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Financial focus Weekly Newsletter InFINeeti ISSUE 4

VOLU ME 1

20 13

 TOP STORIES….…........1  MARKET ACTIVTY  ECONOMICS

….....2

....... …... 3

 TERM OF THE WEEK  TRADING CALLS

….4

..…….5

Financial focus

A one stop guide to know about all the recent happenings in the finance world

TOP STORIES : INDIA 

INDIA MINISTRY SAYS WORST IS OVER, PROJECTS 6% GROWTH India's economy is now safely on course to achieve at least 6% growth in the current fiscal year ending next March, the Finance Ministry said. "I am sure we have had the worst and we are going to be definitely 6% growth. But we need to spend the money to generate the growth," said Minister of State (Revenue) Jesudasu Seelam.

 GOVT RELAXES FDI NORMS IN 13 SECTORS

In a bid to stem the rapidly widening current account deficit, the government today allowed 100% FDI in the telecom sector hiking it from the existing 74% while permitting more foreign money into the defense sector albeit with caveats. The Centre agreed to the recommendations of the Mayaram Committee and cleared 13 sectors out of 20 for a raise in FDI cap. There has been no hike in FDI cap in aviation. The FDI in four areas -- gas refineries, commodity exchanges, power trading and stock exchanges -- will be through FIPB route. 

JUNE WPI INFLATION RISES TO 4.86%; DENTS RATECUT HOPES WPI inflation rose marginally for the 1st time in 5 months in June due to higher food prices, adding to eco challenges & reducing rate cut hopes. The Wholesale Price Index (WPI) inflation for the month of June came in better than expected at 4.86 percent. Core inflation came in at 2 percent. Although the numbers brought about some cheer in the market after weak IIP and auto sales numbers, the growth in food inflation number was a dampener.


Financial focus Weekly Newsletter InFINeeti

TOP STORIES : WORLD 

G-20 LEADERS FOCUS ON SAFETY NETS FOR FINANCIAL SYSTEM Leaders of the Group of 20 nations are meeting Friday and Saturday in Moscow to consider ways to increase safety of the financial system amid a U.S. move toward easing monetary stimulus. Finance ministers and central bankers are also expected to discuss financial regulation, long-term investment financing, tax avoidance and concerns related to the International Monetary Fund.

DETROIT, LARGEST U.S. CITY TO FILE FOR BANKRUPTCY Decades of decline and mismanagement render the home of the U.S. auto industry insolvent. Crime is rampant, and the city literally cannot afford to keep the lights on-a whopping 40% of streetlights are out. Michigan governor Rick Snyder said there was no other option & it was a difficult step, but the only viable option to address a problem that has been six decades in the making. Detroit has seen its population shrink by more than half, from 1.8 mn people in 1950 to 700,000 today.

CHINA TELLS GOVERNMENT AGENCIES TO RAMP UP SPENDING The Chinese Ministry of Finance ordered government agencies at all levels to accelerate spending to stimulate domestic demand and stabilize economic growth. The ministry said it wants a "relatively big" reduction in budgeted funds left unspent at the end of this fiscal year compared with last year's figure. At the end of May, the ministry had 3.23 trillion Yuan sitting unused in the central bank.

MARKET ACTIVITY 

JAPANESE MARKET FALLS FROM 2-MONTH HIGH AMID PROFIT TAKING Asian-Pacific markets mostly tumbled Friday as profit taking brought Japan's Nikkei 225 down 1.5% from a two-month high, ahead of an election for the upper house of parliament. Hong Kong's Hang Seng Index rose 0.1%. Australia's S&P/ASX 200 gave up 0.4%. China's Shanghai Composite dropped 1.5%. South Korea's Kospi slipped 0.2%. India's Sensex was up 0.2%.

SENSEX CLOSES FLAT; TCS UP 5%, BHEL DOWN 8% ON ORDER WOES The market remained lacklustre Friday with the equity benchmarks closing flat, but stocks that announced earnings swung sharply either side. The BSE Sensex was up 21.44 points to close at 20149.85 while the Nifty is down 8.85 to end at 6029.20, but the BSE Midcap and Smallcap indices fell 0.6 percent each.


Financial focus Weekly Newsletter InFINeeti 

RUPEE DEFENCE DRIVES UP GOVERNMENT BORROWING COSTS The rupee rebounded in late trade on Friday boosted by dollar selling by state-run banks, likely on behalf of the Reserve Bank of India, which helped the local unit snap a nine-week losing streak. The rupee gained 1.1 percent on the week on the back of intermittent dollar selling by the central bank through the week and dovish comments from the Federal Reserve chief on monetary stimulus on Wednesday.

ECONOMICS  ECB ADJUSTS COLLATERAL RULES TO SUPPORT

ABS The European Central Bank has revised rules for collateral to help banks use asset-backed securities as collateral for ECB credit. The change is expected to be offset by tightened rules for covered bonds. "These measures taken together have an overall neutral effect on the amount of collateral available," according to the ECB. 

