The fear can be seen in the market prior to the Budget session that will be conducted on Monday. FII have been selling in the Indian markets since last few trading sessions. Not only has this had the Libya issues taken most of the emerging markets for a toss. Fear of more civil war has impacted the global markets. Libya being the 12th largest Oil export is been in trouble since last few weeks. All thanks to the ruler Muammar Gadaffi. Crude oil has shoot up $100 a barrel. Brent crude is nearly $120 a barrel.
Consumer confidence rose to a 3yr high in Feb. but the home prices for the 6th month in row in Dec suggests that the economy still faces significant hurdles. The expectations rose to its highest level to 95.1, its highest level since Dec 2006, From 87.30.
Nifty and Sensex tanked nearly 3% in a week. Midcap and Smallcap were badly hit during the fall. Both the index fell more than 4%. The entire sector index closed in red. Capital good Index fell more than 6% while bankex, Reality and Healthcare Index fell down nearly 4.5%. Automobile Index lost 5.3%. After the Rail budget most of the rail related stocks fell heavily. Kalindee rail & Titagarh Wagon lost 20% while Texmaco lost 11%. Sesagoa, Bpcl & Dlf lost 8% each. M&M, Lnt, Tata Motor, Sbi, Rcom lost in the range of 6 – 7.5% each. Bhel, Ntpc, Jaiprakash & Hdfc Bank lost nearly 5.5% each.
In the stocks Aurobindo was one of the major looser which lost 25%. Mphasis after its results update fell 32%. Orchidchem by 11%.
ADAG stocks were in the limelight. All negative rumors flew in the market about Anil Ambani.
Oil jumped to the highest in more than two years in New York as intensifying violence in Libya stoked concern that supplies from the holder of Africa’s largest crude reserves may be disrupted. Brent crude may trade in the range of $105-110 in the unrest continues. As Libya continues to simmer, the whole world is waiting to see if the crisis will spread to other oil producing nations in West Asia. Analysts estimate that as many as a million barrel if Libyan oil a day have been removed from world markets in recent days, and investors fear that more oil production could be disrupted if the unrest spreads to other crucial producing nations, like Algeria.
Finally the Indian government has taken front seat to punish the culprits in the 2G & CWG scams.
Highlights of Economic Survey 2010 – 11 • Economy expected to grow at 8.6% in 2010-11 and 9 per cent in next fiscal • Growth broad based with rebound in Agriculture, continued momentum in manufacturing and private services • Fundamentals strong with Savings & Investments up, exports rising rapidly and inflation falling • Agriculture likely to grow at 5.4% in 2010-11; • Industrial output grows by 8.6% ; manufacturing sector registers 9.1% • Exports in April-December 2010 up by 29.5 % • Imports in April – December 2010 up by 19% • Trade gap narrowed to US $ 82.01 bn in April-December 2010 • 59% rise in Net Bank Credit • Social program spending stepped up by 5 percentage points of GDP over past 5 years • 9.7% growth of GDP at market prices.
Monday’s the day when most of the Indian people will have their head in the Idiot box. Not even Indian’s; FII’s too will be looking for the ‘Budget day’.
Some of the expectation from the Budget 2011.
· Possibility of the hike in Excise duties- Negative for Automobile.
· Import duty may be cut- Positive for Coal.
· Expect increase in Central Excise duty – Negative for Engineering
· Expect increase in outlay for defense – Negative for Engineering
· Reduction in the duties on crude oil – Positive for Oil sector
· Expect higher Plan allocation to power sector & housing and provision of basic amenities – Positive for Metal.
· Expect continuation of Technology upgradation Fund Scheme – Positive for IT
· Expect reduction in import duty – Positive for Textile.
The last article which I had written was on 5th Feb 2011. Nifty was trading at 5395. I had mentioned that the Nifty is controlled by the Bears. (Nifty will find support at 5348 but close below the same will take the Nifty to 5232 levels directly) Nifty Friday made a low of 5232 and closed at 5303. In the chart we can see that the Nifty closed below the 61% retracement level on Friday. Close below the same will a kind of a blood bath in the Indian markets. In the fall of the 2008 nifty bounced back but could not cross the resistance at 5232-5250 levels and we all know what the impact was. Nifty might come down to 4800 levels also. This target will be only in the extreme case which can be achieved. With all the bad rumors I don’t think that the Nifty will turn up so soon.
This weeks call
Sell Bharat Forge close below 302 SL 307 tgt 298-294- 288.
Sell Bhel below 1961 SL 1973.
Sell Cromptrom below 240 SL 243.
