MONTHLY ROUNDUP (May13)

EQUITY COMMENTARY
Lead Indices In the month of May 2013 Benchmark indices ended positively. While BSE Sensex grew by 1.31% & Nifty gained 0.94%. RBI cuts interest rates by twenty five bps & Wholesale Inflation figure came down below 5 %. However GDP Data came in month of May, were in line with expectations, dampening hopes of further rate cut.
Week no. % Change Key positives Sensex Nifty India Govt. slashed the rate of tax from 20% to 5%, levied on the interest that foreign investors earn from their investments in local bonds, in its latest effort to attract more foreign capital to help finance a wide CAD. The Reserve Bank of India cut the repo rate by 25 bps for the third time since January, but said there is little room to ease monetary policy further, disappointing markets. In the week ended 26 April 2013, Indias foreign exchange reserves increased by $1.60 billion at $ 296.37 billion. In the previous week ended 19 April 2013, the forex reserves had been declined by $ 485.90 million to $294.76 billion. The Cabinet cleared the way for 839 new FM radio channels to go on air in around 300 cities later this year. Lok Sabha has passed the Finance Bill for the fiscal 2013-14 with minor amendments, even as the Principal opposition Party BJP walked out from the house protesting against Coalgate. India's industrial production growth rate bounced back to 2.5% in the month of March 2013 on better performance of power and manufacturing sectors coupled with higher output of capital goods. However, the factory output measured in term of IIP grew by just 1% in FY2013 compared to a growth of 2.90% in previous financial year. Meanwhile, the industrial output growth for the month of February has been slightly revised downwards to 0.46% from the estimates of 0.6% released last month. RBI pegged the GDP growth rate for the current fiscal year at 5.7%, significantly lower than Finance Ministry's forecast of 6.10% to 6.70%. Key negatives

1.50

1.20

2.80

2.80

Indias services sector for 2013-14 financial year began on a dismal note, as the HSBC PMI index for services sector grew at 50.70 in April, compared to 51.40 in March. The composite Purchasing Managers Index (PMI) for India also includes manufacturing PMI was down to 50.50 in April from 51.4 in March. As per a monthly HSBC India survey of services sector managers, the pace of hiring by private sector companies was slowest in seven months. However, the executives expressed optimism about improving trends in coming months. Indirect tax collection in April grew by a meagre 3.30% to Rs 33,684 crore with excise duty collection declining 14.70% y-o-y. Customs duty collection increased by 12.8% to Rs 13,083 crore, while service tax collection grew 13.60% to Rs 10,712 crore in April.

1.30

1.10

India's annual CPI Index slowed for the second straight month in April to 9.39%. In the March month Consumer prices rose 10.39
annually. In April Food prices for consumers rose 10.61% annually, slower than rise of 12.42% annually in March.

MONTHLY ROUNDUP (May13)

India's annual inflation as per the wholesale price index weakened more than expectation of economists in April. The WPI increased 4.89% yoy in April. Economists had forecast a 5.45% increase. Prices of food articles rose 6.08 percent annually, and costs of non-food products advanced 7.59 percent. Fuel and power prices recorded 8.84% increase from a year earlier. Finance Ministry has been agreed to dole out a record Rs.100,000 crore towards cooking fuel and diesel subsidy in Fiscal 2012-13 but wants to change pricing formula from current year to cut down the outgo. Finance Ministry, which had previously given out cash subsidy of Rs.55,000 cr, now has been agreed to give Rs.40,000-45,000 cr more to cover unmet revenue losses on fuel sale in the fiscal year ending March 31, 2013. Excise duty collection has fallen to Rs 9,889 crore for during the month, compared to Rs 11,590 crore in previous year.

