Morning Be!!.........Indian Indices up in the early trade

Indian Market

The BSE Sensex was 17,678, up 56 points over the previous close. It had earlier touched a day’s high of 17,689 and a day’s low of 17,631. It opened at 17,631.

NSE Nifty was quoting 5,353, up 18 points over the previous close.It has earlier touched a day’s high of 5,354 and a day’s low of 5,335. It opened at 5,343.

The culprit for Tuesday's insipid session was the advance GDP estimate for FY12. It shows less than 7% growth for the first time in three years. Hopefully, the final reading will be a little higher.

The Indian economy has lost steam and the Government needs to act now to give it a fillip. The upcoming Budget will be crucial in this context. But, before that the market will have to grapple with state elections. A favourable result for the UPA will be seen as a positive. On the flip side, the undertone might be hit in case of an adverse outcome for the Congress.

Global Markets

Asian markets are mostly up while the US and Europe stocks pared losses overnight. Reports point to some progress in talks to save Greece from a default.

Leaders of the three political parties that back Prime Minister Papademos's interim unity government are set to meet the premier in an effort to finalize details of the program.However, the meeting was postponed until Wednesday, according to media reports.

Separate news reports indicated that Greek government officials were drafting a final agreement on budget cuts to be presented to political leaders. The agreement on fresh austerity measures is seen as necessary to avoid a disorderly default.

Also, Federal Reserve chief Ben S. Bernanke has reiterated his readiness for more stimulus if the need arises. But, one must remain on guard after a sharp and swift rally.

Currencies

The US Dollar rose against the Indian Rupee by 0.3% to Rs.49.2 on Tuesday as oil importers' demand for the greenback and a negative local share market offset comfort from dollar inflows. Outlook on the local currency is turning increasingly uncertain due to continuing concerns over Greece's debt problems, and the political logjam that continues to hem in local reforms as well as the persistently high inflation.

Commodities

Oil gained a second day in New York after an industry report showed crude stockpiles shrank in the U.S., the world’s biggest consumer of the commodity.

Outlook

Today, we expect the Indian Markets to open in the green following positive global cues and trade in a range with positive bias. Immediate resistance for Nifty is at 5389, while support is at 5300. Among the sectoral indices, Banks and Oil Gas look good. After correcting yesterday, Capital Goods & Realty could also bounce back today. However, FMCG index could underperform.

Source-hdfcsec, IIFL

Calendar Feb 2012

Morning Be!!......Indices up,but the sentiment remains edgy amid concerns about Greece's ability to secure a second bailout package

Indian Market

The frontline Indian stock indices are trading with moderate gains in early minutes of trade but the sentiment remains edgy amid concerns about Greece's ability to secure a second bailout package from the international lenders to avert a default. the market also seems to be taking some breather after five straight weeks of gains. Technically, the market does appear to be a little bit overbought. So, traders should be cautious at this juncture and wait for the confirmation of an end to the bear market.

The BSE Sensex was 17,743., up 36 points over the previous close. It had earlier touched a day’s high of 17,828 and aday’s low of 17,720. It opened at 17,813.

NSE Nifty was quoting 5,369, up 8 points over the previous close.It has earlier touched a day’s high of 5,413 and a day’s low of 5,362

The shares of Reliance Industries have edged higher after Goldman Sachs upgraded the index bellwether to a 'Buy' from 'Neutral', citing a potential gain in margins on increased refining and recovering oil demand. Goldman raised its target prices for the oil and gas major to Rs. 970 from Rs. 960 previously.

Shares of Hindustan Unilever Ltd. (HUL) are down a day after the FMCG giant posted better-than-expected Q3 net profit on rising prices and volume growth. However, HUL did warn about headwinds from an uncertain global environment.

HUL said it could have to deal with challenges arising from inflation and currency volatility. However, it vowed to maintain relentless focus on cost management and execution to contain these threats.

Major Results Today:

BILT, Cadila Healthcare, GMR Infra, Hindustan Oil Exploration, ICRA, IL&FS Transportation, JK Lakshmi Cement, M&M, Omaxe, Opto Circuits, Phillips Carbon, Radico Khaitan, Triveni Engineering, UB and VIP Industries.

Global Market

Most Asian markets are down today amid growing tensions over the fate of Greece as the debt-ridden eurozone nation's leaders failed to adhere to the Monday's timeline for accepting the terms of the second round of bailout.

