Monthly Report
April 2011

Monthly Report April 2011

Retail Research


Table of Contents
Title Slide No.

Monthly Equity Commentary − Market Statistics − Bond yields, commodities and currencies − Comparison of Equity Returns in various emerging markets − Outlook Going Forward Technical Commentary Learning Technical Analysis Derivatives Commentary Learning Derivatives Extract of Calls during March 2011 FII & Mutual Fund Flow & Indices moves during March 2011 Gainers & Losers – March 2011 Disclosure

03 05 09 15 20 29 34 37 39 43 44 45 46

Monthly Report April 2011

Retail Research


Monthly Equity Commentary
BSE SENSITIV-Dly .25/02/11-04/04/11 I-1 Price 19600 19400 19200 19000 18800 18600 18400 18200 18000 17800 17600 11 M A O 19474 H 19730 L 19449 C 19702 V 1630541 V 321245 TREND M 04/04/11

After two months of correction, the Indian markets bounced back smartly in March 2011 to end the month with robust gains. The BSE Sensex & Nifty surged 9.1% & 9.4% respectively in the month. The markets started off the month on a positive note on the back of positive announcements from the Union Budget, expansion in the manufacturing sector and in line GDP growth in Q3FY11, but witnessed correction in the middle of the month, on the back of tension in Middle East and North Africa region and a major earthquake in Japan. However, the indices bounced back smartly in the fourth & fifth week on the back of positive comments from Warren Buffet on the Indian economy, easing food inflation & the decline in India’s trade deficit during April-Feb 2011. Market friendly measures announced by Finance Minister Pranab Mukherjee in the Union Budget 2011-12 presented on Feb 28 2011 pushed the markets higher in the first week ending March 04. The BSE Sensex & Nifty ended higher by 4.4% each for the week. The FM announced a cut in surcharge on corporate tax on domestic firms to 5% from 7.5% and projected a lower fiscal deficit target of 4.6% for FY12. Further, he refrained from raising excise duty. Some other favourable announcements made in the budget included a lower-than-expected net borrowing programme, a thrust on infrastructure and agricultural sectors, permission for foreign investors to invest in mutual fund schemes and plan to move towards direct transfer of cash subsidy to people living below poverty line. Among the other news, India’s GDP grew by 8.2% in Q3FY11, up from 7.2% in corresponding quarter in previous fiscal aided by strong growth in agriculture, mining and financial services. Also, the manufacturing sector expanded at its fastest clip in three months in Feb 2011. Further, the output of six key industries expanded by 7.1% in Jan 2011, faster than a downwardly revised growth of 6.1% in Dec 2010, while the exports in Jan rose 32.4% Y-o-Y to $20.6 bn. Even the auto sales were better than expected in Feb 2011. All these improved the sentiments further on the domestic bourses.
Monthly Report April 2011 Retail Research


Monthly Equity Commentary


The market edged lower for the second week ended March 11, 2011 as tension in Middle East and North Africa region and a major earthquake in Japan on Friday March 11, sapped risk appetite. Political worries early in the week, which abated later, triggered volatility. With the ongoing violence in Libya keeping crude-oil prices above $100 a barrel, market participants feared that the government might soon have to let fuel prices from state-owned energy firms rise. The BSE Sensex & Nifty corrected 1.7% each in the week. The market ignored a series of positive news flow during the week like better than expected IIP numbers for the month of Jan (up 3.7% Y-o-Y), easing of food inflation (to 9.52%) for the week ended Feb 26, growth in the net direct tax collections during April 2010-Feb 2011 (up 20.75%) and 49.8% Y-o-Y rise in the exports in the month of Feb 2011 (on the back of increased demand from markets like North America & Africa). The market continued to fall in the third week ending March 18 on concerns over developments in Japan and its impact on the global recovery. The RBI raised key interest rates repo & reverse repo by 25 bps each at a mid-quarter policy review and said that it would continue with its anti-inflationary stance. The central bank also warned that continuing uncertainty about energy and commodity prices may vitiate the investment climate, posing a threat to the current economic growth trajectory. This put the pressure on the market. Political uncertainty in India also weighed on the market following fresh allegations of government corruption. (Wikileaks cable suggested the Congress party bought votes in parliament in 2008 to secure a civilian nuclear deal between India and the US). Some of the positive events, which were ignored by the investors during the week were the easing of food inflation & robust increase (24%) in the advance tax collection. The BSE Sensex & Nifty ended lower by 1.6% & 1.3% respectively in the week. The indices rallied smartly in the fourth week ending March 25. The stocks rose in four out of five trading sessions in the week with bullish comments on India from billionaire legendary investor Warren Buffett and on hopes for economic reforms, aiding the rally. The Sensex & Nifty surged 5.2% each in the week. Mr. Buffet said that his firm Berkshire Hathaway is looking to park funds in large investment destinations and India fits the bill perfectly. During the week the government also tabled some key reforms bills in parliament. The Finance Minister made some crucial changes including, reducing dividend distribution tax (DDT) threshold for foreign companies to 26%, withdrawal of 5% service tax on air-conditioned hospitals with more than 25 beds and on diagnostic services, increasing the abatement from 40% to 55% in case of 10% excise duty levied on branded apparel and reducing the import duty on raw silk from 30% to 5% to push imports. Further, during the week, Dr Manmohan Singh reiterated that none from the Congress Party or the Government had bribed anyone to win the trust vote in 2008.
Monthly Report April 2011 Retail Research

stating that the foreign companies operating in India won't need prior approval from their existing jointventure partners to operate separately in same business segments. thus ending the month on a positive note.Dow Jones US . Also the food inflation eased back to single digits.Shanghai composite Feb-11 12226. lower than the previous week's annual increase of 10.1 % Change 0.4 2905. Given below is an overview of global markets’ performance during March 2011 Indic es US . However.4 -8.3 2782.FTSE Japan .2 1.06 bn from $100. Hopes on easing of tension between India and Pakistan aided gains after Pakistan agreed to allow an official team from India to travel to Pakistan to probe the 2008 Mumbai terrorist attacks. The Japanese market fell sharply during the month on the back of a massive earthquake.Bovespa Singapore .1% (Sensex). killing thousands of people. the government eased rules on foreign investments during the week.3 68587 3105.4 5333. Moreover.Nifty Indonesia . 3.4 6.Strait Times Hong Kong – Hang Seng India . based on the annual WPI.8 The world markets ended the month of March 2011 on a mixed note with India.2 3010.05%. as the Sensex & Nifty gained 3.1 9.1 5908. 6% & 3.8 3.2 0. India’s trade deficit during April-Feb 2010-11 declined to $97.Sensex India .Nikkei Germany .2% respectively.1 Mar-11 12319.0 0.7 2928.DAX Brazil . Reports added that this measure will promote the competitiveness of India as an investment destination & it will be instrumental in attracting higher levels of FDI and technology inflows into the country. tsunami over there.8 9. Monthly Report April 2011 Retail Research .2% respectively.5% in the week ended March 19. which rose 9. All these events lifted the sentiments on the domestic bourses.0 -1.Jakarta Composite Chinese . Food inflation.2 5833.3 5994 10624. falling by 8. Japan.2% & 1.Nasdaq UK .5 23338 17823.3 67383. Indonesia & Singapore being the top three gainers.2%.3 3470.1 7041.24 bn in the same period previous fiscal.8 3678. Further. rose 9.1 7272.7 2781.HOME 5 Monthly Equity Commentary contd… The rally continued in the last four trading sessions of the month.4% respectively.5 19445.3% & 3. aided mainly by a dip in items such as vegetables and cereals.2 -3. Germany & UK underperformed.8 0.9 23527.8 9755.

M-o-M). 13. Healthcare. Bajaj Auto.5% weightage to the overall Auto index. Realty index. contrary to market expectations of a 2% hike. PSU.8% weightage in the Realty index. Sobha Developers & HDIL. 12. the government's focus on the rural economy may spur demand for two-wheelers and cars.8% & 11. M&M.7% to Rs.9%. which was the biggest loser amongst all the indices in Jan & Feb. reasonable gearing.7% respectively.3% & 10.7%. ended the month with gains of 15.426 cr in Feb 2011. 1.8%. FIIs were net buyers in 14 out of 21 trading sessions in the month (till March 30). 5066 cr (net). The rise in the M&M stock price was on the back of announcement made by the company that it has plans to set up a plant in Andhra Pradesh. Auto index outperformed on higher sales in February 2011 and as the government kept excise duties on automobiles unchanged in the Budget. 12. These companies have 79. The index gainers were mainly led by major realty players like DLF. which rose sharply by 26%. 6. FIIs were reported as net buyers to the tune of Rs.46.6 Monthly Equity Commentary contd… Average daily volumes on BSE during the month of March 2011 fell by 7. data for Feb 15). Auto. Mutual funds were net buyers for fourth consecutive month to the tune of Rs.3%. which rose by 17.2% respectively. The stocks also rose on anticipation of a reduction in crude prices following the earthquake & tsunami in Japan.8%.2% . All the sectoral indices ended the month of March with robust gains. some analysts are of the opinion that such a rally is not sustainable due to high interest rates and commodity prices. The average daily derivatives volumes on NSE fell by 10.3% & 4. Banks & Consumer Durables were the top four gainers. 8.814 cr in March (In Feb 2011: Rs. 15.3%. Hero Honda & Maruti. 1.30.6%. 28 cr during the month of March 2011 after being net buyers of Rs.8% respectively. However. The government provided 1% interest subvention on home loans up to Rs. In CY11. Unitech.731 cr in cash markets in March 2011 (Data available till March 30) after being net sellers of Rs. 5313 cr in Feb 2011 (excl. The index performed well right from the start of the month on interest rate subvention scheme being continued and enhanced (in terms of values).1%. FIIs have sold stocks worth Rs. The other indices like Oil & Gas. 17. JP Morgan upgraded the stock to "overweight" from "neutral" citing cheap valuations. which together have ~83. Monthly Report April 2011 Retail Research . stood as a top performer during March 2011. comfortable liquidity and high embedded land value. India Bulls Real Estate. Metals & FMCG reported single digit gains in the range of 4-9%. 19. 15 lacs in the Union Budget.5% M-o-M as markets witnessed volatility (NSE daily average volumes were lower by 12. Capital Goods. 1. IT. However. Realty. Tata Motors.465 cr). The stocks also rallied due to positive sales announced by OEMs (Original Equipment Manufacturers). 19. with FMCG gaining the least by 4. which could ease the liquidity situation in the country. Unitech surged during the month after.

