LAST WEEK WAS FULL OF EVENTS THE MOST IMPORTANT OF WHICH WAS UNION BUDGET. AGAINST THE FEAR , F.M DELIVERED A MODERATE BUDGET FOCUSING ON CUTTING SUBSIDIES AND FISCAL CONSOLIDATION. THE FISCAL DEFICIT TARGET OF 5.1% AND LIMITING THE SUBSIDY BELOW 2% IS A WELCOMING AND REALISTIC STEP. HOWEVER LACK OF ENTHUSIASM AND ANY MAJOR ANNOUNCEMENT OF REFORMS AND POLICIES LED TO SOME PESSIMISM.
I HAVE ATTEMPTED TO SUMMARIES THE MAIN POINTS OF THE BUDGET 2012-13 AND THE COMPANIES WHICH MAY BE BENEFITED OR AFFECTED BY IT FOR YOUR GUIDANCE AND INFORMATION:
HIGHLIGHTS:
1. Fiscal Deficit is projected to be 5.1% of GDP( Analysts believe that its realistic and could be achieved but there is no road map,how will it be achieved);
2. Total Subsidy Expenses (Fuel, Food & Fertiliser) may be around 77784 crore, which may be brought below 2% of GDP(A good projection, indication of hike in fuel prices soon shows that the Government is seriously thinking for it);
3. Disinvestment in PSUs targeted to be 30,000 crore;
4. GDP for the year FY12 may grow around 6.9% and for FY13 may be 7.6%(+/- 0.25%);
5. Fiscal Responsibility and Budget management Act (FRBM) shall be introduced in the finance bill;
6. Rajiv Gandhi Equity Scheme is to introduced for increasing participation of retail in share market;
7. Implementation of GST shall come effective from August 2012;
8. Service Tax hiked to 12% from 10%;
9. Now all services to be taxed except those in negative list(e.g., Government services, entertainment, education, public transport, etc)
10. STT reduced by 20% on delivery transaction to 0.10% from earlier 0.125%.
COMPANIES GETTING EFFECT FROM THE BUDGET ARE AS FOLLOWS:
(A) INFRASTRUCTURE: Positive for L&T, Lanco Infra, IVRCL Infra, IRB Infra, etc.
(B) BNAKS: Positive for PSU Banks like SBI, PNB, BOB, BoI, CAN BANK, SYNDICATE BANK, etc
(C) FERTILISERS: Positive for Fertiliser stocks like GSFC, NFL, CHAMBAL, GNFC, COROMANDEL etc.
(D) AUTO: Negative for Auto Stocks like MARUTI, TATA MOTORS, MAHINDRA, etc.,
(E) TEXTILE: Shares of the companies like SKUMARS, SIYARAM, LOVABLE, BOMBAY DYEING may be benefited by the budget.
(F) RETAIL: Companies like TRENT, PANTALOON, etc may get benefit on the government's consideration of FDI in multi-brand retail.
(G) OIL & GAS: Companies like GAIL, ONGC, CAIRN etc may be seen in benefit from the budget.
(H) POWER SECTOR: Companies like RPOWER, NTPC, etc may get the benefit.
(I) JEWELRY SECTOR: Companies like TITAN, GITANJALI, RAJESH EXPORTS etc may be getting negative effect from the budget.
Now what next in the Market and what one should do???
Political situation at the Center and Global Cues may govern the future course of market. Absence of any major event(s) may keep the stock market in a small range of 5200-5600 in Nifty, beyond which Nifty may give +/- 5% move. Any instability on political front at the center, deepening of the eurozone crisis, oil price shocks, rising dollar and weakening rupee may worsen the sentiments and Indices may go down, else every dip is a buying opportunity in stock specific counters. Power, Textile, Sugar sectors may remain in focus in the near term for buying.