-2.90

-3.30

Sectoral Performance In the month of May all Sectoral indices ended in positive except Bankex, Capital Goods, Metal, Oil and Gas, Power, PSU and Realty. The top three gainers of the month were IT, Technology & Consumer durable which rose by 6.23%, 3.69%, and 3.53% respectively while Top three looser indices were Realty, Capital Goods & PSU fell by 11.40%, 3.20% and 3.04% respectively.
BSE INDICES SENSEX BSE-MIDCAP BSE-SMALLCAP 30 Apr 2013 19504.20 6344.00 6021.20 31 May 2013 19760.30 6389.47 5943.46 % Change 1.31 -1.29 0.72 Bank stocks fell on profit booking after recent gains triggered by expectations that the RBI will cut policy rate to boost economic growth. Interest-rate Sensitive & banks fell after the RBI said that assessment of growth-inflation dynamics limits scope for further easing of policy rate. SBI reported 18.54% fall in net profit to Rs 3299.22 crore on 6.98% rise in Revenue to Rs 36330.87 crore in Q4 2013 over Q4 2012. In Fourth quarter PNB and UBI reported a sequential improvement in asset quality. Remarks

BANKEX

14363.70

14261.24

-0.71

BSE CD INDEX

7432.50

7695.00

3.53 Larsen & Turbo reported 6.9% fall in net profit to Rs 1787.94 crore on 9.9% rise in Revenue to Rs 20686.93 crore in Q4 2013 over Q4 2012. Capital goods stocks rose on renewed buying. On 7 May 2013 Uttar Pradesh state government slashed VAT on cigarette/cigar from 50% to 25%. The Centre had raised the excise duty on cigarettes by 18% on all cigarettes except cigarettes of length not more than 65 mm in Union Budget 2013-

CAPITAL GOODS

9718.80

9407.38

-3.20

BSE FMCG INDEX

6548.50

6772.13

3.41

MONTHLY ROUNDUP (May13)

14. Japanese drugmaker Daiichi Sankyo Co, which bought control of Ranbaxy Laboratories in 2008, said it believes unnamed former shareholders of the company-hid information regarding US regulatory probes into Ranbaxy. Ranbaxy pleaded guilty to felony charges related to drug safety and agreed to pay $500 million in civil and criminal fines under a settlement with the U.S. Department of Justice.

BSE HEALTHCARE

8691.20

8846.91

1.79

BSE-100 BSE-200 BSE-500

5941.40 2389.00 7385.30

5991.11 2409.22 7441.89

0.84 0.85 0.77 IT stocks gained on positive economic data in the US. US is the biggest outsourcing market for the Indian IT firms. Wipro's IT services Total Income rose 0.50% to $1.585 billion in Q4 2013 over Q3 2012. On yearly basis, IT services revenues rose 3.2% to $1.585 billion in Q4 2013 over Q4 2012. While HCL Technologies reported strong Q3 results. As per US accounting standards consolidated net profit rose 7.8% to Rs 1040 crore on 2.40% growth in Total Income at Rs 6425 crore in Q3 2013 over Q2 2012. Infosys is collaborating with SAP on development of mobile applications for the retail industry. These efforts are focused on giving consumer packaged goods companies anytime, anywhere access to sales representatives and merchandisers, enabling them to capture information from the field to make them more competitive and agile. Sterlite Industries reported 51% yoy jump in its consolidated net profit at Rs 1,925 crore for the quarter ended Q4 2013. The company's revenue grew at 17% yoy basis to Rs 12,674 crore during the recently quarter driven depreciation of the Indian Rupee. In month of January 2013, the government has allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers. Oil market companies have increased diesel prices by Rs 1.02 per litre; it is the fourth increase in this year.

BSE IT INDEX

5709.60

6065.34

6.23

BSE METAL

8651.10

8503.01

-1.71

BSE Oil & Gas

8711.00

8654.79

-0.65

BSE PSU INDEX BSE TECK INDEX

6864.60 3474.20

6655.84 3602.53

-3.04 3.69 Realty stocks edged lower on account of profit booking after the gains triggered by the expectations that the Reserve Bank of India may further cut key policy rates to perk up economic growth after the latest data showed a sharp fall in WPI in April 2013. Unitech fell on news that the HSBC has sold 20 lakh shares of Unitech through open market for about Rs 6 crore, resulting reduction in its stake. JSW Energy fell as one of the promoters of JSW Energy has made an offer to sale of 2.82 cr shares through the separate windows provided by the bourses for this purpose. Shares were subscribed 1.75 times. In Q4 2013 Reliance Infra reported 76.4% increase in

BSE REALTY

1901.30

1684.92

-11.38

BSE POWER

1761.90

1755.12

-0.38

MONTHLY ROUNDUP (May13)

consolidated net profit to Rs 725 crore on 13.29% fall in Revenue from operations to Rs 6187 crore. Net profit increased 41.59% to Rs 2247 crore on 7.57% fall in total operating Revenue to Rs 22382 crore in the year ended March 2013 over March 2012.