to Rs.7 Monthly Equity Commentary contd… Banks stocks ended the month on a strong note after the Union Cabinet cleared the Banking Regulation (Amendment) Bill 2011. Currently. 15. The buying could also be attributed to sector’s underperformance for a longer time primarily due to sluggish order intake and higher material prices impacting the input cost.4% to 51% (at par with other PSU banks). including creation of an infrastructure debt fund and raising the limit of foreign institutional investors in corporate bonds. the SBI amendment Bill was passed in Parliament.9%. 14. Monthly Report April 2011 Retail Research . 1.8%. Hopes that India’s economic growth story would stay intact and in turn boost demand for loans pushed the index higher.2% respectively during the month.5% respectively during the month. SBI & Axis Bank.2% & 14. during the month. 5. 5. HDFC Bank. the voting rights of a shareholder are limited to 1% of the holding for state-run banks and 10% for private banks. Even the Consumer Durable index outperformed. Whirlpool. Also. reporting double digit gains mainly on the back of good performance by companies like VIP. 15.3%. 360-400 mn during the month by way of secondary market purchases.6% and 7.000 cr. Gitanjali Gems.6%. Now that the valuations are looking a bit cheap. Sentiments were also buoyed after Finance Minister Pranab Mukherjee announced several key initiatives in the Budget to boost the infrastructure sector. The bill also proposes that an individual or institution can hold a more than 5% stake in a bank only after receiving approval from the central bank.6%. which together have ~75. The rise in the Oil & Gas index was on account of a rise in RIL & ONGC. which rose 8. Capital Gas index surged up on continued buying support. ICICI Bank. Current gas output from the D6 block in Krishna-Godavari basin is 53 mmscmd. The Bill also provides for increasing SBI’s authorized capital from Rs. Buying emerged in index heavy-weight Reliance Industries on the back of an announcement from DGH stating that the company's gas output from east coast block may touch 67 mmscmd in April.7% respectively during the month. Several banks and investors have been demanding changes to these rules. Blue Star & Titans. which will now be placed for parliament's approval.8% weightage to overall index registered robust gains of 14.2% & 14. VIP industries registered good gains as private equity player Blackstone reportedly bought a 2% stake in the company valued at Rs.1% in January. 15. value buying seems to have emerged. after the output of the six core infrastructure industries grew by 7. The Bill seeks to bring down government’s holding in SBI from the current 59. The Banking Regulation (Amendment) Bill seeks to give shareholders of banks voting rights in proportion to their holding. which rose 27.000 cr.

7. Major losers from the F&O space included Areva T&D (down 10. Escorts. Educomp Solutions (down 10. This was along with the increase in the open interest. In the Stock Futures segment. the FIIs were net buyers in the Index Futures & Options segment. especially in the US and in anticipation of robust Q4FY11 results. they were net sellers of Rs.731 cr in March 2011 till March 30 (In Feb. This indicates long positions being held by FIIs in futures segment & more call buying (since the market went up substantially. which fell in the range of 3-8%. HCL Tech & TCS.HOME 8 Monthly Equity Commentary contd… IT stocks surged during the month on the back of improving industry scenario. the FIIs were net sellers. Apollo Tyres (up 32.8%) & Hindustan Oil Exploration (up 26. Monthly Report April 2011 Retail Research .9%) & Piramal Healthcare (down 9%). Infosys.3%).5 Feb-11 -5313 1968 2569 4346 23 19429 58998 32521 1139 11209 44317 25742 586 Mar-11 Feb-11 Note: * Figures for March 11 are upto March 30. Ambuja Cements. Adani Power. since the sector looks a bit overvalued & there are also concerns that rising input cost could put pressure on the margins of FMCG companies. Glaxo Smithkline Pharmaceuticals. The Stock Options segment witnessed very low participation during the month.6%). National Aluminium (down 9. rising in the range of 22-26%. Sterlite Technologies & Reliance Capital performed well. The prospects for the Indian IT companies appear brighter after the US companies like Oracle and Accenture Plc delivered higher earnings growth for the period. Mphasis Ltd. Mc Dowell. FII Activity Equities (Cash) Index Futures Index Options Stock Futures Stock Options Net Buy / Sell Net Buy / Sell Open Interest Open Interest Mar-11 * 6731 4241 8551 -1752 -1. Suzlon. Top gainers amongst the F&O stocks included Deccan Chronicle (up 40.8%. 5313 cr).2% respectively during the month. the FIIs were reported as net buyers of Rs. & Dabur were some of the other underperformers.2%). In the F&O space. which indicates short positions undertaken (to hedge the market) or cash-futures position being undertaken.7%).5% of the overall IT index weightage. Hexaware. which together account for 94. The FMCG index gained the least. reported robust gains of 9. 6. Wipro. Even R Com. it appears that call buying was more than call writing) in options during the month.8% & 6.4%). DLF (up 26.1%. while the open interest increased over Feb. 7. Fund Activity: In the equity space.

after raising its short-term rates for the eighth time in the past 12 months.39% respectively. Bond yields exhibited mixed movements through the month of March 2011.89% and 4. The index exhibited mixed moves during the month.81% and 5. The Reserve Bank of India (RBI) warned of both inflationary pressures and emerging risks to growth.98%.0 0 8 . The central bank raised its forecast for headline inflation at the end of March to 8 percent.7% for the month of March 2011. On 17th March 2011 the RBI announced its monetary policy. 1 0 Y e a r G o v e r n m e n t B o n d 1 0 . which is a drop of 3 bps for the month ended March 2011.0 0 % 6 .0 0 4 . and flagged inflation as a big concern spurring expectations for more tightening measures. Zinc and copper were the major losers with each dropping by 9.43 for the month of March 2011. During the month the yields touched a high of 8. During the month the index touched a high of 362. cattle. Monthly Report April 2011 Retail Research . from its earlier 7 percent.T r e n d P e r io d Commodities: The Reuters/Jefferies CRB Index of 19 raw materials ended higher by 1. and indicated it was likely to stay with its anti-inflationary stance. which rose by 2.0 0 12/28/2008 12/23/2009 12/18/2010 9/29/2008 3/28/2009 6/26/2009 9/24/2009 3/23/2010 6/21/2010 9/19/2010 3/18/2011 7/1/2008 Y ie ld . Most of the metals registered a drop for the month except for aluminium and lead.15%. On the other hand Nickel.5% each for the month.94% to 359.14.89 and a low of 338.01% and a low of 7. The key constituents pushing the index up were natural gas. which climbed around 1. hogs and sugar. It raised the interest rates by an expected quarter percentage point. 6.93%.9 Monthly Equity Commentary Bond Yields: contd… Indian G-Sec bond yields closed the month at 7.

Towards the end of the month China.89% -9. During the month the copper prices touched a high of USD 9979 per ton and a low of USD 8990 per ton. causing power disruption and other radiation hazards. This had its cascading effects on the base metal pack in the form of reduced offtake. which resulted in halting of industrial activities.03% 5. which pushed up the prices for the month. which use lead as an essential input International Copper prices registered a drop of 4. which is one of the major metal consumer. announced that it could step up monetary tightening after data showed that manufacturing accelerated for the first time in four months Monthly Report April 2011 Retail Research .5 per ton Lead witnessed industrial buying at the LME. Japan consumed 2.70% contd… International lead prices on the LME registered a rise of 5. Copper prices remained weak for a major part of the month due to the reduced off take by consuming industries amid weakening trend at London Metal Exchange. The disaster crippled the Fukushima Dai-Ichi nuclear power plant.7% for the month of March 2011. was high and is expected to remain on an upward trend as the country seeks batteries and generators to help it recover from the destruction caused by the strongest earthquake on record and tsunami.81% -4.39% for the month of March 2011. Copper prices were buoyant for the initial part of the month and later on were consistently on a downward trend. During the month one of the strongest earthquake and a tsunami hit Japan.4% of the world’s lead last year and the disruption of the power plant could result in the higher demand of batteries (as an alternate source of power). During the month lead prices exhibited mixed movements and touched a high of USD 2700 per ton and a low of USD 2414. This could be attributable to reports suggesting that demand for lead in Japan. the third-biggest economy.10 Monthly Equity Commentary Behaviour of Metal prices (LME 3 month buyer prices) during the month of March 2011:  Metals Aluminium Copper Zinc Nickel Tin Lead 31-Mar-11 28-Feb-11 % Chg 2631 9408 2331 26125 31545 2670 2559 9840 2504 28755 32200 2526 2.15% -2.39% -6. Most of the industries in the country were badly hit and hence stopped production activities.

Towards the second week the gold prices were almost flat with movements within a specific range. Japan and Europe. particularly towards the last week the oil prices firmed up on concerns of escalating unrest in Libya. Oil-rich Libya produced 1. which posed concerned over the supply of oil.0% for the month ended March 2011. Towards the middle of the month oil prices continued to remain soft as Libya said it would cease military operations against rebels and begin talks aimed at resolving the dispute that has curtailed crude shipments. Gold fell in the initial part of the second week as a stronger dollar prompted some investors to sell the metal after unrest in the Middle East and northern Africa pushed prices to a record but it bounced again towards the end of the week.11 Monthly Equity Commentary contd… International gold prices registered a modest rise of 2. The international crude oil prices rose by 10. Most part of the month saw the impact of the political unrest in the Middle East and Africa taking its toll on the crude oil prices. The rise in the yellow metal continued through to the end of the month primarily as a demand for safe heaven investments rose in the light of the ongoing turbulence in the Middle East. Towards the beginning of the month the yellow metal firmed up and exhibited a buoyant trend.67 per barrel. Yemen and the Middle East.05% to close the month at USD 106. In the second week of the month the crude oil prices softened as Japan’s strongest earthquake on record resulted in halting the industrial activities in Japan. In the initial part of the month crude prices rose primarily on the unrest in Libya and the expectation that this could spread to Nigeria and Angola. Japan is the third largest consumer of crude oil.8 per ounce. Towards the middle of the month the yellow metal rose as the investor’s demand for an alternative to gyrating currencies rose. which are the other oil producing nations. During the month gold exhibited mixed trends. International crude oil prices (WTI) exhibited mixed movements for the month ended March 2011 and touched a high of USD 106. The yellow metal touched a high of USD 1438.72 per barrel.69 million barrels a day of oil before the unrest.9 per ounce and a low of USD 1392. Monthly Report April 2011 Retail Research .72 per barrel and a low of USD of 96. according to the International Energy Agency and post the unrest it produced a meagre 400.000 barrels a day. However in the second half of the month.

