-Daily Morning Outlook- June 26, 2012 MORNING BELL INDIAN INDICES Markets at a Glance Index 25/06/12 Pt Chg % Chg A flattish to lower opening is very much the possibility for the Indian equity market today, BSE SENSEX 16,882 (90) (0.5) tracking weak Asian markets. Meanwhile, the Asian markets tumbled in the early trade to- NSE NIFTY 5,115 (31) (0.6) day on global growth concern following the weak closing of European market & American BSE MIDCAP 6,008 (2) (0.0) Indices during the last trading session, as Moody’s downgraded 28 Spanish banks. Further, skepticism over EU summit is still maintain, as Germany is holding strong stance to not share BSE SMALLCAP 6,423 15 0.2 the burden of debt laden countries in European region. On the domestic front, the investors CNX MIDCAP 7,119 (14) (0.2) will keep a close on Infra stocks today, after RBI has allow them to avail of ECB for repayment BANK NIFTY 9,926 (113) (1.1) of outstanding Rupee loans towards capital expenditure under the approval route. In SGX Nifty, Jun’12 contract last traded at 5,108.50, up by 4.50 points from previous settlement. CD 6,185 10 0.2 Wall Street Update PSU 7,029 (60) (0.9) After opening lower with a loss of more than a percentage, major equity averages finished off POWER 1,876 (18) (0.9) their lows. Lieu of negative news flooded the markets, started with Spain formally requesting BANKEX 11,443 (119) (1.0) €100billion to recapitalize its banks, and continued with the resignation of Greece’s newly appointed finance minister along with Cyprus asking the European Union for help. Mean- GLOBAL INDICES while, homebuilders saw good move on the back of better-than-expected new home sales Index 25/06/12 Pt Chg % Chg number but could not hold on to its momentum and veered sharply lower. Meanwhile, treas- Dow Jones 12,503 (138) (1.1) uries saw strong gains as heavy buying of longer dated maturities has those yields down as much as nine basis points. NASDAQ 2,836 (56) (1.9) Previous Day Roundup (Domestic) FTSE 100 5,451 (63) (1.1) Indian benchmark indices ended lower as the measures taken by the RBI and government DAX 6,132 (131) (2.1) to boost the economy failed to meet market expectations. The BSE Sensex closed at 16,882.16 down by 90.35 points or by 0.53% and NSE Nifty Index* 26/06/12 Pt Chg % Chg closed at 5,114.65 down by 31.40 points or 0.61%. The BSE Midcap was at 6,008.46 lower by 1.75 points or by 0.03% while, the BSE SmallCap gained 15.22 points or 0.24% at Nikkei 225 8,674 (61) (0.7) 6,422.72. Hang Seng 18,916 18 0.1 On Sectoral front, baring Consumer durables, all the other indices ended lower with Bankex, Power PSU, Metal and IT leading the losers pack. Shanghai 2,214 (10) (0.5) Indian Rupee recovered a bit, as the RBI announces desperate measures to check its fall. SGX Nifty 5,108 4 0.1 Derivative Strategy for June 26, 2012 * live intraday prices at 8:15am IST Scrip CMP Recommendation Target Stop Loss NIFTY 5,109 SELL 5,050 5,140 Net Inflows in Equity HEROMOTOCO 2,034 SELL 2,004 2,044 ` crore Buy Sell Net YTD BANKBARODA 699 SELL 685 707 RECLTD 175 SELL 169 178 FII (June 25) 1,322 1,441 (119) 42,263 DRREDDY 1,577 BUY 1,590 1,569 MF (June 22) 300 455 (155) (5,944) Today’s Event UBS Consumption Indicator for the month of May FII participation in Derivatives Germany’s Gfk Consumer Confidence Survey for the month of Jul Buy Sell Net UK’s Public Sector Net Borrowing Data for the month of May Index Futures 4,034 4,107 (72) China’s CB Leading Economic index Index Options 20,445 20,227 217 US’s Consumer Confidence for the month of Jun Stock Futures 4,809 5,076 (267) Stock Options 1,455 1,450 6 Source: Dion Global Solutions Ltd Technical Overview Nifty closed down 31.40 points (-0.61%) at 5,114.65, after failed attempt by government to bolster investor sentiment by announcing measures to curb Rupee's slide and weak sentiments from Europe. As mentioned in our previous reports that market is trapped in the range of 5,100-5,180, Nifty after faint attempt to breakout from this range closes within the range. Nifty made a big bearish candle on daily charts, closing a tab above its support of 5100, signaling the possibility of a quick short covering. Further, any breakout from this range will decide the trend for the market. Trading strategy would be to Sell if market resist at 5,200 and Buy if support at 5,100. First resistance for the Nifty is 5,155 and next resistance 5,199 and first support for the Nifty is 5,082 and next support at 5,050. Support & Resistance Sensex Gainers & Losers Nifty Gainers & Losers Gainers 25/06/12 Pt Chg % Chg Gainers 25/06/12 Pt Chg % Chg Indices S2 S1 LTP R1 R2 Maruti 1,114 12.6 1.1 Cairn 331 4.4 1.4 Nifty 5,050 5,082 5,115 5,155 5,199 Gail India 343 2.6 0.8 Gail India 345 4.5 1.3 RIL 716 5.2 0.7 RIL 717 6.0 0.9 Sensex 16,677 16,779 16,882 17,057 17,145 HDFC 643 3.3 0.5 Ambuja Cem. 168 1.3 0.8 Bank Nifty 9,759 9,815 9,926 10,115 10,209 Bajaj Auto 1,550 4.8 0.3 Maruti 1,110 7.9 0.7 Stocks S2 S1 LTP R1 R2 Losers 25/06/12 