Weekly Market Analysis (28 June - 2 July)

Dear All,
Benchmark Indices Nifty & Sensex both closed absolutely flat on a WoW basis last week in what was a eventful week. Markets witnessed a range-bound movement throughout the week admist choppy movements.

Globally,

Earlier Last week, contrary to world expectation, China unlocked the value of Yuan & announced a Flexible Yuan policy thereby allowing it to appreciate in value. This bought about a buoyant mood in the world market at the beginning of the week.

Fed policy makers left the overnight interbank lending rate target unchanged in a range of zero to 0.25 percent. Fed echoed that low inflation, stable price expectations and high unemployment “are likely to
warrant exceptionally low levels of the federal funds rate for an extended period.”

For the week ended 25th June 2010,

Change in Global Markets:
US markets: 3-4 % down
European Markets: FTSE down 3.8%, CAC down 4.54% & DAX down 2.35%.
Asian Markets: HangSeng up 2.1%, Shanghai up 2%, Nikkei down 2.58%, Kospi up 1%.

In our Markets Last Week,
Sectors such as Oil & Gas, Realty & FMCG outperformed the indices while IT & Banking sector witnessed deep cuts.
OMC stocks gained anywhere between 10-15% on Friday itself. Stocks such as ONGC & Sun-Pharma gained approx 5-6%. While RCom, HUL & Maruti gained 3-5% on an weekly basis. IT majors faced selling pressure & were down between 3-4% each. Banking Stocks were the hardest hit with SBI & HDFC Bank facing cuts between 2-4%.
Much awaited OMC policy was announced by Government on Friday. It caused the Oil & Gas sector to outperform all the other indices by leaps & bounds. Public sector oil marketing companies (OMC) surged the most after petrol prices were increased by Rs 3.50 a litre and diesel price by Rs 2 a litre, as part of a plan to move towards a market-determined fuel price regime. OMC stocks may even see an earnings upgrade by 20-25% based on the policy itself. Under-recoveries of oil marketing companies for the financial year without this decision were estimated at Rs 72,000 crore . This decision will help bring it down by about Rs 21,000 crore to Rs 53,000 crore. This (Rs 53,000 crore) will be borne by the government and upstream oil companies.
Fundamentally, Automobile & Banking Sector will be the hardest hit sectors as Rising Fuel prices may dampen Sales demand & Rise in Inflation due to rise in fuel prices may prompt the RBI to take some action on the Interest Rate front. Fuel Price rise may have an approx impact of 90-100 bps on WPI index. This policy may also put pressure on the Bond Markets.
Automobile & Cement Stocks would see some action as companies will announce June Sales volume data in early July 2010. Even Progress of the monsoon will also be closely watched.

Last Week,
Nifty opened positive on the back of Positive opening of its Asian peers due to Chinese flexible Yuan Policy news. But ended the week near its weekly low on the back of profit-booking post OMC policy announcements.

Nifty Future Analysis :
PCR is 1.49 indicating mild bearish sentiment. Options Concentration for the week has shifted to 5200 Strike Put option & 5400 Strike Call option indicationg the possible range of 5200-5400 for Nifty.
Nifty Fut has immediate support at 5244. If breaches & sustains below it, will fall upto 5176 & 5129.
On the other hand, Nifty Future faces critical resistance in the zone of 5339-5359. Above which levels of 5398/5435 are achievable

Regards,
Team Market View Investments.

Nifty View (25/06/2010)

Nifty Fut CMP 5282. If does not break 5265, will bounce back upto 5315 & 5339.

Nifty Levels (24/06/2010)

Nifty June Fut Kisses below 5300. 5346 to CMP 5294... Now if reaches 5289 & sustains below it, it will fall all the way upto 5249. If not bounce back possible...

Nifty View (23/06/2010)

Nifty is on weakish note. It May slide further upto 5279 & 5249 if 5303 is breached & sustain below it. Use yesterday's Revised SL 5326 to hold shorts

Nifty View (22/06/2010)

Nifty STBT 5360 to 5330. Book partial & Revise SL to 5349.

Going Forward,
Nifty can slide upto 5320-5316.
If it holds 5312, may bounce back upto 5380/5415.
Below 5312, It may well fall upto 5279

Weekly Market Analysis (21/06/2010 to 25/06/2010)

Profit Booking Likely at Higher Levels

Last Week, Both Sensex & Nifty advanced 2.96% & 2.79% respectively for the week backed by the higher Advance Tax paid by the Front Line Companies for the First Quarter Ended June 2010 & Rally in global markets. Advance tax collections were higher by 35-40% in some cases whereas average rise is 20%.