82 29.39 -2.4% and 1.40% Indian rupee for the month.40% towards the end of the month.20% month of March 2011.90% against the INR. The benchmark index (BSE Thai baht 31.71 -2. The index continued its buoyant trend towards the middle of the month on the back of increased cargo shipments.87 1.8%. However the BDI remained soft for some days in the middle of the month primarily due to unavailability of the cargoes and the devastating earthquake in Japan.27 1. initially the BDI rose due to the expectations of a pick up in the cargo availability.10% booming domestic equities amid a weak dollar overseas.40% reports suggest that sustained sale of dollars by exporters and Eur o 0.9 7. During the month the BDI exhibited mixed movements.05 3.80% Kor ean won 1127. The USD rose against the Argentina Peso and the Yen by 0.12 Monthly Equity Commentary contd… The Baltic Dry Index (BDI).50% the dollar primarily due to frantic buying by foreign funds in Taiwan dollar 29.2 billion Japanese yen 81. The Baltic dry index is more influenced by the movement of goods from/to China primarily that of iron ore.56 8748.73 82.65 -0. The USD / INR exchange rate touched Chinese yuan 6. Foreign I ndonesian r upiah 8849. The index touched a high of 1585 and a low of 1251.58 6.4% respectively for the month. During the month.73 0.79 -1. The USD dropped the most against the Euro.48 -1.27 and low of Rs 44.4 -1.10% Institutional Investors picked up shares worth over USD 1.66 1. In the initial days of the month the index was on an upward trend while it softened during the middle of the month and than was again on an upward trend towards the end of the month.5% and 1. Monthly Report April 2011 Retail Research .83 -1.65 -0.9% respectively Given below is a table that shows the depreciation (-)/appreciation (+) of the dollar against various currencies for the month of March 2011: The USD depreciated against the Indian Rupee by 1.57 -0. Bhat. Market Singapore dollar 1.13 30. The rupee rallied against I ndian r upee 46.65 1105.40% Sensex) exhibited an upward trend for a major part of the month Malaysian r inggit 3. USD exhibited mixed trends against the Hong Kong dollar 7.8 85.65. 2. 1.07 45.5% for the USD to : 28-Feb-11 31-Mar-11 % Chg Pakistani r upee 85. Towards the end of the month the BDI was on an upward trend primarily due to the increasing bunker costs and (port) congestion.03 -0. coupled with slow steaming Currencies The US dollar fell against most of its peers for March 2011 except for the Argentina Peso and the Japenese Yen.03 4.91 -1.60% Ar gentine peso 4. which halted most of the industries. Indian Rupee and Korean Won by 2.70% due to the frenzied FII buying amid firm global cues.80% some banks also aided the rupee rise.20% a high of Rs 45. This helped push the USD down Br az ilian r eal 1.05 0. which is a measure of the international shipping prices for raw materials rose by 22% for the month of March 2011.26 -0.4%.

In the second half of the month the Euro zone leaders had reached an in principal agreement on a pact for the Euro to coordinate economic policies. Towards the end of the month the Yen plunged against the dollar as Group of Seven nations jointly intervened in foreign-exchange markets for the first time in more than a decade by selling the currency. Later the USD gained ground against the 16 nation currency as the EU leaders planned to enter a final round of bargaining in their attempt to hammer out a package to snuff out the euro-area crisis by March 25 deadline. The rebuilding process in general was perceived as positive for the yen.13 Monthly Equity Commentary contd… USD depreciated against the Euro by 2. The South Korean won appreciated as the improved outlook for the global economy boosted confidence in the country’s assets.8% for the month of March 2011. This would probably spark increased optimism as the markets hoped for a stabilized Euro Zone. as Japanese investors sold foreign denominated assets for yen to fund the recovery. Foreign investors increased their holdings of Korean stocks. The USD depreciated against the Korean won for the month of March 2011 by 1. The yen continued its rally in the second half of the month as well primarily due to the repatriation of Japanese Yen. As the nuclear crisis in Japan continues to bear down on market sentiments. increasing speculation that the insurance companies and investors will buy back yen to pay for damages. as the Kospi Index of the nation’s shares climbed during the period. In talks was the establishment of a new European Stability Mechanism. This increased speculation by currency traders on a Euro interest rate hike. The yen rose against the USD for a major part in the first half of the month after the worst earthquake in at least a century struck Japan.4%.9-magnitude temblor and as a tsunami of 10 meters (33 feet) engulfed towns along the northern coast. The USD / KRW pair registered one of the biggest gains in the month of March 2011. and the USD/JPY could face increased volatility over the near-term as policy makers weigh alternative measures to shore up the ailing economy. The European Central Bank President Mr Trichet suggested that the ECB intends to raise interest rates next month. The key reason sited for the rise in the Korean stocks is the expectations of improvement in the economic situation of the nation. Monthly Report April 2011 Retail Research . spurring domestic investors to buy the currency as a safe haven. with investors expecting to see a large wave of repatriation in the near future.9%. The USD appreciated against the JPY for the month of March 2011 by 1. The Japanese currency strengthened against all of its major counterparts after the 8. Bond yields in Greece & Portugal touched euro-era records this week & debt ratings of Greece & Spain were cut. the impact of the intervention may taper off. In the initial part of the month the US dollar dropped against the Euro on expectations of a likely interest rate hike in the European nation. During the week ending 21st March 2011 the German ZEW Economic Sentiment data came out lower than expected and this weakened the Euro.

so far the measures have failed to produce the desired result. when damage to Japan’s nuclear power plants curbed demand for emerging-market assets. Asian stocks halted a four-day loss after the Federal Open Market Committee said in a statement that the pickup in the U. hurting exports.S. Malaysia shipped 61 billion ringgit worth of exports to the U. The USD depreciated against the Brazilian Real by a meagre 0. economy “is on a firmer footing.7% for the month of March 2011. The tax is part of a government drive to reduce U.8% for the month of March 2011. in 2010. and overall conditions in the labor market appearing to be improving gradually. The “Greenbacks” value continues to shrink and the net USD inflow from January to mid-March surpassed that registered in the entire last year.S.S.HOME 14 Monthly Equity Commentary contd… The US dollar depreciated against the Malaysian ringgit by 0. dollar inflows and arrest the appreciation of the Brazilian real against the U. But. According to a brazillian newspaper. The real has gained 45% against the dollar over the past two years. The currency climbed after slumping the most in more than three months.” Malaysian bonds gained as well. which cited an unnamed person close to the government. helping damp concern that devastation from Japan’s earthquake will derail the global recovery. Ringgit rose after the Federal Reserve upgraded its growth assessment for the world’s largest economy.S. The Brazilian government is planning to impose a financial operations tax on overseas bond issues by Brazilian companies. officials are also concerned about a recent increase in dollar-denominated debt among Brazilian companies. The US is the fourth-largest market after Singapore. The appreciation of the Real has prompted the Brazilian Central Bank to adopt multiple measures over the past few months to curb it. Monthly Report April 2011 Retail Research . dollar. China and Japan for Malaysia.

542.6% 1.0% 0.5% 2.6 1.204.9% 16.5 6.632.4 1.086.2 912.4 469.5% -14.9% 560.4 718.942.5% 5.8% 6.3% I SRAEL 17.152.4% -2.4% 4.5% 3.1 2.144.3% -5.4 258.3 3.1% -2.4% 2.8% -4.5% -0.7 586.2% -6.6% -3.4% 3.6% FI NLAND 6.7% 0.9 102.4% 8.181.4 12.9% 2.5% -2.9% NETHERLANDS 20.7% 7.0% GREECE 24.15 Monthly Equity Commentary Comparison of Equity Returns in various markets .3% 0.9% 21.7% 3.1% 11.5% 4.4% -4.7% 1.3% 11.3% Monthly Last Returns 3 Month Returns contd… Y TD Returns 5.3% 1.5% 4.5% UNI TED ARAB EMI RATES 27.9% 2.2% 10.8% 3.0 -10.9% 4.4 334.5 1.4% 4.2% -0.7% 0.0% -8.6% NI GERI A 22.3 5.9 590.835.3% 11.1% KENYA 986.8% CROATI A -24.0 734.9% 3.7% 7.2% 10.562.7% -10.6 4.2% 10.8% -14.9 1.4 382.6% 2.9% -0.9% -28.5 3.4% 5.5% 3.2% -6.9% 2.5% 2.8% AUSTRALI A 26.9 474.9% 4.7% 6.9% 21.7% ROMANIA 15.4% -2.2% 4.8% 0.2 530.8% Last Returns Returns Y TD Returns 1 Y ear Returns MSCI Index Developed Mark ets 9.6% 15.170.3% -5.9% -5.3% 5.112.7 2.MSCI Indices in US$ terms Monthly 3 Month MSCI Index Emerging Mark ets BRI C EM (EMERGI NG MARKETS) EM ASI A EM EUROPE EM EUROPE & MI DDLE EAST EM LATIN AMERICA CHI NA I NDI A I NDONESIA KOREA MALAYSI A PHI LI PPI NES TAI WAN THAI LAND BRAZI L CHI LE COLOMBI A MEXI CO PERU CZECH REPUBLI C HUNGARY POLAND RUSSI A TURKEY EGYPT MOROCCO SOUTH AFRI CA 367.9% BANGLADESH -4.7% 5.9 -1.7% 1.6% 4.0% 16.8 4.2% 8.2% 3.6% 11.4% SI NGAPORE 30.0% 16.9% -5.2% -6.9 299.9% Frontier Mark ets 17.2% 0.1% UNI TED KI NGDOM SWI TZERLAND 7.8% -2.6% 11.9% 16.8% SPAI N 29.2% -0.7% 11.3% -9.9% 7.8% NEW ZEALAND 38.2% 5.4 509.348.9% 2.5% -23.4% -10.9 1.8% -14.7% -10.7% 7.4 273.5% UKRAI NE 9.9% 32.9% -2.1 206.2% 6.3 871.0 498.0% 4.6% 9.8% 1.3% 20.7% 1.6% -28.7% 21.8% 0.9% 2.6% 1.1% -1.1% 19.2% 7.0% 1.7% 6.5% -2.169.9% 10.334.2% 6.6% 15.7% -4.3% 3.7% TUNI SI A 7.1 591.2% 12.3% 3.5% -23.3% 11.5% 12.5 502.7% -6.9 486.6 114.4 566.7% 7.0% I RELAND 8.3% -6.1% -1.4% 2.4 1.5% Monthly Report April 2011 Retail Research .5% -14.0% -8.4% -10.6 0.5% 12.3% 20.7% -4.9% -0.4% -4.9% 32.8% -6.8% THE WORLD INDEX 20.0% 0.1 1.505.9% 3.7% 1.6% 5.6 797.1% 3.6% EUROPE 15.0% 1.3% 0.1% -28.4% -2.3% 11.1% JAPAN 11.9% G7 I NDEX 16.7% 11.2% 7.2% 10.7% -4.6% -1.7% 2.5% 3.4 436.8% -5.3% -2.3% -2.3 352.2 68.5 594.2% 12.2% 4.4% -2.1% 9.8 655.7% 5.9% 0.5% FM (FRONTI ER MARKETS) 28.0% 8.1 1.2% -0.6% 21.7% 1 Y ear Returns 9.0% 3.668.4 397.4% 4.5 1.0% 9.8% -5.5% 11.1% -12.5% 11.0% 27.7% 5.1% 5.083.3% -5.

