Financial focus Weekly Newsletter

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ISSUE 3 2013 VOLUME 1

TOP STORIES….…........1 MARKET ACTIVTY ….....2

ECONOMICS ........ …... 3

TERM OF THE WEEK ….4 TRADING CALLS……….5

A o n e s t o p g u i d e t o k n o w a b o u t a l l t h e r e c e n t h a p p e n i n g s i n t h e f i n a n c e w o r l d

TOP STORIES : INDIA

TWIN SHOCKER: IIP CONTRACTS BY -1.6%, CPI AT

9.87% Industrial production unexpectedly contracted by 1.6% in May from a year earlier vs 2.1% in April, with manufacturing sector shrinking 2% from a year earlier & capital goods production contracting 2.7% in May from a year earli-er. CPI inflation on the other hand picked up in June to 9.87%, after slowing for 3 straight months. Food prices for consumers rose an annual 11.84% in June, faster than an annual rise of 10.65% in May.

Financial focus

JUNE CAR SALES DIP 9%; SIAM SEEKS STIMULUS

Domestic car sales fell for a record eighth month in row in June with a dip of 9% as economic slowdown and low consumer sentiments continue to hit demand, prompting the industry body SIAM to seek stimulus package for the automobile sector from the Government. According to the data released by the Society of Indian Automobile Manufacturers (SIAM), mo-torcycle sales in last month declined by 9.16 percent to 7,99,139 units from 8,79,721 units in the same month previous year.

GOLD CURBS AID TRADE DEFICIT NARROW IN JUNE

FROM 7-MTH HIGH

India's trade deficit narrowed in June to USD 12.24 billion from a 7-month high, helped by a slowdown in gold imports, which should ease pressure on the current account balance and the beleaguered rupee. To tamp down gold demand, Indian authorities last month took a slew of measures including a 2 percentage point hike in import duty. Those measures appear to have worked as the growth in gold and silver imports slowed to 22.8 percent year-on-year at USD 2.45 billion last month.

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ASIAN-PACIFIC MARKETS MIXED AMID CAUTION ABOUT CHINA'S GDP DATA

Asian-Pacific markets were mixed Friday as investors edged away from risk, awaiting next week's data on growth of China's economy. Japan's Nikkei 225 and Australia's S&P/ASX 200 each edged up 0.2%. Hong Kong's Hang Seng Index slid 0.8%. China's Shanghai Composite dropped 1.6%. South Korea's Kospi fell 0.4%. India's Sensex was up 1%.

NIFTY RECLAIMS 6000 ON TRADE DEFICIT FALL; IN-FOSYS UP 11%

The index rose 73.90 points or 1.25 percent to finish at 6009, continuing its uptrend for the second consecutive session. The BSE Sensex advanced 282.41 points or 1.44 percent to end at 19958.47 after hitting an intraday high of 19991.94. Infosys, the second largest software services exporter, beat the street with the consolidated net profit growing higher-than-expected 0.8 percent sequentially to Rs 2374 crore as against analysts’ expectations of Rs 2315 crore, helped by new deal wins.

TOP STORIES : WORLD

BERNANKE EMPHASIZES U.S. FED MESSAGE OF CON-

TINUED STIMULUS

Speaking shortly after the U.S. Federal Reserve released minutes of its lat-est policy meeting Wednesday, Chairman Ben Bernanke reinforced the impression that the Fed will be sticking with its bond-buying program for a while. "Highly accommodative monetary policy for the foreseeable future is what's needed in the U.S. economy," Bernanke said.

CHINA EXPORTS SLUMP TO 44-MONTH LOW IN JUNE

China's exports in June were down 3.1% from a year before, raising fresh concerns about the nation's economy and possibly derailing Beijing's goal of 8% export growth for the year. The latest figure combined with a 0.7% decline in imports yielded a trade surplus for the month of US$27.13 bil-lion, down 14% from a year earlier.

ECONOMISTS SEE NO FURTHER EASING BY BANK OF

JAPAN THIS YEAR

Economists are citing the risk of inflation and reversing their previous fore-casts, predicting no additional easing by the Bank of Japan this year. "The BOJ is very reluctant to take any small steps. They are going to hold firm for a while unless something really big happens that forces them to change their price outlook," said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.

MARKET ACTIVITY

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ECONOMICS BRAZIL BOOSTS BENCHMARK INTEREST RATE TO

8.5%

Responding to a six-month inflation rate that hit 3.15% last month, Brazil's central bank raised its key interest rate from 8% to 8.5%. The in-crease is likely to move interest rates higher and in turn reduce consumer spending, an important part of Brazil's economy.