BSE Auto

10957.90

11166.34

1.90

Auto stocks edged higher on renewed buying.

Global Markets WORLD MARKET INDICES PERFORMANCE

Index 27 April 2013 14712.55 1582.24 3279.26 27 May 2013 US 15394.5 1650.51 3459.41 EUROPE Frankfurt (DAX30) 7,814.76 London (FTSE) Paris (CAC 40) Hang Seng Japan NIKKEI Shanghai Comp 6,426.42 3810.05 22547.71 13884.13 2177.91 8,383.30 6,696.79 3956.79 ASIA 22686.05 14142.65 2292.84 138.34 258.52 114.93 0.61 1.86 5.28 568.54 270.37 146.74 7.28 4.21 3.85 Points Chg (%) Chg

DJIA S&P 500 NASDAQ

681.95 68.27 180.15

4.64 4.31 5.49

In the month of April 2013, the world markets ended on a positive note. Nikkei, Dow Jones, NASDAQ, CAC, FTSE, Hang seng, Shanghai Composite & and Frankfurt Dax were the gainers, rising 1.86, 4.645, 5.49, 3.85, 4.21, 0.61, 5.28 & 7.28 percent respectively. Meanwhile BSE & NSE also edged higher with the Gain of 3.21% & 2.82% respectively. During the month of May 2013, Average daily volumes on BSE rose 4.50% M-o-M. The average daily derivatives volumes on NSE also rose 1.20% in month of May 2013.

Fund Activity
FII & MF TRADING ACTIVITY IN MARCH Foreign Institutional Investor
Net Purchase/Sales in Equity Net Purchase/Sales in Debt

Mutual Funds
Net Purchase/Sales in Equity Net Purchase/Sales in Debt

17931.80

7579.60

-1320.70

17307.90

In month of April, FIIs were the net buyers of Equity & Debt worth Rs. 17931.80 & Rs. 7579.60 crore respectively. Meanwhile Mutual funds sold Equity worth Rs. 1320.70 crore but they were strong buyer of Debt worth Rs. 17307.90 crore Bond Yields
10 Year Government Bond Yield Trend

MONTHLY ROUNDUP (May13)

At the end of May 2013, Indian G-Sec bond yields closed lower by 48 bps at 7.24% over April 2013. The yield on the benchmark security fell sharply on account of amid lower inflation and expectations of further interest rate cut by the RBI. Increasing inflation has been one of the biggest factors in the sharp fall in the bond yields. While expectations of monetary easing in the June policy led to a fall in the yields.

Commodities In month of May 2013, the Reuters/Jefferies CRB Index of 19 raw materials ended down by 2.18% to close at 284.90 because investors might have been turned to equities markets Speculators cut their bullish bet in cotton futures and options to a three-week low. The fall in the Reuters/Jeffries CRB Index was because of a fall witnessed in commodities like Natural Gas (-7.40%), Live Cattle (- 7.40%), Silver (- 6.00%), Gold (- 5.40%), Coffee (- 5.30%), Cocoa (- 5.30%), Sugar (- 4.50%), Cotton (- 4.40%), Nickel (- 3.60%), Crude Oil (- 1.60%) and Wheat (- 1.30%). Natural gas is the biggest gainer among commodities thus far in 2013, gained 7.4 % in May. BEHAVIOR OF COMMODITY PRICES DURING MAY 2013: 30 May, 30 April, Commodity M-o-M % Chg 2013 2013 Gold 1393.00 1472.10 - 5.37 91.97 93.46 -1.59 Crude Oil 1903.00 1886.00 0.90 Aluminum 20895.00 20820.00 0.36 Tin 7270.00 7105.00 2.32 Copper 1913.00 1887.00 1.38 Zinc 14700.00 15250.00 -3.61 Nickel 2186.00 2037.50 7.29 Lead Currencies USD to:
Pakistani rupee Hong Kong dollar Chinese Yuan Indian Rupees Taiwan dollar Singapore dollar Argentine peso Euro Thai baht Malaysian ringgit Japanese yen Indonesian rupiah Brazilian real Korean won

Behaviour of commodity prices during the month ended May 2013 is given. The base metals pack traded on a positive note except Nickel tracking a stronger euro for all metal markets as volumes were thinned by a European holiday.