Globally,
Rally in Global Stocks was aided on account of the easing of the Euro Zone Debt worries after a successful Spanish Government Bond Auction on Thursday.

For the Week ended 18th June 2010,
Change in Global Markets:
US markets: + 2.5-3 %
European Markets: FTSE up 1.8%, CAC up 3.71% & DAX up 2.79%.
Asian Markets: HangSeng up 2.1%, Nikkei up 3%, Kospi up 2.14%, Taiwan up 4%.
Euro registered its strongest weekly gain since September 2009 rising from 1.2112 to 1.2388.


In our Markets Last Week,

IT, Capital Goods, Realty & FMCG sectors were the out performers. While Metal & Oil Gas Stocks Once again proved to be draggers. Cuts in Oil & Gas Stocks were on account of the postponement of EGOM (Empowered group of Ministers) meeting with respect to Free Fuel Pricing as some Ministers within the group being against any kind of Price Hike.

Markets cheered the news regarding Global rating agency FITCH Ratings raising India’s Local Currency rating to Stable from Negative. It even upgraded India’s Growth Forecasts to 8.5% from its earlier forecast of 7%.

WPI based Inflation rose by 10.16% in May vs 9.59% in April. RBI is maintaining a liberal stance on raising the Interest rates. It can be observed by the speed with which the rates where cut during 2008-2009 due to the liquidity crisis (Sub-Prime) & despite the World Economy & Indian Economy rebounding and showing signs of growth & exuberance, RBI is not raising the growth rate with the same speed or not even bringing the rates back to normal as were before the crisis.

DTC draft 2.0 was announced earlier last week. It proposes to Taxing gains from investment in Stock Markets & also Equity Linked MF units at the applicable rate of taxation. DTC 2.0 states that the STT will stay & rates will be calibrated. In first draft DTC unveiled last year Government proposed to scrap STT. DTC also proposes to tax income on Foreign funds treating all incomes from their investments in the Stock Market in India as Capital Gains.

RIL AGM fails to cheer the markets as shares of RIL & ADAG pack fell after Mukesh Ambani gave no details of reconciliation between the two brothers at the AGM. Expectations were so unrealistic & high, the outcome of the AGM failed to cheer the markets & as a result of which RIL slipped approx 3.5-4% from the day high. Even ADAG goups stocks were battered with RNRL & RelCap slipping 7-8% & 4% respectively.

Last Week,
Nifty Future crossing 5176 went upto 5297.
On Thursday Nifty Fut made a high of 5297 & Friday 5296.8.
We feel the current upside of the rally is capped. But there can be stock specific activities going ahead as the small caps & mid-caps still have some catching up.

If Nifty fails to cross 5298-5320, We can see a slide upto 5179. Below 5168, Levels of 5080/5063 can be seen.
If Nifty crosses & sustains above 5320, will move upto 5394/5438.
Be cautious in all Long Positions ahead of expiry.

Nifty Fut shorted at highs of 5290 with SL 5320. Booked partially at 5250 on Friday.
Risk-Takers can again short at highs of 5290-5295 with 5320 SL.

Regards,
Team Market View Investments.
9987750901

Nifty Levels (18/06/2010)

Nifty Future will find support at 5246 & 5218.
Upper Resistance will be capped at 5288 & 5307

Positional Nifty View - 17/06/2010

Dear All,
After a roller coaster ride from 5056 to 5297,
Nifty CMP : 5288/5290...
We feel the current upside of the rally is capped.
This may be the end of the rally. Prefer booking Longs at all rises.
There can be some stock-specific activities going ahead as the mid-caps & small-cap still have some catching up..Though Index may remain stagnant with a downward bias.
Nifty will face tremendous selling pressure from 5298-5319 area.
Be cautious in all Long positions ahead of expiry.
Only High Risk Takers Can go short with 5320 SL

Regards,
Team Market View Investments
9987750901

Nifty View (17/06/2010)

Nifty Resistance - 5239 & 5253
Support - 5209 & 5184

We are continuously cautioning everyone about 5248-5253 levels acting
as a stiff resistance.

Again Today 5238 to 5207...Revise SL for positional shorts at 5253.

Sent Yesterday : http://mktviews-nifty50.blogspot.com/2010/06/nifty-view-16062010.html

Nifty View (16/06/2010)

Sent Yesterday : Nifty Fut CMP 5243. If does not cross 5248 today or tomorrow, Expect minimum 5150 & 5060.