An index of sentiment dropped 10 points to 38.1%. However. The economy contracted 1. Monthly Report April 2011 Retail Research . as Britons grew more pessimistic about the sustainability of the economic recovery and the outlook for jobs.7% respectively.9% & 0. but will pick up in the subsequent quarters when the reconstruction efforts. As per the World Bank report. with a cash injection of more than $180 bin. there was some relief after the Japanese officials said that they would backstop the country's financial system. 1. The tsunami was followed by powerful aftershocks that were felt in Tokyo.16 Monthly Equity Commentary contd… Comparison of Equity Returns in various markets . Netherlands & Australia.4%. While the Developed markets fell in the range 1. underperformed. the lowest since records began in 2004. as the house prices fell for an eighth month in Feb as the supply of homes for sale increased the most in three years. U. gain momentum.3% more than the government initially estimated in Q4CY10 because of a downward revision to capital investment and consumer spending. emerging markets were clear outperformers during the month. expecting the country's plans to clean up the battered banking sector will cost more than government expects and add to its debt burden. However.9% & 1. 2. further index losses were restricted due to outperformance by some of the developed markets like Singapore. The country’s consumer confidence fell to a record low in Feb. However.5%. UK & Switzerland were the top three losers. which gained 4. Even other developed markets like Ireland. 0. Morgan Stanley MUFG Securities Co has said that the March 11 disaster may cause Japan’s GDP to shrink by as much 12% on an annualized basis in Q2. to buffer it against the economic impact of the earthquake and tsunami.6%). 2. Greece & Spain fell marginally by 1. Israel. Japanese markets fell sharply during the month after a 8.K. which may last five years. frontier markets stood flat. New Zealand.9-magnitude earthquake hit northern Japan on March 11.6% (with G7 Index falling the most by 1. While the developed markets underperformed the other indices. some constituents amongst them fell much more than that.8% respectively. Finland.9% & 2. Japan.8%. 3%. which fell by 10. 3. triggering massive tsunamis that swept across towns apparently killing hundreds and nuclear disaster. the real GDP growth of Japan will be negatively affected through mid-2011. reporting negative returns.1% to 1. Spanish market fell during the month after Moody's slashed Spain's sovereign credit rating by a notch to Aa2 and warned of further cuts.1% respectively.7%.MSCI Indices in US$ terms The Equity markets across the globe ended the month of March 2011 on a mix note.

the former Soviet republic’s biggest crude oil producer and which makes up 25% of the index’s weighting. Frontier markets ended the month on a flat note.7%. to help investors gain more knowledge of the listed companies.632 in the first two months of 2011.7% & 4. making compulsory submission of quarterly financial Statements by the listed companies.1%. Even the Ukrainian Equities Index continued to underperform as its biggest stock.8% in Feb 2011 Y-o-Y (though lower than what economists expected). as political turmoil in Libya curbed demand for frontier. The reforms made by the country in 2010 like removal of all the paper shares from the stock exchanges and replacement of same by demat transactions.2%. partly because of the pricing (of the deal). almost in line with other countries.9%. Nigerian markets underperformed during the month of March. marking the economy's first growth following the 2008 crisis. Kenya. as they fell 6. which rose 12.9% on the year to 8. Even Croatia did well. Market sources predict that Romania's GDP will grow by 1.9% & 10. Nigeria & Ukraine were some of the markets.and emerging-market assets. threatening to stoke inflation and damp global growth. UAE & Tunisia were the top four gainers. particularly inviting institutional confidence from FIIs in putting funds in Bangladesh stock markets due to higher corporate transparency and improved compliances and governance in place. 5.2% respectively.5% in 2011.17 Monthly Equity Commentary contd… Singapore markets outperformed during the month after news reports said that the Singapore Stock Exchanges. allowing mutual funds to participate in the Book Building process. Monthly Report April 2011 Retail Research . Bangladesh markets outperformed during the month due to increased participation from institutional investors. witnessed a record fall and violence in Libya sent oil prices surging. Romania. etc have put the Bangladesh stock market on a fast forward track. fixing the tenure of Closed-end mutual funds.8% respectively. 10. Also the news reports that Japan's nuclear crisis is getting contained boosted the risk appetite. Ukrnafta VAT. Romania index surged during the month as the sales of new passenger cars in Romania rose by 7. in its bid to take over Australia's ASX is faltering due to political opposition. which restricted index gains. rising 8. However. which would be mainly led by increasing external demand continuing to bolster export volumes. 11. The majority of market players feel that if the deal doesn't go through then that's better. Introduction of Book building method for the first time. This was mainly due to outperformance by some of the markets like Bangladesh. Further the country’s exports grew at a decent rate by 7.

7% during the month. Russia & Brazil also did well. India was a top performer (with 11.3%. and as the number of initial public offerings increase. a lot of Seoul-listed companies' earnings would suffer. Also the index went up on some speculation that some local industries would benefit from the record-breaking earthquake in Japan. Taiwan gained the least.2% & 3. Amongst the emerging markets. India & Indonesia (top three performers amongst the EM Asia). rising 5. The South Korea's bank chief called for "multipronged" policy responses to contain inflation expectations. which increased by 7.1%. which surged 5. The Indonesian economy outperformed on increasing forex reserves and on statement made by Finance Minister Agus Martowardojo that the increase in oil prices would not pose a serious problem with the state budget because the higher oil prices could be compensated with a stronger rupiah.1% & 9. FDI in China climbed 32. The Indonesian bourse expects the Jakarta Composite index (JCI) to rise 25-30% in 2011 as profits for listed companies grow. The index rose 0. surging 5. saying that price stability was the greatest challenge facing the country. the world leader in thermal coal exports. driven by overseas demand for the country’s cars and electronics. rising marginally by 1.3%. according to the Indonesian Coal Mining Association. An analyst at Bookook Securities was not so bullish on the country stating that if oil prices remain above $100 per barrel for an extended period amid Middle East turmoil. 5.5% during the month.1% gains).6% from De 2010. including Bumi Resources.6%. Indonesia is a home to several coal miners.6% respectively. The BRIC index was the second best performer amongst the emerging markets. China & Malaysia did well.2% to $78bn in Feb. rising 8. Monthly Report April 2011 Retail Research . which ended the month with robust gains of 11. EM Asia was a top performer. 5. The Jakarta Globe reported during the month that Indonesia’s coal production is forecast to increase by 20% this year as coal prices continue to rise. indicating investor confidence to boost household incomes. while China. 11. However.18 Monthly Equity Commentary contd… Emerging Markets outperformed the other indices. This was due to outperformance by markets like Korea. Chinese market increased during the month as an indicator of China’s economic outlook rebounded. Even the other Asian markets like Philippines. The South Korean market performed well as the country’s industrial production grew at the fastest pace in five months by 13. Thailand. Production gained 4. easing concerns that the government’s campaign to curb inflation and asset bubbles may lead to a sudden slowdown in the world’s second-biggest economy.6% respectively.5%. South Korea is the world's fifth-largest crude oil importer.7% Y-o-Y in January 2011.3% & 5%.3% to 155 in Jan M-o-M. 7.7% during the month.

Chile. This boosted the sentiments further & drove the market higher.Latin America gained the least among the emerging market index. The index surged amid speculation a Group of Seven meeting will calm global markets after Japan's nuclear disaster. The Czech Republic’s main equity index rose during the month as Japan moved closer to containing its nuclear crisis. the country’s industrial output grew 16.4%. Colombia. First.Europe & EM . Second.5%.6% respectively. The index gains were led by Czech Republic. Turkey & Russia. However.6% & 2. falling by 3. as the construction & energy stocks declined on investor concern over the crises in Libya and Japan.7%. the Libyan unrest has cut off the 11 bn cubic-meter natural gas (bcm) Greenstream pipeline to Italy.7% & 3. restoring investors’ demand for risk worldwide. Brazil & Mexico all did well. outweighing concern domestic growth will slow more than previously forecast.2% respectively. rising 3. 3.4% & 5. the general unrest in the Middle East has increased the price of oil by 18. which surged 8. chief executive officer at broker ICAP Brasil said during the month that Bovespa might rise 10% this year. Brazil outperformed during the month as steelmakers rallied. Chile outperformed during the month as investors continued to buy shares at attractive prices and as forecasts pointed to the imminent end of a long-drawn drought. Monthly Report April 2011 Retail Research .4% each during the month. bringing a reprieve to power generators and end users alike. jobs data.5% respectively. 4%. Also. Even Poland & Hungary performed well. Russia may be the one country that stands to gain from the various calamities in 2011. rising 5. Peru underperformed. EM .Europe & Middle East both did well. surging 4. EM . boosting power producers. rising 4. which were boosted by encouraging earnings from technology companies and U. Similarly. Many industry analysts are forecasting that drought conditions due to the La Nina weather phenomenon. Alan Gandelman.1%.S. the index climbed as the rising commodity prices boosted the outlook for Brazil’s producers. Further. As the second largest oil exporter — and one not bound by OPEC production quotas — the increase in price goes directly into the Kremlin’s swelling coffers and is a welcome addition after the severe economic recession in 2009. driven by a steady expansion in manufacturing. stocks.3% during the month.HOME 19 Monthly Equity Commentary contd… The Russian market rose amid the geopolitical events. offsetting concerns that Brazil will face higher inflation and lower growth than previously expected.S. Also the Ipsa ended higher as it tracked rising U. The Peru index underperformed during the month. will likely end soon. causing Europe’s third largest consumer of natural gas to turn to Russia to make up the difference. 7. Japan’s nuclear imbroglio has forced Tokyo to turn to Russian emergency shipments of liquefied natural gas (LNG) to fuel its natural gas-burning power plants.9% on the year in January after a revised annual rise of 12% in December.

