Morning Bell...Greek bailout package renewed hopes among investors.

Headlines

The Sensex opened flat on Tuesday to make a swift upward move as news of a Greek bailout package renewed hopes among investors. The Sensex was trading 87 points up at 18,375.94 and the Nifty was gaining grounds with a 26 point up move to 5,590.25.

Indian Market

The key Indian stock indices advanced modestly in early morning trade amid media reports that euro area finance ministers had reached an agreement on a second bailout package for Greece. The euro gained versus the US dollar while crude oil futures also rose after the announcement. US stock futures were also trading higher and Asian benchmarks pared some of the intraday losses.

The BSE Sensex surpassed 18,400 while the NSE Nifty crossed 5,600 in opening minutes of trade on the back of strength in Capital Goods, Realty and Power stocks. Select stocks in Oil & Gas, Metals, FMCG, PSU, Banking and Pharma sectors are also trading higher. On the other hand, Consumer Durables, IT and Teck indices are in the red.

The market breadth is positive as the Small-Cap and Mid-Cap indices are marginally out-performing the frontline indices. The BSE Small-Cap index was up ~0.8% while the BSE Mid-Cap index rose ~0.6%.

Technical Outlook

The NSE Nifty broke out above 5430 last week and closed comfortably above the resistance of 5550. This upmove happened despite uncertainty over Greece and higher oil prices. The ‘spinning top formation ’on Friday showed indecisiveness among the traders but any positive opening today would be suffice to extend the rally towards 5700. There is a 'left out' feeling in the market and every one is waiting for a dip to initiate long positions.

Outlook

Today, the Indian Markets could open lower following negative Asian cues and remain volatile in a range. The markets are likely to take cues from Dow Futures & European markets during the latter half of the session for any further direction. If the much-awaited Greek debt deal goes through, then the optimism could take the markets further higher. Immediate upside target for the Nifty is at 5700. However, weakness could emerge if the supports of 5500-5475 are broken. Among the sectoral indices, Capital Goods, IT & Banks look good, while Auto & Healthcare could underperform.

Sources-IIFL,HDFC SEC

Weekly Market Snapshot....Nifty breaking out of its recent highs of 5428 and continuing its uptrend

Indian Market

After taking a breather last week, the week gone by saw the Nifty breaking out of its recent highs of 5428 and continuing its uptrend. The Nifty thereby ended with W-o-W gains of 3.4%. It was the seventh consecutive week of gains for the Nifty.

A new long term bull market was also confirmed in the process as the Nifty moved above its previous long term highs of 5400.Reflecting the positive price action seen this week, market breadth was positive in four out of the five trading sessions of the week.

With the liquidity flow continuing relentlessly, indices have no other way but to look up. The truncated week could see some wild swings though. The left out feeling is there in some quarters and a few are wary of the sudden rise and may prefer to sell into the strength. The week will give some opportunities to get in as the global macro factors could cause a temporary cooling anytime.

Global Markets

Among the global factors to watch out for there is Greece which is showing signs of pressure as the country faces a March 20 bond redemption totaling 14.5 billion euros ($19 billion). While the nation’s political leaders have signed up for fiscal retrenchment and detailed 325 million euros in new budget cuts for this year, euro-area governments have yet to approve a second bailout of 130 billion euros

Also, ECB's second tranche of the LTRO is due at the end of February and many see at least a similar take-up of funds as was seen in December. It may be recalled that more than 500 banks across Europe borrowed €489bn from the ECB at 1% in December

Key Events

PM takes steps to address coal supply issues for power projects

Inflation falls below 7% in January

Outlook of the week

With the underlying trend remaining up on all time frames (Short term, intermediate and long term), traders will need to watch if the Nifty can hold above the immediate supports of 5500-5475 in the coming week. A close below these supports could lead to some more weakness in the markets. On the upside, our immediate targets are at the next intermediate highs of 5702.

Sources-hdfcsec, IIFL

Diwali 2012, Christmas 2011 or ongoing Chinese new year?

When we were hiking in the Right Horizons offsite that was held in November 2011, I remember that every minute of the climb would appear pretty ok in terms of strain that one was undergoing, and the ground appeared fairly ok to climb – with not real apparent steepness, except at certain places. However, when the climb was over post the 30-45 minute trek and you reached the top; you turned to see some stunning views. More important, in the 30 minute trek, you had slowly but surely climbed some serious distance to the top was evident only from the peak and not from the intermediate points of the climb.