30 April, 2013
99.42 7.76 6.19 56.35 30.04 1.26 5.28 0.77 30.21 3.08 101.03 9832.84 2.11 1130.07

30 April, 2013
98.86 7.76 6.22 54.16 29.54 1.23 5.18 0.76 29.31 3.03 97.84 9727.63 2.00 1108.52

M-o-M % Chg
0.60 0.00 -0.50 4.00 1.70 2.30 2.00 0.70 3.10 1.40 3.30 1.10 5.50 1.90

In May 2013, USD was positive against other currencies. The USD remained strong against its several peers during the month except Chinese yuan because speculation grew that stronger U.S. economic data will urge the Federal Reserve to reduce its unprecedented monetary stimulus. Report on rebounding U.S. housing sector also strengthened the USD.

MONTHLY ROUNDUP (May13)

OUTLOOK GOING FORWARD GLOBAL: US Economy on the way of Recovery It has become routine, at about this time of year, to predict that the US economy is on the mend only for that recovery to swiftly rot away. In the second quarter of 2010, the median forecast for US growth in 2011 was 3.1 per cent, and the Fed was gunning for 3.9 per cent. The actual outcome was a depressing 1.8 per cent and the pattern of the next two years was similar. Spring turns to summer in America, and once again, the mown-grass scent of economic optimism is in the air. An 11 per cent annual rise in house prices and a boom in the stock market does that to people. Higher asset prices are not much good by themselves growth in incomes, jobs and activity is plodding but markets seem to be sustaining the economy through the worst of tax rises and government spending cuts. Consumer confidence has not been this high for five years. Interest rates are lower than in previous years, adding more support for the economy, and the Federal Reserve itself is less of a risk to growth. Its new policies tie easy money to the state of the economy low interest rates at least until unemployment falls below 6.5 per cent and more asset purchases until there is a substantial improvement in the labour market outlook. This reduces the chance of a premature tightening. After a lengthy recession, stock markets in the US are starting to look healthy. The S&P Broad Index shot up 26% in the past year to a record high. The most recent data shows the US economy is expanding at a 2.4% annual pace. Recovery in housing has a powerful accelerator effect. Higher house prices mean that more people have enough equity in their home to refinance at a low mortgage rate; do that and they can start spending more. Japan Abenomics coming to its rescue Prime Minister Shinzo Abe is promoting policies nicknamed Abenomics'' to help revive Japan's economy after two decades of stagnation, raising public spending and easing monetary policy by an unprecedented extent to stimulate demand and investment, along with reforms aimed at making Japanese business more competitive. Supporters of Abenomics say they expect a recovery by mid-year, as the economy enters a virtuous cycle of rising prices, rising wages and surging demand thanks to a recovery in corporate investment. Skeptics question whether companies will raise wages and investment, and whether the recovery can prevail over the blows to demand from two looming sales tax hikes, even if Abe succeeds in pushing through politically difficult deregulation and other reforms needed to improve competitiveness and sustain growth in the long run. Japan's economy has started picking up. Exports have stopped decreasing as overseas economies have been moving out of the deceleration phase that had continued since last year and are gradually heading toward a pick-up. Business fixed investment continues to show resilience in nonmanufacturing and appears to have stopped weakening on the whole. Public investment has continued to increase, and housing investment has generally been picking up. Private consumption has seen increased resilience, assisted by the improvement in consumer sentiment. Reflecting these developments in demand both at home and abroad, industrial production has stopped decreasing and signs of picking up have become increasingly evident. In recent days, however, concerns have grown about rising interest rates in the government bonds market, which could threaten Japans monetary policy. Japan is vulnerable to rising borrowing because of its high public debt burden, which is twice the size of its economy. Bonds are also the main financial asset held by banks, pension funds and insurance companies, making a surge in debt yields perilous. Eurozone Recession looming again The European Central Bank has warned that the eurozone's slumping economy and a surge in problem loans were raising the risk of a renewed banking crisis, even as overall pressures in the region's financial markets had receded.