2 trillion. For many years. However. Japan’s immediate focus is rightly on the enormous human suffering and on rescue operations. this should quickly pass. However. Major economic impacts to Japan will be disruptions to the supply chain within industries like automobiles & electronics.5 trillion. As per the World Bank report. the Japanese economy has been struggling & was not considered a source of significant global growth. as well as containing nuclear-reactor risks. Japan’s leaders have moved swiftly to stem fallout from the earthquake and tsunami on all fronts. The economic damage is estimated at $250 bn. to buffer it against the economic impact of the earthquake and tsunami. The tragic loss of life is still unfolding before our eyes. including economic.0% of Japan’s population of 127 mn. the economic impact to this region is about $100 bn. but will pick up in the subsequent quarters when the reconstruction efforts. the losses did not stop there. Monthly Report April 2011 Retail Research .7% share of global GDP & comprises the world’s third largest economy. the real GDP growth of Japan will be negatively affected through mid-2011. Japan’s overall GDP is estimated at ~$5. With excess capacity in other parts of the world. and the same proportion of GDP. The three trading days following this disaster resulted in losses in the Japanese equity markets of about $500 bn. This area represents approximately 2. which may last five years. even though Japan represents about an 8. We expect the global economy to be modestly impacted by this disaster. according to the International Monetary Fund (IMF). extending worldwide in the neighborhood of $1. with a cash injection of more than $180 bn.20 Monthly Equity Commentary Outlook going forward Global market outlook Japanese economy post Earthquake & Tsunami The whole world is now aware about the recent earthquake and ensuing tsunami that devastated much of Japan’s northeastern Iwate prefecture. there was some relief after the Japanese officials said that they would backstop the country's financial system. Morgan Stanley MUFG Securities Co has said that the March 11 disaster may cause Japan’s GDP to shrink by as much 12% on an annualized basis in Q2CY11. therefore. The loss of inventories and supply-chain disruptions could cause inflation to rise temporarily from very low levels. gain momentum.

The badly damaged nuclear reactors. This disaster may also reduce pressure in some of the basic commodities with the changing consumption patterns in Japan. then the human. Major re-construction required is likely to benefit companies engaged in construction. the Japanese public holds most of Japan’s debt. prompting upward revisions to the forecasts. With the quick response & action from the Japanese Government & the Bank of Japan. include insurance companies (that have large exposure to potential Japanese claims). Coal demand would increase for the major suppliers in countries like Australia as Japan replaces electricity produced from nuclear power with electricity produced from coal. environmental and economic toll could rise significantly. including energy subsidies/taxes/refining margins. causing a larger challenge to the global economy. the future growth of nuclear power generation all over the world is in difficulty. Moreover. banks. Inflation should still be the bigger concern of Asian central banks. However. Asia’s growth momentum moderating. unlike the US. some might benefit from the devastation in the short to medium term. but could rise significantly in the medium to long term. concerns overblown There are some growth worries in Asia arising from rising global oil prices on the back of Mideast & Japan concerns and potential trade disruption. once Japan’s reconstruction bolsters. Inflation has mostly surprised on the upside. the industrial production was back to pre-earthquake levels. Korea. potentially posing a much greater challenge to the global economy. and currency appreciation could mitigate the impact from higher input costs. Korea would benefit due to their excess oil refining capacity. this looks a bit overblown.21 Monthly Equity Commentary Impact on the Global economy & commodities post the devastation in Japan contd… Post the 1995 Kobe earthquake (which was relatively lower on Richter scale).the severity of which may not be known for a while. Monthly Report April 2011 Retail Research . equipment. While some industries & economies could be severely impacted. India & China could benefit from potential trade gains with the Middle East. However. and materials industries. which will be in greater demand from Japan. Korea & China could be affected significantly. This increases reliance on fossil fuels. Further. countries who are large net oil importers like India. and other financial services companies . the same kind of approach & determination is being witnessed. which are now difficult to be contained appear to be Japan’s largest risk going forward. The industries. If nuclear meltdown occurs in future over there (which is quite possible). the use of fiscal measures. people all over Japan showed great resilience and commitment to rebuilding their economic base and within two months of the event. Even Technology components manufactured elsewhere should witness a surge in business. which could be negatively impacted. & core inflation momentum has been rising broadly across the region. however. especially at a time when the Middle East and North Africa are experiencing great turmoil. Crude oil demand may be affected in the short term. While high-energy prices could benefit certain countries who are net oil exporters like Malaysia & Indonesia.

This could be mainly because of the ongoing unrest in the Middle East nations (fighting continued in Libya and there were more anti-government demonstrations in places like Bahrain. With less dependence on the inventory cycle as well as net trade and capital investments. However. Managing the risk of overheating in the domestic economies remains a key challenge for the major emerging economies in 2011. the growth rate is likely to be lower than in 2010 on the back of fading monetary and fiscal policy tailwinds and some hints of overheating. Further. we feel that factors like increasing oil prices. political issues . The Middle-East nations account for a major portion of the oil production. Yemen and Syria). which in turn could pose a threat to corporate profits. Even the devastation in Japan has not been able to cool down the oil prices. mainly BRIC countries (Brazil. That can actually put the premium valuations of the Indian markets vis-à-vis other emerging markets under pressure. India runs a large deficit. Russia.22 Monthly Equity Commentary Emerging economies to grow at a robust rate in 2011 but lower than 2010 contd… The major emerging economies. The premium that India has been enjoying is likely to come under pressure. Oil prices impacts both these numbers. This does not augur well for the Indian market. higher oil prices are simply not good for the Indian markets. the two crucial spots are current account and fiscal side.key factors to watch out While the Indian Government continues to remain optimistic about India’s growth story going forward. causing interruptions to oil supplies. the chances of India enjoying substantially higher premium to its peers also reduces. While a rebound in exports has led to some improvement in the fiscal position during April-Feb 2011. Another major risk to the Indian market is the soaring oil prices. leading to a slowdown. Indian Market outlook High co-relation of earnings to global factors. India & China) and even Mexico are expected to grow at a robust rate during 2011. As the co-relation of India’s earnings to global growth increases. These earnings either come from global commodities or from international subsidiaries of Indian corporates. once the reconstruction in Japan bolsters. which could drive the oil prices significantly higher from the current levels. For India. political issues & increasing co-relation of market earnings growth to the global factors need to be closely monitored. the demand for oil could increase substantially. The idle capacity could be marginal & cyclical inflation and input cost pressures could be on a rise. the growth across the major emerging markets is likely to become more balanced. Monthly Report April 2011 Retail Research . and more confidence on domestic final consumption as a growth driver. high oil prices. In both these places. Around 55-56% of earnings of the Indian market are currently co-related to global factors.

Not just in terms of India underperforming relative to the region. For instance. the global liquidity pushing up all the asset classes. Risk-trade i. which was higher than expected.3%. interest rate sensitive sectors like banks. e. thus hampering India’s growth story. RBI could go in for another 50-75 bps hike in the interest rates. While the “soaring crude prices” factor threatens to be a barrier to economy’s future growth. the RBI has also highlighted upside risks to inflation and raised its March-11 WPI estimate from 7% to 8%.17% (assuming that government absorbs 50% of the incremental under-recovery burden). contrary to the usual thinking that the Indian economy is hurt by oil price increases. there are certain mitigating factors like ~US$300bn forex reserve cushion. We feel that if the inflation continues to remain high. higher oil prices are also contributing to inflation worries. this co-relation has reversed recently. Oil prices and Sensex have had positive co-relation. which could make the impact less severe than the past. The manufactured products reversed the moderation posted in the previous month. we have seen most pressures on the companies in the real estate.38% as a proportion of GDP and the fiscal deficit by 0. property & autos have also underperformed since MENA concerns surfaced. The normal perception of the Indian economy suffering due to rises in oil prices can actually be quantified. Infact with the recent ease in the food inflation. At its recent policy. fuel price regulation and new gas discoveries.23 Monthly Equity Commentary contd… All these years. depending on how it is transmitted. The market certainly does not seem to have factored in these possible rate hikes. The recent political issues and the government scandals are also increasingly weighing on the markets. Inflation . Monthly Report April 2011 Retail Research . A lot of investments that were expected to come through are facing some slowdowns and that would continue to be in the minds for most investors looking at India. US10 increase in global crude prices normally increases the CAD (current account deficit) by 0. However. oil marketing Companies. While the uptrend in manufactured non-food product inflation is an indicator closely tracked by the RBI. Although 100% de-regulation of domestic fuel prices looks unlikely at present. infrastructure and industrial sectors. the market participates may have a feeling that the interest rates have peaked out & there would be no further hikes. along with other concerns (high inflation. That could happen only if inflation cools down considerably & consistently. inflation could certainly be impacted by higher oil prices. High inflation could compel RBI to go for more interest rate hikes. but sectors that are negatively impacted by oil price increases.e. which looks unlikely. has been a major reason for such correlation. This factor. In some of the sectors.g. rising interest rates & oil prices) have been the main reason for a sharp correction that took place in the Indian markets in January & February 2011.a major challenge Inflation for the month of February stood at 8.

3 bn over the same period last year. This augurs well for urban-consumption demand. We believe a skilled labour shortage (reinforced by slowing population growth rate.as per he latest census).24 Monthly Equity Commentary India’s consumption & investments remain buoyant . Imports also increased by 21. the government has also eased the rules on foreign investments. stating that the foreign companies operating in India won't need prior approval from their existing joint-venture partners to operate separately in same business segments. The trade gap for the period stood at USD 97 bn. given the last year of the Eleventh Five Year Plan.could be major growth driver contd… Despite strong economic growth in 9MFY11. This is on the back of rising demand from the US and other markets.4% over the year-ago period and past the yearly target of USD 200 bn. The result of strong urban and rural income growth is reflected in strong growth in two-wheeler and passenger car sales despite a high base.2 bn.5 bn. an increase of 31. Monthly Report April 2011 Retail Research . we feel that the worst could be over. cotton yarn and made-ups (43%). leaving a trade deficit of USD 8. taking the April-Feb 2010-11 figure to USD 208. During April-Feb 2010-11. supported by higher corporate free cash flow and the need to reduce cost pressure.2% in the month under review to USD 31. markets have been bogged by certain concerns like lagged effects of the RBI’s monetary tightening. Further. petroleum and oil lubricants (34%). As in 2010. chemicals (22%) and electronics (40%). Rebound in the exports witnessed. US tech spending. While real GDP growth may slow to around 8. high crude prices & tight money-market liquidity conditions. This would promote the competitiveness of India as an investment destination and would be instrumental in attracting higher levels of FDI (foreign direct investment) and technology inflows into the country.7 bn. We feel that consumption could be a major growth driver for the economy going forward. helps in improving the fiscal position India’s exports went up by 49. we feel that the fears in the market are exaggerated as India’s consumption story remains buoyant.1 bn. We expect the infrastructure spending to pick up in FY12. would remain strong. the market for skilled labour remains buoyant led by the service sector. imports grew by 18% to USD 305.7% Y-o-Y during Feb to USD 23.5% Y-o-Y in FY12 as the economy fights with high interest rate. Offlate. Rural consumption shall likely remain supported by higher support prices for agricultural products and higher government redistributive expenditure. that could slow India’s growth momentum. spurring additional hiring by the IT and ITeS sectors. The big tailback to the investments has been delays due to environmental and land-acquisition issues. coupled with the aggressive hiring plans by IT and ITeS. However. India’s investments have slowed considerably. high commodity prices and political uncertainty. The exporting sectors which performed well during the 11 months of fiscal include engineering (81%). The order timelines for investment projects are being shifted to Q4FY11 – Q1FY12. could exert significant upward pressure on salaries across other sectors.

