Morning Notes. Domestic Market View. LKP Advisory. 9-Mar-2015

Transcription

1 Morning Notes 9-Mar-2015 Indices 5-M ar 4-M ar % Chg. M ajor Indices 6-M ar 5-M ar % Chg. FII's & DII's in equity Rs.Crs S&P BSE SENSEX 29,449 29, % CAC 40 Index 4,964 4, % 05-M ar B uy Sell N et S&P CNX NIFTY 8,938 8, % DAX Index 11,551 11, % FII / FPI Investments S&P BSE M ID CAP 11,045 10, % Dow Jones Industrial A 17,857 18, % DII's Investments S&P BSE SM ALL C 11,457 11, % FTSE 100 Index 6,912 6, % FII's contribution to the total turnover 42% Nasdaq Composite In 4,927 4, % DII's contribution to the total turnover 16% BSE Sectoral Indices S&P BSE HEALTHCAR 16,991 16, % M ajor Asian Indices 6-M ar 5-M ar % Chg. FII's in Derivatives Rs.Crs S&P BSE FM CG 8,251 8, % Hang Seng Index 24,164 24, % 05-M ar Index Fut Index Opt Stock Fut Stock Opt S&P BSE BANKEX 22,642 22, % Nikkei ,971 18, % Net S&P BSE AUTO 19,697 19, % KOSPI Index 2,013 1, % OI S&P BSE POWER 2,286 2, % Shanghai Composite 3,241 3, % Chg.OI -0.6% 0.2% 0.8% 4% S&P BSE REALTY 1,795 1, % Taiwan SE Index 9,646 9, % FIIs' contribution to the total Derivatives turno 24% S&P BSE CONSUM ER 10,237 10, % S&P BSE OIL & GAS 9,777 9, % Commodities (MCX) 5-M ar 4-M ar % Chg. Futures (NSE) 5-M ar 4-M ar % Chg. S&P BSE PSU 7,989 8, % Aluminium (31M AR % USDINR 27-M AR % S&P BSE IT 11,952 12, % Copper (30APR2015) % EURINR 27-M AR % S&P BSE CAPITAL GO 18,292 18, % Crude (19M AR2015) 3,138 3, % JPYINR 27-M AR % S&P BSE TECk 6,399 6, % Gold (3APR2015) 26,012 26, % FTSE100 (20-M AR % S&P BSE M ETAL 10,043 10, % Silver (5M AY015) 35,972 36, % S&P500 (20-M AR % Domestic Market View Markets to make a soft start after a long weekend Indian markets had consolidated before going for a long weekend; today the start of the new week is likely to be soft-to-cautious taking cues from the weak global cues. Traders will be a bit more cautious with an Assocham s post-budget survey of CEOs and CFOs, where majority of them have said that they find revised GDP data of over 7 percent growth as too good to be realistic and too optimistic since the underlying situation is not all that upbeat. The telecom stocks will keep buzzing, as the bidding for spectrum by the telecom operators reached Rs 86,000 crore on the fourth day of the auction, surpassing the government s revenue expectation of Rs 82,000 crore. The metals and power stocks too will remain in action with government s cumulative proceeds surging to Rs 1.57 lakh crore from the ongoing auction of coal mines. There will be some cheer in the export oriented stocks, as the Commerce and Industry Minister Nirmala Sitharaman has said that the government is planning to form a committee to tackle issues related to exporters as well as boosting outward shipments.

