Daily Equity Report (26 JUN 2012)

Highlights Indian market

Indian equity markets down 0.61%. Nifty down 31.40 pts and settle at 5114.65. Sensex was down 90.35 pts at 16882.16. Bank Nifty down 161.75 pts at 9870.00.

Global market
European markets were down with FTSE down by 32.71 pts at 5480.98, CAC down by 53.92 pts at 3036.98 and DAX down 97.05 pts at 6166.20. Dow future down 91 pts at 12477.00. USD Building permits is 0.78M & previous 0.72M

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Market Analysis:

Snapping the three-day rally, the benchmark Index of the Bombay Stock Exchange (BSE) today ended below 17K to 16,972.51, declining by 60.05 points on profit booking by local operators and a sliding Rupee.The Nifty of National Stock Exchange (NSE) fell by 18.95 points to 5,146.05. High volatility was witnessed during the day. the Sensex slipped by 92.14 points in the opening session. Later, it lost ground by nearly by 224.76 points to 16,807.80, the day's low figure, after the rupee slumped to an all-time low against the dollar as foreign investors shunned risky assets and month-end demand for the greenback from Indian refiners for oil imports. At the end of the session, it finished at 16,972.51, fell by 60.05 points from its last close.The Sensex registered the day's high and low at 17,016.06 points and 16,807.80 points respectively. The Nifty recorded the day's high and low at 5159.80 and 5094.00 respectively. In the sectoral indices, Metal, Capital Goods, Technology, IT, FMCG, bankex and Consumer durable were seen under pressure. However, Realty, Auto and Power stocks maintained its positive trend intact for the second day today. Hindalco Industries was the major loser, down by 3.34 pc to Rs 117.25. Other scrips also dipped including Reliance, SBI, L&T, Tata Steel and HDFC. Weakness in global stocks also weighed on the sentiment. Bank stocks were mixed. IT stocks were mostly lower on weak US economic data. Shares of public sector oil marketing companies (PSU OMCs) were mixed. Auto stocks were mixed. Metal shares declined as weak manufacturing reports from around the world hit global commodity prices hard today.

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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 25-Jun-2012 25-Jun-2012

BUY 1404.14 773.18

SELL 1251.04 747.00

NET 153.10 26.18

NIFTY Daily pivots

Pivot Nifty

R4 R3 R2 R1 PP S1 S2 S3 S4 5450.90 5346.20 5241.50 5175.40 5136.80 5070.70 5032.10 4927.40 4822.7

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Daily Nifty Gainers

COMPANY
Cairn India Maruti Suzuki GAIL India Reliance Ind. HDFC

CURR.RATE
329.9 1113.9 343.65 716.2 644

VOL(000)
2057.92 910.24 1426.2 2540.45 2475.98

PREV.CL
326.1 1102.1 340.6 711 640.05

NET CHANGE
3.8 11.8 3.05 5.2 3.95

CHANGE%
1.17 1.07 0.9 0.73 0.62

Daily Nifty Losers

COMPANY
Hero Moto Corp ONGC JP Associate Cipla Grasim Ind.

CURR.RATE
2030.8 272.6 69.55 306.25 2469.45

VOL(000)
291.07 1744.05 15414.15 744.63 56.77

PREV.CL
2086.1 279.5 71.3 313.75 2526.7

NET CHANGE
-55.3 -6.9 -1.75 -7.5 -57.25

CHANGE%
-2.65 -2.47 -2.45 -2.39 -2.27

Stock in ban period

ABAN ABGSHIP COREEDUTECV ORCHID CHEM SUZLON

Stocks to watch
AMBUJA IDFC M&M L&T RELIANCE CAP.

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Nifty Daily Chart

INDEX Nifty

Open 5148.90

High 5202.90

Low

Close

Change

5098.20 5109.30 41.85

ANALYSIS:
Nifty looks bearish Strategy: Sell on rise
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Bank Nifty Daily Chart

INDEX

Open

High

Low

Close

Change % change

BankNifty 10050.10 10188

9867.20 9901.50 130.25 1.30

ANALYSIS
Bank Nifty looks bearish Strategy: Sell on rise

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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 smart 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 range bound 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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