Banking & Real estate stocks may loose shine till the chances of RBI cutting the interest rates become clear. Annual credit policy review by RBI is scheduled on Tuesday, 17th April 2012 and the analysts expect that RBI may look for inflation figures of April & May 2012, before it starts cutting the rates. The main reason for this presumption is that government has hiked customs and excise duty, service tax and indicated for cutting of fuel subsidies, which may again start inflation to rise in months to come, hence RBI may review inflation figure of April & May before it starts the bringing down of key interest rates. On the other side, the growth concerns and unavailability of cheaper funds to India Inc. have already started affecting the margins & hitting the Capex plans significantly and that's the reason why Indian stock market have been lagging behind amongst its Asian peers and global leaders. Also the price of crude will play an important role. If the global worries ease especially pertaining to Iran and its nuke-plans, falling demand from China, as China's economy is slowing down may brighten the chances of crude coming down below $90/bbl. Weakening rupee is also a very important factor and indicator for market direction. If the value of $ in terms of the rupee rises to 52-54, then certainly its will be problematic for Indian stock market. However there is ray of hope that after the successful end of the budget session, the markets will set for some up-move above 5600.
In the mean time we have to accumulate the select stocks if Nifty reaches 5200-5150 range below which it it may test 5000-4950-4800. The chances of Nifty testing below 5000 is very less and only any major shocking event(like failure of Congress led Govt in the Center, global tensions, or oil price shock) could bring it down, which shall be the best buying opportunity. As of now chances of below 5000 is less, say 25%.
The upside of the market is capped at 5600-5650, beyond which market needs a positive cue, especially from RBI that interest rate may be softened soon. On this expectation and inflation figures, there may be a short term rally in the market starting from March last-April first week and may culminate if the RBI remains silent on its April, 17th policy review. If there is cut in repo-rate by 50bps(chances are fair for this magnitude in the starting of rate cuts), then the market shall take it as positive and shall further fuel the rally, which will be mainly driven by the liquidity and FIIs flows.
Technically,Nifty should get the strong support in the range of 5200-5150, below which the short term trend would become negative and Nifty may test 5050-4800. On the higher side Nifty may find crucial resistance in the range of 5500-5550 above which gate for 5630-5750 will be open.
FOR THIS WEEK(SPOT LEVELS): Support for the Nifty is at 5270 and resistance at 5420. Hence the no trading zone for the nifty is 5270-5420.
BUY CE5400 & CE5500 only above 5420 for the target of 5550-5630, keeping stop-loss of 5270. (Chances are very less in the march series)
BUY PE5300 & PE5200 only below 5270 for the target of 5200-5150, keeping the stop-loss of 5240.(Chances are high for the decline in march series)
FOLLOWING STOCKS COULD BE THE BEST STOCK PICKS FOR THE NEAR TERM DELIVERY HOLDINGS(45-60++ DAYS):
1. HDFC WARRANT(961682)-CMP 82.76: JUST KEEP ON BUYING THIS STOCKS IN THE LOT OF 1850. THOSE WHO CAN HOLD MEDIUM TERM(2-5 MONTHS) MAY GET PRICE AROUND 125++ BY 22ND AUGUST 2012. SERIOUS INVESTOR MUST BUY AT LEAST 1 LOT.
2. STANDARD CHARTERED PLC(580001)-CMP 94.20: RECOMMEDED LAST WEEK AT 79, STOCK SHOT UP 20%. THE NEXT TARGET IS 125++++. BUY AND ADD ON EVERY DIP.
3. SAINT GOBAIN(515043)-CMP46.60: THIS STOCK HAS BEEN IN OUR RADAR FOR LAST ONE YEAR AND NOW AGAIN RUMORS OF DE-LISTING COULD MOVE THE STOCK TO 65-70+++. AS THE STOCK HAS MOVED TO TRADE-TO-TRADE GROUP BUY ONLY IN DELIVERY FOR HOLDING 45-60 DAYS.
3. TIMKEN(522113)-CMP 228.45: BUY/ADD THIS STOCK ON EVERY DIP AND HOLD FOR THE TARGET OF 300++++. NEWS FLOW MAY HIT THE MARKET SOON. BUY IN SMALL QUANTITY.
4. RPOWER(532939)-CMP 130.50: BUY AT CMP & DIPS. THE STOCK MAY SURGE TO 150++ VERY SOON. TRADERS IN F&O CAN KEEP THE STOP-LOSS OF 125.