2 Domestic Market OverView Benchmarks eke out slender gains Buying activity which took place during last leg of trade mainly drove the markets higher and key domestic benchmarks managed to keep their head above water on Thursday. Markets traded choppy throughout the session as investors remained on sidelines ahead of the US job data, due tomorrow amid a long weekend. The markets are closed on Friday for Holi, followed by the regular weekend holidays. Some support came in on the back of reports that foreign portfolio investors (FPIs) bought shares worth a net Rs crore on Wednesday, as per provisional data. Sentiments also got some support after global rating agency Moody's underscored that the new inflation targeting mechanism is a credit positive development and it would make RBI's monetary policy tools much more effective. However, gains remained capped on report that Reserve Bank of India (RBI) has cautioned that the uncertainty surrounding global oil prices can have an adverse bearing on the inflation outlook, though it will endeavour to bring it down to the target of 4 percent by Appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at per dollar at the time of equity market closing against the Wednesday s close of on the Interbank Foreign Exchange. Meanwhile, shares of insurance companies advanced after the Lok Sabha passed the Insurance Laws (Amendment) Bill, 2015, that proposes to raise the foreign investment cap to 49% from 26% in the insurance sector. Additionally, Public sector oil marketing companies (PSU OMCs) advanced after the Ministry of Petroleum & Natural Gas announced that 81% active LPG consumers (11.74 crore) have joined the Direct Benefit Transfer for LPG (DBTL) scheme called PAHAL as on March 2, On the flip side, shares of telecom companies ended lower due to investor worries that buying expensive spectrum could impact margins. India s biggest auction of wireless radio waves started on Wednesday with phone companies making bids worth an estimated Rs 60,000 crore in all four spectrum bands that are on the block. Moreover, shares of metal companies declined across the bourses after China, the world s largest consumer of metals, lowered its economic growth forecast for the current year. Global Market Overview The US markets ended lower in last session on concern that Fed may increase the interest rate earlier than expected following the release of upbeat US employment data. The Asian markets have made mostly a soft start tailing the weakness in US markets. Japanese market was lower as the nation s revised fourth-quarter gross domestic product rose less than estimated, while the Chinese market was down despite its Exports gaining more than 48 percent from a year earlier in February.

3 Index Futures (OI in '000 Shares) Future Chg Spot Chg Prem / Total Open Interest 5-Mar (%) 5-Mar (%) Disc 5-Mar Chg (%) NIFTY 8, , , CNXIT 12, , BANKNIFTY 19, , , Increasing OI, Increasing Delivery Qty & Increasing Price in Stock Futures (Open Interest in '000 Shares) Symbol Total OI Del Qty Cash Market Prev Increase Spot Fut Spot Fut Prem / 5-Mar % Chg. 5-Mar % Del. % Del. Del Qty (Rs.) (Rs.) Chg (%.) Chg (%.) Disc DIVISLAB % 433,618 72% 47% 365, % 2.3% 14.4 UBL % 195,303 37% 29% 59, % 2.8% 7.6 GLENMARK 2,522 5% 604,401 50% 52% 126, % 4.6% 5.3 AUROPHARMA 12,188 4% 748,733 44% 40% 78, % 2.1% 7.3 ADANIPOWER 64,416 4% 5,035,480 17% 22% 1,427, % 5.1% 0.5 IOC 5,136 4% 358,565 36% 31% 112, % 2.1% 2.3 EXIDEIND 8,068 1% 794,014 41% 45% 122, % 2.5% 1.1 DRREDDY 1,278 1% 168,242 57% 54% % 1.7% 21.3 ADANIPORTS 10,228 0% 670,784 34% 27% 93, % 0.3% 1.1 BATAINDIA 1,408 0% 100,748 53% 46% 35, % 0.2% 8.6 Increasing OI, Increasing Delivery Qty & Decreasing Price, (Open Interest in '000 Shares) Symbol Total OI Del Qty Cash Market Prev Increase in Spot Fut Spot Fut Prem / 5-Mar % Chg. 5-Mar % Del. % Del. Del Qty (Rs.) (Rs.) Chg (%.) Chg (%.) Disc NMDC 16,950 7% 2,747,582 58% 60% 791, % -3.3% 0.9 ACC 1,842 7% 356,659 57% 46% 153, % -1.6% -7.1 SRTRANSFIN 1,050 6% 255,547 64% 52% 44, % -1.3% 8.6 ADANIENT 6,652 5% 719,095 34% 31% 184, % -0.3% 4.3 GAIL 7,237 4% 1,138,537 62% 72% 88, % -0.2% 3.0 HINDALCO 32,098 4% 6,516,692 64% 47% 3,678, % -3.1% 0.9 TATAMTRDVR 15,970 4% 1,108,332 59% 40% 345, % -1.8% 2.6 COALINDIA 15,712 4% 3,861,694 74% 72% 450, % -2.1% 2.5 ULTRACEMCO 1,268 3% 315,617 62% 63% 134, % -3.2% 22.6 IDEA 17,976 3% 7,467,599 71% 45% 5,031, % -3.9% 0.8 Open Interest Break-up (Rs. in Cr.) 05-Mar 04-Mar Change in OI % Chg INDEX FUTURES 30,614 30, INDEX OPTIONS 100, , TOTAL INDEX 130, , STOCK FUTURES 73,755 73, STOCK OPTIONS 15,603 15, TOTAL STOCKS 89,358 89, GRAND TOTAL 219, , FII's 139, , Others 80,191 80,