Check the post on : http://mktviews-nifty50.blogspot.com/2010/06/nifty-view-15062010.html . Visit the 2nd Last Comment.

Check today's high 5248.7......If it does not break, Expect a good Downside !!!

Nifty View (15/06/2010)

Said yesterday in advance : Nifty Fut CMP 5202. If fails to cross 5219, Will fall....

http://mktviews-nifty50.blogspot.com/2010/06/nifty-view-14062010.html

5202 to 5173. Book partial & Revise SL 5209.

Nifty View (14/06/2010)

Nifty will face critical resistance around 5164-5180 area. If fails to cross that, will fall towards 5126 & 5090

Weekly Market Analysis (14-18 June 2010)

Are we heading for a Double Top Formation ??

Last Week, Nifty & Sensex opened on a negative note on the back of global cues, recovered from the losses during the weak on account of short-covering & closed marginally 0.31% down for the week.

The Hungary/Greece factor has been completely discounted for. Markets may not now pay too much attention to this news unless something of much more serious magnitude props up from the Euro-Zone. Euro crashed to 1.19 vs the Dollar.

Globally,
For the Week ended 11th June, US markets closed approximately 2 – 2.5% higher. Even Europe managed to close in the green backed by the boost given by ECB, China ’s pension Funds & Germany’s court for stabilizing the Euro Zone ( FTSE up 0.74%, CAC up 2.9% & DAX up 1.83% ). Asian Markets also followed the global cues with all of them closing marginally in the green with the exception of Shanghai . Robust Export data from the Chinese markets also lent stability to the global markets.

In our Markets Last week,
IIP grows by 17.6% in April vs 13.5% in March. IIP output grew for the straight 7th Month in a row backed by a strong growth in Capital Goods sector & consumer durables.
Some serious delivery based Selling was witnessed in Real Estate Stocks with Sector heavy-weights like DLF & Unitech witnessing cuts of over 5-6% each.
IT & Metal stocks also proved to be draggers with both index losing over 2.5% each. Metal stocks faced cuts of over 4-5%.
Auto & Pharma Sector Stocks acted as defensive stocks with both index rising over 1.5 to 2 %.

Another important development was RIL entry into the BroadBand Internet market by taking over 95% equity of Broadband Infotel promoted by the Nahata Group for a whopping Rs 4800 crore. Even the payment made by Nahata Group for acquiring Pan – India BWA licence has been paid by RIL.

As already mentioned above about strong IIP nos, Monthly Inflation numbers are also due to be released earlier this week & are expected to be in double digits. This will call for some serious tinkering from the RBI over some policy tightening measures.

Another thing to keep an eye on is the First Installment of the Corporate Advance Tax payment (15th June) which will give us some rough idea about their Q1 2010 performance.

EGOM (Empowered group of Ministers) meeting with respect to Free Fuel Pricing is on 17th June (Thursday) . Hence special attention will be on Oil marketing Cos Stocks.

Again Last week, Nifty Future made a significant bounce back from the lows of 4937.65 upto 5138. But failed to cross that & sustain above that. Even week before last week, Nifty Fut made a high of 5134.9. It might signal a double-top formation.
Even Sensex has formed double tops at 17150 & 17131.

For the coming week,
Nifty Future If crosses & sustains above 5176, will move all the way upto 5280.
But If it fails to do so, it will find support at 5053. If it manages to breach that level & sustain below it, will fall all the way upto 4941. More weakness upto 4816 & 4685 only if 4907 is violated.

Regards,
Team Market View Investments
9987750901.

Ps : Views & Comments on the above Weekly Analysis is welcome. Pls feel free to write in at marketview@ymail.com

Nifty Levels (11/06/2010)

Nifty Fut has support at 5096 & 5063.
Upper Resistance is capped at 5149 & 5176

Nifty View (10/06/2010)

Nifty Fut CMP 5030-5036. Nifty Fut faces a high resistance at 5040-5056.
Expect minimum 4976 & 4925 if 5056 is not broken

Nifty View (09/06/2010)

Nifty Fut CMP 5043 : If fails to cross 5056, We may fall upto 5010 & 4978. Sell with 5056 SL.

Nifty View (08/06/2010)

Nifty Fut CMP 5044. If does not cross 5060, will fall upto 5005 & 4975.

