Market Outlook: Dealer's Diary

Market Outlook
July 8, 2013
Dealers Diary
Indian markets are expected to open in the red today tracking negative opening trades in SGX Nifty and most of the Asian bourses. Asian markets are trading lower as better-than-forecast monthly US jobs report has fueled speculation that the Federal Reserve may begin reducing stimulus this year. US markets moved mostly higher over the course of the trading session on Friday. The strength on Wall Street came following the release of the report from the Labor Department showing stronger than expected job growth in the month of June. Majority of European markets finished in the red on Friday, following the strong rally of the previous session. The unexpected decline in Germany factory orders weighed on investor sentiment. Also, investors were unsure about what an upbeat U.S. jobs report may mean in terms of potential stimulus tapering by the Federal Reserve. Meanwhile, Indian markets pared early gains on Friday, as weak rupee and caution ahead of U.S. jobs data due later in the day limited the upside. President Pranab Mukherjee signed the ordinance on Food Security Bill, which will lapse if the Parliament fails to pass the bill within six weeks of the first sitting of the monsoon session expected to start in late July.
Domestic Indices Chg (%) (Pts) (Close)
BSE Sensex Nifty MID CAP SMALL CAP BSE HC BSE PSU BANKEX AUTO METAL OIL & GAS BSE IT
Global Indices
0.4 0.5 0.2 0.3 0.1 0.5 0.2 0.0 0.6 1.5 (0.3)
Chg (%)
85 19,496 31 11 15 12 28 5,868 5,992 5,692 9,083 6,027
31 13,038 2 10,818 47 131 (18)

(Pts)
7,648 8,916 6,226

(Close)
Dow Jones NASDAQ FTSE Nikkei Hang Sang Straits Times Shanghai Com
Indian ADR
1.0 1.0 (0.7)

2.1 1.9 0.7 0.1
147 15,136 36 (46) 3,479 6,376
291 14,310 386 20,855 23 1 3,170 2,007
Markets Today
The trend deciding level for the day is 19,538/ 5,876 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 19,598 19,700 / 5,893 5,918 levels. However, if NIFTY trades below 19,538 / 5,876 levels for the first half-an-hour of trade then it may correct up to 19,436 19,375 / 5,851 5,834 levels.
Indices SENSEX NIFTY S2 19,375 5,834 S1 19,436 5,851 PIVOT 19,538 5,876 R1 19,598 5,893 R2 19,700 5,918
Chg (%) 1.5 1.5 (0.9) 2.4
(Pts) 0.6 0.1 (0.3) 0.9
(Close) $41.1 $7.4 $36.9 $36.9
INFY WIT IBN HDB

Advances / Declines
News Analysis

BSE
NSE
JLR facilities faces strike threats over third party staff RCom to hive off realty assets into separate listed company Ashok Leyland bags orders for 2,610 buses from IRT Thermax wins order worth `1,700cr
Refer detailed news analysis on the following page
Advances Declines Unchanged

Volumes (` cr)
1,189 1,152 133
688 651 95
Net Inflows (July 4, 2013)

` cr FII MFs Purch 2,298 365 Sales 1,877 389 Net 421 (24) MTD 1,040 (450) YTD 72,347 (12,627)
BSE NSE
1,627 8,237
FII Derivatives (July 5, 2013)

` cr Index Futures Stock Futures Purch 1,304 1,556 Sales 1,180 1,391 Net 124 164 Open Interest 10,806 26,759
Gainers / Losers
Company
Thermax IDFC Jaiprakash Asso. Jindal Steel M & M Finan.
Gainers Price (`) chg (%)

625 130 54 224 276 5.6 4.4 3.7 3.5 3.1
Company
Wockhardt Gitanjali Gems MMTC Emami Amara Raja Batt.
Losers Price (`) chg (%)

915 183 80 479 267 (7.9) (5.0) (5.0) (4.6) (3.3)
www.angelbroking.com
Market Outlook
July 8, 2013
JLR facilities faces strike threats over third party staff

According to media reports, the production line at Jaguar Land Rover (JLR) facilities in the UK may get impacted after delivery workers from DHL voted for a strike. The DHL workers have been demanding a large pay rise and similar terms and conditions on par with the JLR staff. As per the reports, DHL has close to 1,800 workers at JLRs facilities in Castle Bromwich, Solihull and Halewood and are responsible for managing the supply chain at the plants. We are watchful of the further developments on this front. However, any shutdown due to the third party strike could impact the JLR operations adversely. We retain our positive view on the company and maintain our Buy rating on the stock. Our SOTP based target price for Tata Motors works out to `347.
RCom to hive off realty assets into separate listed company