4 Corporate News Intellect SEEC, the insurance software division of Intellect Design Arena, has launched an Intellect Underwriting Workstation (UWX) at NAMIC Commercial Lines Seminar in Chicago, Illinois. UWX enables Commercial Insurance carriers to make better risk selection and pricing decisions while improving efficiency and turnaround time. HCL Technologies and Tele 2, one of the leading European telecommunications operators, have entered into a strategic partnership to address the substantial market opportunities for Machine-to-Machine (M2M) and Internet of Things (lot) solutions in Europe. By focusing on the Healthcare segment in Europe, the two companies will jointly address one of the fastest growing areas of the M2M/loT market. For example, in healthcare the two companies are planning to develop remote patient monitoring systems that are enabled through smart phones. Fineotex Chemical has established a wholly owned subsidiary (WOS) as a 'Free Zone Enterprise' in RAK Investment Authority Zone in the United Arab Emirates for doing the business of specialty chemicals. Sundance Helicopters, the longest running helicopter tour operator in Las Vegas, Nev, has implemented Aviation Maintenance Repair and Overhaul (MRO) solution developed by Ramco Systems, to manage flight and maintenance operations for its fleet of 28 tour helicopters. Ramco's Aviation solution has helped automate systems, which were previously manual, reducing errors while increasing productivity. The system has enabled historical information for each aircraft part to be traced and accessed on any smart device. The solution has also been integrated to work with other applications such as Pilot 411 as well as Solomon Financials. Adhunik Metaliks has locked-out its factory located at Chadrihariharpur village, Sundergarh district in state of Odisha with effect from February 13, The company has taken this step due to adverse business conditions. KEC International (KEC), a global infrastructure EPC major, an RPG Group company has secured new orders worth Rs 1243 crore in its Transmission & Distribution, Railways and Cables businesses. Dewan Housing Finance Corporation (DHFL) has raised Rs crore by issuing shares to institutional investors. The company has issued and allotted 1,69,31,102 equity shares to the Qualified Institutional Buyers (QIBs) at a price of Rs per equity share, including a premium, aggregating to Rs crore. NTPC, the largest power generator in the country has commenced the commercial operation of Unit V of 660 MW of Barh Thermal Power Project on March 04, With this, the total installed capacity of Barh-ll has become 1320 MW and the total installed capacity of NTPC group has become MW. Crude Oil Production from ONGC's Western Offshore Fields touched 325,000 barrels oil per day (80PD) on March 3, This is the highest production from Mumbai Offshore during the last 5 years. The production has started increasing from average 315,000 BOPD in February 2015 to over 325,000 BOPD in March, Usha Martin won the Brinda & Sasai block in the second set of auctions that started on March 4, The block reserved for the non-power sector was won by Usha Martin at Rs 1,804 a tonne. Bidding for the block had begun at Rs 1,802 a tonne. Tech Mahindra, a specialist in digital transformation, consulting and business re-engineering, has inaugurated its Vietnam Sales Office in Hanoi, bringing jobs, IT expertise and expanding operations in the country and across the region. Adani Power has won its first coal block in the on-going e-auctions after its bid of Rs 302 a tonne for Jitpur in Jharkhand beat the likes of Jindal Steel and Power, Jaiprakash Power Ventures and others. Wipro, a leading global information technology, consulting and business process services company and Orga Systems, a leading software vendor for real-time charging and billing solutions has jointly developed a pre-integrated BSS (Business Support Systems) solution.