MONTHLY ROUNDUP (May13)

In a sober assessment of the state of the zone's financial system, the central bank said that a prolonged recession had made it harder for many borrowers to repay their loans, burdening banks that had still not finished repairing the damage caused by the 2008 financial crisis. While the central bank did not mention specific banks, as is customary, it said the most vulnerable were those in countries with high unemployment or falling house prices. That list would include Italy, Spain, Greece and Portugal. But ailing banks are also a problem in stronger countries like Germany, where Commerzbank and publicly owned state banks are struggling with bad loans to the shipping industry. The recovery of the Japanese economy, just as a recession in Europe digs in, is renewing pressure on European policymakers to shift course from austerity to stimulus.

Indian Market Outlook:

Q4FY13 Review Quarterly earnings of India Inc hit a new low in the three months between January and March this year thanks to some severe pressure on demand, high interest costs and relatively weak bargaining power of the companies in raising prices even though expenses rose. An analysis of quarterly earnings of nearly 1,100 companies (excluding oil companies) showed that the aggregate net profits of these companies fell 14.6% on a y-o-y basis to Rs.62,244 cr. For FY13 too, the combined net profits of these companies fell 5% to about Rs.2.72 lakh cr. This is the first time since the global financial crisis year of 2008-09 that the yearly profits showed a decline. This was also the second yearly drop in net profits in the last 10 years. India's corporate performance, despite gloom and doom all around, wasn't very disappointing at an aggregate basis due to impressive performance by a few sectors like oil & gas and automobiles and large caps. While broad Sensex earnings are above expectations, they were boosted by heavyweight sectors like oil & gas and utilities. On the other hand, there is clear case of revenue slowdown in many sectors, while margins continue to be under pressure. Small-Cap and Mid-Cap companies have been the worst hit with their net profits for Q4FY13 reducing to one-third of level seen in the corresponding quarter last year while largecap companies have seen relatively slower deceleration in net profits. The better performance was led by strong performance from companies like NTPC, Coal India and Hindustan Zinc which enjoy dominant market position in their respective sectors. Rupee Depreciation Cause for another trouble? The Rupee has remained under pressure since the start of May 2013, with a depreciation of 3.5%. The currency has been weighed down by the widening of trade deficit in April- 2013, domestic political issues and a strong Dollar amidst rising expectations of tapering of QE by the Fed. Going by the current pace of weakening, value of 58-59 vs the USD seems possible in the next few weeks. A section of the street however expects the currency to receive support in the medium term and return back to the 53-55 range on improvement in current account deficit, robust capital flows and from RBI policy measures. The trading though is likely to be choppy amidst global uncertainties like possibility of withdrawal of stimulus by the Fed and revival of Eurozone debt concerns. With several state elections this year and the General elections next year, domestic political dynamics will be a key input towards shaping market sentiments. The main reason causing the rupee to fall is the immense strength of the Dollar Index, which has touched its three-year high level of 84.30. The record setting performance of US equities and the improvement in the labor market has made Americans more optimistic about the outlook for the US economy, thereby spurring greater hopes of QE tapering. The US Dollar is looking like gold these days because the Federal Reserve is in a very different position versus the ECB, BoJ and the RBA. The Federal Reserve is talking about tapering asset purchases at a time when European officials are considering more aggressive monetary easing measures such as negative deposit rates. The fact that the Euro zone is in a recession is just another reason why investors are snapping up dollars. The monetary policies of the ECB and the BoJ pose a threat to the value of the EUR and JPY whereas the next move by the Fed should support the dollar. This divergence is bringing the dollar more into the limelight as a 'safe haven'. Capital preservation is just

