Financial focus Weekly Newsletter InFINeeti ISSUE 3
VOLU ME 1
20 13
TOP STORIES….…........1 MARKET ACTIVTY ECONOMICS
….....2
........ …... 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
TWIN SHOCKER: IIP CONTRACTS BY -1.6%, CPI AT 9.87% Industrial production unexpectedly contracted by 1.6% in May from a year
earlier vs 2.1% in April, with manufacturing sector shrinking 2% from a year earlier & capital goods production contracting 2.7% in May from a year earlier. CPI inflation on the other hand picked up in June to 9.87%, after slowing for 3 straight months. Food prices for consumers rose an annual 11.84% in June, faster than an annual rise of 10.65% in May.
GOLD CURBS AID TRADE DEFICIT NARROW IN JUNE FROM 7-MTH HIGH India's trade deficit narrowed in June to USD 12.24 billion from a 7-month high, helped by a slowdown in gold imports, which should ease pressure on the current account balance and the beleaguered rupee. To tamp down gold demand, Indian authorities last month took a slew of measures including a 2 percentage point hike in import duty. Those measures appear to have worked as the growth in gold and silver imports slowed to 22.8 percent year -on-year at USD 2.45 billion last month.
JUNE CAR SALES DIP 9%; SIAM SEEKS STIMULUS Domestic car sales fell for a record eighth month in row in June with a dip of 9% as economic slowdown and low consumer sentiments continue to hit demand, prompting the industry body SIAM to seek stimulus package for the automobile sector from the Government. According to the data released by the Society of Indian Automobile Manufacturers (SIAM), motorcycle sales in last month declined by 9.16 percent to 7,99,139 units from 8,79,721 units in the same month previous year.
Financial focus Weekly Newsletter InFINeeti
TOP STORIES : WORLD
BERNANKE EMPHASIZES U.S. FED MESSAGE OF CONTINUED STIMULUS Speaking shortly after the U.S. Federal Reserve released minutes of its latest policy meeting Wednesday, Chairman Ben Bernanke reinforced the impression that the Fed will be sticking with its bond-buying program for a while. "Highly accommodative monetary policy for the foreseeable future is what's needed in the U.S. economy," Bernanke said.
CHINA EXPORTS SLUMP TO 44-MONTH LOW IN JUNE China's exports in June were down 3.1% from a year before, raising fresh concerns about the nation's economy and possibly derailing Beijing's goal of 8% export growth for the year. The latest figure combined with a 0.7% decline in imports yielded a trade surplus for the month of US$27.13 billion, down 14% from a year earlier.
ECONOMISTS SEE NO FURTHER EASING BY BANK OF JAPAN THIS YEAR Economists are citing the risk of inflation and reversing their previous forecasts, predicting no additional easing by the Bank of Japan this year. "The BOJ is very reluctant to take any small steps. They are going to hold firm for a while unless something really big happens that forces them to change their price outlook," said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.
MARKET ACTIVITY ASIAN-PACIFIC MARKETS MIXED AMID CAUTION ABOUT CHINA'S GDP DATA
Asian-Pacific markets were mixed Friday as investors edged away from risk, awaiting next week's data on growth of China's economy. Japan's Nikkei 225 and Australia's S&P/ASX 200 each edged up 0.2%. Hong Kong's Hang Seng Index slid 0.8%. China's Shanghai Composite dropped 1.6%. South Korea's Kospi fell 0.4%. India's Sensex was up 1%.
NIFTY RECLAIMS 6000 ON TRADE DEFICIT FALL; INFOSYS UP 11% The index rose 73.90 points or 1.25 percent to finish at 6009, continuing its uptrend for the second consecutive session. The BSE Sensex advanced 282.41 points or 1.44 percent to end at 19958.47 after hitting an intraday high of 19991.94. Infosys, the second largest software services exporter, beat the street with the consolidated net profit growing higher-thanexpected 0.8 percent sequentially to Rs 2374 crore as against analysts’ expectations of Rs 2315 crore, helped by new deal wins.
Financial focus Weekly Newsletter InFINeeti RUPEE SNAPS NINE-WEEK LOSING STREAK; RBI TO THE RESCUE
The rupee rebounded in late trade on Friday boosted by dollar selling by state-run banks, likely on behalf of the Reserve Bank of India, which helped the local unit snap a nine-week losing streak. The rupee gained 1.1 percent on the week on the back of intermittent dollar selling by the central bank through the week and dovish comments from the Federal Reserve chief on monetary stimulus on Wednesday.
