Nifty may slip to 5000, warn experts

The Indian market has been on a weak wicket over the last few days. Yesterday, the Nifty lost 48 points and closed at 5,194, while the Sensex slipped 135 points and ended at 17,121.62.
Today is the last day of the long drawn out March series. Futures and options contracts will expire today. It hasn't been a good series for the market. It appears the series is not ending well. The Nifty, till date, has lost 5% in the March series.
CNBC-TV18's managing editor Udayan Mukherjee says, the environment has worsened since the start of this March series. "The 5% drop in the series is due to a lot of macro cues as well as fundamental newsflow," he explains.
The Nifty broke its 200-day moving average (DMA), 5,151, in the early trade. Experts were keenly watching this level. They believe that the market might now even slip to 5,000.
Ambareesh Baliga, COO of Way2Wealth says, breaking of the 200-DMA will lead to short selling and will take the Nifty to the levels of about 5,000-5,050. He says, one should start buying at these levels. "One should think of buying because most of the negatives like GAAR, political issues are already priced in. The April results expectations are not too high. On the positive side, for the first time, we are seeing some pressure on oil," he elaborates.

According to Udayan, traders will be watching the 200-DMA level. "All attempts will be made by the index to see it stay and close above 5,200. If the F&O expiry is weak then the index could break below this mark," he warns.
Meanwhile, Sudarshan Sukhani, s2analytics.com suggests investors to avoid trading today. "There is a lot of volatility and it's almost completely unpredictable. Sometimes volatility is predictable. But on F&O expiry a lot of the stuff is unpredictable. So, those who have short positions should keep them, but beyond that today is a no trading day," he asserts.
Generally, the last day of any F&O expiry is characterised with volatility. Also, the global cues are quite weak today. So, investors are advised to exercise some caution. 

http://www.moneycontrol.com/sensex/bse/sensex-live

Market Watch: Cues that will affect market momentum today

 

 

Moneycontrol Bureau
Global equity markets paused and took a breather yesterday after Monday's stellar rally. Major US markets dipped into negative territory in the final hour after trading flat for most of the day. Key indices, however, are still on track for their best quarter since 1998.
European markets too closed lower by 0.5-1% after weak US data raised concerns about the economic recovery. Derailed investors are awaiting UK and French GDP today.
Back home, recovery in the second half of trade pushed Nifty up 59 points to end at 5,243. The Sensex gained over 200 points to close at 17, 257.
Asian markets started off on a weak note this morning, selling off after the big rally yesterday and weighed by late session losses seen in US markets overnight. The Nikkei opened down 1.1%, and other key indices were down 0.3-0.7%. However, the indices are still sitting on multi-month highs.
For more morning cues, listen to the accompanying audio..
Currency Corner
The euro marginally fell against the dollar, snapping a 2-day gain, but is still firmly above 1.33. The dollar index climbed above the 79 mark.
The rupee ended at 50.68 to the dollar as against 51.26 on Monday.
Commodities
Crude prices came off slightly as news of release of a potential oil reserve weighed on sentiment. Brent prices are however stable in Asia trade, holding to the key USD 125 per barrel mark.
Among precious metals, gold prices eased off two-week highs and slipped to USD 1680 per ounce levels.
Global Cues
Single-family home prices in the US were unchanged in January, according to the Case-Shiller home price index. Meanwhile, consumer confidence declined in March to 70.2 from an upwardly revised 71.6 in the previous month. Keep an eye out for the durable goods orders, which are expected to rise by 2.9% for the month of February. Also watch out for data from weekly mortgage applications, and for the French and UK GDP numbers.
Fed chairman Ben Bernanke spoke again last night, saying that "all options were on the table" when it came to QE3.
Domestic cues
Looking to frontload its borrowing program, the government yesterday announced that it will borrow Rs 3.70 lakh crores on a gross basis in the first half of FY13. This is nearly 65% of the total borrowing for 2012-2013.
Finance ministry sources outlined the tests that foreign investors need to pass to avoid coming under GAAR regulations. But sources indicate that P-notes may face taxing times in the future. According to them, the GAAR invocation rules will be applicable only in case the source of funds is unknown, as per chapter II of the Finance Bill.
Also, in a CNBC-TV18 exclusive, sources indicate that Finance Ministry officials along with the SEBI chief will speak to foreign investors today to clarify GAAR apprehensions.
Stocks in News
The Coal India board will meet today to discuss the decision to get to hike long-term fuel supply pacts to as high as 80% with the power sector.
Also watch out for Patni in trade today as its reverse book building process for its delisting opens today with the floor price at Rs 356.
L&T Finance acquired Fidelity's Indian mutual fund business, saying that this buy is a strategic transaction for them and that with this it has become the tenth biggest equity fund house in the country. Shares of L&T Finance were up 4.5% yesterday.
Essel group acquires 10.19% stake in IVRCL. The group said that they see opportunities to expand the infrastructure portfolio via IVRCL.
State Bank of India joins the bandwagon and hikes some deposit rates by 25-100 basis points. This hike takes effective from today.
TVS Group acquires Universal Components UK. This is the second acquisition by TVS Group in UK, with which their business in the region is set to cross over Rs 1,000 crores.
Dhanalaxmi bank's board is set to meet today to discuss a revival plan for the bank which could includes business growth and cost reduction plans.
Tata Global Beverages to buy 14.18 lakh equity shares (4.17%) of Mount Everest Mineral Water for Rs 198 per share before 31 March.
Bank of Maharashtra to issue 15.33 crore shares to the government and 2.4 crore shares to LIC at Rs 56.09 per share to GOI.
Fortis Healthcare promoters pledge 2.7 crore shares (6.6%) with IDBI Trusteeship Services.
IFGL Refractories to purchase 5.81 lakh shares of IFGL Exports from promoters to make it a 51% subsidiary.
The Mint reports that LIC has been allowed to buy over 10% in listed firms.