While the topline is expected to grow by 21. Economists anticipate a further increase in indicative rates by RBI. India Inc has staved off cost pressures in the past four quarters due to sustained growth momentum. investment experts are once again bullish on the domestic growth story.6% of the estimates.7% reached in Q2FY11. Monthly Report April 2011 Retail Research . Q4FY11 Results would be keenly watched – decent topline growth expected.6% Y-o-Y on the back of higher input cost. Banks are also expected to show robust profits due to strong credit demand. aggregate sales and profits of the Nifty companies are expected to grow in double digits for the sixth consecutive quarter. the bullish expectations about India's growth story do not appear to be lacking in steam.2%. For the March quarter.06 bn from $100. IT players would continue to do better following firm outsourcing demand & expected improvement in billing rates. which could put pressure on the net profitability of India Inc.24 bn in the same period previous fiscal. aggregate finance charges are likely to increase in double digits for the second consecutive quarter against a benign trend a year ago.49% to $9.25 Monthly Equity Commentary contd… With exports growing at a much faster rate than imports.India Inc enters fiscal 2012 amid unabated inflationary pressure. The extent of the cost impact should be visible in the March 2011 quarter since margins are likely to slip from 9-quarter high of 23. Decline in trade gap augurs well for the country’s current account deficit which has come down by 20. capital goods and FMCG sectors would see lower margins despite moderate to robust growth in revenues. According to the forecast. a higher oil bill. and soaring borrowing costs. The Centre's fiscal deficit during April-Feb 2010-11 worked out to be 68. according to ET Intelligence Group's estimates of the quarterly performance of Nifty 50 companies. The timing for the shift in their expectations is critical.7 bn during the Oct-Dec quarter over the same period last fiscal. the operating profit growth is expected to be slightly lower at 19. showing improvement in the fiscal position. compared to 92% in the same period last year. the sample's OPM is expected to erode sequentially by 50 bps for the March quarter. It is expected to repeat its resilience even during the March 2011 quarter.2% Y-o-Y. India’s trade deficit during April-Feb 2010-11 declined to $97. At an estimated level of 23.margins could be under pressure After shunning Indian equities for the past four months. Even though challenges are in abundance and the journey in the new fiscal would be choppy. given the mounting macroeconomic challenges . Companies in automobiles. Most sectors will face the hit due to inflationary pressure.

which is neither very cheap nor expensive. though the valuations are not very cheap. the companies should be able to grow profits at a conservative rate of 13-14% in FY12. So.26 Monthly Equity Commentary Is market looking overvalued at current levels? contd… The net profit of the Nifty companies has grown at more than 20% in the trailing 12-month period for each of the past four quarters. 1200 for FY12). Considering the uncertainty on the macroeconomic front. Markets have traded at lower valuations like 10-11 times in the past. However. like in 2008 & in early 2009. What could offer relief to investors.6 at the market peak in Dec 2007. However. the valuation is slightly higher than the long-term average PE (8-10 year average PE). which stands at ~15x. Sensex levels – 1 year forward PE Monthly Report April 2011 Retail Research . but generally that does not happen unless the world goes through a catastrophe and we have a major disappointment. given the challenging macroeconomic factors related to soaring costs of raw materials and expensive borrowing due to rising interest rates. is the fact that valuations are far from being unreasonable i. On that basis the Nifty trades at a 1-year forward PE of 16. much lower than the PE of 24. investors need to watch out for triggers that could impact the growth scenario substantially. FY12 will test India Inc's resilience further. they are neither too expensive at current levels.2 (on an estimated EPS of ~Rs.e. despite the current challenging scenario. The current valuations look reasonable as long as profit growth remains in double digits.

Over the long term. Currently.2%. the retail participation (directly or through mutual funds) is also important. then the FIIs confidence on the Indian markets could increase and the valuations could expand from the current levels. a thrust on infrastructure and agricultural sectors.27 Monthly Equity Commentary contd… After two months of sharp correction. If the Government is able to implement the budget proposals. a lower-than-expected net borrowing programme. if it happens.6 bn in FY10 & Rs. the Indian market bounced back sharply in the month of March on the back of better than expected Union Budget FY12. the Indian market has mainly been driven by FII flows rather than the domestic institutions. 661.8 bn in FY08. Further the market PE has some correlation with the expected growth in EPS. which was a kind of Euphoria). The main reasons could be domestic selling & FIIs’ unwillingness to buy at higher levels. 1462. it could actually be a big positive trigger for the Indian economy & the equity market as well. 1426. substantial PE expansion difficult unless there are more earnings upgrades It is to be noted that over the last few years. that the oil prices cool down from current levels and settle at somewhere near $85-90 per barrel. the FII flows are at an all time high. Monthly Report April 2011 Retail Research . However. However. With FY12E EPS of Sensex expected to grow by 13. it is also very important. India’s growth rates could remain attractive than most other emerging & developed economies. in order to trade higher valuations. there is a limit to PE expansion and the Sensex will beyond a point wait for earnings upgrade for FY12 before breaking into new highs. Hence India remains a long-term buy on sharp dips.9 bn in FY11 as compared to being reported as net buyers of Rs. The FIIs were net buyers worth Rs. that is possible if there are more earnings upgrades in the coming quarters along with cooling off of oil & inflation. retail participation equally important. yet the Indian markets have not surpassed their previous highs of Jan 2008. the Indian market has traded at 18-19x 1 year forward PE. In good times (excluding the period Sept-Dec 2007. implementation of budget proposals by the Government and general improvement in corporate governance practices across the listed space. Indian markets more FII driven. The market has probably taken cues from the favourable announcements made in the budget like lower fiscal deficit target set for FY12. It took nearly $29 bn in investor flows in CY10 to cause the market to rise steadily until Nov 2010 but relatively tiny outflows have caused sharp reversals. For markets to surpass the all time high. Though this looks difficult at present. reduction in surcharge on corporate tax & permission for foreign investors to invest in mutual fund schemes.

Along with the oil prices. the markets are likely to consolidate in the month of April before taking any further direction. Monthly Report April 2011 Retail Research . inflation & corporate results.HOME 28 Monthly Equity Commentary Market to consolidate in the month of April. The Sensex could trade in a range of 19000-20000. upside for the month looks limited contd… After registering a sharp rally in March 2011. state elections in April & May 2011 would also be keenly watched by the market participants & would test the Government’s pragmatic or populist approach to policy issues in this period.

Monthly Report April 2011 Retail Research .29 Technical Commentary Larger Picture as a Contracting Triangle contd… We have been assuming that the all time high. is the starting point of the correction from where the downward wave ‘A’ of a ‘Contracting Triangle’ started. Currently we are in wave ‘C’ and this wave is going to correct some of the rise made by wave ‘B’.207. The upward rising wave which was going for all most 2 years was wave ‘B’ as marked on the chart above. which was made at 21.

296) as it has taken 34 trading sessions so far. Monthly Report April 2011 Retail Research .30 Technical Commentary Lower Top Lower Bottom formation along with Faster Retracement contd… We have assumed that the end of the wave ‘B’ is at 20.665.665 because from thereonwards the real acceleration in the downward trend started. corrections should/ must take more time than the move it is correcting and this rule is properly followed by the current upward move (from 17. Time Rule The downward move from 20.296 in just 28 trading sessions and which is according to us as wave ‘A’ and this downward move was retraced by more than 61.8% by the current upward move which has started from 17.296 took 28 trading sessions and according to the rule designed by Glenn Nelly. The Sensex moved downward from 20. the Sensex started forming ‘Lower Top and Lower Bottom’ formation.665 to 17.665 to 17. Also from 20.296.

575 and stays above it. If the Sensex is able to breach 17.8% of the previous downward move then the whole structure goes into ‘Flat’ realm and following are the categories given in the theory of Flats.31 Technical Commentary Price Rule contd… According to Neely if the correcting move is more than 61.8% is breached the next level is 80%.000 level. Monthly Report April 2011 Retail Research .985 and coincidently the trendline joining all the significant recent tops is also at 20. Flat Structure As can be seen in the pictorial presentation given above whenever 61. the next target will be 80% which is at 19.

296 and go till 15. However if the present upmove lasts beyond 20.845. For this to happen the low of the smaller wave B should be breached (17.2% of the previous upmove (8. This large wave should retrace atleast 38.665) which comes to 15.665. Monthly Report April 2011 Retail Research .047 to 20.985.32 Technical Commentary contd… We are expecting a weak ‘B’ or a normal ‘B’ because ‘C’ which will be the next big wave which will follow the wave ‘B’ whenever it is completed should have enough strength to perform. On a larger scale.665.665 is a larger wave C. then we will have to relook at the whole structure. For this to happen the recent upmove (in the form of wave B) should be a weak B or less than normal B suggesting a maximum upmove not exceeding 20. Overall we think that the present upmove (we are in wave e of flat – to be followed by a downtrending wave f and uptrending wave g completing a diametric formation in wave B) could last upto a maximum of 19.296). This could breach the lows of 17. the downmove from 20. post which a fall could begin in the form of wave C of larger wave C.845. This is because according to the Elliot wave Analysis the length of wave ‘B’ in relation to wave ‘A’ decides whether wave ‘C’ may or may not exceed the beginning of wave ‘B’.

982 on 1st March 2011. On Monthly charts. In next 8 trading sessions it was continuously making Higher Highs as well as Higher Lows.HOME 33 Technical Commentary . Monthly Report April 2011 Retail Research .Month Gone By The Sensex opened at 17. Post this for 11 trading sessions the trend was down but the down trend was very slow in nature as it made an intraday low at 17.792 on 21st March 2011 and in 11 trading sessions the Sensex fell by 945 points. After making an intraday low at 17. It made an intraday high at 19. After moving in upward direction for 2 trading sessions it made an intermediate high at 18.737 on 4th March 2011.445.792 on 21st March 2011. the Sensex never looked back and started rising continuously.575 on 31st March 2011 and finally closed near the high of the day and the month at 19. the Sensex formed a Bull candle.

