Morning Notes

06.06.2012

R. Wadiwala

Securities Pvt Ltd Commodities Pvt Ltd

Member Broker: NSE, BSE, MCX & NSEL || DP: CDSL || PMS || Mutual Fund

Japan Stocks Rise on G-7 Euro Pledge, U.S. Services Data Japanese stocks rose for a second day after Group of Seven officials agreed to coordinate efforts to tackle Europes debt crisis and a U.S. service industry gauge rose unexpectedly. Nippon Sheet Glass Co. (5202), which generates 39 percent of its revenue in Europe, added 5.5 percent. Toyota Motor Corp. (7203), a carmaker that relies on the U.S. for a fifth of its sales, climbed 0.6 percent after the yen extended losses against the dollar yesterday. Tokyo Derica Co., which sells womens leather handbags, surged 12 percent after canceling a share sale. The Nikkei 225 Stock Average (NKY) rose 0.5 percent to 8,420.66 as of 9:49 a.m. in Tokyo. The broader Topix Index gained 0.2 percent to 709.88 on speculation the market had fallen too far after dropping this week to its lowest level since 1983. Aussie Rises Before GDP Data; Kiwi Gains on Milk Prices Australias dollar rose against most of its 16 major counterparts before data today forecast to show the nations gross domestic product grew at a faster pace in the first quarter. The so-called Aussie gained for a third day as Asian shares advanced, bolstering demand for higheryielding assets. The currency has climbed from an eightmonth low of 95.82 U.S. cents set last week. New Zealands dollar advanced after Fonterra Cooperative Group Ltd., the worlds largest dairy exporter, said auction prices for wholemilk powder rose for the first time this year. Draghi May Move Toward Rate Cut as Debt Crisis Worsens The European Central Bank may edge closer to cutting interest rates to a historic low as the debt crisis tightens its grip on the euro economy and threatens to hurt global growth. While ECB officials meeting in Frankfurt will leave the benchmark rate at 1 percent today, according to 32 of 44 economists surveyed by Bloomberg News, 11 predict a quarter- point reduction and one forecasts a half-point cut. With European governments struggling to fix a crisis thats engulfing Spain and could force Greece out of the euro, pressure is mounting on the ECB to lower rates and introduce more liquidity support for banks.

KEY INDICES
Indian Markets
Index
S&P CNX NIFTY CNX NIFTY JUNIOR CNX 100 S&P CNX DEFTY S&P CNX 500 CNX MIDCAP NIFTY MIDCAP 50 SENSEX