Nifty Levels (07/06/2010)

Nifty Future will find support at 4972 & 4931. Upper Resistance will be capped at 5039 & 5077

Nifty Weekly Analysis

Dear All,

Last Week Nifty ended with Modest gains of 1.36% & Sensex with 1.56% on account of the uncertainity over the progress of monsoons & Ongoing Debt crisis in EuroZone.

Even the possibility of Chinese Economy's moderating growth on account of Manufacturing activities expanding at a slower pace than expected kept a check on the gains of the markets globally.
For the Week ended 4th June, US markets closed approx 2% lower while Europe closed mixed (FTSE & CAC down 1.5% & DAX up 1.88%). All Asian Indices closed in the green only with the exception of Shanghai which closed 4% lower.
Stocks in US plunged around 3.5 % - 4% on friday over weak data & rising concerns over Economic conditions of Hungary.

In our Markets Last week, Telecom Stocks gave a Dead-Cat Bounce virtually off their 52-Week lows. Reliance Communication gained around 14% while Idea 10% & Bharti Airtel also gained 5-6% on a weekly basis . But caution is advised into bottom-fishing into them as they may even break their recent lows & sustain below them as the movements in last entire week were purely speculative on some take-over news in few select stocks. It is better to exit these stocks on every rise & shift the funds into some other better return yielding sectors.
Defensive stock like HUL rallied smartly on buy-back news. Metal Counters continued to face selling pressure & were clearly weak.
Robust GDP data (8.6%) boosted the market sentiment. Even Auto & Cement companies have clocked decent numbers for the month of May.
Government has made a killing by adding 68000 Cr to the revenue bounty on account of 3G Auctions thus helping it to bring down the fiscal deficit in the current fiscal.
Add to it, the revenue from Pan-India bid licence for Broadband Wireless Access Auctions.

On Monday, We have the all important EGOM (Empowered group of Ministers) meeting with respect to Fuel Pricing strategy. Hence special attention will be on Oil marketing Cos Stocks. IIP data for the month of April 2010 will be announced on 11th June i.e Friday.

Last week, Nifty Future made a remarkable comeback from the lows of 4933 upto 5134.9. But it has failed to cross a crucial level of 5137.
An important worrying factor is Lack of volumes & broad-based participation. Even sharp increase in volataility is also witnessed.
We continously stated that Markets are weak as This was only a pullback which has happened after breaking an important support (4816 - Nifty Fut). Even stated that this might just be the end of the Pull-Back rally. We still continue to feel the same.

For the coming week,
Nifty Future If breaks & sustains below 5007, Will fall upto 4935/4917. More weakness upto 4813 & 4684 only if Nifty future breaches 4907 on the downside.
On the other hand, If Nifty Future crosses & sustains above 5076/5080, it will move upto 5146 & 5230.
Nifty Future may trade in a range of 4912 - 5146.

Open Position - Nifty Future Short on friday at 5125 with 5137 SL
Nifty 4900 PE @ 36-38 levels recommended on Friday.


Regards,
Team Market View Investments.
9987750901

Is Hungary the next Greece ?

Today, the Hungarian markets came under pressure after Lajos Kosa, Deputy Head of the ruling Fidesz party compared the situation in Hungary with Greece and said the economy was in a much worse state than expected.

• Adding to the negative sentiment were negative comments regarding the budget situation from Prime Minister Orban and State Secretary, Mihaly Varga. Varga said that he expected a budget deficit 7-7½% of GDP in 2010.

• Overall, Hungarian newsflow is quite concerning and even if the negative rhetoric is ‘just politics’ we advise that more bad news might well be in the pipeline. The comparison with Greece might be ‘overdone’, but one can hardly say that public finances are in good shape in Hungary.

Kosa: “Only a slim chance of avoiding a Greek-style scenario”

This afternoon market participants shocked when Lajos Kosa, Deputy Head of the ruling Fidesz party, said that the state of public finances in Hungary was such that Hungary only had a slim chance of avoiding a Greek-style scenario.
It shouldn’t be a surprise to anyone that such comments spook the markets, especially taking into account that Hungarian policy makers do not have a strong track record of being fiscally conservative. However, the key question from our perspective is whether Kosa’s comments were intended to spur the Hungarian electorate into accepting the Fidesz plans to renege on their election promises to loosen fiscal policy, or whether it was just a politician displaying honesty. From a market perspective, neither option is positive. The conclusions are that either Hungary is dangerously close to default, or that Hungarian policy makers fail to realise that political game-playing can have a seriously negative impact on the market. That said, if this is “just” politics, then the impact for Hungarian markets should be fairly limited in the longer run.