During standstill periods. the interpretation of the Bollinger Bands is based on the fact that the prices tend to remain in between the top and the bottom line of the bands. The following traits are particular to the Bollinger Band: abrupt changes in prices tend to happen after the band has contracted due to decrease of volatility. the price movement that has started from one of the band’s lines usually reaches the opposite one. while the Bollinger Bands are plotted a certain number of standard deviations away from it. if prices break through the upper band. Bollinger Bands are usually plotted on the price chart.e. In periods of considerable price changes (i.34 Learning Technical Analysis Bollinger Bands (BB) Bollinger Bands Technical Indicator (BB) is similar to Envelopes. or the periods of low volatility the band contracts keeping the prices within their limits. The last observation is useful for forecasting price guideposts. Standard deviation is a measure of volatility. therefore Bollinger Bands adjust themselves to the market conditions. but they can be also added to the indicator chart (Custom Indicators). a continuation of the current trend is to be expected. A distinctive feature of the Bollinger Band indicator is its variable width due to the volatility of prices. Monthly Report April 2011 Retail Research . When the markets become more volatile. of high volatility) the bands widen leaving a lot of room to the prices to move in. the bands widen and they contract during less volatile periods. Just like in case of the Envelopes. The only difference is that the bands of Envelopes are plotted at a fixed distance (%) away from the moving average.

35 Learning Technical Analysis contd… Calculation: Bollinger bands are formed by three lines. Monthly Report April 2011 Retail Research . TL. ML = SUM [CLOSE. N]/N The top line. The middle line (ML) is a usual Moving Average. is the same as the middle line a certain number of standard deviations (D) higher than the ML. TL = ML + (D*StdDev) The bottom line (BL) is the middle line shifted down by the same number of standard deviations.

A strategy for trading Bollinger bands is to gauge the initiation of an upcoming squeeze. SMA — Simple Moving Average. moving averages of less than 10 periods are of little effect. The Bollinger squeeze is pretty self explanatory. N]/N) It is recommended to use 20-period Simple Moving Average as the middle line. StdDev = SQRT(SUM[(CLOSE — SMA(CLOSE. Monthly Report April 2011 Retail Research . then the move will usually continue to go up. Besides. If the candles start to break out above the top band. When the bands “squeeze” together. it usually means that a breakout is going to occur. and plot top and bottom lines two standard deviations away from it. then the move will usually continue to go down. If the candles start to break out below the lower band.HOME 36 Learning Technical Analysis BL = ML — (D*StdDev) contd… Where: N — is the number of periods used in calculation. N))^2. StdDev — means Standard Deviation.

5313 cr in Feb 2011 (excl.804crs.692crs. In terms of value. FIIs were reported as net buyers to the tune of Rs. 1.731 cr in cash markets in March 2011 (Data available till March 30) after being net sellers of Rs. 6. It was Rs. 28 cr during the month of March 2011 after being net buyers of Rs. the April 2011 series has begun with market wide OI at Rs. In the process. The April series has started on a heavier note compared to the previous series. 5066 cr (net).97. thereby entering into a fresh intermediate uptrend. FIIs have sold stocks worth Rs.221crs. FIIs were net buyers in 14 out of 21 trading sessions in the month (till March 30). Rs. The bulls however came back strongly in the last week of March 2010 and pushed the Nifty above their previous highs of 5600.37 Derivatives Commentary The month of March 2011 began on a positive note. Mutual funds were net buyers for fourth consecutive month to the tune of Rs. at the beginning of the Feb 2011 series. Vs.426 cr in Feb 2011. Monthly Report April 2011 Retail Research .86. The markets however faced resistance at the previous Nifty highs of 5600 and traded in a range with a negative bias.1. it also moved above the crucial 200-day exponential moving averages. at the beginning of the March 2011 series. In CY11. This indicates an increase in conviction levels after the month gone by saw the Nifty breaking out of its previous highs of 5600.02. data for Feb 15).

India Cement. 65% during the same time in the previous series. Ruchi Soya and Godrej Ind. 83% in the previous series.20 levels last month. This combined with the fact that the rollover costs were more than 0. We say this because the maximum call writing is being seen in the 5900-6100 strikes. Sun TV and OnMobile. Market wide rollover was at 85% Vs. Derivative indicators are giving healthy signals as the Nifty IV dipped to around 19% from 23-24% last month.34 from 1.4%. Index option activity suggests that the Nifty could remain in a range within the 5600-6100 levels during the month of April 2011. We can observe on the daily charts that the Nifty has crossed its previous highs of 5600 and also trades above the 200 day exponential moving average. The Nifty OI PCR is giving bullish signals as it has climbed to 1. the markets have signaled that they have entered into a fresh intermediate uptrend. The current uptrend would reverse if the recent lows of 5348 are broken. implying that traders are expecting the Nifty to remain above these levels for the time being. The 200 day EMA also resides near the 5600 levels.HOME 38 Derivatives Commentary contd… Rollovers to the April 2011 series too were higher. the highest rollovers were seen in GTL. Technically. Maximum Put writing is being seen in the 5700-5600 strikes. Nifty rollovers were at 71% Vs.6% during the April rollovers compared to the three month average of 0. reflects the increased confidence levels that traders have in the current rally. The lowest rollovers were seen in Patni. thereby lending strong support to this level. Coming to stock specific rollovers. Monthly Report April 2011 Retail Research . Adani Ent.

timevalue decay thus becomes an ally instead of a foe. When we say an option is at the money. Buying puts or calls is typically a way for investors and traders to speculate with only a fraction of their capital. Figure 1 provides a table of possible positions of the underlying in relationship to an option's strike price. If you have ever sold covered calls against stock positions. When they establish a position. But these straight option buyers miss many of the best features of stock and commodity options .39 Learning Derivatives Analysis Options – time value decay: Most investors and traders new to options markets prefer to buy calls and puts because of their limited risk and unlimited profit potential. paid by option buyers. out or at the money. the option can be in. the option seller can benefit from the passage of time. Depending on where the underlying price is in relation to the option strike price. and timevalue decay becomes money in the bank even if the underlying is stationary. When the price of a commodity or stock is the same as the strike price (also known as the exercise price) it has zero intrinsic value. Fig 1 Monthly Report April 2011 Retail Research . but it also has the maximum level of time value compared to that of all the other option strike prices for the same month. we mean the strike price of the option is equal to the current price of the underlying stock or commodity. option sellers collect time-value premiums.such as the opportunity to turn time-value decay into potential profits. you can appreciate the beauty of selling time value. Rather than struggling against the ravages of time value. For option writers (sellers).

and if the underlying stock index at expiration closes at 1150. For example. the underlying price is less than the option strike price. Intrinsic value increases the more in the money the option becomes. no changes in the underlying and volatility levels). In the case of a put option at the same strike price of 1100 and the underlying at 1050. Figure 2 below illustrates this concept. 'in the money' means that the underlying price is greater than the option strike price. the put's strike would be less than the underlying price. For a call option. As Figure 2 indicates. For out-of-the-money options. This is because one will be closer to the money than the other. is a function of two variables: (1) time remaining until expiration and (2) the closeness of the option strike price to the money. the option at expiration also would be 50 points in the money (1100 -1050 = 50). deep in-the-money options and deep out-of-the-money options have little time value. both put and call options would be at the money when the strike price and underlying expire at the exact same price. the same rules apply at any time before the options expire.e. All other things remaining the same (i. For example. Monthly Report April 2011 Retail Research . if we have a Reliance call with a strike price of 1100 (an example we will use to illustrate time value below). Time value is at its highest level when an option is at the money because the potential for intrinsic value to begin to rise is the greatest right at this point. While we are referring here to the position of the option at expiration. With these basic relationships in mind. If we leave volatility aside for now. the more value the option will have in the form of time value. the longer the time to expiration. And at-the-money options have the maximum level of time value but no intrinsic value. when a put option is in the money. and the call's strike would be greater than the underlying price. Finally. to be out of the money. That is. But this level is also affected by how close to the money the option is. let's now take a closer look at time value and the rate of time-value decay (represented by theta. also known as extrinsic value.40 Learning Derivatives Analysis contd… As can be seen in Figure 1 above. the exact reverse applies. two call options with the same calendar month expiration (both having the same time remaining in the contract life) but different strike prices will have different levels of extrinsic value (time value). indicating when time-value would be higher or lower and whether or not there will be any intrinsic value (which arises when the option gets in the money) in the price of the option.1100 = 50). the option will have expired 50 points in the money (1150 . the time-value component of an option. from the Greek alphabet).

If we compare the prices of each option at a certain moment in time. Taking our series of Reliance call options. the option premium declines from 38. the Feb call option has five days remaining until expiry. This should make the above concepts more tangible. Monthly Report April 2011 Retail Research . As you can see. The fewer days remaining translates into less time value.41 Learning Derivatives Analysis Fig 2 contd… In Figure 3 below. Figure 3 graphically illustrates the premium for these at-the-money Reliance call options with the same strikes. and comparing them. all having the same strikes but different contract expiration dates. each with different expiration dates (Feb. As Figure 3 shows. we are simply taking different prices at one point in time for an at-the-option strike (1100). We can witness how the passage of time changes the value of the options. March and April). With the underlying stationary. Assume the date is Feb 8.70 when we move from the strike 68 days out to the strike that is only 33 days out. we can simulate how time value influences an option's price. declining from there as we move to the options that are closer to expiration (33 days and five days). the Mar call option has 33 days remaining and the Apr call option has 68 days. we simulate time-value decay using three at-the-money Reliance call options. the highest premium is at the 68-day interval (remember prices are from Feb 8). all with an at-the-money strike price of 1100.90 to 25. Again. the phenomenon of time-value decay becomes evident.

a look at time-value decay is a good place to start when beginning to understand how options are priced. Monthly Report April 2011 Retail Research . and implied volatility).HOME 42 Learning Derivatives Analysis Fig 3 One important dynamic of time value decay is that the rate is not constant. Conclusion While there are other pricing dimensions (such as delta. gamma. As expiration nears. This means that the amount of time premium disappearing from the option's price per day gets greater with each passing day. the rate of time-value decay (theta) increases.