Since January 2012 to today, while it might have appeared that the market has indeed climbed and given good returns, just look back now and you know what has happened. YTD, the Nifty index has gained 20.33% and this has to be seen in the context of what has happened in the entire of 2011, since for the entire year we were down around 24% and in 45 days we are close to recover what we lost in an entire year. So you lose patience and do stupid things and the markets punish you on both sides. You take out money saying you always lose money in stock markets and then pulling a fast one on you by rising so fast that you would think that I could have waited.

Today’s session has been quite relentless in terms of rising nature of the market. Everyone is expecting a fall, and these are times where the market would surprise you on the upside too; jus the same way it did last year. When everyone expected the fall to stop at every lower level. He who has been just putting money and averaging at every level must be a happy and content man.

For now it looks like the Shewag blitzkerg, all the way. In a way it also looks like Diwali is coming in way to early for comfort, or you could also argue that it is still Christmas of 2011; better still the ongoing Chinese New Year. Happy New year.

Impact of Rate cut..

The RBI, after a long hiatus, finally cut rates for a change. Over the last 18 months, interest rates have been increased 13 times in a row. The new year came with some good news on the monetary front. The rate cut of 50 bps (from 6% to 5.5%) on CRR (Cash Reserve Ratio) was a welcome change - CRR is the percentage of bank deposit that lenders have to keep with the RBI and this reduction is expected to inject Rs. 32,000 crore liquidity into the economy.. The cut in CRR is seen as a first step towards softening inflation substantially. In addition to this, the lending rates on Home loans, auto loans and personal loans etc would also come down.

The rate cut logic

Even given that it would not be an unmixed blessing, the rate cut was predominantly mooted due to the stress that it laid on the economic growth. There have been repeated revisions in the GDP guidance and negative sentiments on growth prospects in the economy. The rates cuts have been triggered with the motive to rein in inflation, maintain the GDP growth at decent levels and improve sentiments in the economy.

Post the interest rate cut it is anticipated that there would be lowering in interest rates on loans – retail / corporate alike. It is also expected that the banks would use the additional liquidity to lend more money thereby creating a robust economic environment which will in turn help boost GDP growth.

Fixed Deposits / Bonds – riding the wave

Fixed income instruments became popular with every upward revision of interest rates, but now given that there is not that much of a dearth of liquidity in the economy; the prevailing high interest rates are likely to drop a notch lower. In no time, the interest rates on long term fixed deposits and bonds can moderate. For those who have been prudent to lock-in the prevailing interest rates, it is time to feel proud about yourself. For those who lost out on this opportunity, better late than never is what we have to say!

Outlook

The rate cut brought great relief to the economy, the investor sentiment and consumer confidence has been restored to some extent atleast. There are telling signs of inflation softening, and this should eventually rub off on the borrowing rates as well. For the fixed income investor, there is still time to lock in the higher interest rates, in the future over a 6-12 month period rates are likely to come off more sharply.

Source-:

Anil rego, CEO Right Horizons

Published in-

Financial Chronicle

Morning Bell......The BSE Sensex opened up 180 points on opening trade

Indian Market

The BSE Sensex opened up 180 points on opening trade, after indications eurozone officials would soon approve a long-awaited bailout for Greece boosted Asian markets. FIIs have invested nearly USD 4.5 billion in last 44 days. Buying was seen in realty, capital goods, power, consumer durables and banking stocks.

Global Markets

U.S. stocks closed ~1% higher on Thursday as positive domestic economic data comforted investors regarding Greeks second bailout. Investors confidence pushed the Dow to its highest level since May 2008. Nasdaq is back in dot com boom territory hitting a peak it hasn't seen since December 2000.

European markets were in a jittery mood Thursday due to uncertainty over whether Greece will get vital bailout cash to avoid defaulting next month, but more buoyant U.S. jobs data helped shore up sentiment. It finally ended on a flat to positive note. Britain's FTSE 100 fell 0.1%, DAX in Germany dropped 0.1% and France's CAC 40 added 0.1%.