5. FORTIS HEALTHCARE(532843)-CMP 107.10: BUY THIS STOCK AT CMP AND ADD ON EVERY DIP. STOCK MAY RISE TO 135-140++++ IN A SHORT TERM. ONLY DELIVERY BUYERS NEED TO BUY.
6. THOMAS COOK(500413)-CMP 64.90: BUY THIS STOCK AT CMP AND ADD ON EVERY DIP. I HAVE BEEN RECOMMENDING THIS STOCK FROM Rs.44+45 & THEN AGAIN AT Rs. 54-55 LEVELS AGAIN RECOMMENDING AT 64-65 FOR THE TARGETS ABOVE 75++. THERE IS A BUZZ OF DE-LISTING AROUND 72 LEVELS. HENCE BUY THIS STOCK.
7. UNITED SPIRITS(532432)-CMP 578.70: BUY & BUY THIS STOCK AND ADD ON EVERY DIP, BE IT 500 OR 450 OR 650. HOLD FOR THE MEDIUM TERM TARGET OF 700+++. EVERY BAD NEWS OF THE UNITED GROUP GETTING PRICED-IN. SOON THE WORST MAY BE OVER. ONLY THOSE WHO HAVE THEIR OWN MONEY TO INVEST NEED TO GO FOR THIS COMPANY AS IT HIGHLY VOLATILE. SHORT TERM TRADERS ARE NOT ADVISED TO BUY. ONLY DELIVERY BUYING.
ASTROLOGICALLY: Planetary configuration is very complex and tough there will be very deceptive moves in the markets. There will be weakness in the markets as said earlier till mercury is retrograde. However there will be sudden deceptive up moves also, which may confuse the traders. Its tough time to trade hence sitting out of markets is advisable, with a view to buy and add on dips the stock specific counters. There will be a short term rally after 28th March 2012 which may last around 13th April 2012. This week market seems to remain weak. Stay cautious and alert.........
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.Nothing in this article is, or should be construed as, investment advice.
Disclaimer:
This is neither an offer nor a solicitation to purchase or sell securities. The information and views contained on this blog are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in, or have positions in the securities mentioned in their articles. Neither I (Vikas Srivastava) nor any of the contributors accepts any liability arising out of use of the above information/article. Reproduction in whole or in part without written permission is prohibited.
I HAVE ATTEMPTED TO SUMMARIES THE MAIN POINTS OF THE BUDGET 2012-13 AND THE COMPANIES WHICH MAY BE BENEFITED OR AFFECTED BY IT FOR YOUR GUIDANCE AND INFORMATION:
HIGHLIGHTS:
1. Fiscal Deficit is projected to be 5.1% of GDP( Analysts believe that its realistic and could be achieved but there is no road map,how will it be achieved);
2. Total Subsidy Expenses (Fuel, Food & Fertiliser) may be around 77784 crore, which may be brought below 2% of GDP(A good projection, indication of hike in fuel prices soon shows that the Government is seriously thinking for it);
3. Disinvestment in PSUs targeted to be 30,000 crore;
4. GDP for the year FY12 may grow around 6.9% and for FY13 may be 7.6%(+/- 0.25%);
5. Fiscal Responsibility and Budget management Act (FRBM) shall be introduced in the finance bill;
6. Rajiv Gandhi Equity Scheme is to introduced for increasing participation of retail in share market;
7. Implementation of GST shall come effective from August 2012;
8. Service Tax hiked to 12% from 10%;
9. Now all services to be taxed except those in negative list(e.g., Government services, entertainment, education, public transport, etc)
10. STT reduced by 20% on delivery transaction to 0.10% from earlier 0.125%.
COMPANIES GETTING EFFECT FROM THE BUDGET ARE AS FOLLOWS:
(A) INFRASTRUCTURE: Positive for L&T, Lanco Infra, IVRCL Infra, IRB Infra, etc.