3 37.0 390.5 5.7 Premature Profit Booked 33.4 Premature Profit Booked -21.5 197.4 86.1 70.2 -15.0 Monthly Report April 2011 Retail Research .4 32.2 Premature Profit Booked 8.5 203. Entry Abs.8 -14.55 43-30 6.0 -18.2 -8.0 78.0 Trading/BTST/Futures Calls Date 1-Mar-11 4-Mar-11 8-Mar-11 11-Mar-11 14-Mar-11 14-Mar-11 21-Mar-11 22-Mar-11 22-Mar-11 23-Mar-11 23-Mar-11 23-Mar-11 23-Mar-11 28-Mar-11 29-Mar-11 B/S B S B S S S S B B B B B B B B Trading Call Havells Punj Lloyd Fut Hind Copper Maruti Fut ABB Futures Kotak Bank Fut Welcorp Futures Bata India Dwarkesh Sugar Atlanta KLG Systel AP Paper Moserbaer LIC Housing Finance Piramal Life Entry at 328-320 65-66.0 360.0 209.0 87.0 77.0 185.5 103.0 Exit Date % G/L Comments 1-Mar-11 7-Mar-11 9-Mar-11 15-Mar-11 16-Mar-11 23-Mar-11 24-Mar-11 23-Mar-11 22-Mar-11 24-Mar-11 28-Mar-11 23-Mar-11 25-Mar-11 28-Mar-11 30-Mar-11 3.6 40.0 430.0 9.0 3.0 43.0 57.4 304.6 80.8 56.5 Stop Loss Triggered 3.0 9.4 29.1 Premature Profit Booked 3.0 5443.5-70 81-79 60-60.5 295.3 216.1 Premature Profit Booked 12.0 340.0 5443-5460 5470.0 65.0 5410.0 10.5 1213.0 225.0 325.0 26.0 29.5-11 15.0 28.2 Premature Profit Booked -26.8 6.0 184.4 313.8 736.0 28.0 108.5 -1.5 41.8 Premature Profit Booked 36.5 61.8 25.6 Premature Profit Booked Time Horizon Avg. Entry Abs.8 25.0 38.7 -15.9 Premature Profit Booked 3.0 198.0 338.0 61.0 46.0 421.3 Stop Loss Triggered 0. Entry Abs.8 175. Gain/Loss 2 days 1-3 days 1-2 days 1-2 days 1-3 days 5 days 2-3 days 2-3 days 80.3 112.2 Premature Profit Booked 6.0 6.0 75.0 33.5 304-300 238.0 700.0 10.0 198.0 120.1 20.0 9.5 210-204 103-95 Sloss Targets Exit Pric e / CMP 318.0 12.5 179.7 156-160 39-41.6 9.0 Exit Date % G/L Comments 16-Mar-11 18-Mar-11 -0.8 Stop Loss Triggered 61.0 67.0 347.1 Premature Profit Booked 2.8 44.7 Premature Profit Booked Time Horizon Avg. Gain/Loss 1-2 days 1-2 days 5446.0 5380.8 75.0 365.0 750.5 Stop Loss Triggered 50.5 4.0 24.6 36.6 3.0 -8.25-4.5 20.0 5438-5454 5464.9 Stop Loss Triggered -2.0 Stop Loss Triggered -0.4 159.3 6.0 1245.0 5464.HOME 43 Extract of Calls during March 2011 Index Futures Calls Date 15-Mar-11 18-Mar-11 B/S S S Trading Call Nifty Futures Nifty Futures Entry at Sloss Targets Exit Pric e / CMP 5370.0 430.6 Stop Loss Triggered Time Horizon Avg.0 25.0 15.6 Premature Profit Booked -1.0 1261.0 10.2 15.0 1195.1 60.5 30-42 Sloss Targets Exit Pric e / CMP 60.3 Premature Profit Booked 8.0 67.0 4.0 350.5-1253 732-740 416-425 193-197 346-347.0 13.0 125.9 Premature Profit Booked 7.0 750.8 61-51 15. Gain/Loss 3 days 2-3 days 3 days 1-2 days 3 days 5 days 1-2 days 2-5 days 2-3 days 2-3 days 2-5 days 2-3 days 2-3 days 2-3 days 10 days 328.2 41.0 Stock and Nifty Options Calls Date 3-Mar-11 3-Mar-11 9-Mar-11 11-Mar-11 14-Mar-11 17-Mar-11 17-Mar-11 24-Mar-11 B/S B B B B B B B B Trading Call Nifty 5400 Put Option Tata Motors 1200 Call Option Nifty 5300 Put Option TCS 1050 Put Option Tata Steel 600 Call Option Tata Motors 1150 Put Option Hindalco 200 Put Option Nifty 5500 Put Option Entry at 85-75 26.8 9.0 18.0 120.3 69.5 3.0 90.1 Premature Profit Booked 5.6 63.4 5.5 67.0 Exit Date % G/L Comments 7-Mar-11 3-Mar-11 14-Mar-11 11-Mar-11 16-Mar-11 24-Mar-11 21-Mar-11 25-Mar-11 35.0 67.7 41.4 Premature Profit Booked -37.9 Premature Profit Booked 8.

6 6730.7 41558.03 Capital Goods 7.3 3432.1 3596.1 -10.4 Cumulative 213.91 5.1 9290.0 2098.0 Net 1324.35 8.29 7. (A ll figures in Rs.59 Bankex 7.4 1762.0 774.3 6373.4 2037.6 643.8 8380.80 5.2 295.23 6.1 9571.6 15348.8 12399.0 8504.5 606.82 IT 9.1 10100.4 3624.0 9279.2 6850.3 284.8 6239.6 Cumulative 1324.7 48288.26 Monthly Report April 2011 Retail Research .5 % c hg 17.4 8252.HOME 44 FII & Mutual Fund Flow and indices moves during March 2011 Total FII Inflow s/Outflow s during the month of Marc h 2011 (A ll figures in Rs.3 2378.7 2712.7 11880.1 4230.48 PSU 4. Cr.5 2500.6 -899.9 28.58 Oil & Gas 31-Mar-11 28-Feb-11 2337.4 1882.0 9459.3 1892.6 10240.0 13299.10 Realty 4.8 17823.6 * Da ta no t a va lia ble fo r 31s t M a r 2011 Total MF Inflow s/Outflow s during the month of Marc h 2011.2 10129.9 9259.7 16161.4 BSE Indic es Sensex Smallcap Midcap 500 200 100 Power FMCG Auto 31-Mar-11 28-Feb-11 19445.0 1137.9 Net 213.85 Consumer Durables 8.7 10095.9 % c hg BSE Indic es 9.33 10.9 8960.7 928.6 5718.8 6106.1 13233.3 5631.4 2185.3 28.1 2963.9 6873.6 11064.4 7817.6 1844.6 Sold 9573.4 7437.6 4160.7 11840.) W eek Ended 7/3/2011 14/3/2011 21/3/2011 28/3/2011 31/03/2011 Total Buy 10897.1 6023.77 Healthcare 12.7 2319.0 6730.2 82.1 6660.4 6548.6 1981.2 8175. Cr.93 12.) W eek Ended 7/3/2011 14/3/2011 21/3/2011 28/3/2011 31/03/2011 Total Buy 2302.1 8255.3 Sold 2089.57 Metal 8.5 -1492.73 6.5 2523.

6 150.3 52.8 Pric e 3/31/2011 247.5 -20.9 Pric e 3/31/2011 58.3 96.1 458.6 % c hg 70.6 634.3 25.8 106.4 DHAMPURSUG BEPL BANARISUG AREVAT&D Monthly Report April 2011 Retail Research .4 -6.8 95.2 46.3 358.4 -21.7 6.0 112.4 -3.1 KGL ASIANELEC MID-DAY MASTEK RAJESHEXPO SURYAROSNI Top Losers From CNX 500 Pric e 2/28/2011 14.2 52.4 69.6 -5.6 202.8 113.9 -9.1 40.4 34.5 211.3 1107.7 1516.7 Top Gainers From CNX 500 Pric e 2/28/2011 BINDALAGRO TATACOFFEE PARSVNATH FMGOETZE DCHL GUJFLUORO AMTEKAUTO ALFALAVAL APOLLOTYRE VENKEYS 34.6 36.8 5.3 59.2 32.6 10.8 26.6 416.5 142.5 99.5 Pric e 3/31/2011 80.6 -10.6 29.9 124.7 141.1 24.4 -4.8 44.0 67.3 961.1 47.8 45.7 147.0 276.8 42.4 -13.9 139.4 -10.HOME 45 Gainers & Losers – March 2011 Top Gainers From F&O Pric e 2/28/2011 DCHL APOLLOTYRE DLF HINDOILEXP RCOM ESCORTS AMBUJACEM HEXAWARE STRTECH RELCAPITAL 57.8 13.6 119.5 80.6 200.6 108.6 415.2 475.2 564.5 70.3 69.9 158.4 95.5 487.6 34.5 25.0 -7.5 85.7 Pric e 3/31/2011 10.7 25.6 -11.6 268.4 32.4 -10.6 583.8 -3.1 % c hg -10.9 53.4 54.2 266.1 117.0 22.7 431.3 -9.8 % c hg -28.6 26.6 30.8 109.3 247.4 66.0 581.8 107.1 58.7 -11.2 % c hg 40.7 34.7 467.8 2063.1 112.0 1130.5 121.9 -12.5 57.0 -12.8 1024.5 24.1 2208.8 419.7 32.7 AREVAT&D EDUCOMP NATIONALUM PIRHEALTH MCDOWELL-N GLAXO ADANIPOWER SUZLON MPHASIS DABUR Top Losers From F&O Pric e 2/28/2011 276.1 650.

I Think Techno Campus. We do not represent that it is accurate or complete and it should not be relied upon as such. Institutional Clients Monthly Report April 2011 Retail Research . Office Floor 8. It should not be considered to be taken as an offer to sell or a solicitation to buy any security. Opp. Bulding –B. We may from time to time solicit from. The information contained herein is from sources believed reliable. Crompton Greaves. ”Alpha”. or perform investment banking. Kanjurmarg (East). Near Kanjurmarg Station. This document is not to be reported or copied or made available to others. but not limited to. This report is intended for Retail Clients only and not for any other category of clients. and buy and sell securities referred to herein. Mumbai 400 042 Phone (022) 30753400 Fax: (022) 30753435 Disclaimer: This document has been prepared by HDFC Securities Limited and is meant for sole use by the recipient and not for circulation. any company mentioned in this document. We may have from time to time positions or options on.46 RETAIL RESEARCH TEAM Head of Research Deepak Jasani Technical/Derivatives Analyst Adwait Sapre Subash Gangadharan Aditi Junnarkar Siddharth Deshpande Mutual Fund Analyst Dhuraivel Gunasekaran Production Sushma Chavan Fundamental Analyst Mehernosh Panthaki Harshal Patil Sneha Venkatraman Tiju K Samuel Kushal Sanghrajka HDFC Securities Limited. including. or other services for.

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