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Daily Market Strategy - F&O expiry; wild swings towards end

Anil Mascarenhas/ Mumbai 08:15 , Apr 23, 2014

The outlook is a flat start. Results will continue to dictate stock-specific movement even as indices look at global cues for most part of the day

You can't be too right too soon and win elections. - George W. Romney

The election fever is underway and the market will be closed tomorrow for the same. A lot of action is likely on the Street today on account of the F&O expiry. Punters will look at making big bets ahead of the results later in May. Whether it is the market or the elections, you can never be too sure too soon.

The outlook is a flat start. Results will continue to dictate stock-specific movement even as indices look at global cues for most part of the day. Cairn India, Yes Bank and Indiabulls Real Estate results to be watched out for. Reports indicate L&T Finance Holdings is in talks with YES Bank for buying out the promoter stake in the company, which Yes Bank has denied. HSBC Manufacturing PMI will be released today.The close will be exciting today on account of the F&O expiry. Investors will do well to remain light ahead of the election holiday tomorrow.

Asian markets are mixed. Chinese manufacturing data is awaited. Japan's Nikkei 225 was up while Hong Kong's Hang Seng was lower. South Korea's Kospi was marginally up while China's Shanghai index is in the red.  The Dow Jones industrial average  rose 65.12 points or 0.40 percent, to end at 16,514.37,while S&P 500  gained 7.66 points or 0.41 percent, to 1,879.55. The Nasdaq Composite  added 39.912 points or 0.97 percent, to 4,161.458.

Former US Federal Reserve chairman Ben Bernanke says the central bank should have done a better job in helping people understand the actions it took during the 2008-09 financial crisis.
“They (the public) think somehow or another that we favoured Wall Street instead of favouring Main Street and that’s unfortunate,” Bernanke said during a question and answer session after a speech Tuesday to the Economic Club of Canada.

Cognizant has entered into a definitive agreement to acquire itaas, a digital video solutions company headquartered in Atlanta, Georgia. The terms of the transaction were not disclosed.

HDFC Bank Ltd has posted 23% surge in net profit of Rs. 23265.20 mn for the quarter ended March 31, 2014 as compared to Rs. 18898.40 mn for the quarter ended March 31, 2013.Total Income has increased from Rs. 111275.40 mn for the quarter ended March 31, 2013 to Rs. 127899.80 million for the quarter ended March 31, 2014.

Point to point rate of inflation based on the CPI-AL and CPI-RL increased from 8.14% and 8.27% in February, 2014 to 8.38% and 8.51% in March, 2014. Inflation based on food index of CPI-AL and CPI-RL are 7.55% and 7.53% respectively during March, 2014.

Glenmark Pharmaceuticals Ltd has announced that the company has lost its appeal to invalidate Abbott Laboratories' TARKA (trandolapril/verapamil hydrochloride) patent when the Court of Appeals for the Federal Circuit, USA affirmed the district court's decision on April 22, 2014 regarding Glenmark's marketing of a generic equivalent of TARKA. Glenmark is disappointed with the decision and is considering its options.

Novartis announced  that it has reached a definitive agreement with GlaxoSmithKline plc (GSK) to exchange certain assets, building global leadership in key segments and focusing the company's portfolio.Under the agreement, Novartis would strengthen the company's innovative pharmaceuticals business by acquiring GSK oncology products, and would divest Vaccines (excluding flu) to them. 

The proximate problem that a central bank faces is maintaining a reasonably stable exchange rate, a variable that captures not only the external sector imbalances but also the future expectations of the relevant fundamentals, Harun R Khan, Deputy Governor, Reserve Bank of India. 

Mahindra Logistics has received an investment of Rs 200 crore for a significant minority stake from Kedaara Capital. This is Kedaara Capital’s maiden investment and is an endorsement of the long term growth potential of the Indian logistics sector.

Results watch:  Cairn India, Indiabulls Real Est, Yes Bank, India Bulls Housing Finance, Ind Bank Housing, Indbank Merch, Indiabulls Infra, Indiabulls Wholesale, Kirloskar Pneu, L&T Finance Holdings, Landmarc Leis, Mahindra & Mah Fin, Mastek, Nath Seeds, Sabero Organics, BSL,Shree Digvijay, SI Capital, SKF India, State Bank BikJpr, Store One, Supreme Inds, Thinksoft, Ultratech Cem.

Trends in FII flows: The FIIs were net buyers of Rs1.62bn in the cash segment on Tuesday, while the domestic institutional investors (DIIs) were net sellers of Rs2.98bn, as per the provisional figures released by the NSE.