The Indian ADRs ended on a mixed note. Tata Motors, Tata Communications and MTNL ended in red falling by 1.1%, 1.1% and 2.7% respectively. Infosys and Wipro were up by1.1% and 0.6% respectively. Dr Reddys, rose by 0.5% while ICICI Bank and HDFC Bank rose by 0.4% each.

Today, the Asian markets are trading in the green with Shanghai & Hang Seng trading up by 0.1% & 0.8% respectively. Nikkei & Strait Times are trading in the green by 1.8% & 0.5% respectively, while Kospi & Taiwan are trading up by 1.5% & 0.8% respectively. SGX Nifty is trading up by 40.5 points over Thursdays close.

Currencies

The rupee was little changed early on Friday as dollar demand from importers offset the comfort from improved global risk appetite

Outlook

Today, the Indian Markets could open in the green following positive global cues and than remain range bound during the day. The immediate supports to watch are at 5475 and 5435 levels while the immediate resistances are at 5575 and 5600 levels. Among the sectoral indices, Realty, power & Capital Goods could witness some profit taking after a run up yesterday.

Sources-Moneycontrol, HDFCsec

Morning Bell.....Nifty tests 5500,5100 is likely to be a strong support for the Nifty

Indian Markets

The Sensex was down 89.26 points or 0.49% at 18113.15, and the Nifty was down 28.20 points or 0.51% at 5503.75.

About 1321 shares have advanced, 1078 shares declined, and 1000 shares are unchanged.

The Indian market opened on a negative note tracking weak global cues. The Nifty is now trading at the highest level in more than six months. China reiterated that the country will continue to invest in European government debt to help resolve Europe's debt problems. Key benchmark indices in Hong Kong, Tokyo and South Korea also rallied to six-month highs.

The Sensex was down 36.33 points or 0.20% at 18166.08, and the Nifty was down 16.15 points or 0.29% at 5515.80. About 748 shares advanced, 441 shares declined, and 2210 shares remain unchanged.

In the largecap space, BHEL, Jindal Steel, Tata Power, NTPC and Larsen were up 1-5%. Coal India, Sun Pharma, Sterlite Industries, DLF and Reliance were down 1

Global Markets

U.S. stocks closed lower on Wednesday as the euro hit a 1-week low on uncertainty over Greece's debt problems. Dow Jones tumbled 97 points, or 0.7%, to end at 12,781. S&P 500 fell 7 points, or 0.5%, to 1,343. Nasdaq dropped 16 points, or 0.5%, to 2,916.

Today, the Asian markets are trading lower with Shanghai & Hang Seng trading lower by 0.1% & 0.7% respectively. Nikkei & Strait Times are trading in the red by 0.3% & 0.7% respectively, while Kospi & Taiwan are trading lower by 1.1% & 0.4% respectively. SGX Nifty is trading lower by 17.5 points over Wednesday?s close.

Currencies

The Indian Rupee ended stronger on Wednesday vs the US Dollar buoyed by large gains in local shares, but off its day's highs on persistent dollar demand by oil firms.

Outlook

Today, the Indian Markets could open lower following negative global cues and trade in a range with negative bias throughout the session. Considering a sharp run up over the last few trading sessions we expect some correction to take place in near term. Strong support for Nifty is at 5435, while immediate resistance is at 5575. Among the sectoral indices, Realty, Banks & Capital Goods could witness some profit taking after a sharp run up yesterday.

Sources- HDFC SEC, moneycontrol

Morning Bell.....Sensex crosses 18k mark,inflation has cooled off in January

Indian Market

As anticipated, the key Indian equity benchmarks have opened with a gap on the back of a firm trend across other Asian markets. Sentiment in Asia has been lifted by media reports that Greek political leaders will give a written undertaking on new budget cuts to international lenders on Wednesday to clinch new aid and avoid default next month. Repots also quoted Chinese central bank governor as saying that China will continue to invest in eurozone government debt.

As far as India is concerned, the good news is that inflation has cooled off in January, giving elbow room to the RBI to ease its hawkish monetary policy further and support growth. FII inflows have remained positive in February despite bad news from the overseas markets. Most of the liquidity gush has been supported by ultra-loose monetary policies in the developed nations.