Sell M&M below 587. SL 595.
Buy Mundra Port close above 148 SL 145.
Sell Ongc below 260 SL 264.
Sell Rcom below 85 SL 87.
Sell Rinfra below 637.
Consumer confidence rose to a 3yr high in Feb. but the home prices for the 6th month in row in Dec suggests that the economy still faces significant hurdles. The expectations rose to its highest level to 95.1, its highest level since Dec 2006, From 87.30.
Nifty and Sensex tanked nearly 3% in a week. Midcap and Smallcap were badly hit during the fall. Both the index fell more than 4%. The entire sector index closed in red. Capital good Index fell more than 6% while bankex, Reality and Healthcare Index fell down nearly 4.5%. Automobile Index lost 5.3%. After the Rail budget most of the rail related stocks fell heavily. Kalindee rail & Titagarh Wagon lost 20% while Texmaco lost 11%. Sesagoa, Bpcl & Dlf lost 8% each. M&M, Lnt, Tata Motor, Sbi, Rcom lost in the range of 6 – 7.5% each. Bhel, Ntpc, Jaiprakash & Hdfc Bank lost nearly 5.5% each.
In the stocks Aurobindo was one of the major looser which lost 25%. Mphasis after its results update fell 32%. Orchidchem by 11%.
ADAG stocks were in the limelight. All negative rumors flew in the market about Anil Ambani.
Oil jumped to the highest in more than two years in New York as intensifying violence in Libya stoked concern that supplies from the holder of Africa’s largest crude reserves may be disrupted. Brent crude may trade in the range of $105-110 in the unrest continues. As Libya continues to simmer, the whole world is waiting to see if the crisis will spread to other oil producing nations in West Asia. Analysts estimate that as many as a million barrel if Libyan oil a day have been removed from world markets in recent days, and investors fear that more oil production could be disrupted if the unrest spreads to other crucial producing nations, like Algeria.
Finally the Indian government has taken front seat to punish the culprits in the 2G & CWG scams.
Highlights of Economic Survey 2010 – 11 • Economy expected to grow at 8.6% in 2010-11 and 9 per cent in next fiscal • Growth broad based with rebound in Agriculture, continued momentum in manufacturing and private services • Fundamentals strong with Savings & Investments up, exports rising rapidly and inflation falling • Agriculture likely to grow at 5.4% in 2010-11; • Industrial output grows by 8.6% ; manufacturing sector registers 9.1% • Exports in April-December 2010 up by 29.5 % • Imports in April – December 2010 up by 19% • Trade gap narrowed to US $ 82.01 bn in April-December 2010 • 59% rise in Net Bank Credit • Social program spending stepped up by 5 percentage points of GDP over past 5 years • 9.7% growth of GDP at market prices.
Monday’s the day when most of the Indian people will have their head in the Idiot box. Not even Indian’s; FII’s too will be looking for the ‘Budget day’.
Some of the expectation from the Budget 2011.
· Possibility of the hike in Excise duties- Negative for Automobile.
· Import duty may be cut- Positive for Coal.
· Expect increase in Central Excise duty – Negative for Engineering
· Expect increase in outlay for defense – Negative for Engineering
· Reduction in the duties on crude oil – Positive for Oil sector
· Expect higher Plan allocation to power sector & housing and provision of basic amenities – Positive for Metal.
· Expect continuation of Technology upgradation Fund Scheme – Positive for IT
· Expect reduction in import duty – Positive for Textile.
The last article which I had written was on 5th Feb 2011. Nifty was trading at 5395. I had mentioned that the Nifty is controlled by the Bears. (Nifty will find support at 5348 but close below the same will take the Nifty to 5232 levels directly) Nifty Friday made a low of 5232 and closed at 5303. In the chart we can see that the Nifty closed below the 61% retracement level on Friday. Close below the same will a kind of a blood bath in the Indian markets. In the fall of the 2008 nifty bounced back but could not cross the resistance at 5232-5250 levels and we all know what the impact was. Nifty might come down to 4800 levels also. This target will be only in the extreme case which can be achieved. With all the bad rumors I don’t think that the Nifty will turn up so soon.
This weeks call
Sell Bharat Forge close below 302 SL 307 tgt 298-294- 288.
Sell Bhel below 1961 SL 1973.
Sell Cromptrom below 240 SL 243.
Sell M&M below 587. SL 595.
Buy Mundra Port close above 148 SL 145.
Sell Ongc below 260 SL 264.
Sell Rcom below 85 SL 87.
Sell Rinfra below 637.
