Daily Equity Report (28JUN 2012)

Highlights Indian market

Indian equity markets up 0.31%. Nifty up 21.10 pts and settle at 5141.90. Sensex was up 52.47 pts at 16959.05. Bank Nifty up 38.25 pts at 10008.35.

Global market
European markets were up with FTSE up by 40.13 pts at 5487.90, CAC up by 18.85 pts at 3031.56 and DAX up 30.15 pts at 6166.84 Dow future up 7.00 pts at 12493.00. S&P/CS Composite-20 HPI y/y is -0.4M & previous -0.6M

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Market Analysis:

Indian stocks closed with modest gains for a second straight day Wednesday. The lacklustre trade saw the Sensex moving in a 100 point range, and the Nifty confined in a 30 point band. The BSE Sensex failed to hold on to the 17,000 mark, while the broader Nifty i ndex closed below the key resistance of 5,150. Indian markets have been in a narrow range, refusing to go down despite disappointment over the much anticipated measures to boost the economy. However, with a change in guard in the finance ministry, markets anticipate that there might be some urgency to kick start stalled reforms and cut down on Indias twin deficits. These steps will certainly raise foreign investors confidence in Indian markets.. Commodity stocks like Sesa Goa (3.7%), Tata Steel (2.5%), and Sterlite Industries (1.8%) gained on positive global cues. US home sale prices rose for the first time in seven months boosting sentiments in risk assets. Power utilities like Tata Power (2.2%) and Reliance Infra (2%) were among the top Nifty gainers on account of the steep rise announced in power tariffs in the capital. Delhi is a big market for these firms. IT stocks like HCL Tech (1.9%), Infosys (1.1%), and TCS (0.94%) also saw buying interest. Among the losers, Tata Motors (-3%) ended at the bottom of the Nifty index. Private lender Kotak Mahindra (-1.7%) and cement major ACC (-1.3%) also saw selling pressure. Oil and gas major Cairn India (-1.1%) fell on declining crude prices. 34 of the 50 stocks closed higher on the Nifty index. On the BSE 500 index, 56% stocks managed to close higher, indicating some degree of buying interest in the broader markets.

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News you can use:

In a bid to check rupee's free falling against the US dollar, the Reserve Bank of India (RBI) on Monday hiked the limit of external commercial borrowing (ECB) by USD 10 billion. Moreover, the regulator also increased the limit of overseas investment in government bonds by USD 5 billion to USD 20 billion. European shares were called to open flat to slightly lower on Monday with Spain at the forefront of investors minds as it is expected to formally ask its euro zone partners for 100 billion euros to recapitalize its banks. Asian shares fell on Monday and the safe-haven dollar rose as concerns about faltering global growth and Europe's intractable debt crisis continued to sap investor confidence, but commodities steadied after a pummelling last week.

Fiis & Diis

CATAGERY FII DII DATE 27-Jun-2012 27-Jun-2012 BUY 1914.47 709.31 SELL 1828.38 724.38 NET 86.09 -15.07

NIFTY Daily pivots

Pivot Nifty

R4 R3 R2 R1 PP S1 S2 S3 S4 5236.30 5205.45 5174.60 5158.25 5143.75 5127.40 5112.90 5082.05 5051.2

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Daily Nifty Gainers

COMPANY
IDFC Sesa Goa Tata Steel Tata Power Reliance Infra

CURR.RATE
135.35 191.45 420.7 97.85 544.8

VOL(000)
6497.19 2260.45 3269.68 3891.71 2459.74

PREV.CL
130.45 184.65 410.5 95.75 534

NET CHANGE
4.9 6.8 10.2 2.1 10.8

CHANGE%
3.76 3.68 2.48 2.19 2.02

Daily Nifty Losers

COMPANY
Tata Motors Kotak Mahind ACC Cairn India JP Associate

CURR.RATE
239.2 570.7 1204.4 325.45 69.45

VOL(000)
9234.55 1183.21 378.73 1991.01 11868.77

PREV.CL
246.7 580.45 1220.55 329 69.95

NET CHANGE
-7.5 -9.75 -16.15 -3.55 -0.5

CHANGE%
-3.04 -1.68 -1.32 -1.08 -0.71

Stock in ban period

ABAN COREEDUTECV ORCHID CHEM

Stocks to watch
Bata India IDFC M&M L&T
RELIANCE CAP.