5 Adani Power (APL) has signed a definitive share purchase agreement for acquisition of 100% shares of Korba West Power Company (KWPCL) from Avantha Power & Infrastructure for which a binding term sheet was signed on November 24, Macquarie Capital was the sole advisor to the transaction. Fair trade watchdog Competition Commission of India (CCI) has imposed a total penalty of Rs 2 crore on Deepak Fertilizers and its subsidiary SCM Soilfert for violating competition norms with regard to their stake purchases in Mangalore Chemicals and Fertilizers (MCFL). Deepak Fertilizers and its subsidiary have been penalised for not giving notice to CCI regarding their acquisition of per cent in MCFL which happened in July Swedish commercial vehicle major AB Volvo has offloaded 12.7 lakh shares or around 4.7% stake in Eicher Motors for $310 million. Moreover, the company said that the divestment will have no bearing whatsoever on VE Commercial Vehicles (VECV), which will continue to be governed as an equal partnership venture. The shareholding pattern and governance framework of VECV remains unchanged. Mahindra Holidays & Resorts is India is all set to invest Rs 500 crore in setting up 8-9 new resorts is all set to invest Rs 500 crore in setting up 8-9 new resorts in the country over the next months. The company, which today opened a new resort near the Kanha National Park in Madhya Pradesh, will fund the expansion programme through internal accruals. It will invest an average of Rs lakh per key for the 500 rooms in intends to build. Titan Company is in the process of setting up a frame manufacturing facility. The company is yet to identify the location but the idea is in the pipeline. Tata Consultancy Services (TCS), a leading IT services, consulting and business solutions organization, has released its Underwriting Workbench, a multi-faceted platform that combines dynamic case management, intelligent workflow, and decision support systems with robust geospatial functions such as mapping and visualization capabilities to form a solution that augments the efficiency and effectiveness of the entire underwriting process. The solution automates the ability to capture, analyze and make use of data in order to determine risk exposure and risk aggregation. Cairn India is all set to cut its projected capital expenditure by 58% for the next financial year to $500 million from the earlier projection of $1,200 million due to historic decline in global crude oil prices. Bajaj Auto has unveiled Bajaj Platina electric start. Two wheeler manufacturer claims it to be the most fuel efficient bike in 100 cc segment to deliver 96.9 kmpl as per ARAI testing. Crompton Greaves has won three prestigious orders from Energy Efficiency Services (EESL), a joint venture set up by the Power Ministry comprising of four public sector undertakings - NTPC, PFC, REC and Power Grid, for the implementation of energy efficiency projects in the country. The company is the only player in the entire lighting industry to qualify for all three orders for energy efficient LED lamps from EESL, as per their technical and commercial requirements. SKS Microfinance has completed the sixth securitization transaction in FY15 of Rs crore. With this, the total sum of securitizations completed during FY15 (YTD) is Rs 1, crore. Reliance Infrastructure has announced the acquisition of Pipavav Defence and Offshore Engineering Company, together with sole management control. Reliance Infrastructure, together with its wholly owned subsidiary (WOS) Reliance Defence Systems, has agreed to acquire from the Promoters of Pipavav Defence 13 crore equity shares representing approximately 18% shareholding in the company at a price of Rs 63 per Share, aggregating Rs 819 crore. JM Financial Institutional Securities is the sole financial advisor and the Manager to the Open Offer. Carborundum Universal has sold its immovable property comprising land and building used for residential purposes in Chennai for a total consideration of Rs 87 crore.