So which of the two is it? The answer is that we simply don’t know. The only established fact is that Hungary is in a very fragile economic situation and public debt levels could veer in a clearly unsustainable direction if measures to improve the budget situation are not passed.

Our view is that this clearly has the potential to develop into a very critical situation for the Hungarian markets – especially if Hungarian policy makers do not take more care in terms of their communication. In that regard, it should be noted that we have been concerned about the new Hungarian government’s verbal attacks on the Hungarian central bank management recently. Such outbursts surely also have the potential to spook investors.

The Hungarian government has said it will soon – likely over the weekend – announce new crisis measures. Such measures could calm nerves in the markets, but on the other hand, if the Hungarian government comes out and says that the budget deficit will be much larger than previously expected, then the sell-off in the Hungarian markets will likely accelerate. In that regard it should be noted that our EMEA FX Scorecard also continues to point towards a weaker forint.

We would also note that the sell-off in the Hungarian markets today has had a spill-over effect to other European markets – with both Western and Eastern European markets coming under some pressure. If the sell-off in the Hungarian markets escalates further in the coming days, then this “new fear” could become a new chapter in the European sovereign debt crisis. Hence, caution is clearly warranted for investor and European policy makers alike.

Hungarian bonds tumbled, pushing up borrowing costs by the most since October 2008, and the forint and stocks plunged after a government official said speculation of a default “isn’t an exaggeration.”

The extra yield investors demand to own Hungary’s debt over U.S. Treasuries rose 149 basis points, or 1.49 percentage point, to 468, according to JPMorgan Chase & Co.’s EMBI Global Index. The BUX Index of equities tumbled as much as 8.4 percent, while the forint fell 1.7 percent to 286.74 per euro at 11:19 a.m. in New York, the weakest level since June 2009.

Credit-default swaps on Hungarian government bonds rose to 371 basis points from yesterday’s close of 308, according to CMA DataVision prices. An increase signals deterioration in investor perceptions of credit quality.

Regards,
Team Market View Investments.
9987750901

Nifty Levels (04/06/2010)

Nifty Future will find support at 5074 & 5049. Upside Resistance will be capped at 5107 & 5126.

Nifty View 03/06/2010

Nifty Fut CMP 5069. If fails to cross 5081, will fall all the way upto 5040 & 5015


Regards, Team Market View Investments. 9987750901

Nifty Levels (03/06/2010)

Nifty Future will find support at 5043 & 5014. Upside Resistance will be capped at 5081 & 5112

Regards,
Team Market View Investments.
9987750901

Nifty Levels (02/06/2010)

Nifty Fut will find support at 4942 & 4907.
Upside Resistance will be capped at 4976 & 4998.

Regards,
Team Market View Investments.
9987750901

Nifty View 02/06/2010

Nifty shorts Initiated yesterday at 5045.
Nifty Fut CMP 4964. Nifty opened gap-up. Those who are holding Shorts initiated yesterday, Revise SL 4976. Even Intraday Traders can short with same SL

Panic Selling in Reliance

British Petroleum shares in UK slumps to a 18 Year Low. Due to which Reliance is witnessing panic selling.
Regards,
Team Market View Investments.
9987750901

Why is the Nifty Future quoting at a discount ?

Why is the Nifty Future quoting at a discount ?

The Nifty futures closed with a discount of 22 points in comparison with the underlying, the S&P CNX Nifty. Why is the future quoting at a great discount even when it has been rallying for the past four days ! This is the month of June in which many Nifty constituents pay their dividends. Equities of many Nifty companies are quoting at a premium to their futures because of the embedded dividends. For example, ICICI Bank and TCS are two such heavy weights whose futures are quoting at a discount. Therefore, the discount of the Nifty future is because of the dividend eligibility of the equities and is a seasonal phenomenon seen every year in the May - June period.

Regards,
Team Market View Investments.
9987750901

Nifty View 01/06/2010

Nifty Fut CMP 5042. If fails to cross 5066, will fall upto 5008 & 4985


Regards,
Team Market View Investments.
9987750901

Nifty Levels (01/06/2010)

Nifty Levels (01/06/2010) : Nifty Future has support at 5012 & 4983. Upside Resistance will be capped at 5059 & 5076. Have a Great Trading day ahead. Regards,
Team Market View Investments.
9987750901

Facebook id : mktviews
Twitter Id : Mktviews
Yahoo Groups : http://in.groups.yahoo.com/group/mktviews