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Nifty Daily Chart

INDEX Nifty

OPEN 5149.45

HIGH 5160.10

LOW 5129.25

CLOSE 5141.90

CHANGE 21.00

%CHANGE 0.41

ANALYSIS:
Nifty looks bearish Strategy: Sell on rise Support:5080 Resistance:5180
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Bank Nifty Daily Chart

INDEX Bank Nifty

OPEN 10025

HIGH 10099

LOW 9951.60

CLOSE 9988.55

CHANGE 19.50

%CHANGE 0.20

ANALYSIS
Bank Nifty looks bearish Strategy: Sell on rise Support: 9920 Resistance:10040

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MARKET CALLS
CASH SCRIPS RIIL SRTRANSFIN B/S B S LEVEL 412 513 SL1 409 500 T1 415 516 T2 418 519 T3 421 522

FUTURE SCRIPS RANBAXY B/S S LEVEL 484 340 SL1 487 343 T1 481 337 T2 478 334 T3 475 331

RELIANCE CAPIT. S

PREVIOUS PERFORMANCE
TYPE CASH FUTURE SCRIPS COAL INDIA IRB INFRA B/S BUY SELL LEVEL 340.10 125 TARGET 344.35 123

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INVESTORS GUIDE
We head into a derivative contracts expiry week, with stock markets having climbed the conventional Wall Of Worry syndrome. The week ahead will be volatile with a Bullish Bias as sentiment has started to turn positive on the back of low oil prices and expectation of better government performance on the back of the expected rejig on key posts being filled due to Presidential elections. Markets surprisingly did not react negatively to the Status Quo on rates announced by the RBI, rating agencies downgrade threats and also ignored poor global cues to end the week up marginally. The only Joker in the Pack continues to be the Rupee, which is limiting inflows by touching new lows despite being very heavily oversold. The same was the sole reason for RBI not cutting rates and easing money supply. Also oil marketing companies in their fortnightly oil price revision stated the same reason for not cutting petrol prices. Rating agencies are also going overboard in threats of downgrade to Speculative grade purely due to the sharper than expected fall in the Rupee. The Nifty now seems set to test the100 dma (day moving average) at 5198 and the Right shoulder @ 5240/50, with support now @ 5074 which is the 200dma. The high Beta Bank Nifty has again started to outperform the Nifty & will test the 100dma @ 10095 & the right shoulder @ 10300. Smart money continues to buy quality with the broader market now showing positive divergence & mid cap stocks recording smart gains. This also indicates that purely by default how much Indias fundamentals tend to improve on the back of low Oil prices & which will actually see Smart Money buy stocks with a longer term horizon. High Beta sector/stocks are being chased with Defensives continuing to underperform. Globally markets continue to be Haunted by rising yields on Spanish, Italian & Portuguese debt, which is seeing equities underperform. However the sharp commodity sell off has also seen Gold lose some of its sheen & it ended near 1 month lows. The same is indicating that the relative outperformance of Gold as an asset class may be over & we could see s mart money reentering Equities. The other factor being watched closely is the progress of Rains/Monsoon & the also in the US certain disruption in Oil supplies due to seasonal Tropical Storms which will see Oil prices react. With most of Europe now actually watching the Euro cup more than tracking the Euro, expect rangebound moves globally & our own markets should see some more optimism with prices/stocks seeking higher levels.

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Factors to watch:

Rupee to stop falling? Progress of rains/US storm impact on Oil Prices. Low Bond yields expecting out of turn action by RBI? Volatility ahead of F&O expiry. Government Rejig: Who will be the FM? Nifty support @ 5070 & resistance @ 5240.

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