(B) BNAKS: Positive for PSU Banks like SBI, PNB, BOB, BoI, CAN BANK, SYNDICATE BANK, etc
(C) FERTILISERS: Positive for Fertiliser stocks like GSFC, NFL, CHAMBAL, GNFC, COROMANDEL etc.
(D) AUTO: Negative for Auto Stocks like MARUTI, TATA MOTORS, MAHINDRA, etc.,
(E) TEXTILE: Shares of the companies like SKUMARS, SIYARAM, LOVABLE, BOMBAY DYEING may be benefited by the budget.
(F) RETAIL: Companies like TRENT, PANTALOON, etc may get benefit on the government's consideration of FDI in multi-brand retail.
(G) OIL & GAS: Companies like GAIL, ONGC, CAIRN etc may be seen in benefit from the budget.
(H) POWER SECTOR: Companies like RPOWER, NTPC, etc may get the benefit.
(I) JEWELRY SECTOR: Companies like TITAN, GITANJALI, RAJESH EXPORTS etc may be getting negative effect from the budget.
Now what next in the Market and what one should do???
Political situation at the Center and Global Cues may govern the future course of market. Absence of any major event(s) may keep the stock market in a small range of 5200-5600 in Nifty, beyond which Nifty may give +/- 5% move. Any instability on political front at the center, deepening of the eurozone crisis, oil price shocks, rising dollar and weakening rupee may worsen the sentiments and Indices may go down, else every dip is a buying opportunity in stock specific counters. Power, Textile, Sugar sectors may remain in focus in the near term for buying.
Banking & Real estate stocks may loose shine till the chances of RBI cutting the interest rates become clear. Annual credit policy review by RBI is scheduled on Tuesday, 17th April 2012 and the analysts expect that RBI may look for inflation figures of April & May 2012, before it starts cutting the rates. The main reason for this presumption is that government has hiked customs and excise duty, service tax and indicated for cutting of fuel subsidies, which may again start inflation to rise in months to come, hence RBI may review inflation figure of April & May before it starts the bringing down of key interest rates. On the other side, the growth concerns and unavailability of cheaper funds to India Inc. have already started affecting the margins & hitting the Capex plans significantly and that's the reason why Indian stock market have been lagging behind amongst its Asian peers and global leaders. Also the price of crude will play an important role. If the global worries ease especially pertaining to Iran and its nuke-plans, falling demand from China, as China's economy is slowing down may brighten the chances of crude coming down below $90/bbl. Weakening rupee is also a very important factor and indicator for market direction. If the value of $ in terms of the rupee rises to 52-54, then certainly its will be problematic for Indian stock market. However there is ray of hope that after the successful end of the budget session, the markets will set for some up-move above 5600.
In the mean time we have to accumulate the select stocks if Nifty reaches 5200-5150 range below which it it may test 5000-4950-4800. The chances of Nifty testing below 5000 is very less and only any major shocking event(like failure of Congress led Govt in the Center, global tensions, or oil price shock) could bring it down, which shall be the best buying opportunity. As of now chances of below 5000 is less, say 25%.
The upside of the market is capped at 5600-5650, beyond which market needs a positive cue, especially from RBI that interest rate may be softened soon. On this expectation and inflation figures, there may be a short term rally in the market starting from March last-April first week and may culminate if the RBI remains silent on its April, 17th policy review. If there is cut in repo-rate by 50bps(chances are fair for this magnitude in the starting of rate cuts), then the market shall take it as positive and shall further fuel the rally, which will be mainly driven by the liquidity and FIIs flows.
Technically,Nifty should get the strong support in the range of 5200-5150, below which the short term trend would become negative and Nifty may test 5050-4800. On the higher side Nifty may find crucial resistance in the range of 5500-5550 above which gate for 5630-5750 will be open.
FOR THIS WEEK(SPOT LEVELS): Support for the Nifty is at 5270 and resistance at 5420. Hence the no trading zone for the nifty is 5270-5420.