The foreign funds were net sellers of Rs5.17bn in the cash segment on Monday, according to SEBI data.

Global Data: BOJ Deputy Governor Nakaso Speech JPY, Consumer Price Index (YoY) (Q1) AUD, Consumer Price Index (QoQ) (Q1) AUD, RBA trimmed mean CPI (QoQ) (Q1) AUD, RBA trimmed mean CPI (YoY) (Q1) AUD, HSBC Manufacturing PMI (Apr)Preliminar CNY, Markit Manufacturing PMI (Apr)Preliminar EUR, Markit Services PMI (Apr)Preliminar EUR, Markit Manufacturing PMI (Apr)Preliminar EUR, Markit Services PMI (Apr)Preliminar EUR, Markit Manufacturing PMI (Apr)Preliminar EUR, Markit PMI Composite (Apr)Preliminar EUR, Markit Services PMI (Apr)Preliminar EUR, Bank of England Minutes GBP, BOE MPC Vote Cut GBP, BOE MPC Vote Hike GBP, BOE MPC Vote Unchanged GBP, Public Sector Net Borrowing (Mar) GBP, 30-y Bond Auction EUR, CBI Industrial Trends Survey - Orders (MoM) (Apr) GBP, MBA Mortgage Applications (Apr 18) USD, Retail Sales (MoM) (Feb) CAD, Retail Sales ex Autos (MoM) (Feb) CAD, Markit Manufacturing PMI (Apr)Preliminar USD, New Home Sales (MoM) (Mar) USD, New Home Sales Change (MoM) (Mar) USD, EIA Crude Oil Stocks change (Apr 18) USD, 5-Year Note Auction USD, RBNZ Interest Rate Decision NZD, Corporate Service Price (YoY) (Mar) JPY, Foreign bond investment (Apr 18) JPY and Foreign investment in Japan stocks (Apr 18) JPY.

In other news in the media:

Tech Mahindra will implement Microsoft’s customer relationship management solution at New Hampshire’s Division of Motor Vehicles (DMV). The solution will replace DMV’s existing legacy system over a 22-month period. (BL)

Emami Ltd has entered the light hair oil segment with its new product Emami 7 Oils in One. (ET)

UCO Bank is eyeing a 20-22% growth in its deposit and advances portfolio in FY15. (BL)

The GMR-Megawide Consortium has paid approximately US$320mn to the Mactan Cebu International Airport Authority, the Philippines, as upfront premium for award of the concession of the Mactan Cebu International Airport. (BL)

In what comes as a temporary relief to Tamil Nadu farmers protesting against GAIL's Kochi-Mangalore LNG pipeline project, the company has decided to cancel the contracts awarded to lay the pipeline in TN. (BS)

Tata Motors is in talks with banks to raise about US$300mn through issuance of US Dollar-denominated bond. (BS)

Sonalika Group farm equipment maker International Tractors Ltd has joined hands with L&T Finance for tractor loan financing. (BS)

Union Bank of India has raised US$350mn by selling offshore bonds as a part of its medium-term note or MTN programme. They will be listed in the Singapore Exchange. (ET)

With Oil Ministry not responding to its requests for information on Reliance Industries' KG-D6 block, the Comptroller and Auditor General of India has written a curt letter to it, reminding of the requisitions pending for months. (ET)

The Centre may soon review SAIL's demand to include security expenses in the project cost of Rs50bn for developing Rowghat mines in Naxal hotbed in Chhattisgarh. (ET)

Ending the over month-long stalemate, employees of Toyota Kirloskar Motor resumed work at the company's two Bidadi plants near here after the Karnataka government asked both the management and the Union to restore normalcy in operations. (BS)

The Reserve Bank of India imposed restrictions on non-fund based credit facilities — guarantees, stand-by letters of credit, letters of comfort, and so on — extended by banks to Indian companies’ overseas arms. (BL)

The Reserve Bank of India is discussing ways to ensure an orderly rollout of its unpopular proposal to price state government debt at market-based valuations to minimise potential losses for banks holding this debt. (BS)

India's fuel demand rose by its slowest pace in almost 12 years after monthly price increases chipped away growth in diesel consumption. India saw petroleum product demand growing by a meager 0.7% in 2013-14, according to the latest oil ministry data. (BS)

