Financial focus Weekly Newsletter InFINeeti ISSUE 2
VOLUME 1
2013
TOP STORIES…….…....1 MARKET ACTIVTY ….... 2 ECONOMICS …………... 3 TERM OF THE WEEK … 4 TRADING CALLS……… .5
Financial focus
A one stop guide to know about all the recent happenings in the finance world
TOP STORIES : INDIA
CABINET CLEARS ORDINANCE ON FOOD SECURITY Impatient over the delay in arriving at a consensus over the proposed food security law with other parties, the govt decided to promulgate an ordinance to implement the Food Security Bill. However it will still need to be passed in both houses of Parliament before it can be made into law. The Ordinance, which will guarantee 5 kg of rice, wheat and coarse cereals per month per person at a fixed price of Rs. 3, 2, 1 per kg, respectively, will come into effect after President Pranab Mukherjee signs it
TELECOM COMMISSION APPROVES 100% FDI IN TELECOM SECTOR Telecom commission approved hiking FDI limit from 74% to 100%. A cabinet note to be released soon. Telcos hail the move & says it will benefit the sector. “The telecom sector in India needs additional funds in the next few years to stay current with emerging technologies, increase offerings and improve penetration. Debt or local investments alone will not be enough “
INDIA INC REVENUE LIKELY TO GROW 5-6% IN Q1: CRISIL "India Inc's revenues excluding banks and oil & gas companies are likely to grow at 5-6% (y-o-y) in the April-June 2013 (Q1, FY'14). While this is only a marginal improvement, at least the sharp drop witnessed over the last five quarters is expected to be curtailed. Operating margins, however, are likely to remain stable in Q1, 2013-14 at 18.5% " CRISIL said
Financial focus Weekly Newsletter InFINeeti
TOP STORIES : WORLD
US JOBS GROWTH STRONGER THAN EXPECTED IN JUNE U.S. job growth was stronger than expected in June and the payroll gains for the prior two months were revised higher, cementing expectations for the Federal Reserve to start winding down its massive stimulus program as early as September. Employers added 195,000 new jobs to their payrolls last month, the Labor Department said on Friday, while the unemployment rate held steady at 7.6 percent as more people entered the workforce
ECB MAKES UNPRECEDENTED COMMITMENT TO HOLD DOWN INTEREST RATES For the first time in its history, the European Central Bank gave public guidance on the direction of its monetary policy. The bank's 23-member governing council said it is committed to holding interest rates at or below current levels "for an extended period of time." In the past, the ECB has avoided "pre-committing" to policies
CHINA
MANUFACTURING
SLOWS
IN
JUNE
Two manufacturing indexes for China showed a marked falloff in activity for June, with the official purchasing managers index easing to just above the neutral mark at 50.1 and an HSBC/Market index at 48.2. The figures are in line with other indicators of a slowing economy as the new government focuses more on restraining credit growth and the real estate market
MARKET ACTIVITY
INTERNATIONAL MARKETS OVERVIEW A new flare-up in the Eurozone crisis with the Portuguese government suddenly on shaky ground and a spike in the nation's bond yields helped push European stocks lower Wednesday, with the Stoxx Europe 600 dropping 0.58% to 285.46. U.S. investors hesitated through much of the day, but the market managed to shake off global worries for a modest 0.08% gain in the S&P 500, which closed at 1,615.41 (June 4)
BSE SENSEX ENDS 85 PTS HIGHER; ITC,HUL SHARES SOAR; OIL & GAS LEADS, IT DRAGS Sensex closed at 19495.82, Nifty at 5867.90 as ITC rose 1.2 % & Hindustan Unilever rose 1.3% after Unilever increased stake in the Indian unit. The BSE Sensex rose 84.98 points or 0.44 percent ,continuing gains for the second consecutive session today. The index rallied more than 300 points in two days, tracking global cues after the European Central Bank (ECB) declared it would keep interest rates at record lows for an extended period and may even cut further
Financial focus Weekly Newsletter InFINeeti
RBI CRACKS DOWN ON FOREX SPECULATIVE TRADING Concerned about the rupee's fall to a record low, the Reserve Bank has discreetly phoned trading desks with unusually explicit messages to cut their speculative positions in the currency, said three senior market participants with direct knowledge of such calls
ECONOMICS
