MARKETCALLS

This week in market may rise with stock specific movement

Last week Sensex gained  +175 points or +0.98% to 18130 and Nifty gained +56 points or +1.02% to 5449 in the week ended 23-7-2010. Last week market ends with minor gain. But in last week nifty made new high of last 2.5 years. Normally we found breakout or new high with good volumes with proper margin. But so many issues are pending and last for F&O expiry market is trading very choppy way. Next week RBI Meet for CRR and RESERVE REPO RATE, RIL result of 1st Qtr, and Finally last week for F&O Expiry. So, looking to these issues market will be highly volatile or too choppy means range bound. We Strictly advise please remain neutral till next Thursay. Nifty resistance at 5476 and 5492.

The results of the stress test of European banks due late on Friday, 23 July 2010, will set the tone for global equity markets early next week. Closer home, investors will watch for any surprises in central bank’s monetary policy review on Tuesday, 27 July 2010. The market has already discounted a 25 basis points rate hike in key short term rates by the Reserve Bank of India.

Volatility may rise as traders roll over positions in the derivatives segment from the near-month July 2010 contracts to August 2010 contracts ahead of the expiry of the near-month July 2010 derivatives contracts on Thursday, 29 July 2010.

On the global front, European Union regulators are examining the strength of 91 banks to determine if they can survive potential losses from both a recession and a decline in the value of their government- bond holdings. The tests are being used to reassure investors about the health of financial institutions from Germany’s WestLB AG and Bayerische Landesbank to Spanish savings banks as the debt crisis pummels the bonds of Greece, Spain and Portugal.

Back home, among the key corporate results, Maruti Suzuki India will announce its Q1 result on Saturday, 24 July 2010. Sterlite Industries and NTPC will announce Q1 results on Monday, 26 July 2010. Larsen & Toubro, Reliance Industries and Hindustan Unilever’s Q1 results are due on Tuesday 27 July 210. DLF, Mahindra & Mahindra and Jindal Steel & Power’s Q1 results are due on 28 July 2010. Hero Honda Motors and ONGC will be announcing Q1 result on Thursday, 28 July 2010.

The first quarter results announced by the companies so far have been decent. The combined net profit of a total of 303 companies rose 25.5% to Rs 20510 crore on 17.7% rise in sales to Rs 133828 crore in Q1 June 2010 over Q1 June 2009.

Investors are closely monitoring the progress of the monsoon rains. The annual monsoon rains were 17% below normal in the week to 21 July 2010, improving after a 24% deficit in the previous week, the India Meteorological Department said on Thursday, 22 July 2010. The seasonal monsoon rains during 1 June to 22 July 2010 were 12% below normal, the weather office added.

Southwest monsoon was vigorous over Sub-Himalayan West Bengal & Sikkim and active over Bihar, West Uttar Pradesh, Uttarakhand, Himachal Pradesh, Punjab, Konkan & Goa, Vidarbha, Telangana, Coastal & South Interior Karnataka and Kerala during past 24 hours, the weather office said in its daily report on Thursday 22 July 2010.

The south west monsoon is important for India as about 60% of the country’s farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector. The weather office expects this year’s monsoon rains to be at 102% of the long-period average. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation.

Investors poured money into equity funds focused on India and China in the week ended 21 July 2010 as concern about economic growth spurred withdrawals from developed-market stocks, global fund tracker EPFR Global said. India funds received a net $187 million, the most in 51 weeks, while China money managers took in $138 million, EPFR said.

Foreign funds have bought Indian equities worth a net Rs 6053.03 crore this month so far, till 22 July 2010, as per data from the stock exchanges. Foreign funds had pumped in Rs 7713.97 crore in equities in June 2010.

Domestic funds have sold shares worth a net Rs 3539.31 crore this month so far, till 22 July 2010. They had sold equities worth a net Rs 4777.05 crore in June 2010. (Data Source: Capitalmarket)

NIFTY WEEKLY CHART

WEEKLY NIFTY SUPPORT 5383 AND RESISTANCE 5476

NIFTY FUT. (5444)
Buy above 5479 Target ????
Sell below 5380 Target ????

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-Always Remember, put SL in your every trade.

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Rupesh Yatesh  Dalal
Head Research Team

www.marketcalls.net

This week in market may rise with stock specific movement

Last week Sensex gained  +373 points or +2.13% to 17833 and Nifty gained +115 points or +2.20% to 5352 in the week ended 09-7-2010. Last week market ends with good gain, Looks like Bulls take the charge finally. In this week we may see stock specific movement due to 1st quarter results announcement. This week nifty closed near previous high. Now more chances are to jump for new high. Now on this week keep your eyes on 5378 and 5398, If nifty close above these levels then we may see new high very soon. Nifty support at 5218 on closing basis. If nifty close below 5218 then we advise to exit from long positions. Till nifty 5218 we are on bull side.