ANALYSIS: INTERNET STARTUPS BLOSSOM ACROSS

MIDDLE EAST

In Amman, Jordan; Dubai, United Arab Emirates; and Riyadh, Saudi Ara-bia, as well as Beirut, Cairo and Gaza City, energetic tech entrepreneurs are launching innovative businesses, creating what some are calling a "startup spring," according to The Economist. "Most of these young firms will not make it, but for those that survive a bright future beck-ons," the magazine says. "Although the Arab world is behind other re-gions in internet use ... it is catching up fast, along with smartphone penetration and e-commerce."

AUSTRALIAN JOBLESS RATES RISES; PRIME MINIS-

TER OUTLINES NEW ECONOMIC FOCUS

With Australia's unemployment rate rising to 5.7%, Prime Minister Kevin Rudd declared the resources boom that sustained the economy through the global economic crisis over. The challenge now, Rudd said, is to revive Australian competitiveness globally with a national strategy of job-market flexibility, less corporate regulation and investment in infrastructure and skill development.

DID YOU KNOW?

None of the Indian Banks operate in Pakistan. Recently, both the countries have agreed to allow two banks from each country, to operate in other country. State Bank of India and Bank of India are allowed to operate in Pakistan. They are yet to start the op-eration. Similarly, National Bank of Pakistan and privately owned United Bank Ltd. are expected to start their operations in India.

RUPEE SNAPS NINE-WEEK LOSING STREAK; RBI TO

THE RESCUE 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.

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Maurti Suzuki Period CMP Call Target Stop Loss

1 week 1447.95 Sell 1390 1501

Avneet’s Call The car sales in India fell for a record eighth month in row in June

with a dip of 9 percent, market leader Maruti Suzuki India posted

8.17 percent decline in domestic sales. With inflation at 9.87% vs

9.31% there would be no rate cut by RBI. The stock also closed below

200-Day Moving Average of 1499.74 and we believe there is more

weakness in the sector and would recommend a sell target at around

1390 for the coming week.

DCB

Period CMP Call Target Stop Loss

1 week 52.25 Buy 55.45 48

The stock has broken the previous level of 51.69 after closing at 52.25

on Friday. With 12 day moving average above 9 day average and RSI

at around 67, the stock is showing a great positive mood. Q1 result of

banks has started on positive note, with the result coming on 16 July.

We expect a positive move even though the markets would remain

choppy.

Strides Arcolab

Period CMP Call Target Stop Loss

1 week 771.85 Buy 815 725

The stock has corrected in this last one week for the reason that

FIPB has not given clearance to Mylan for acquiring Agila Special-

ties. They had FIIs holding of about 46 % and the company has recent-

ly raised this limit from 49% to 74 percent just last week for which

they will be seeking the permission from the RBI. With RSI around 34

and even though the price is below 10 day moving average, we expect a

target of 815-820.

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InFINeeti Team

Aakanksha Hajela

Bhushan Kanathe

Kunal Maheshwari

Vaibhav Garg

Md. Umair Ansari

Bhushan’s Call

Mahindra & Mahindra

Period CMP Call Target Stop Loss

1 week 905.6 Sell 870 920

M&M has closed below its 200-Day moving average of 913.75

on Jul 12. Slowdown in the economy and lower consumer senti-

ments, have adversely affected sales making big players to make

adjustments in production operations. M&M experienced 8%

decline in sales in the month of June 2013. Even when the NIFTY

ended above 6000 on Friday, M&M was down by 1% showing

weakness. Huge selling volumes and high increase in open

interest in F&O on the short side confirm the bearish trend.

IGL

Period CMP Call Target Stop

Loss

1 week 289.10 Buy 310 279

IGL had been trading in the 260-280 range for a while now, and

the range has been broken on the upside amid high volumes on

Friday. The IGL-PNGRB hearing on 16 July is the major trig-

ger for this stock, if SC upholds the decision of high court which

was in IGL’s favor. If it breaks the hurdle of 292 with high vol-

umes, then bullish trend would be confirmed.

IDFC

Period CMP Call Target Stop Loss

1 week 135.30 Buy 145 129

(Purely Technical Call) IDFC has closed above its 20 DMA of

132.13 on Friday. The daily and weekly charts are showing a bull-

ish pattern formation ( Morning star followed by a gap-up opening

candle formation), and also with huge increase in volumes. The

change in open interest in F&O though has decreased on the long

side. RSI is closer to overbought levels of 70, but if the market

continues upward momentum, it might be able to break upwards

above 140 (Trade with a strict Stop Loss in this case—High risk

trade coupled with high return)

Avneet Bulania and Bhushan Kanathe are 2nd year students of IIFT (Kolkata campus)

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