BUY CE5400 & CE5500 only above 5420 for the target of 5550-5630, keeping stop-loss of 5270. (Chances are very less in the march series)
BUY PE5300 & PE5200 only below 5270 for the target of 5200-5150, keeping the stop-loss of 5240.(Chances are high for the decline in march series)
FOLLOWING STOCKS COULD BE THE BEST STOCK PICKS FOR THE NEAR TERM DELIVERY HOLDINGS(45-60++ DAYS):
1. HDFC WARRANT(961682)-CMP 82.76: JUST KEEP ON BUYING THIS STOCKS IN THE LOT OF 1850. THOSE WHO CAN HOLD MEDIUM TERM(2-5 MONTHS) MAY GET PRICE AROUND 125++ BY 22ND AUGUST 2012. SERIOUS INVESTOR MUST BUY AT LEAST 1 LOT.
2. STANDARD CHARTERED PLC(580001)-CMP 94.20: RECOMMEDED LAST WEEK AT 79, STOCK SHOT UP 20%. THE NEXT TARGET IS 125++++. BUY AND ADD ON EVERY DIP.
3. SAINT GOBAIN(515043)-CMP46.60: THIS STOCK HAS BEEN IN OUR RADAR FOR LAST ONE YEAR AND NOW AGAIN RUMORS OF DE-LISTING COULD MOVE THE STOCK TO 65-70+++. AS THE STOCK HAS MOVED TO TRADE-TO-TRADE GROUP BUY ONLY IN DELIVERY FOR HOLDING 45-60 DAYS.
3. TIMKEN(522113)-CMP 228.45: BUY/ADD THIS STOCK ON EVERY DIP AND HOLD FOR THE TARGET OF 300++++. NEWS FLOW MAY HIT THE MARKET SOON. BUY IN SMALL QUANTITY.
4. RPOWER(532939)-CMP 130.50: BUY AT CMP & DIPS. THE STOCK MAY SURGE TO 150++ VERY SOON. TRADERS IN F&O CAN KEEP THE STOP-LOSS OF 125.
5. FORTIS HEALTHCARE(532843)-CMP 107.10: BUY THIS STOCK AT CMP AND ADD ON EVERY DIP. STOCK MAY RISE TO 135-140++++ IN A SHORT TERM. ONLY DELIVERY BUYERS NEED TO BUY.
6. THOMAS COOK(500413)-CMP 64.90: BUY THIS STOCK AT CMP AND ADD ON EVERY DIP. I HAVE BEEN RECOMMENDING THIS STOCK FROM Rs.44+45 & THEN AGAIN AT Rs. 54-55 LEVELS AGAIN RECOMMENDING AT 64-65 FOR THE TARGETS ABOVE 75++. THERE IS A BUZZ OF DE-LISTING AROUND 72 LEVELS. HENCE BUY THIS STOCK.
7. UNITED SPIRITS(532432)-CMP 578.70: BUY & BUY THIS STOCK AND ADD ON EVERY DIP, BE IT 500 OR 450 OR 650. HOLD FOR THE MEDIUM TERM TARGET OF 700+++. EVERY BAD NEWS OF THE UNITED GROUP GETTING PRICED-IN. SOON THE WORST MAY BE OVER. ONLY THOSE WHO HAVE THEIR OWN MONEY TO INVEST NEED TO GO FOR THIS COMPANY AS IT HIGHLY VOLATILE. SHORT TERM TRADERS ARE NOT ADVISED TO BUY. ONLY DELIVERY BUYING.
ASTROLOGICALLY: Planetary configuration is very complex and tough there will be very deceptive moves in the markets. There will be weakness in the markets as said earlier till mercury is retrograde. However there will be sudden deceptive up moves also, which may confuse the traders. Its tough time to trade hence sitting out of markets is advisable, with a view to buy and add on dips the stock specific counters. There will be a short term rally after 28th March 2012 which may last around 13th April 2012. This week market seems to remain weak. Stay cautious and alert.........
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.Nothing in this article is, or should be construed as, investment advice.
Disclaimer:
This is neither an offer nor a solicitation to purchase or sell securities. The information and views contained on this blog are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in, or have positions in the securities mentioned in their articles. Neither I (Vikas Srivastava) nor any of the contributors accepts any liability arising out of use of the above information/article. Reproduction in whole or in part without written permission is prohibited.
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