Reliance Communications (RCom) yesterday announced that its Board of Directors has in-principle approved the demerger of its real estate assets into a new company Reliance Properties Ltd. to unlock value. The new entity will be listed separately and the company will allot pro rata shares in the new entity as per the RComs share holding. The demerger is expected to enhance value for RComs existing shareholders. As per the company, independent valuers have estimated that the preliminary and indicative monetized value of RComs real estate on development is more than `12,000cr (~US$2bn), or `60 per RCom share. These include two properties, the 135 acres in Dhirubhai Ambani Knowledge City where it has potential to build 15mn square feet of space in Navi Mumbai and 4 acres of property near Connaught Place in New Delhi. The valuation does not include properties in Hyderabad, Kolkata, Chennai amongst others which have not been valued. The proposed separation of real estate into a separate unit is part of RComs strategic plan to divest non-core assets and focus on its core wireless and enterprise business and reduce debt burden. The board also decided to set up a committee which will decide on the timeline of the monetization. The proposed demerger is subject to approvals from shareholders, lenders and courts. Last December, RCom and China's Wanda Group entered a joint venture, giving it the rights to develop residential and commercial property at DAKC. Wanda Group was also given a contract to develop a new business district project in Hyderabad covering 80 acres, owned by its sister concern Reliance Infrastructure, for commercial, residential purposes and hotel, with plans to develop up to 10mn sq ft. We believe that this deal is value accretive. Earlier no value was been given to the land which was with RCom, now a value has been given. This spin off is another effort in anticipation for the group to raise funds through an imminent stake sale. The company has been trying to raise funds for several years to reduce debt. The rating is currently under review.
Ashok Leyland bags orders for 2,610 buses from IRT

According to a BSE announcement, Ashok Leyland has bagged an order to deliver 2,610 buses from the Institute of Road Transport (IRT), Tamil Nadu. The company however has not disclosed the details of the value of the order nor has it disclosed
Market Outlook
July 8, 2013
the timeframe for order execution. Nonetheless, this is a positive development for the company and is expected to provide boost to the companys volumes given that the demand environment is extremely challenging for the commercial vehicle manufacturers. We retain our positive view on the company. At `19, the stock is trading at 8.7x FY2015 earnings. We maintain our Buy rating on the stock with a target price of `27.
Thermax wins order worth `1,700cr

Thermax has bagged order worth `1,700cr order from a petrochemical company for supply of high pressure boilers. The project scope involves design, manufacture and commissioning of nine CFBC boilers for two of its plants. The boilers are expected to be commissioned at the clients sites within 25-29 months. We maintain Neutral rating on Thermax.
Economic and Political News

President signs ordinance, Food Security is law now UIDAI aims to cover 60cr citizens under Aadhaar FIPB clears 7 pharma FDI proposal, defers 3 Sugar imports set to stop after import duty hike India expanded at faster rate than China in June: HSBC
Corporate News

Shriram Transport to raise `2,000cr through NCD issue
CCI rules out abuse of dominance by United India Insurance

SJVN gets coal block for 1,320MW power plant in Bihar
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint

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Market Outlook

85 19,496 31 11 15 12 28 5,868 5,992 5,692 9,083 6,027

31 13,038 2 10,818 47 131 (18)

7,648 8,916 6,226

1.0 1.0 (0.7)

147 15,136 36 (46) 3,479 6,376

291 14,310 386 20,855 23 1 3,170 2,007

Chg (%) 1.5 1.5 (0.9) 2.4

(Pts) 0.6 0.1 (0.3) 0.9

(Close) $41.1 $7.4 $36.9 $36.9

INFY WIT IBN HDB

Advances Declines Unchanged

1,189 1,152 133

Net Inflows (July 4, 2013)

FII Derivatives (July 5, 2013)

Gainers Price (`) chg (%)

Losers Price (`) chg (%)

JLR facilities faces strike threats over third party staff

RCom to hive off realty assets into separate listed company

Ashok Leyland bags orders for 2,610 buses from IRT

Thermax wins order worth `1,700cr

Economic and Political News

Shriram Transport to raise `2,000cr through NCD issue

CCI rules out abuse of dominance by United India Insurance

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