http://www.moneycontrol.com/news/market-edge/market-watch-cues-that-will-affect-market-momentum-today_686050.html

PSU shares gain as as government approves buyback

Shares of various public sector companies today gained ground after the government approved buyback of shares by certain PSUs as part of the divestment programme.

The Cabinet today approved the buyback of shares in PSU companies, but further details would be finalised by the boards of individual public sector entities.

While the names of potential buyback candidates could not be immediately ascertained, shares of companies like MMTC, Coal India, NMDC, Shipping Corporation surged higher.

MTNL, HMT, STC, Hindustan Copper, Engineers India Ltd, MOIL, Power Finance, Oil India and NHPC were also trading higher.

While MTNL was the biggest gainer in the PSU pack with a gain of over 6 per cent at the BSE, HMT gained 5.9 per cent, STC by about 5 per cent and National Fertilizers by over 4 per cent.

Hindustan Copper, NMDC, EIL and Shipping Corporation were up more thant 3 per cent, while MMTC and Neyvelli Lignite were up about 2.9 per cent each.

Nalco, Bank of Baroda, PFC, Chennai Petro, NHPC, Oil India, BEML, Coal India and Syndicate Bank were trading with gains of over one per cent at 1150 hours in a weak market.
http://economictimes.indiatimes.com/markets/stocks/stocks-in-news/psu-shares-gain-as-as-government-approves-buyback/articleshow/12094966.cms

Market expected to be choppy, don't see upside currently

In an interview with ET Now, Andrew Holland, CEO-Investment Advisory, Ambit Capital Ltd, gives his views on the market. Excerpts:


ET Now: We have seen a lot of back and forth action this week -- a bad Monday, a good Tuesday and a choppy Wednesday. Do you think this is a sign and signal of a market which is looking toppy or is this a sign and a signal of a market which is consolidating, resting and is preparing for the next leg up?

Andrew Holland: It is similar to all markets actually. You have not really seen a lot of volatility in the Indian markets, but we are starting to see that now. The news obviously yesterday with ECB is now baked into all the markets. There are no real big events which we can pin our hopes on in terms of liquidity coming into the markets. So, for India the focus is on domestic issues and obviously we have got the election results next week.

Also, I am not overly convinced for markets going higher from here. If they consolidate, that's great, but all global markets are looking overbought to my mind and we could see markets come down. So if they can consolidate, great, but that's not my scenario. We will probably go down from here now.

ET Now: What do you think is going to be a bigger trigger for the market -- the UP election results next week, the credit policy or is it going to be the outcome of the budget this time?

Andrew Holland: Keeping in view the people I speak to and the kind of feeling which is in the market, all these three seem to be triggers for the market. There has been a positive spin there partly because markets have risen. So expectations have run ahead of themselves.

ET Now: Do you track MTNL? Do you think it makes sense for the overnment of India to divest their stake in MTNL?

Andrew Holland: I have no idea. Maybe they are improving their services, but yeah, I do not know who would want to buy it as a company. That's for sure.

ET Now: What are you telling your clients to buy after the recent price appreciation, so after a 20% price appreciation, where do you see value in this market?

Andrew Holland: I am really not seeing the value. It has been a great liquidity rush and whilst I list into very carefully what was being said yesterday following the ECB and 800 banks applying in the window. On the basis of that, this is good news that they would now be able to, this money would be used to help lend and help the economy, but most of the countries are in austerity programmes. So it kind of flies in the face of what's being said.

Some of the yields that the banks are taking from say an Italy or a Portugal are really because they are getting cheap loans and it is helping for them to fund those lower yields, but that's working on the basis that nothing else goes wrong. So I am a bit worried about that, but liquidity always has a way of just keeping the markets higher for longer, but it does not take much for that to change.

ET Now: Does it seem like the disinvestment target could be met even though with a delay and it does not seem like a Herculean task anymore or do you think we are going to still run into that gap?