ECONOMICS
BRAZIL BOOSTS BENCHMARK INTEREST RATE TO 8.5% Responding to a six-month inflation rate that hit 3.15% last month, Brazil's central bank raised its key interest rate from 8% to 8.5%. The increase is likely to move interest rates higher and in turn reduce consumer spending, an important part of Brazil's economy.
ANALYSIS: INTERNET STARTUPS BLOSSOM ACROSS MIDDLE EAST In Amman, Jordan; Dubai, United Arab Emirates; and Riyadh, Saudi Arabia, as well as Beirut, Cairo and Gaza City, energetic tech entrepreneurs are launching innovative businesses, creating what some are calling a "startup spring," according to The Economist. "Most of these young firms will not make it, but for those that survive a bright future beckons," the magazine says. "Although the Arab world is behind other regions in internet use ... it is catching up fast, along with smartphone penetration and e-commerce."
AUSTRALIAN JOBLESS RATES RISES; PRIME MINISTER OUTLINES NEW ECONOMIC FOCUS With Australia's unemployment rate rising to 5.7%, Prime Minister Kevin Rudd declared the resources boom that sustained the economy through the global economic crisis over. The challenge now, Rudd said, is to revive Australian competitiveness globally with a national strategy of job-market flexibility, less corporate regulation and investment in infrastructure and skill development.
DID YOU KNOW? None of the Indian Banks operate in Pakistan. Recently, both the countries have agreed to allow two banks from each country, to operate in other country. State Bank of India and Bank of India are allowed to operate in Pakistan. They are yet to start the operation. Similarly, National Bank of Pakistan and privately owned United Bank Ltd. are expected to start their operations in India.
Financial focus Weekly Newsletter InFINeeti
Financial focus Weekly Newsletter InFINeeti
Avneet’s Call
Maurti Suzuki Period
CMP
1 week
1447.95
Call Sell
Target 1390
Stop Loss 1501
DCB Period
CMP
1 week
52.25
Call Buy
Target 55.45
Stop Loss 48
Strides Arcolab Period
CMP
1 week
771.85
Call Buy
Target 815
Stop Loss 725
The car sales in India fell for a record eighth month in row in June with a dip of 9 percent, market leader Maruti Suzuki India posted 8.17 percent decline in domestic sales. With inflation at 9.87% vs 9.31% there would be no rate cut by RBI. The stock also closed below 200-Day Moving Average of 1499.74 and we believe there is more weakness in the sector and would recommend a sell target at around 1390 for the coming week. The stock has broken the previous level of 51.69 after closing at 52.25 on Friday. With 12 day moving average above 9 day average and RSI at around 67, the stock is showing a great positive mood. Q1 result of banks has started on positive note, with the result coming on 16 July. We expect a positive move even though the markets would remain choppy. The stock has corrected in this last one week for the reason that FIPB has not given clearance to Mylan for acquiring Agila Specialties. They had FIIs holding of about 46 % and the company has recently raised this limit from 49% to 74 percent just last week for which they will be seeking the permission from the RBI. With RSI around 34 and even though the price is below 10 day moving average, we expect a target of 815-820.
Financial focus Weekly Newsletter InFINeeti
Bhushan’s Call
Mahindra & Mahindra Period
CMP
Call
Target
1 week
905.6
Sell
870
Stop Loss 920
IGL Period
CMP
1 week
289.10
Call Buy
Target 310
Stop Loss 279
IDFC Period
CMP
1 week
135.30
Call Buy
Target 145
Stop Loss 129
M&M has closed below its 200-Day moving average of 913.75 on Jul 12. Slowdown in the economy and lower consumer sentiments, have adversely affected sales making big players to make adjustments in production operations. M&M experienced 8% decline in sales in the month of June 2013. Even when the NIFTY ended above 6000 on Friday, M&M was down by 1% showing weakness. Huge selling volumes and high increase in open interest in F&O on the short side confirm the bearish trend.
IGL had been trading in the 260-280 range for a while now, and the range has been broken on the upside amid high volumes on Friday. The IGL-PNGRB hearing on 16 July is the major trigger for this stock, if SC upholds the decision of high court which was in IGL’s favor. If it breaks the hurdle of 292 with high volumes, then bullish trend would be confirmed.
(Purely Technical Call) IDFC has closed above its 20 DMA of 132.13 on Friday. The daily and weekly charts are showing a bullish pattern formation ( Morning star followed by a gap-up opening candle formation), and also with huge increase in volumes. The change in open interest in F&O though has decreased on the long side. RSI is closer to overbought levels of 70, but if the market continues upward momentum, it might be able to break upwards above 140 (Trade with a strict Stop Loss in this case—High risk trade coupled with high return)
Avneet Bulania 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