Pt Chg % Chg Losers 25/06/12 Pt Chg % Chg RIL 707 711 716 722 728 Hero Moto 2,028 (56.8) (2.7) Hero Moto 2,030 (56.1) (2.7) SBI 2,041 2,078 2,115 2,176 2,237 Hindalco 115 (2.8) (2.4) Siemens 696 (19.0) (2.7) ITC 246 248 250 253 256 Grasim 2,462 (65.1) (2.6) ONGC 273 (6.5) (2.3) Infosys 2,442 2,455 2,468 2,486 2,503 Cipla 306 (7.7) (2.5) Cipla 307 (7.1) (2.3) L&T 1,332 1,343 1,355 1,375 1,395 SBI 2,115 (41.9) (1.9) JP Associate 70 (1.7) (2.4) Source: Dion Global Solutions Ltd CRUDE & BULLION Commodity 25/06/12 Pt Chg % Chg Crude (`) (JuL) 4,526 (77) (1.7) Gold (`) (Aug) 30,080 106 0.4 Silver (`) (Jul) 53,675 722 1.4 Copper (`) (Jun) 417 (1) (0.2) Corporate, Industry And Economy (CIE) News At Glance Corporate News BSE Code LTP (`) Event Suzlon Energy has sold its Chinese manufacturing subsidiary to China Power (Tianjin) New Energy Development Company for `340 crore as part of its strategy to retire debt by exiting non-critical assets. The company hit by the huge interest costs on the 532667 17.75 debt has decided to re-align its business in the Chinese market and focus on asset-light business model to achieve high growth and margins. India’s largest engineering conglomerate, Larsen & Toubro Ltd (L&T) is mulling the stake sale in its infrastructure arm to raise as 500510 1,355.05 much as USD 500 million. Ramco Systems Ltd, has successfully implemented the ERP software for the Equipment Rental Management Industry at Al Faris Equipment Rentals in an entire span of a record 100 days. The implementation of Ramco’s ERP system has enabled Al Faris, the 532370 144.00 owners of the largest fleet of Mobile Cranes in the UAE, to have effective control over costs and operational parameters, leading to improved equipment utilization and profitability. The government has asked the Mukesh Ambani led Reliance Industries Ltd (RIL) to increase the supply of natural gas from its KG 500325 716.20 -D6 block to the urea manufacturing units of IFFCO and Indo Gulf Fertilizer Ltd. Industry News Bringing uniformity in the sector, the government has decided to charge 8% of gross revenue as license fee from all telecom service providers across all cate- gories and services from 2013-14. Currently, the operators are mandated to pay a license fee in the range of 6-10% depending upon type of service and circle. With internet becoming handy to everyone via mobile handset, the telecom operators are worried over the declining usage of short messaging services (SMS). The fear comes following the wide adaptation of free smartphone services that enables the user to stay in touch using free voice, video and text applications. As per the telecom sector, the SMS services were introduced in a bid to utilize the spare telecoms capacity. However, the service developed to become key cash generator for operators, while provided the users an alternative to huge expenses on voice calls. Economy News Believing in India’s strong fundamentals, global agency Moody's has retained India’s outlook to stable despite the slowdown in GDP growth rate. The rating comes in contrast to the ratings of other agencies and banks which took the poor GDP as base to calculate the outlook. Against the herd mentality, Moody’s has analyzed the slowdown in Indian economy such as lower growth, slowing investment and poor business sentiment very unlikely to be even a medium-term feature. Following the turmoil in Indian economy, the economic think tank, Centre for Monitoring Indian Economy has raised its inflation target for 2013-14 to 7.3% from earlier 6.7%. The upward revision was done on the account of continuous depreciation of Rupee which is further expected to hike inflation. Further, it is expected that the CPI inflation for industrial workers will rise by 8.1% in 2012-13 from 8.5% in 2011-12. Source: Dion Global Solutions Ltd Corporate Actions Record Dates Company name BSE Code Purpose Current week Forthcoming week 8K Miles Software Services 512161 Bonus 25/06/2012 National Oxygen 507813 Rights 27/06/2012 Ex Dividend Date Company Name BSE Code CMP Current Week Forthcoming week Indian Bank 532814 175.25 25/06/2012 JMT Auto 513691 57.00 26/06/2012 Andhra Bank 532418 122.60 27/06/2012 DCM 502820 117.00 28/06/2012 Infrastructure Development Finance Company 532659 130.95 28/06/2012 Sonata Software 532221 18.75 28/06/2012 Atul Auto 531795 180.10 03/07/2012 GIC Housing Finance 511676 93.20 04/07/2012 Bajaj Auto 532977 1,550.05 05/07/2012 Jammu & Kashmir Bank 532209 948.00 05/07/2012 Ex Split Company Name BSE Code Current Week Forthcoming Week CMP Ratio Date CMP Ratio Date Zylog Systems 532883 620.15 2:1 29/06/2012 Ex Bonus Company Name BSE Code Current Week Forthcoming Week CMP Ratio Date CMP Ratio Date Aarey Drugs & Pharmaceuticals 524412 24.00 5:1 25/06/2012 Forthcoming Results Company BSE Code Date CMP Ashirwad Steels &Industries 526847 30/06/2012 9.70 Source: Dion Global Solutions Ltd Alankit Assignments Limited. 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