Andrew Holland: Obviously good companies will always find buyers. Obviously LIC is a main contributor to the government coffers at the moment in terms of being a backstop for all of these issues. So does it make me feel as though the government has got the fiscal discipline it should have? No, not really.

We will have to wait for the budget. So yeah, they are just trying to mop up in a better market and trying to get as much money as they can before the end of the year, but it does not change anything to my mind in terms of the problems that the government is facing. It is great news in terms of fiscal deficit, but I do not think it has really taken away the problem of the fiscal deficit.

ET Now: Do you think this rate sensitive trade, especially in some of the financials, now is getting slightly crowded?

Andrew Holland: We have been talking about this since December that come March-April, the RBI would be looking to reduce rates. They actually indicated then that it would not be increasing rates. So it is not surprising, but yes, it is a very crowded trade.

When everyone is saying exactly the same thing, you can be absolutely sure it is not going to work out to be exactly what you are thinking. The interest rate play is something we have been talking about and advising, but it has run up very quickly. Again we are just walking away from some of the problems that the banking sector has in terms of nonperforming loans.

ET Now: A word on gold? Do you think the dip that gold actually gave last night should be considered as a buying opportunity and that should be the case for the next 2-3 months?

Andrew Holland: Anytime the price of gold dips, my wife tells me I should buy more and she is the expert, not me.

ET Now: If you have to invest for your wife for the next three years, would you invest in equities or would you invest in gold?

Andrew Holland: Actually she has invested in some of these bonds which guarantee quite a bit of money. So that's where we are.
http://economictimes.indiatimes.com/opinion/interviews/market-expected-to-be-choppy-dont-see-upside-currently-andrew-holland-ambit-capital/articleshow/12095069.cms?curpg=2

Global markets dampened by Bernanke, eye PMI

 

Asian shares mostly fell on Thursday as Federal Reserve Chairman Ben Bernanke put the brakes on a recent rally by not signalling any further monetary easing to stimulate growth, while investors shifted their focus to manufacturing data due later in the day.
The European Central Bank's second liquidity injection operation came within market expectations, spurring the unwinding of positions built up ahead of the event on hopes that the money would further ease funding tensions in Europe and bolster risk appetite.
The MSCI Asia Pacific ex-Japan fell 0.3% after rising 1.4% to a seven-month high on Wednesday, taking its cues from US stocks which were weighed down by Bernanke's comments.
Japan's Nikkei opened up 0.5%t and extended its gains in early trade, but was still below a seven-month high hit on Wednesday.
The euro stood steady at USD 1.3328 after falling more than 1% on Wednesday to a nearly one-week low of USD 1.3315 as the ECB extended 530 billion euros in cheap, 3-year loans, with more than 800 banks applying for funding, up from 523 banks in its first auction in December.
The dollar held its ground after rising strongly on Wednesday when Bernanke, while offering a cautious view of the US economy, stopped short of signaling further Fed bond purchases, disappointing investors who were hoping for more stimulus.
"The US dollar pushes higher while equities retreat alongside metals as Bernanke gives a nod to inflation, departing from his last three speeches where he accentuated the extension of extremely low interest rates into 2014," said Ashraf Laidi, chief global strategist at City Index Group.
Bernanke described rising gasoline prices as "primarily reflecting higher global oil prices -- a development that is likely to push up inflation temporarily while reducing consumers' purchasing power," an acknowledgement of inflationary pressure, Laidi said.
Focus on recovery
As the ECB completed its much-awaited liquidity operation and Bernanke sounded a cautious note on extending the current super-loose monetary stance, gold was caught in the unwinding of positions built on expectations of more funding supplies from central banks.
Spot gold regained 0.6% on Thursday to USD 1,704.80 an ounce after falling 5% to less than USD 1,690 an ounce on Wednesday, for its biggest one-day drop in more than three years, as funds exited the bullion trade on speculation that central banks might be done with easy monetary policies.
Oil recovered after two straight days of losses, with US crude up 0.1% at USD 107.12 a barrel. Brent crude settled at USD 122.66 on Wednesday, rising 10.5% last month for its best monthly performance since February last year.
With the three-year longer term refinancing operation out of the way, the markets' attention is expected to focus on the state of the global recovery, Barclays Capital analysts said.
Data on factory activity in Asia, Europe and the United States will be released later in the session. China's PMI manufacturing report is due at 0100 GMT.
Data released on Wednesday provided further evidence of underlying strength in the US economy, with a gauge of factory activity in the Midwest hitting a 10 month high in February, while the US economy grew slightly faster than initially thought in the fourth quarter.
A Fed report showed the economy expanded modestly in January through mid-February as hiring picked up a bit.

http://www.moneycontrol.com/news/international-markets/global-markets-dampened-by-bernanke-eye-pmi_675141.html

ONGC gains as govt begins 5% stake sale

Investors turn bullish on silver; prices zoom by 18%