Close
4863.30 9407.65 4760.90 3023.20 3862.55 6801.75 1948.55 16020.64

Pt. Chg.
+15.15 +17.80 +13.95 -0.95 +11.75 +32.00 +6.20 +32.24

Change %
0.31 0.19 0.29 -0.03 0.31 0.47 0.32 0.20

Global Markets
Change (%) 0.57 0.66 0.22 0.00 -0.15 1.07 0.76 0.39 0.67

Index S&P 500 NASDAQ DOW JONES FTSE DAX CAC 40 NIKKEI HANG SENG STRAITS TIMES

Close 1285.50 2778.11 12127.95 5260.19 5969.40 2986.10 8444.16 18329.66 2730.64

Global data recorded/updated last as on 06, June 7.30 a.m. IST

R. Wadiwala

NIFTY TOP GAINERS

Indian Markets Change (%) 3.21 3.09 2.81 2.47 Indian Markets

NIFTY TOP LOSERS

Change (%) -3.15 -2.99 -2.50 -2.37

Company LARSEN & TOU GRASIM IND RELIANCE ENR CAIRN IND

Close 1,211.15 2,311.25 450.15 314.70

Company TATA MOTORS GUJ AMB CEME BHARTI TELE SIEMENS

Close 221.65 146.10 287.20 648.80

MARKET SUMMARY
The key domestic benchmarks pared most of their earlier gains and ended on a flat note, with a positive bias as a weak rupee weighed on domestic sentiment. The rupee reversed earlier gains against the greenback and was nearing the 56 per dollar mark on renewed dollar demand from oil importers and rising global risk aversion that bolstered the safe haven demand for the dollar. A falling rupee may raise overseas borrowing costs for India Inc. and even fuel domestic inflationary pressures. The deepening worries over Europes debt turmoil also kept investors on the edge with investors eyeing the outcome of talks between G7 finance ministers and central banks later as they discuss Europes debt crises. However, positive cues from Asian markets and hopes of an interest rate cut by the RBI supported domestic benchmarks. The BSE SENSEX closed at 16,020.64, up by 32.24 points or by 0.20 per cent and the NSE Nifty ended at 4,863.3, up by 15.15 points or by 0.31 per cent. After witnessing a gap up opening, the key domestic benchmarks continued their northward journey tracking positive cues from their Asian peers. After hitting the days high, the benchmarks pared gains as worries over a falling rupee and lingering debt woes in Europe undermined sentiment. On the Sectoral front, Capital Goods and Banking gained 2 per cent and 0.82 per cent, respectively. Out of the 30 Sensex stocks, there were 18 advances and 12 declines. The Market breadth, indicating the overall health of the market, was strong. On BSE out of total shares traded 3529, shares advanced were 1450 while 1323 shares declined and 756 were unchanged. The top gainers of the BSE Sensex pack were Larsen & Toubro Ltd. (Rs. 1209.50,+3.08%), NTPC Ltd. (Rs. 146.95,+1.98%), State Bank of India (Rs. 2080.25,+1.66%), Hindalco Industries Ltd. (Rs. 117.15,+1.60%), Bharat Heavy Electricals Ltd. (Rs. 210.10,+1.47%), among others. Asian stock markets rose on Tuesday amid speculation that global policymakers may undertake measures to bolster economic growth. Shanghai Composite ended up 0.15 per cent, Hang Seng closed up 0.40 per cent and Nikkei 225 ended higher by 1.04 per cent.

R. Wadiwala

NEWS UPDATES
MACRO Nomura expects RBI to cut the repo rate by 25 basis points at its June 18 meeting, joining the growing chorus predicting the RBI will ease policy this month. Nomura cites "continued weakness" in domestic demand and "moderate" core inflation as key factors behind call. Nomura says expects a total of 50 bps in cuts for calendar 2012, with a second easing move coming in the second half. It had previously expected just one 25 bps rate cut this year, after RBI lowered rates by 50 basis points in April. COMPANY State Bank of India (SBI) is reports that the bank has signed an agreement with brokerage firm Geojit BNP Paribas Financial Services to offer portfolio investment services (PIS) to Non-Resident Indians (NRIs). "NRIs would be able to use the PIS account to trade in shares and convertible debentures through stock exchanges, and the investments would have both options of being repatriable or non-repatriable," the report suggests. Punjab National Bank (PNB), which had proposed to buy 30 per cent in MetLife Insurance for Rs 1, has reworked the sale agreement amidst the insurance regulators discomfort with the deal structure. According to the new proposal, the existing partners (apart from MetLife International) will sell stake to MetLife, which will be offered to PNB. That will ensure the equity capital base of the insurance company is not increased so that the efficiency ratios are kept unchanged. The previous proposal envisaged stake dilution by existing partners by issuing fresh shares and PNB buying stake from the expanded equity base. Brooks Brothers Group, Inc. and Reliance Brands Limited, a part of the Reliance Industries Group, announced the formation of a joint venture company in India. Brooks Brothers is an American icon, an institution that has redefined and shaped classic American style for nearly two centuries, making it the countrys oldest clothing retailer and the clothier of choice for nearly every US President as well as leaders in the worlds of business, the arts, finance and politics. Alstom T&D India has successfully charged three switchyard bays, at 7G5 kV and Ado kV each, in March 2012 in a record time of less than eight months, for Power Grid Corporation of India Limited. Power Grid, the country's central transmission utility, awarded the contract worth i960 MINR to Alstom T&D India in February 2010, Due to delay in land acquisition the company could start work on the 765 kV switchyard in July 2011. Subex, a leading global provider of Business Support Systems (BSS) for Communications Service Providers (CSPs), announced that it has successfully completed the TM forum business metrics automation certification on their ROCware platform. The product has been successfully certified against business metrics automation interface version 1.0 and the revenue assurance metric groups in the business performance measurement system version 5.6. Ruias'-promoted Essar Oil, country's second largest private refiner, has completed the optimisation project at its Vadinar Refinery in Gujarat to 20 million metric tonnes per annum or 405,000 barrels per day. Essar Oil had completed the refinery expansion project to raise its nameplate capacity to 18 million metric tonnes per annum (mmtpa) from 10.5 (mmtpa) this March with an investment of Rs 9,100 crore. Hero MotoCorp (HMC), the countrys largest two-wheeler manufacturer, on Monday announced an investment of Rs 2,575 crore to set up, among other things, two more manufacturing units to the existing three factories.