The market is divided over whether the wrangling over Greece's debt restructuring talks would eventually be resolved or trigger contagion across other vulnerable eurozone countries.

US stocks finished flat as Greek political parties failed to agree on terms for a new bailout package. European stocks declined as talks between Greece and various other stakeholders drag on amid rising threat of a default. Willy-nilly, Greece has become a test case for the eurozone as it struggles to rein in a long-running debt crisis.

Other events to watch out for today include: interest rate decision in Australia, industrial production in Germany and Federal Reserve Chairman Ben Bernanke’s testimony.

Currency Update

The Indian Rupee ended a four-day winning streak on Monday, reversing early gains that saw it rise to a more than four-and-a-half month high, as US Dollar demand from local oil refiners and big companies offset a rise in local shares. A report by rating agency Standard & Poor's outlining the numerous hurdles faced by India in maintaining its stable rating outlook and the lingering Greek debt crisis weighed on the unit.

Key Events

The advance GDP estimate for FY12 will be out today. The numbers are unlikely to be upbeat and most of the reasons are well known. The Indian economy is likely to grow by ~7% in FY12 vs. 8.4% in FY11. However, stock market tends to discount events well ahead of time and therefore the GDP data may not hurt sentiment.

Outlook

Today, we expect the Indian Markets to open marginally in the green and than continue to remain range bound during the day. Immediate resistances for Nifty are at 5389 & 5398 levels, while supports are at 5300 & 5275 levels. Among the sectoral indices Realty, Capital Goods and Metal could witness correction during the day.

Sources- India infoline,hdfcsec

Temptation to throw the towel

After a massacre that was seen in 2011 in the equities and the performance in 2012 so far, everyone appears to be saying that probably this could be the best time to get out. On surface it appears a good argument, what with the markets providing YTD returns in the range of 16% and that too without any intermediate correction or stopover. This could be particularly relevant for investors who would be invested over the past 18 or so months and seen their investment value erode.

However, just as investment value in the stock markets erode without providing any time to think or ponder, so does bull markets happen when everyone is busy trying to figure out when the next fall would come by. The markets are ever mercurial and understanding that is half the battle won. On a broad thought process level, being plain contrarian would works wonders and as I always mentioned in the past quoting Warren Buffet – “be greedy when others are fearful and fearful when others are greedy”. This mantra is as basic as gravity, alas ever easy to understand but mighty difficult to practice.

Today the market started tentative and swayed between coming close to zero line and then swinging back to positive zone several times during the day. Overall the direction remains positive; however, at some point altitude sickness is bound to set in. There are certainly a section of people who have made too much too fast over the past few days and those set would certainly sell and go away. How much of an impact that would have is yet to be seen. Secondly, there are big boys reporting in the financial space over the next few days which could throw water over the ovens. Finally, the hot air balloon goes up only if the engine runs (read the FII’s pumping in money) and we certainly do not know when that engine will turn cold.

Otherwise, there is no stopping for the juggernaut pulling away stellar returns fro the year. I am just imagining that sky scraper that would be built on the solid foundation that we have built over the past 2-3 years in the corporate space. Meaning, how high can the index go when the structural bull market begins.

Sensex Kalifa – anyone.

Morning Bell...The key Indian stock indices have advanced in early minutes of trade

Indian Market

The key Indian stock indices have advanced in early minutes of trade, with the BSE Sensex and the NSE Nifty rising by ~1% each. The Nifty has strengthened its foothold above 5,300 while the Sensex has surpassed 17,700. The undertone is upbeat due to relentless inflow of overseas capital into Indian financial assets. The relief over a court ruling in the 2G scam is also partly behind the positive start today as is the upbeat US jobs report for January.

The BSE Sensex was 17,778, up 173 points over the previous close. It had earlier touched a day’s high of 17,829 and aday’s low of 17,741. It opened at 17,741.

NSE Nifty was quoting 5,374, up 48 points over the previous close.It has earlier touched a day’s high of 5,390 and a day’s low of 5,372. It opened at 5,379.

Wipro, TCS, Bajaj Auto, DLF, L&T, ICICI Bank, M&M, HUL, Hero MotoCorp, Coal India, Hindalco Inds,Sterlite Inds, were among the notable leaders in the Sensex and the Nifty.

ONGC, Tata Power, Gail India were among the notable losers in the Sensex and the Nifty.