6 SML Isuzu has reported % jump in February sales. The company has sold 981 vehicles during February 2015 against 447 vehicles sold in February The company had reported sales of 771 vehicles during January 2015 against 602 vehicles sold in January Aban Offshore s wholly owned step-down subsidiaries - Deep Drilling 7 and Deep Drilling 8, have redeemed the outstanding bonds issued by them having an aggregate principal amount of $216 million amounting to Rs 1,335 crore along with accrued interest on the due date i.e. March 5, Economy Inflation targeting 'credit positive' for India: Moody's In a major boost to India's sovereign outlook, global rating agency Moody's underscored that the new 'inflation targeting' mechanism is a 'credit positive' development and it would make RBI's monetary policy tools much more effective. According to the agency, inflation targeting is forward looking as this would encourage a focus on future, rather than past, price trends. Moody's underscored that quantitative inflation targeting would foster transparency and predictability in monetary policy, as capital market participants, businesses and the public understand the drivers of central bank actions and hence has termed this move as credit positive. Additionally, it emphasized that increase in monetary policy transparency and effectiveness would just lessen volatility in international capital flows into India and support institutional strengthening via accountability. Moody's, while cautioning that unchecked inflation would have a greater chance of hurting growth, added that inflation between 2011 and 2014 inflation was largely driven by food and commodity prices but it ultimately compromised growth. States should use additional funds, resources for infrastructure: Modi Prime Minister Narendra Modi, in a meeting with 35 first-time Maharashtra MLAs suggested that additional funds and resources disposal of states should be directed primarily towards nation building. The Minister, while highlighting the union government`s initiatives towards cooperative federalism, underscored that states have been allocated 62% of the total resources in the union budget, while only 38% have been left for use by the Centre. Further, the minister also emphasized upon the government s acceptance of the recommendations of the 14th Finance Commission regarding devolution of 42% of the divisible pool of taxes to states and expressed the desire of sharing the proceeds of coal auctions and the enhanced mineral royalties with states. According to recommendations of the 14th Finance Commission, States will get a much higher share of central taxes, as the government accepted the 14th Finance Commission s recommendation to devolve an unprecedented 42 per cent of the divisible pool to states during to , against 32 per cent suggested by the previous commission. This means in , states will receive Rs 5.79 lakh crore of the Centre s expected gross tax receipts of Rs lakh crore. The share of states will rise per cent compared to the estimate of Rs 3.82 lakh crore. RBI governor cautions of uncertain global oil prices adverse impact on inflation The Reserve Bank of India (RBI) after announcing a surprise rate cut outside the policy review cycle, has cautioned that the uncertainty surrounding global oil prices can have an adverse bearing on the inflation outlook, though it will endeavour to bring it down to the target of 4 percent by The RBI and the government had last month entered into an agreement to lower inflation to below 6 percent by January 2016 and further to around 4 percent by March next year. The central bank will be deemed to have missed its target if consumer inflation remains above the 6 per cent level for three consecutive quarters during or if it remains below 2 per cent for three consecutive quarters during the year In case of a failure, RBI will have to specify the reasons.

7 The RBI Governor Raghuram Rajan, has though stated that, 'The RBI will seek to bring inflation rate to the mid-point of the band of 4 percent, (+/-) 2 percent provided for in the agreement, i.e., to 4 percent by the end of a two year period starting fiscal year '. For other risk to inflation, RBI said, emanate from any possible spill over of volatility from international financial markets. RBI is of the opinion that softer readings on inflation are expected to come in through the first half of before firming up to below 6% in the second half. First day auction of telecom spectrum sees bids of around Rs crore The biggest ever telecom auction of 2G and 3G airwaves has got a good start with operators making aggressive bids worth an estimated Rs 60,000 crore after six rounds of bidding in all four bands. The government is selling airwaves in four bands: 2,100 megahertz (Mhz), 1,800 MHz, 900 MHz and 800 Mhz and a total of MHz of spectrum is on offer in the premium 900 MHz band, 1,800 MHz and 800 MHz while 5 MHz is up for bidding in the 2,100 MHz band across 17 out of 22 telecom areas or circles in the country. Although, the government cannot not release results of the auction because of a court ruling, but viewing the aggressive bid till sixth round only, it can to raise over its expected Rs 82,000 crore, as value of approximately Rs 60, 000 crores was committed by bidders against the value (at reserve price) of around Rs 49,000 crores of provisionally won spectrum. It has been reported that 900 Mhz and 2,100 MHz bands witnessed good bidding, while 800 MHz band too drew lot of interest. However, there was not much bidding in Mumbai, Delhi and Karnataka circles in the 2,100 MHz band. The bidding process, which starts at 9 am each day through 7.30 pm, will continue till the time all spectrum on the block is sold or no companies bid for any spectrum in any band in any circle. GDP to remain comprehensive measure to capture changes in the economic activity: Govt The government has stated that the Gross Domestic Product (GDP) will remain a comprehensive measure to capture changes in the economic activity and it will not be replaced by Gross Value Addition (GVA). The GDP includes GVA plus taxes on products, including import duty and excluding subsides on the products. The Statistics Minister V K Singh has said that GDP is a comprehensive measure of production activity in the economy, and therefore cannot be replaced by GVA. He further stated that GVA of an enterprise is measured as the value of the output minus the value of goods and services used to produce output. On the other hand, GDP combines in a single figure all the production carried out by enterprises, government and households in the country. GDP can thus be said to be equal to the sum of GVA of all enterprises, government and households. As per the international practice the government began giving growth rate figures in terms of GVA after it recently introduced a new series of national accounts with as the new base year. As per Central Statistical Office (CSO) latest data India s GDP growth was 6.9 percent in the fiscal , whereas the GVA growth stood at 6.6 percent Source: Reuters, Ace Equity & LKP Research