The Indian market, the NSE Nifty has been sustaining above the support of 5350 for the past few sessions despite bad news from the overseas markets. A gap up opening in today’s trading session could confirm resumption of a fresh uptrend with immediate resistance seen at ~5580.

Global Market

The leaders of Greece’s two biggest political parties will provide written commitments to budget cuts, a government official in Athens was quoted as saying.

Asian stocks extended gains after China’s central bank governor Zhou Xiaochuan was quoted as saying that the country was ready to be more involved in resolving the long-running European debt crisis.

US stocks pared losses in the last half hour of trading on Tuesday amid signs that Greek leaders could soon seal the deal on fresh international rescue funds. US stocks had slumped earlier in the wake of disappointing retail sales data.

But, overall world equity markets are showing some signs of fatigue this month after a surprisingly strong January. Corporate results have been mixed in the backdrop of a slowing economy.

Concerns about the eurozone remain at the forefront after Moody’s downgraded six European nations and warned the UK on its ‘AAA’ grade. Greece continues to stumble in its attempts to secure more international aid before next month’s scheduled repayment.

Currencies

The Indian Rupee ended lower on Tuesday vis-a-vis the US Dollar as strong dollar demand from local oil companies offset a rise in the share market and some recovery in the euro. The rupee ended at 49.36/37 to the dollar, compared with Monday's close of 49.19/20.

Today’s Outlook

Today, the Indian Markets could open in the green and continue to trade in with a positive bias for the day. The immediate supports to watch are at 5350 and 5300 levels while the immediate resistance levels are at 5450 and 5500. Therefore, one must remain a bit cautious and wait for more signs of strength in the markets.

Sources- IIFL, hdfcsec

Morning Bell.......Indian Indices trading flat,For the day, all eyes will be on the inflation data for January

Indian Market

For the second day in a row, the main Indian equity benchmarks have started day's trading on a flat note as market players take stock of the situation following January's stellar rally. The undercurrent is cautiously optimistic amid lingering concerns about weak domestic economic backdrop and worsening eurozone credit crisis. Even technically, the frontline indices look a bit tired and could see some pullback in the near term from the current levels.

For the day, all eyes will be on the inflation data for January, which is most likely to show moderation from December. The January wholesale price index (WPI) based inflation is expected at 6.7% as against 7.47% in December. Core inflation is also likely to slip to below 7%. However, the impending drop in headline inflation is partly due to a high base effect. Inflation could turn back up, especially if the Government allows oil companies to hike fuel prices in the wake of the recent spurt in crude oil prices.

So, the RBI will keep a strong vigil on inflation given the elevated crude oil prices and the Centre's ballooning fiscal deficit. It may slash the CRR again in March but a cut in the repo rate may not materialise till the central bank's annual policy meeting in April.

Meanwhile, the RBI has decided to change the Bank Rate with immediate effect by realigning it with the Marginal Standing Facility (MSF) rate, which in turn is linked to the policy repo rate. Accordingly, the Bank Rate shall be 9.5% with effect from the close of business on Monday.

Shares of banking titan SBI are up after reporting better-than-expected growth in net profit for the fiscal third quarter. Although concerns prevail over deteriorating asset quality in a slowing economy, the bank's chairman has said that the worst is over as far as NPAs are concerned.

Major Results Today: ABG Shipyard, Akzo India, Alok Industries, Amtek Auto, BL Kashyap, BPL, Deccan Chronicle, Dhanlaxmi Bank, Dredging Corp, Educomp, Essar Oil, Gati, Gitanjali Gems, Graphite India, Great Offshore, GVK Power, HDIL, Hubtown, IVRCL, Jaiprakash Associates, Kingfisher Airlines, Kohinoor Foods, Koutons, Max India, Monnet Ispat, Nestle India, Nitesh Estate, PSL, Ramky Infra, REI Agro, Reliance Infra, SCI, Supreme Infra, Tata Motors, Tecpro Systems, Unitech, UTV, Viceroy Hotels and Voltas.

Global Market

Most Asian markets are trading with a negative bias following the mass downgrade of euro area nations by Moody's. Their counterparts in the US and Europe gained overnight after Greece moved a step closer to securing second round of bailout money from international lenders.