JAPAN POSTS 4TH MONTH OF RECORD-HIGH MONETARY BASE Japan's monetary base soared more than 34% from a year before to a record ¥173.12 trillion in June, the fourth straight month of record highs. The new figure, up 8.8% from May, came as Japan continued to try to escape the grip of deflation
CHINA LENDING SEEN FALLING IN JUNE, BUT REAL ESTATE BORROWING REMAINS HIGH Chinese bank lending may have slowed in June, to about 800 billion Yuan, down from 900 billion Yuan a year earlier, according to an estimated by Economic Information Daily. The data also pointed to local governments and real estate developers as the biggest borrowers in June. "The condition ... needs to be closely watched, especially in several shareholding lenders, because it is both unsustainable and risky," one source said
DRAGHI BLAMES PUBLIC FINANCES FOR HOLDING BACK EURO Unsound public finances are part of the reason the euro's use in global markets has declined, European Central Bank President Mario Draghi says. "In 2012 the euro-area sovereign debt crisis continued to weigh on the international use of the euro, which declined moderately in some market segments," Draghi wrote in a report. "The persistent fragmentation of the euro-area financial system is one of the main underlying causes of these developments, as it affects the depth and liquidity of euro-area capital markets."
DID YOU KNOW? According to the World Gold Council the global demand for gold fell 13% to its lowest in 3 years, in the quarter ended March 2013.For the March quarter, global gold demand was 963 tonnes The figure for similar period last year was 1107.5 tonnes. This is despite the increase in buying from emerging economies like India & China
Financial focus Weekly Newsletter InFINeeti
Financial focus Weekly Newsletter InFINeeti
Avneet’s Call
Indraprastha Gas Ltd Period
CMP
1 week 278.80
Call
Target
Stop Loss
Buy
300
260
The verdict between IGL vs PNGRB court case is coming on 16 July, and with IGL already having the upper hand in court case, IGL looks to make a move this week (With RSI at 50 and MACD 12 day above 9 day moving average). And if the verdict comes out in favour of IGL, the share would break past the weekly target of Rs. 300.
With the share price breaking the first Fibonacci retracements level of 38.2 %, and RSI at around 68 the share looks to break the current level of 1130 for the next target of 1170.
Jubilant Foodworks Period
CMP
1 week 1130.95
Call
Target
Stop Loss
Buy
1260
1060
Power Finance Corp Ltd Period
CMP
Call
Target
1 week
137.95
Buy
140
Stop Loss 130
The RSI at 30 and MACD at all time low and with the share price at year low of Rs. 137, the share has already beaten down. We see it as an opportunity to enter the stock at current level for a target of 140.
Financial focus Weekly Newsletter InFINeeti
Bhushan’s Call
Sun Pharma Ltd Period
CMP
Call
Target
Stop Loss
1 week
1036
Buy
1080
990
Wipro Ltd Period
CMP
Call
Target
Stop Loss
1 week
351
Buy
365
345
DLF Period
CMP
Call
Target
Stop Loss
1 week
177.35
Sell
165
182
Sun Pharma has been forming higher tops and higher bottoms from quite some time now. The defensive sectors are the safest bet in such volatile market conditions. The stock went through minor correction last month, and consolidation last week, and is ready to breakout at higher prices. Buy around 1010-1020 levels. With depreciating rupee it is expected to post good Q1 2014 numbers.
Wipro has closed above 50-Day Moving Average of 344.31 on Friday. Also with the probability of rupee further sliding down after it closed above the psychological level of Rs 60/$ would assist in increasing the Q1 EPS of the IT firms. The 20 day Moving average has just crossed the 50 day moving average from below supporting bullish pattern formation.
DLF has formed a bearish engulfing candlestick pattern on daily charts. The weekly charts are also bearish. The real estate stocks has been witnessing some pressure in the recent sell-offs in the markets. The stock could not sustain above 180 levels in the recent market up-move, and was not able to break the strong resistance level of 188. There may be more downside left in the stock in case the NIFTY breaks below 5800 levels.
Avneet and Bhushan are 2nd year students of IIFT (Kolkata) Disclaimer: InFINeeti does not take any responsibility regarding the authentication 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