The Mid-Cap and Small-Cap index was trading at 1%.

The gains are broad based with the Small-Cap and Mid-Cap indices keeping pace with their Large-Cap peers. The market breadth is positive. Most sectoral indices on the BSE have gained. The INDIA VIX on the NSE is marginally lower.

A lower court delivered a favourable verdict on the alleged complicity of P. Chidambaram in the 2G scam. Markets are likely to display similar relief today. Suddenly the prospects for equities seem to have brightened. FII inflows continue to be strong. The rupee too is gaining ground.

Hopes are also building on material improvement in governance and policy making. The Uttar Pradesh elections and the Union Budget will be two big events on the domestic calendar in the near term. Corporate earnings will continue to roll in for few more days.

Major Results Today:

Adani Port, Adani Power, BGR Energy, Bajaj Electricals, Dena Bank, GSK Consumer, Gujarat Industries Power, Gulf Oil, HUL, India Cements, Kesoram, MOIL, NALCO, NCC, Spicejet, Texmaco, Trent and Zydus Wellness.

Sources-:India Infoline

Weekly Market Wrap..Nifty rallying further to end with gains for the fifth consecutive week.

The week gone by saw the Nifty rallying further to end with gains for the fifth consecutive week. The Nifty gained 2.33% W-o-W. Market breadth was positive in four out of the five trading sessions of the week. The biggest gainers from the CNX 500 were STC India, KSK, Aban, Tata Global and Prestige. The biggest losers were Varun Shipping, Sterling Bio, FDC and Tata Coffee.

Indian Markets

Equity benchmarks maintained their upward momentum during the week, rising 2% over last Friday. A glance at the events and developments that ruled sentiment during the week.

• December exports up 6.7% to $25 billion, trade deficit (exports-minus imports) for April-December soars to $133 billion, and seen touching $160 billion by March.

• Core sector growth in December at a tepid 3.1%, indicating that the recovery in the November index of industrial production may have been an aberration.

• Finance ministry advisor Kaushik Basu sees inflation for FY12 between 6.5-6.8%, says economy is turning around.

• Rupee continues to rise against the dollar, hits three month high of 48.68, driven by strong FII inflows, weakness in dollar relative to other economies.

• Growth in household savings declines to 13.7% in 2010-11, compared to 21% the previous fiscal, mainly due to high inflation.

• Purchasing Managers Index for manufacturing hits 7-month high of 57.5 in January.

• Liquidity pressure persists despite cut in cash reserve ratio, RBI resorts to open market operations to infuse liquity.

Policy Changes:

The Supreme Court on Friday cancelled 122 2G telecom licences issued after January 2008, saying that norms were flouted while awarding them to companies. Uninor, Loop DB Etisalat, Sistema Shyam among worst affected. No clarity yet on refund on licence fee.  The spectrum available as a result of the cancellation of the licences, will be auctioned, earning much needed revenues to the cash-strapped government.

The government revised the economic growth rate for 2010-11 financial year slightly down to 8.4% from the earlier estimate of 8.5%.

Exports grew by merely 6.7% to $25 billion in December 2011 compared to the same month last year due to demand slowdown in the western markets of the US and Europe.

Key Sectoral Movement

All the sectoral indices except Consumer Durables and Capital Goods ended in the green, which lost 2.8% and 1% respectively. The top gainers were Realty, Auto, IT and Bankex, which ended higher by 4.8%, 3.7%, 3.3% and 3.2% respectively.

Outlook of the week

With the markets moving up further for the fourth consecutive session, the underlying trend continues to remain up. Immediate upside targets for the Nifty in the coming week are at 5360-5380. The current short term uptrend would reverse with a Nifty close under 5076.

Sources-moneycontrol, hdfcsec

Morning Be!!........The Sensex opened flat on the last day of the week after rallying for consecutive three sessions

Indian Markets

The key Indian stock indices have opened on a sedate note and are trading with slim gains in early minutes of trading, as investors assess the wider impact of the Supreme Court's verdict on the 2G scam. While the FII inflows remain robust, there are concerns about the Government's ballooning budget deficit. Sentiment is also edgy ahead of tomorrow's lower court ruling on P. Chidambaram's alleged role in the 2G scam.

The Government’s already scarred image has taken another knock in the form of an adverse Supreme Court verdict which could make matters difficult for the Congress in the crucial UP elections.

