Financial focus Weekly Newsletter InFINeeti ISSUE 9
VOLU ME 3
20 13
TOP STORIES….…........1 MARKET ACTIVTY ECONOMICS
….....2
....... …... 3
TERM OF THE WEEK
….4
STOCK CALLS ……...….5
Financial focus
A one stop guide to know about all the recent happenings in the finance world
TOP STORIES : INDIA
Q1 GDP SHOCKER: SLOWEST IN 4 YEARS AT 4.4% Q1 GDP came at 4.4% vs 5.4% (YoY), below street expectation of 4.7%. Agricultural growth, on which economists had pinned a lot of hope, came in at 2.7% & industrial growth recorded a dismal 0.2% growth vs 1.8% (YoY). Services sector grew in line with expectation at 6.6%. Trade & hotel sector grew at 3.9%, while financing, insurance and business services grew at 8.9% during the first quarter.
LAND BILL, A RETROGRADE STEP: INDUSTRY India inc is concerned that the land acquisition bill could have "adverse consequences" on the country's industrial & infrastructural development. In a statement, FICCI said the Bill may make key factor of production for manufacturing scarce and expensive. CII also said the industry has serious concerns over the Bill as it may increase the cost of land acquisition by 3-3.5 times, making industrial projects unviable.
NO CAPITAL CONTROLS TO ANCHOR RUPEE: PM The PM said rupee's tumble was a "matter of concern", but part of a needed adjustment, given our large current account deficit, & would boost exports. He also said the medium term objective would be to reduce CAD to 2.5% of GDP. The PM said once again that 1991 crisis will not be repeated and sub-3% GDP is very far from happening. Markets & rupee reacted positively to the PM's assurances.
Financial focus Weekly Newsletter InFINeeti
TOP STORIES : WORLD
U.S. REPORTEDLY SEEKS ADVICE ON OIL IMPACT OF SYRIAN ATTACK U.S. officials have been discussing with energy experts likely oil-market consequences of a military attack on Syria, sources say. So far, the U.S. isn't considering a release from the Strategic Petroleum Reserve to hold down prices. Concern that Syria's civil war will spread to neighbors has driven oil prices to their highest level in six months.
DETROIT AIMS TO TERMINATE SWAPS DEAL WITH BORROWED $350M Detroit is expected to issue a request for proposals to borrow $350 million, which would be used to end a complicated swaps deal, the city's emergency manager said. "Our goal is to fund the swap settlement and provide the city with adequate liquidity throughout the restructuring case to start reinvesting in Detroit," said Bill Nowling, press secretary for Emergency Manager Kevyn Orr.
BRAZIL BOOSTS KEY INTEREST RATE IN BID TO COOL INFLATION The monetary policy committee of Brazil's central bank voted unanimously to raise its benchmark Selic interest rate to 9% from 8.5%. The committee said it may boost the rate further in the future. The rate hike was intended to "contribute to [putting] inflation on a decline and assure that this trend will persist next year," the committee said in a statement
MARKET ACTIVITY
ASIAN-PACIFIC MARKETS UP MODESTLY AMID WORRIES OVER SYRIA Major Asian-Pacific markets were mostly positive Friday, but the possibility of a U.S. military strike in Syria blunted investors' appetite for risk. Japan's Nikkei 225 fell 0.5%. Hong Kong's Hang Seng Index gained 0.1%. Australia's S&P/ASX 200 rose 0.8%. China's Shanghai Composite edged up 0.1%. South Korea's Kospi gained 1%. India's Sensex was up 1.2%.
SENSEX UP 219 PTS ON SHORT COVERING; BANK, IT STOCKS UP Sensex surged 624 pts in 2 days. It closed at 18619.72 on last Friday, Nifty at 5471.80 as HDFC Bank rose 3.8%, HUL up 4% & TCS rose 4.4%. It was a great beginning for September series as the market rallied more than one percent amid volatility Friday, continuing upward journey for the second consecutive session on short covering and recovery in rupee
Financial focus Weekly Newsletter InFINeeti
FISCAL DEFICIT REACHES NEARLY 63 PCT OF FULLYEAR TARGET - GOVT
India's fiscal deficit during the April-July period was 3.41 trillion rupees, or 62.8 percent of the full-year target, government data showed on Friday. Net tax receipts for the first four months of the current fiscal year to March 2014 touched 1.45 trillion rupees, while total expenditure was 5.21 trillion rupees.
