gujarat Gas, Idea Cellular, Kirloskar Industries, MRF, Sterlite Tech, Tamil Nadu Petroproducts, Strides Arcolab and L&T Finance Holdings.

Global Data Watch:

Germany Consumer Price Index (MoM) (YoY) (Apr), EU Consumer Confidence (Apr), EU Economic Confidence (Apr), EU Industrial Confidence (Apr), US Initial Jobless Claims (Apr 21), US Continuing Jobless Claims (Apr 14), Pending Home Sales (MoM) (Mar), UK Gfk Consumer Confidence (Apr).