Markets could be edgy today as investors await a lower court’s order on the alleged role of P. Chidambaram in the 2G mess. The court is set to deliver its verdict on Saturday.

The SC ruling has also thrown up a few tricky questions that could continue to haunt the telecom sector for a while. Let’s hope that the damage to investor confidence is limited.

On the global front, things have turned quiet ahead of Friday’s US monthly jobs data. While French and Spanish debt auctions went off well a deal on Greece’s debt recast remains elusive.

Just like the RBI governor, his US counterpart, Ben S. Bernanke, has raised a red flag over its government's ballooning budget deficit.

Global Markets
On the global front, Asian markets are cautious as investors await the release of monthly US jobs data on Friday and talks on the proposed debt swap in Greece remain inconclusive. The US markets finished mostly flat overnight while their European counterparts managed moderate gains.

Currencies
Indian Rupee climbed to a 3-month high vis-?-vis the US Dollar after a private report showed the nation?s manufacturing expanded at the fastest pace in eight months. The currency rose for a third day, strengthening past 49 per dollar for the first time since November 4, 2011.

Commodities
The metals ended mixed on the LME with Nickel and Zinc gaining marginally by 0.1% while Aluminium and Copper fell by 0.6% and 0.5% respectively. Oil for March delivery slipped $1.25 cents to end at $96.36 a barrel.Gold futures for April delivery added $9.80 to $1,759.30 an ounce.

Outlook
Today, we expect the Indian Markets to open flat to marginally in the green and trade in a narrow range. With the markets moving up further for the third consecutive session, the underlying trend continues to remain up. Immediate resistance for Nifty is at 5300, while support is at 5200. Among the sectoral indices, IT, Metal & Capital Goods continue to look good, while Healthcare & FMCG could underperform.
Sources-: hdfcsec, india infoline

Time for the second line?

Today the trade was simple and straight. The ones which did not run for many days are now participating in the rally. This might be good and bad at the same time. Good because that makes the rally a very broad based one, bad because now each and everything seem to be running, whether it merits increase or not. The likes of Ambuja, DLF, ACC, GAIL & Sesa Goa were amongst the top gainer for the Nifty stocks. Now the cement pack has been very quite on the back of subdued cement prices and consequent flat or lower earnings; so where is the need to run away to glory?

The global markets running with confidence lends more credibility to the continued terrific performance that the indices are displaying, but now I am getting a feeling that it is moving too fast and too furious for comfort.

If that were the case, then we are in for trouble ahead since YTD we are now coasting at around 15% or thereabouts on the Nifty Index and if we keep moving this way then in a few weeks we would be hitting 19k levels very soon. And then we will need to pull out money fast. What might be interesting is that fact that in all this, only the outsiders would have made money. Since the FII’s are pumping the money and the domestic guys are still sitting on the sidelines. So we could be missing the stellar returns yet again and sound like being in catch 22. Again!

February 2012 would be very interesting indeed. If this gallops, then we make superb returns, if we return then the question would be, are we returning to sub 4800 levels? This market still would not le us sleep easy. Keep eyes wide open, steep curve ahead.

Morning Be!!!.........Indian stock indices have continued their good run of the past two sessions

Indian Markets

The frontline Indian stock indices have continued their good run of the past two sessions in early morning trade, as investors cheer encouraging manufacturing PMI data from across the globe. Also, FII inflows into Indian financial assets continues to be robust following a spectacular January rally. Globally too, risk appetite seems to be back amid optimism about US and Chinese growth and hope of a resolution to the euro area credit crisis.

The bullish undercurrent in the Indian market is in line with the ongoing global 'risk on' rally as market players gradually resume their shopping spree in equities after last year's debacle. Growth in the US is holding steady despite the eurozone debt crisis while China too looks likely to avoid a hard landing. As far as the euro area is concerned, there are still fears of the fiscal mess stretching longer as Greece struggles to seal a deal over its debt restructuring.

The rising market brings back memories of 2007. Risk appetite is back on the table as global liquidity, unlocked by easy monetary policies, chases high returns after a tumultuous 2011. The trigger for Wednesday’s worldwide ‘risk on’ rally came from upbeat manufacturing data.

Back home, auto sales for January and the manufacturing PMI have further stoked optimism about a gradual revival. Results have been mixed but most players are probably looking ahead to FY13.