TEN MOST ACTIVE FUTURES

Symbol

No.of Cont Traded

Last price

Open Interest

% chg in Op.Int

RELIANCE

46,311

970.75

5527500

-38.22

SBIN

32,141

2,050.45

2772875

-23.20

ICICIBANK

27,687

1,290.95

5156500

-24.31

HDFCBANK

26,949

728.40

11717000

-30.29

MCDOWELL-N

18,515

2,835.00

2790000

-36.70

DLF

17,279

157.55

27474000

-20.58

LT

16,391

1,346.55

3616000

-20.52

RCOM

16,164

133.30

11768000

-45.54

BHEL

15,905

187.15

10520000

-54.93

TCS

15,218

2,225.80

1951750

-21.18

TEN MOST ACTIVE OPTIONS


Option Type

Strike price

No.of Cont Traded

Open Interest

% Chg in Op.In

RELIANCE

CE

980

12,108

792750

39.32

RELIANCE

CE

1,000

9,645

840500

3.96

SBIN

CE

2,100

8,461

527375

33.18

ICICIBANK

CE

1,300

6,168

745250

1.15

INFY

CE

3,200

5,987

351000

33.08

RELIANCE

CE

960

5,881

339000

-38.34

SBIN

CE

2,050

5,488

270625

9.73

TCS

CE

2,250

5,287

346500

28.21

RELIANCE

PE

960

4,904

265000

-19.45

SBIN

PE

2,050

4,399

134625

10.35

SUPPORT & RESISTANCE LEVEL

Company Name

S3

S2

S1

Close

R1

R2

R3

ACC

1,314

1,319

1,324

1,334

1,345

1,350

1,355

AMBUJACEM

211

212

213

215

217

218

219

ASIANPAINT

531

532

534

536

538

540

541

AXISBANK

S3

1,490

1,494

1,502

1,510

1,514

1,518

BAJAJ-AUTO

1,983

1,988

1,993

2,003

2,013

2,018

2,023

BANKBARODA

771

774

776

781

786

789

791

BHARTIARTL

330

331

332

334

336

337

338

BHEL

184

184

185

187

188

189

190

BPCL

467

471

475

484

493

497

502

CAIRN

360

360

361

363

365

366

366

CIPLA

392

393

394

397

400

401

402

COALINDIA

296

297

298

300

301

302

303

DLF

154

155

155

157

158

159

160

DRREDDY

2,530

2,534

2,540

2,550

2,560

2,565

2,570

GAIL

373

375

377

380

383

385

387

GRASIM

2,739

2,747

2,756

2,773

2,790

2,799

2,807

HCLTECH

1,429

1,434

1,438

1,448

1,458

1,462

1,467

HDFC

867

869

872

878

883

886

888

HDFCBANK

721

723

725

729

733

735

737

HEROMOTOCO

2,240

2,246

2,252

2,265

2,278

2,284

2,290

HINDALCO

140

141

142

144

147

148

149

HINDUNILVR

588

590

592

595

599

600

602

ICICIBANK

1,270

1,275

1,280

1,289

1,298

1,303

1,308

IDFC

117

117

118

119

120

120

120

INDUSINDBK

490

492

494

498

502

505

507

INFY

3,117

3,126

3,136

3,155

3,174

3,184

3,193

ITC

348

348

349

351

353

353

354

JINDALSTEL

270

271

273

277

281

283

284

JPASSOCIAT

56

57

57

58

58

59

59

KOTAKBANK

795

796

798

802

806

808

809

LT

1,320

1,326

1,332

1,345

1,357

1,364

1,370

LUPIN

964

969

974

984

994

999

1,004

M&M

1,008

1,012

1,016

1,024

1,032

1,037

1,041

MARUTI

1,951

1,957

1,964

1,977

1,990

1,997

2,003

NMDC

149

150

150

150

151

151

151

NTPC

122

122

123

123

124

124

125

ONGC

321

322

324

327

330

331

333

PNB

770

774

779

787

796

800

804

POWERGRID

105

105

105

106

107

107

107

RANBAXY

461

462

463

465

467

468

468

RELIANCE

945

951

956

967

978

983

988

SBIN

2,027

2,033

2,039

2,051

2,063

2,069

2,075

SSLT

188

189

190

193

196

198

199

SUNPHARMA

616

617

618

620

622

623

624

TATAMOTORS

423

424

426

428

431

432

434

TATAPOWER

82

82

83

84

85

85

85

TATASTEEL

418

419

419

421

423

424

425

TCS

2,203

2,207

2,213

2,222

2,232

2,237

2,242

ULTRACEMCO

2,181

2,186

2,192

2,203

2,214

2,220

2,225

WIPRO

513

517

522

532

541

546

551



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