R. Wadiwala

TECHNICAL ANALYSIS MOST ACTIVE STOCKS PIVOTAL GUIDANCE

Company NIFTY BANK NIFTY RELIANCE RCOM RELCAPITAL REL INFRA LT STER ICICIBANK SBIN TATASTEEL RPOWER TATAPOWER INFOSYSTCH BHEL ONGC ACC Lower 2 4822.73 9263.99 690.66 60.21 294.63 442.89 1190.38 88.01 789.63 2062.59 397.80 88.88 87.96 2372.13 208.85 250.91 1116.33 Lower 1 4849.67 9369.72 695.24 61.30 297.02 446.47 1200.01 89.22 795.99 2079.19 401.00 89.60 88.67 2391.21 210.53 252.93 1125.31 Axis 4864.61 9462.44 700.82 62.20 300.41 450.05 1210.64 90.44 802.34 2095.78 404.20 90.31 89.38 2410.30 212.21 254.95 1134.29 Higher 1 4882.68 9541.71 706.71 63.63 303.49 455.18 1225.07 91.07 807.90 2110.30 407.00 90.94 90.00 2426.99 213.68 256.72 1142.14 Higher 2 4905.77 9643.54 710.58 64.70 306.87 458.74 1236.58 92.18 808.89 2112.89 407.50 91.05 90.11 2429.97 213.94 257.03 1143.55

BULLISH ON SHORT TERM

GRASIM LUPIN BUY AS QUICKDELIVERY FOR BTST/T+2 WITH TARGETS OF 2320-2330-2340 SL 2285 BUY AS QUICKDELIVERY FOR BTST/T+2 WITH TARGETS OF 546-550-553 SL 534

FII and DII Investments

FIIs Date *05 June June-2012 2012 Till Date Purchase 1193.74 9647.60 280901.10 Purchase 1400.18 764.70 51442.10 Sale 1874.60 10994.90 239104.00 Sale 605.53 712.70 57596.20
Inv (crs)

-680.86 -1347.30 +41697.10

Inv (crs)

DIIs

Date *05 June June-2012 2012 Till Date * Provisional Data

+794.65 +52.50 -6153.20

R. Wadiwala

Following the MUTUAL FUNDS

Kotak Select Focus G

Latest NAV: 10.41 (04/06/12) 52-Week High: 11.90 (07/07/12) 52-Week Low: 9.81 (20/12/11)

Top Holdings: As on 30 Apr.