Such powerful is the sentiment that lingering problems are being overlooked. The question is whether the current upswing is sustainable? Won’t take long for fear to return and some cooling is a given after a strong rally. So, ride the bullish wave as long as it lasts.

Global Markets

A couple of other reports also underscored the resilience of the US economy in the face of the eurozone fiscal malaise. While China’s manufacturing PMI reports were mixed few economists see a hard landing there.

Given the encouraging global backdrop, the start today is likely to be positive. Asian markets are on a firm wicket. US stocks shook off their recent lethargy to end smartly up. European indices too joined the party.

Currencies

The Indian Rupee hit a near three-month high on Wednesday vis-a-vis the US Dollar, clawing back all early losses, supported by robust dollar inflows, local share gains and a recovery in the euro.

Commodities

Among the metals, Aluminium lost 1.9% while Nickel fell by 1.3%. Copper and Zinc ended lower by 1.2% each. Oil for March delivery fell 87 cents to end at $97.61 a barrel. Gold futures for April delivery rose $9.10 to close at $1,749.50 an ounce.

Key events to watch for today

India - WPI

Outlook

Today, we expect the Indian Markets to open up and then later during the day, it could take cues from Dow Futures & European markets for any further direction. With the markets erasing almost all its losses, the underlying trend continues to remain up. Immediate resistance levels for Nifty are at 5275 & 5230, while support levels are at 5159 & 5125. Among the indices, Metals, Capital Goods & Auto could outperform.

Sources- hdfc security, india infoline

Morning Be!!......Indian stock indices are trading with minor losses in early morning trade

Indian Markets

The main Indian stock indices are trading with minor losses in early morning trade, stepping back slightly after the previous session's stellar gains and a fantastic start to the year. The undertone is cautious after the fiscal deficit reached more than 90% of the FY12 goal. Also, data from the US showed some softening amid ongoing worries about the eurozone. China's manufacturing PMI reports have been mixed as well. South Korea has swung to its first trade deficit in two years. Australia's home prices fell the most on record in 2011.

Shares of HDFC Ltd. are down in a sluggish market in early morning trade after Carlyle reportedly sold a big chunk of its stake in the housing finance major through a block deal.

More manufacturing PMI reports will be out later in the day from across the globe. The Indian market will also react to the latest trade data apart from the monthly auto and cement volumes.

Talking of fiscal conditions, India’s budget deficit has almost reached the year-end projection. The external balance sheet too is showing some signs of stress. movement in currency and commodities will be crucial going ahead. One has to see how the Government tackles these issues once the political compulsions of state elections subside.

US and European Markets

January offered up an apology to discouraged investors. Unlike 2011, when markets spiked and sunk several hundred points each day but ultimately closed out the year relatively flat, all three indexes mostly climbed higher throughout the month with occasional dips

Eurozone troubles are a big overhang at the moment. The deal on the proposed restructuring of Greek debt remains elusive. Negotiations between Greek government and private bondholders are likely to end today. Portugal is feared to be next in line for seeking writedowns on its debt load. Italy and Spain too have crippling debt burdens. In short, the world economy will do a whole lot better if Europe manages to come out of the current mess largely unscathed.

Asian Markets

Today, barring Strait Times, which is trading marginally lower by 0.1%, all the other Asian indices are trading in the green with Hang Seng & Shanghai trading up by 0.4% & 0.2% respectively. Nikkei & Kospi are trading higher by 0.3% & 0.6% respectively, while Taiwan is trading in the green by 0.3%. SGX Nifty is trading lower by 16 points over Tuesday?s close.

Currencies

The Indian rupee surged against the US Dollar on Tuesday, as local stocks jumped. Foreign funds are investing aggressively into the local stocks, which are attractively valued.

Commodities

Among the metals, Nickel was the only loser falling by 0.8% while Aluminium gained the most (2.4%). Copper and Zinc ended higher by 1% each. Oil for March delivery dropped 37 cents to $98.39 a barrel. Gold futures for April delivery rose $7.40 to $1,740.40 an ounce.

Outlook

Today, we expect the Indian Markets to open flat to marginally in the negative. Later during the day, it could take cues from Dow Futures & European markets for any further direction. With the markets erasing almost all its losses seen on Monday, the underlying trend continues to remain up.

Immediate resistance for Nifty is at 5250, while support is at 5125. Among the indices, Banks, Realty & Auto are looking good and could outperform.

Source- hdfc security, india infoline