ECONOMICS
ONLINE SERVICES ARE SET TO CHALLENGE TRADITIONAL ADVISERS Technology firms that are also registered investment advisers are preparing to launch Internet services that will compete with traditional financial advisers for retail investors' business. Since January, venture capital investors have put $215 million into companies that provide online financial advice, says Grant Easterbrook, an analyst at Corporate Insight.
SOUTH KOREA POSTS 18TH MONTH OF CURRENTACCOUNT SURPLUS; BOND ISSUE ANNOUNCED South Korea reported its 18th consecutive month of current-account surplus in July at US$6.7 billion, bringing the surplus for the first seven months to US$36.5 billion. Separately, the Finance Ministry announced it would issue US$6.2 billion worth of state bonds in September.
ANALYSIS: CENTRAL BANKS NEED TO BECOME MORE PREDICTABLE Central banks have left financial markets bewildered in their quest to be flexible in handling economic problems. The situation leaves market participants trying to determine central banks' priorities, according to The Economist. "Resolving these tensions may demand sacrificing some flexibility for the certainty that more binding commitments provides," the magazine notes.
DID YOU KNOW? World Bank publishes an index called ‘Ease of doing business’ index. The index reflects the business climate in a country and is closely followed by investors across the world. The index is based on the study of laws and regulations affecting business in 185 economies. Some of the areas considered include starting a business, paying taxes, getting credit etc. India ranks 132nd amongst 185 economies, in 2013. It is also ranked the lowest among BRIC nations.
Financial focus Weekly Newsletter InFINeeti
Source : FLIP
Financial focus Weekly Newsletter InFINeeti
Avneet’s Call
Jubilant Foodworks Period
CMP
Call
Target
1 week
1005
Sell
960
Stop Loss 1060
Strides Arcolab Period
CMP
Call
Target
1 week
873.85
Sell
800
Stop Loss 920
HDFC Bank Period
CMP
1 week
594
Call
Target
Sell
550
Stop Loss 612
The stock closed below its 10 day moving average last Friday. The stock is currently in downtrend and with the economy slowing down, there would be more pressure on the stock. With RSI close to 34 and the stock also broke a major support level of 1040.
The stock is currently in overbought zone. All the positives have been factored in of the Mylan deal. The stock was unable to break the 900 level and with RSI at 60 ( overbought ), the stock is bound to go downward before any upward move.
The stock is trading above its 10 day moving average volume after the recent rally. The stock is currently at its resistance level, if it closes above this there would be a positive rally. But since there has been no change in the market sentiment, there is bound to be a more downward rally in banking stocks. And we expect HDFC bank to underperform the markets.
Bhushan’s Call
Cipla Period
CMP
1 week
416.95
Call Buy
Target 428
Stop Loss 410
Adani Enterprises Period
CMP
1 week
141.50
Call
Target
Sell
135
Stop Loss 146
Cipla has formed a very big engulfing candle last Friday, after some consolidation in 380-400 range for past few days. The closing price (416.95) is also above the Parabolic SAR price of 410. The MACD is on the verge of crossover in Daily Charts and the Accumulation is also increasing in the counter giving the sense of strong uptrend from these levels.
Adani Enterprises Ltd has broken its very strong historic support level of 151 with high volumes, and it is nearly at its 3-yr lowest levels. An ADX above 40 suggests that the downtrend is still strong, with bears in control. The nest immediate support is at 138.6, breaking which it can go to more lower levels till 120. Its historic support of 151 has now become its resistance level. In F&O section too, there was a build up of huge OI of 24% yesterday on downside amid high volumes.
Financial focus Weekly Newsletter InFINeeti
Mahindra & Mahindra Period
CMP
1 week
783.25
Call
Target
Sell
760
Stop Loss 800
M&M has formed a Piercing Bearish Pattern on daily charts. The hiking of Diesel Price is also a negative for the company, in the already slowing consumer demand. The Weekly MACD line signifies the continuation of the bearish trend for this company. The Accumulation has been decreasing in the counter & in F&O space too there has been a huge build up on the downside. The support levels are at 774 & 752 for this stock in short term.
Avneet Bhulania and Bhushan Kanathe are 2nd year students of IIFT (Kolkata campus) Disclaimer : InFINeeti and IIFT do not take any responsibility regarding the authenticity of above calls. Please consult your financial advisor before taking any investment decisions
InFINeeti Team Aakanksha Hajela | Bhushan Kanathe| Kunal Maheshwari| Vaibhav Garg| Md. Umair Ansari