MONTHLY ROUNDUP (May13)

as important as capital appreciation in the present times and for this reason the direction of the monetary policy and the consequent implications for the currency has become very important. Indias economic cycle bottomed out? India's Q4FY13 GDP grew 4.8% y-o-y, broadly in line with expectations. This follows 4.7% y-o-y growth in Q3 and resulted in average real GDP growth of 5.0% during FY13. Therefore, the overall momentum of the recovery remains tepid. Indeed, the RBI has reduced policy interest rates considerably in the recent months, but transmission of those cuts into bank lending rates has been poor. The likelihood of continued fiscal austerity, along with weakness in typically resilient segments such as domestic services, suggests sluggish economic activity for a while yet. On a more positive note, the rainfall forecast for the coming monsoon season is normal, which should help the agriculture sector to fare better in the current fiscal year as well as possibly support an improvement in consumption spending to some extent. Likely improvement in government spending should also help GDP growth in H2FY14. Capital expenditure (capex) is showing signs of revival. According to experts, this would resume in the current quarter, with the lagged effect of lower interest rates, slightly stronger exports and improved equity market performance. Recent macroeconomic data have increased expectations for rate cuts by the RBI in 2013. The RBI has already cut the repo rate by 75 bps this year. Inflation could remain broadly within the RBIs comfort zone in the coming months, while th e growth recovery will remain weak.

MONTHLY ROUNDUP (May13)

TECHNICAL COMMENTARY
CNX NIFTY

On the daily chart of nifty we can see nifty has given almost 50 % retracement of its current rally and forming lower top and lower bottom formation. Currently nifty is trading near its 100 days and 50 days SMA. Nifty short term trend is down and it may continue to the level of 5750 if nifty breaks 5860 levels on closing basis. Trader with short position can liquidate there some potion on current levels and re-enter in short after 5860 levels. Nifty has nest major support at 5780 and resistance at 6150.

Resistance 1 Resistance 2 Support 1 Support 2

6050 6150 5750 5500

MONTHLY ROUNDUP (May13)

STOCK IDEAS
BANK OF INDIA CMP CMP TARGET TARGET SL SL OUTLOOK OUTLOOK ENTRY RANGE ENTRY RANGE 287 1825 260 1920 303 1793 Bearish Bullish Near 290 Above 1840

TECHNICAL chart Dr. Reddys Lab TECHNICALVIEW: VIEW:- -On Onthe thedaily daily chartof of Bank of India, we trend is up.trend Currently stock has wecan cansee seestock stocklong has term broken its rising line with good bounced after stock making and volume. back Currently is double trading bottom bellow patter 8 days, 13trading days near range Technical upper level. Technical indicators RSI and its 21trading days EMA. indicator RSI and MACD and STOCHASTIC showing strength stock. Currently Histogram are alsoare showing weakness inin stock. Stock can stock is 260 trading above its 8 days, days and 21 days touch levels in lower side, 13 investor should exit EMA. from Investor can make long position in stock above 1840 levels there long position or can make fresh short position in stock with stop loss of 1793 for target price of 1920. with stop loss of 303 260.

YES BANK CMP TARGET SL OUTLOOK ENTRY RANGE 487 460 515 Bearish Near 495

TECHNICAL VIEW: - On the daily chart of Yes Bank, we can see stock has broken its support level of 500 with good volume. Currently stock is trading bellow 8 days, 13 days and 21 days EMA. Technical indicator RSI and MACD are showing weakness in stock. Investors can make fresh short position in stock near 495 levels with stop loss of 515 for target price of 460.

MONTHLY ROUNDUP (May13)

ARVIND CMP TARGET SL OUTLOOK ENTRY RANGE 81.95 86 78 Bullish Near 81

TECHNICAL VIEW: - On the daily chart of Arvind, we can see stock has outperformed nifty in last some session. Currently stock is trading above its 8 days, 13 days and 21 days EMA. Technical Indicator RSI is showing strength in stock. Stock has broken its falling trend line with good volume. Aggressive trader can make long position in stock near 81 with stop loss of 78 for target price of 86.

POWER FINANCE CORPORATION CMP TARGET SL OUTLOOK ENTRY RANGE 183 174 198 Bearish Near 190

TECHNICAL VIEW: - On the daily chart of PFC, we can see stock has broken its trading range of 190 to 200 in lower side. Currently stock is trading bellow its 8 days, 13 days and 21 days EMA. Technical indicators RSI is showing weakness in stock. Investor can make short position in stock near 190 levels with stop loss of 198 for target price of 174.

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