JAPAN'S ABE SEEKS SPECIAL ECONOMIC ZONES TO BOOST GROWTH A key element of Japanese Prime Minister Shinzo Abe's plan to revitalize the economy is the creation of special economic zones, where he hopes tax incentives and regulatory flexibility would encourage innovation and investment. The idea has a lot in common with one being tried in China. Premier Li Keqiang had to overcome internal opposition to establish a free trade zone in Shanghai.

END OF QE LOOMS ON SIGNALS FROM UK AND US The end of quantitative easing in the Western world loomed closer after both the UK and the US signaled a potential retreat from the controversial crisis policy. In the UK, Bank of England rate-setters voted unanimously to leave QE unchanged at £375bn for the first time since October last year and, in the US, Federal reserve chairman Ben Bernanke again hinted that money printing would be slowed later this year if the economy remains strong.

DID YOU KNOW? 65% of adult population in India doesn’t have a bank account. Hence as a part of the financial inclusion, RBI has mandated for the banks to open 25% of the new branches in areas having population of less than 10,000


Financial focus Weekly Newsletter InFINeeti

Source : FLIP


Financial focus Weekly Newsletter InFINeeti

Avneet’s Call

Maruti Suzuki Period

CMP

1 week

1451

Call Sell

Target 1390 1410

Stop Loss 1501

Jain Irrigation Period

CMP

1 week

55.30

Call Buy

Target

Stop Loss

58

53.50

Vijaya Bank Period

CMP

1 week

44.60

Call Buy/Sell

Target 47.57/41

Stop Loss -

Last week the stock touched 1402 and bounced back again. Since the stock closed below 200-Day Moving Average of 1499.74 and we reaffirm our belief that there is more weakness in the sector and would recommend a sell target of 1390 - 1410 for the coming week but it could touch its support level of 1359, If Nifty breaks the lower range of 5967 possible within 2-3 trading days.

The stock has bounced back from its low and is trading above its 10 day moving average of 52. The stock is moving in range and with good monsoon this year the positive rally will continue even though long term trend is downward.

The stock has struck in very short range between 44 and 45.3. It could go both ways either up or down. The Bank Nifty underperformed the benchmark Nifty for the past whole week. And Nifty is also struck in a very short range between 6069 and 5967, any major break of resistance level will be shown across the sectors. So we would wait till market breaks this resistance, advisable to enter the markets with bias on downward side. So a buy would initiate at above 45.3 and a short would initiate below 43.7.


Financial focus Weekly Newsletter InFINeeti

Bhushan’s Call

Bajaj Q1 net rose 2.8% to Rs 738 cr, in line with the street’s expectations even in this gloomy environment witnessed by Auto Industry. On Friday there was 10 times increase in daily volume, coupled with huge build up in the long position in F&O space. The strike is still continuing at Chakan Plant, which the management is hoping will end soon. As per the technicals, the stock has entered a bullish phase with it breaking the trading range of 1800—1900 with high volumes, & the closing price was above 150,200 DMA on Friday

Bajaj Auto Period

CMP

1 week

1972

Call

Target

Buy

2050

Stop Loss 1880

BHEL Period

CMP

1 week

174.40

Call

Target

Sell

168

Stop Loss 178

BHEL is one of the weakest stock on NIFTY now, with a 9% fall coming in just one session. The capital goods space has been affected the most by the slowdown in the economy. Order book build up has been quite sluggish for BHEL, and some weakness in still remaining in the stock. The daily charts have formed a huge engulfing bearish candle after Friday session, and a Bearish Piercing pattern has been formed on weekly charts.

GAIL Period

CMP

1 week

333.35

Call

Target

Buy

342

Stop Loss 328

Stock Name

Call

Target Price

Strides Acrolab

Buy

815

IGL

Buy

310

Mahindra & Mahindra

Sell

870

GAIL charts have formed a bullish pattern, with the nature of call being short term . There is a minor resistance at 336, and only buy after it crosses 336 amid good volumes . The candlestick pattern formed is ‘Three Outside Up Bullish’ which might signify a strong short term momentum on the upside. Also there was a huge block deal of around 20 cr around 326 purchased by institutional investors. GAIL would be presenting its Q1 results on 25 July, and the analysts on the street are expecting positive results.

TARGET HIT

Avneet Bhulania and Bhushan Kanathe are 2nd year students of IIFT (Kolkata cam-

Last Week’s Stock Calls that hit their target levels pus)

Disclaimer : InFINeeti and IIFT do not take any responsibility regarding the authenticity of above calls. Please consult your financial advisor before taking any investment decisions

InFINeeti Team Aakanksha Hajela Bhushan Kanathe Kunal Maheshwari Vaibhav Garg Md. Umair Ansari


InFINeeti Newsletter July Week 3