Name of Holding
ITC ICICI Bank HDFC Bank Infosys Reliance Industries

Top 5 Sectors
% Net Assets
6.64 6.20 5.68 4.68 4.03

Top 5 Sectors
Financial FMCG Energy Healthcare Technology

% Net Assets
24.41 13.50 12.29 10.46 10.33

Top 3 Holding Company Details ITC

LTP: 230.20 PB Ratio: 9.75 PE Ratio: 29.66 Year to Date Return: 14.36 Other Funds That Own ITC
Fund name
SBI Magnum FMCG ICICI Prudential FMCG Birla Sun Life Enhanced Arbitrage Ret LIC Nomura MF Equity

% Net Asset
36.78 36.46 10.14 9.78

Date
Apr 30, 2012 Apr 30, 2012 Apr 30, 2012 Apr 30, 2012

ICICI Bank
LTP: 790.30 PB Ratio: 1.49 PE Ratio: 13.94 Year to Date Return: 15.44

Other Funds That Own ICICI Bank

Fund name
Goldman Sachs Banking BeES ance Banking ETF UTI Banking Sector Reg Religare Banking

% Net Asset
28.52 27.10 23.86 22.16

Date
Mar 31, 2012 Apr 30, 2012 Apr 30, 2012 Apr 30, 2012

HDFC Bank
LTP: 496.80 PB Ratio: 3.86 PE Ratio: 22.36 Year to Date Return: 16.33

Other Funds That Own HDFC Bank

Fund name
Reliance Banking ETF Goldman Sachs Banking BeES Religare Banking ICICI Prudential Banking and

% Net Asset
26.05 26.02 23.24 22.77

Date
Apr 30, 2012 Mar 31, 2012 Apr 30, 2012 Apr 30, 2012

R. Wadiwala

DERIVATIVES NOTES
Nifty June 2012 futures were at 4844, at a discount of 19.30 points compared to spot closing of 4863.30. Turnover on NSE`s futures & options (F&O) segment declined to Rs 73256.34 crore from Rs 81583.31 crore on Monday, 4 June 2012.
% Change OI
-1.73

Institutional Investment Trends

(in Crores) JUNE 05, 2012

BUY
1271.59

SELL
986.07

Net Buy/Sell
285.52

OIEoD
7666.62

INDEX FUTURES

State Bank of India (SBI) June 2012 futures were at 2075.10, at a discount compared to spot closing of 2079.85. Tata Motors June 2012 futures were at 222.75, near spot closing of 221.60. L&T June 2012 futures were at 1207.90, near spot closing of 1208. In the cash market, the S&P CNX Nifty rose 15.15 points or 0.31% to settle at 4,863.30, its highest closing level since 31 May 2012.

STOCK FUTURES

1169.70

890.58

279.12

20372.52

1.85

Put Call Ratio Symbol INFY ABGSHIP BANKNIFTY NIFTY NIFTY NIFTY CAIRN RELIANCE MINIFTY NCC LT NIFTY NIFTY Expiry Date 26-Jul-12 28-Jun-12 26-Jul-12 30-Jun-16 31-Dec-15 26-Jul-12 26-Jul-12 26-Jul-12 26-Jul-12 28-Jun-12 26-Jul-12 27-Sep-12 28-Jun-12 Put 60875 44000 8625 1700 2050 9473750 2000 22500 300 40000 9000 772350 46644700 Call 6625 6000 1500 350 500 4364850 1000 13000 180 24000 5500 513250 32787150 Ratio 9.19 7.33 5.75 4.86 4.10 2.17 2.00 1.73 1.67 1.67 1.64 1.50 1.42

R. Wadiwala

DIVIDEND AND OTHER INFORMATION

Innoventive Industries Limited has informed the Exchange that the Board of Directors of the Company at its meeting held on May 30, 2012 has recommended a final dividend of Rs.3/- (Rupees Three Only) per Equity share of Rs.10/- each for the year ended March 31, 2012. Arvind Remedies Limited has informed the Exchange that the Board of Directors of the Company at their meeting held on May 30, 2012 has recommended a dividend @ 7% viz. Rs. 0.70 paise per equity share of Rs. 10 each, subject to the approval of the shareholders in the Annual General Meeting. Kabra Extrusion Technik Limited has informed the Exchange that the Board of Directors of the Company in their meeting held on May 29, 2012 have recommended a dividend of 20% i.e. Rs.1/- per share of Rs.5/- each.

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R. Wadiwala