Stocks may extend gains next week as companies start disclosing their results for the first quarter ended June 2010. Though a few results will start trickling from Monday, the real action will kick off with the Infosys earnings on Tuesday, 13 July 2010.

Some prominent results next week include, Infosys Technologies, Exide Industries and Hotel LeelaVenture on Tuesday, 13 July 2010, HDFC and South Indian Bank on Wednesday, 14 July 2010, TCS, Axis Bank, LIC Housing Finance, Castrol India on Thursday, 15 July 2010 and Chambal Fertilizers & Chemicals, BASF India and Honeywell Automation on Friday, 16 July 2010.

Advance tax collections for the first quarter of the current financial year point to a strong growth in corporate sector profits. Advance tax payments by companies during the April-June quarter account for 15% of the total advance tax payable in the fiscal year. Corporate advance tax for the first quarter stood at Rs 26,876 crore, against Rs 20,456 crore in the year-ago period, a rise of 31.4%, the fastest since 2005.

Auto firms are seen reporting strong Q1 results on the back of healthy volume growth. However, margins could be under pressure due to higher input costs. Improved lending growth will spur bottom line growth of banks whereas healthy order book will drive earnings of capital goods and engineering giants L&T and Bharat Heavy Electricals (Bhel). Higher sales realisation would boost boom line of metal firms.

As far as the IT sector is concerned, the focus is on whether the IT bellwether Infosys revises its annual guidance when it announces the first quarter results on 13 July 2010. The IT bellwether will issue guidance for the second quarter ending September 2010 at the time of announcing the first quarter results.

On macro front, the major economic data due next week includes the industrial production data and monthly inflation report. Industrial production data for May 2010 will be released on Monday, 12 July 2010, while the inflation data will be released on Wednesday, 14 July 2010

The Reserve Bank of India (RBI) on 2 July 2010, hiked the repo rate by 25 basis points to 5.5% from 5.25%, with immediate effect. It also hiked the reverse repo rate, at which it absorbs excess cash from the banking system, by an equal 25 basis points to 4% from 3.75%. The central bank said the latest rate hike is a part of the calibrated exit from the expansionary monetary policy.

Two-thirds of WPI inflation in May 2010 was contributed by non-food items, suggesting that inflation is now very much generalised and that demand-side pressures are evident, the central bank said in a statement. WPI inflation increased to 10.2% in May 2010, up from 9.6% in April 2010.

In its April 2010 policy review, the Reserve Bank projected real GDP growth for 2010-11 at 8% with an upside bias. More recent data suggest that the upside bias has largely materialized, thecentral bank said. The growth projection will be reviewed in the first quarter review on 27 July 2010, RBI said.

Analysts expect another 25 basis points rate hike by the central bank at its quarterly review on 27 July 2010.

Investors are also closely watching the progress of the monsoon rains. Rains have revived after weak monsoon last month. Crop planting suffered last month as rainfall was 16% below normal, but rainfall deficit for the country as a whole has narrowed down to 10% for the period 1 June-8 July after heavy rains in the past few days. Rains were 2% above normal in the week ended 8 July 2010.

The south west monsoon is important for India as about 60% of the country’s farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector. The south-west monsoon usually covers the entire country by mid-July. The weather office expects this year’s monsoon rains to be at 102% of the long-period average. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation.

Last week, the International Monetary Fund (IMF) raised its world output forecast for 2010, citing solid growth in the first half, especially in Asia, but warned of significant downside risks flowing from Europe. The IMF revised its 2010 world gross domestic product forecast to 4.6%, up from a previous forecast in April of 4.2%. The 2011 GDP forecast was unchanged at 4.3%.

The IMF raised India’s growth forecast for 2010 to 9.5%, stating that favourable financing conditions and robust corporate profits will accelerate economic expansion. The IMF expects India’s economy to grow 8.5% in 2011.

On the global front, US earnings season kicks off Monday, 12 July 2010, night when Alcoa reports results. Besides the earnings season, retail sales excluding autos, inflation figures, industrial production data and minutes of Federal Open Market Committee (FOMC) meeting are due next week. And from China, the Q2 GDP data is due next week. Market participants are expecting the data to show China’s economic growth slowed to around 10% in the second quarter from the previous quarter’s 11.9%.  (Data Source: Capitalmarket)

NIFTY WEEKLY CHART

WEEKLY NIFTY SUPPORT 5218 AND RESISTANCE 5378-98

NIFTY FUT. (5354)
Buy above 5380 Target ????
Sell below 5216 Target ????

For SL and Targets Levels – SUBSCRIBE Nifty Calls AT : www.marketcalls.net
and enjoy many more things….  (See Subscribe menu to subscription details)

-Always Remember, put SL in your every trade.

- Weekly Levels are Closing Basis, so follow on clsoing time.
-How to follow our calls on Click Here
-Read Disclaimer at Click Here

Rupesh Yatesh  Dalal
Head Research Team

www.marketcalls.net