Morning Triggers 05/12/2013

_{WORLD MARKET}

Asian markets were off to a nervous start on Thursday as never- ending speculation about the fate of U.S. stimulus lifted bond yields, while Japanese shares tried to find their footing after taking a spill.

The Dow and the S&P 500 finished lower for the fourth consecutive session on Wednesday after investors found few reasons to make big moves, with uncertainty remaining over when the Federal Reserve will start to slow its stimulus.

European shares fell for a third consecutive session on Wednesday in response to evidence of growing momentum in the U.S. economic recovery that could mean a scaling-back of stimulus by the Federal Reserve.

_{MARKET OUTLOOK FOR TODAY}

Despite weak global cues like Asian stocks and a bearish closing on Wall Street overnight, the key domestic indices may open on a positive today due to positive cues from SGX Nifty trading positive by about 85+ points at this morning.

Exit poll outcome is as expected by the markets and this would provide a further traction to the market.

However, Global Investors may remain jittery ahead of the US jobs data to be released tomorrow which may offer further cues over the timing of the reduction of the US Federal Reserve's record stimulus plan.

Asian stocks were trading in the red as strong US economic reports fueled fears that the Fed may start tapering QE in the near-term. Better-than-expected private payrolls data raised speculation that tomorrow's non-farm payrolls data may signal strength in the labour market, which may prompt the Fed to reduce stimulus support.

US private payrolls advanced 215,000 last month, up from 184,000 in October, ADP said. China's Shanghai fell after yesterday's impressive rally while Hang Seng and Japan's Nikkei 225 were also trading on a bearish note on caution ahead of a string of US data today including Q3GDP, jobless claims and factory orders.

Back home, caution ahead of the results of the state assembly elections which will be declared on this Sunday, and the beginning of the Winter Session of Parliament today may weigh on the bourses.

_{MAJOR NEWS}

ü  Cyprus has agreed to share banking related information with India for tax administration purposes. This tax haven — which was recently blacklisted by India as a non-cooperative jurisdiction — has also promised to improve communication channels to facilitate Indian information requests.

ü  The 400-km distance between Wardha and Aurangabad may not be very long, but the cables which connect the two cities in Maharashtra will, in a couple of years, have the distinction of being the world’s highest capacity power transmission line. At present, it is “charged to 400 kV” but when the Power Grid Corporation of India is ready, the capacity of the line will be raised to 1,200 kV. Nowhere in the world does a 1,200-kV line exist, partly because other countries do not need such high capacity lines

_{ECONOMY NEWS}

 

ü  As was expected, on Day Two of the Ninth World Trade Organisation (WTO) Ministerial, a deal at Bali seemed out of reach with India favouring failure of the summit over a compromise. Addressing the Plenary, Commerce and Industry Minister Anand Sharma not only stated that India cannot accept the due restraint provision in its current form but also that “we consider it premature to lend support to an inconclusive trade facilitation agreement.”

ü  Pick-up in exports and decline in gold imports are likely to keep the country’s current account deficit lower during the rest of the fiscal compared to the same period last year, India Ratings report indicated.

ü  The study ‘The Product Mindset 2013’ conducted by safety science company UL said as much as 88 per cent of Indian manufacturers operate globally compared with 68 per cent in China and 64 per cent in Brazil.

ü  The country’s GSM operators added 1.66 million rural subscribers in October, taking their overall user base to 274.32 million, with Vodafone India adding the maximum users during the month.

_{INTERNATIONAL NEWS}

ü  The European Union is imposing fines totalling 1.7 billion euros ($2.3 billion) on six financial institutions for manipulating interest-rate benchmarks.

ü  The Organization of Petroleum Exporting Countries (OPEC) has no appetite for changing its daily production limit amid comfortable prices.

ü  The Obama Administration has urged the US Congress to hold off on new sanctions against Iran as this could jeopardise the recently negotiated deal on the Iran nuclear weapons programme.

_{COMPANY NEWS}

ü  At least 500 executives at Ashok Leyland Ltd have opted for a voluntary retirement scheme (VRS) announced by the company last month as part of its efforts to cut costs in the wake of a slowdown in the commercial vehicle sector.

ü  Indian generic drug manufacturer Wockhardt has been asked by America’s Federal Drug Administration (FDA) to conduct a global assessment of its plants to ensure that the drug produced by the company conform to FDA requirements for safety, efficacy, and quality.

ü  Cash-rich PSUs such as Coal India, NMDC, SAIL, NTPC and ONGC may buy a stake in power equipment producer Bharat Heavy Electricals Ltd (BHEL), a ‘Maharatna’ category Central public sector enterprise (CPSEs).

ü  Kingfisher Airlines tops a list of 50 top loan defaulters drawn up by public sector banks. The list, released by the All-India Bank Employees Association, says Vijay Mallya’s now-defunct airline owed Rs 2,673 crore to public sector banks.

ü  The board of trustees of SKS Trust Advisors, the single-largest shareholder in SKS Microfinance, has decided to approach the Company Law Board (CLB), alleging "oppression of minority shareholders", as well as "mismanagement" in the company.

ü  Mexico-based Cinepolis, the world’s fourth multiplex operator, has signed up with mall developers to open 50 screens in Andhra Pradesh with an incremental investment of Rs 100 crore over the next 30 months

_{NIFTY TECHNICAL LEVELS}

ü  RSI was at 53, MACD positive above signal line; India VIX was at 23~ which all Indicate that MACD positive is a good sign but VIX at higher levels indicating that market may witness some profit booking at higher levels.

ü  Though Nifty closed below its 5 DMA (6170) but still above its 20 DMA (6114), 50 DMA (6080) & 200 DMA(5871) indicating that market has broken its immediate short term support but still undertone is bullish.

_{Fundamental picks for Investors:}

BHEL, Bajaj Finance, Cipla, Corporation Bank, DB Corp., Engineers India, Exide Inds., Federal Bank, GMDC, Goodyear India, HT Media, IDFC, Ingersoll-Rand, Jyoti Structures, Kalpataru Power, KSB Pumps, LIC Hsg Finance, McNally Bharat, Navneet Education, Power grid Corpn, PTC India, Reliance Inds., PNB, SBI, TVS Motors, Yes Bank, Castrol India, SKF India.