The back-and-forth between risk aversion and risk tolerance may continue market players take stock of the situation. Stick to a measured, stock specific approach to avoid short-term volatility. But, beware of dodgy small-caps and mid-caps.

Today’s Outlook

A higher close on Monday following last week's spinning top pattern reinforces bullish stance on our markets. The Nifty has been flirting with the resistance of 5430 for the past 3-4 trading sessions. Buying momentum could return if the Nifty manages to move past this barrier. It might cross 5500 in the near term but is bound to face hurdles on the way.
Source- IIFL,

Why this Stagnancy di…

Over the past few days the speed bump on the index movement has been hit, or so it seems. There seems to be a tug-or-war like situation on the movers of the index, with counters such as RIL, automotive players such as Bajaj Auto, Tata Motors and Hero Moto Corp., etc. Steel counters such as SAIL and Tata Steel; and other beta counters but small time influencers such as Rcom, Sterlite are proving to benefit the index. The draggers include a few IT names INFY, Wipro and financial counter such as SBI which declared soft results were the target of the bears.

Until such time that we are still a bit tentative on the counters that were listed above, and we are yet to push the valuations on the ones where there is bullishness, expect today like logjam where the markets would see swings that were seen.

Today the thankful aspect was that despite ending of the earnings season, the market seems to have stayed put; and that is actually a consolation on the background of what has happened in 2011. Also, it looks like until, at least the global markets are positive this stagnancy would continue. Now the action really would shift meaningfully onto events. UP Elections, govt. stability, RBI policy and host of events taking center stage over the next few weeks.

Morning Bell.....key Indian equity benchmarks have gained modestly in early minutes of trade after a really slow start

Indian Markets

The key Indian equity benchmarks have gained modestly in early minutes of trade after a really slow start. The NSE Nifty remains above the psychological level of 5400 while the BSE Sensex is trading above 17,800. the BSE Sensex was 17,875, up 44 points over the previous close. It had earlier touched a day’s high of 17,881 and aday’s low of 17,798. It opened at 17,817.

Tata Power is trading firm ahead of its Q3 FY12 earnings while DLF is under some pressure before its results. Tata Steel has gained after its Q3 results but Hindalco is in the red. RCOM is up before its Q3 earnings. ACC has advanced after posting strong quarterly profits. L&T, Bajaj Auto, Grasim, SAIL, Sesa Goa and BPCL are among the top leaders so far.

December IIP print is seen between 2.5% and 3.5%. This is slower than November’s reading of 5.9%. However, the markets may not get swayed much as the IIP data generally has been quite erratic.

Global Markets

The undertone has been buttressed by news that Greek leaders have reached an agreement on new budget cuts that are needed to get more international money and avoid a debt default. However, the eurozone finance ministers are yet to clear the new bailout funds pending an approval of the austerity measures by the Greek parliament.

Meanwhile, the US Labor Department’s count of Americans filing initial claims for jobless benefits dropped by 15,000 last week to 358,000. The four-week moving average fell to 366,250, its lowest since April 2008.

China’s exports fell for the first time in more than two years in January as trade was disrupted by the weeklong Chinese New Year holiday. The overseas demand was also hit by Europe’s prolonged debt crisis.China's exports declined 0.5% from a year earlier, the customs bureau said today. Imports dropped by a more-than-forecast 15.3%, leaving a trade surplus of US$27.3bn.

Globally, equities have got off to a strong start in 2012. So, don’t be surprised if market players turn a little hesitant in pushing stocks much higher.

Major Results Today:

Apollo Hospitals, Aurobindo Pharma, BPCL, Britannia, DLF, Eros International, Gammon Infra, GE Shipping, Hathway Cable, Hotel Leela, IDFC, JSW Steel, Lovable Lingerie, MMTC, MTNL, Neyveli Lignite, Pantaloon Retail, Pipavav Defence, Reliance Capital, RCOM, Shriram Transport, Sun TV, Tata Chemicals and Tata Power.

Outlook

Today, the Indian Markets could open lower following negative Asian cues, but could make an attempt to inch up later during the day. A move above 5,420 on the Nifty could result in further upside. Meanwhile, 5330 level remains a strong support. Among the sectoral indices, Banks, Auto & Consumer Durables continue to look good, while FMCG & Healthcare could relatively underperform.

Sources-IIFL,Hdfcsec