8 Tech View CNX Nifty Technical View Nifty managed to bounce from low point of day and closed with marginal gains. However, market breadth has not witnessed marked improvement which implies that Nifty will continue to face pressure at higher levels. Momentum indicators have not witnessed increased action suggesting that index will continue to trade in range in coming days. Nifty is likely to find support at levels and resistance at 9000 levels. Nifty is expected to open with a point fall and test levels today. If it manages to trade above 8810 levels then a small bounce cannot be ruled out. IMPORTANT LEVELS FOR THE DAY Support BSE NSE BANKNIFTY S1 29, S2 28, Resistance R1 29, R2 29, Pivot 29,377 8,915 19,659

9 Tech View PIVOT POINTS S c rip Na me CMP RB2 RB1 PP S B1 S B2 S c rip Na me CMP RB2 RB1 PP S B1 S B2 ACC GAIL ADANIENT GLENMARK ADANIPORTS GMRINFRA ADANIPOWER GODREJIND ALBK GRASIM AMBUJACEM HAVELLS ANDHRABANK HCLTECH APOLLOHOSP HDFC APOLLOTYRE HDFCBANK ARVIND HDIL ASHOKLEY HEROMOTOCO ASIANPAINT HEXAWARE AUROPHARMA HINDALCO AXISBANK HINDPETRO BAJAJ- AUTO HINDUNILVR BANKBARODA HINDZINC BANKINDIA IBREALEST BATAINDIA ICICIBANK BHARATFORG IDBI BHARTIARTL IDEA BHEL IDFC BIOCON IFCI BPCL IGL CAIRN INDIACEM CANBK INDUSINDBK CENTURYTEX INFY CESC IOB CIPLA IOC COALINDIA IRB COLPAL ITC CROMPGREAV JINDALSTEL DABUR JISLJALEQS DISHTV JPASSOCIAT DIVISLAB JPPOWER DLF JSWENERGY DRREDDY JSWSTEEL EXIDEIND JUBLFOOD FEDERALBNK JUSTDIAL

10 Tech View S c rip Na me CMP RB2 RB1 PP S B1 S B2 S c rip Na me CMP RB2 RB1 PP S B1 S B2 KOTAKBANK TATACHEM KTKBANK TATACOMM L&TFH TATAGLOBAL LICHSGFIN TATAMOTORS LT TATAMTRDVR LUPIN TATAPOWER M&M TATASTEEL M&MFIN TCS MARUTI TECHM MCDOWELL- N TITAN MCLEODRUSS UBL MRF UCOBANK NHPC ULTRACEMCO NMDC UNIONBANK NTPC UNITECH OFSS UPL ONGC VOLTAS ORIENTBANK WIPRO PETRONET YESBANK PFC ZEEL PNB POWERGRID PTC RANBAXY RCOM RECLTD RELCAPITAL RELIANCE RELINFRA RPOWER SAIL SBIN SIEMENS SRTRANSFIN SSLT SUNPHARMA SUNTV SYNDIBANK

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