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Daily Market Strategy - Indices set for flat start

Anil Mascarenhas/ Mumbai 08:15 , Jul 24, 2014

The Outlook is expected to be flat to open. Global cues are positive but attention will now be more on the earnings again.

Do not waste yourself in rejection, nor bark against the bad, but chant the beauty of the good. - Ralph Waldo Emerson

For seven days in a row, the indices have been managing to close in the green with the Sensex adding over 1000 points in the bargain. TCS made headlines after it crossed Rs5 lakh crore in mcap making its market value higher than the next four Indian IT companies combined besides exceeding that of other Tata Group firms put together, says a report.

The Outlook is expected to be flat to open. Global cues are positive but attention will now be more on the earnings again. Shares of Cairn India will be in focus after Q1 results. Glenmark Pharma, Biocon and Bharti Infratel results will in focus besides a lot many companies which will announce numbers today. Chinese manufacturing positively surprised with a strong reading. The HSBC flash PMI came in at 52.0 for July, its highest reading in 18 months.

Asian indices are mostly in the green. Japan's Nikkei 225 is marginally up while Hong Kong's Hang Seng index was up 0.3%. South Korea's Kospi index has added 0.20% while China's Shanghai index is trading 0.8% higher. The Dow fell 0.16% while S&P 500 gained 0.18%. Nasdaq Composite added 0.4%.

Since the beginning of July, FIIs have net bought Rs 12,869 crore of Indian debt securities while they have net invested Rs 6,464 crore in equities. In April, at the beginning of the financial year, they had net sold Rs 10,768 crore in debt and net bought Rs 5,283 crore in equities, says a report.

The rally in industrial stocks may run out of steam because foreign fund holding in many of these stocks is fast approaching the limit of stake they are allowed to hold in them, says a report.

The Reserve Bank of India on Wednesday moved closer in setting up a Trade Receivables Discounting System or TReDS - an exchange driven trading mechanism that could end the agony of lakhs of Small and Medium Enterprises which face endless delays in receiving payments for their supplies to bigger companies, says a report."The TReDS will facilitate the discounting of both invoices as well as bills of exchange," RBI said in its draft guidelines.

Jet Airways and Etihad Airways have outlined plans to reinforce their long-term commitment to the growth of India’s economy and aviation industry, including a major new turnaround strategy for Jet Airways to return to profitability in three years. The two airlines have been codeshare partners since 2008 and their relationship was strengthened in November 2013, after Etihad Airways received approvals to acquire a 24 per cent stake in Jet Airways, marking it the first investment by a foreign carrier in India’s airline industry.

Yes Bank Ltd has posted a net profit of Rs. 4394.80 mn for the quarter ended June 30, 2014 as compared to Rs. 4008.40 million for the quarter ended June 30, 2013. Total Income has increased from Rs. 28399.70 mn for the quarter ended June 30, 2013 to Rs. 31052.10 mn for the quarter ended June 30, 2014.The stock was down 2% at Rs536.

Honda Cars India launched its new Multi-Purpose Vehicle (MPV), the Mobilio at a starting price of Rs 6.49 lakh (ex-showroom Delhi), according to reports. Report stated that the petrol car will cost Rs 6.49 lakh for the E variant; while diesel variants have been priced between Rs 7.89 lakh to Rs 10.86 lakh. 

Tata Power generated 45,210 MUs (million units) of power collectively from all its power plants in the year 2013- 2014, compared to 34,683 MUs in the previous fiscal. This marks a significant 24% increase in generation, with the total power generation capacity of Tata Power standing at 8613 MW from various fuel sources such as thermal (coal, gas and oil), hydroelectric power, renewable energy (wind and solar PV) and waste heat recovery, thereby reinforcing its position as the largest integrated power company in India.

J. Kumar Infraprojects Limited has concluded its fund raising exercise through Qualified Institutions Placement (QIP) Process. The Company raised Rs 1.37 bn through the QIP route, which saw participation by some highly reputed investors in India and across the globe. The Company accordingly will issue 44,25,000 equity shares of face value of INR 10/- per equity share at a price of Rs309.98 including a premium of INR 299.98. Post issue the promoters holding will be 51.04% as against 59.16% on June 30, 2014. 

Results watch: Glenmark Pharma, Bharti Infratel, Biocon, ACC, Ambuja Cements, Apollo Finvest, Bayer Crop, Century Enka, Century Ply, Century Tex, Dewan Housing, Empire Inds, Gandhi Spec, Garnet Intl, GM Breweries, Granules India, Hester Bio, Hexa Tradex, Jenson & Nich India, Jindal Saw, KSB Pumps, Mahindra & Mah Fin, Mastek, Mirc Elect, Mirza Intl, Modella Wool, OCL India, Omax Autos, Pfizer, PI Inds, Rajshree Sug, Rane Engine, RAS Resorts, Rose Invest, RPG Life, Servotech Engr, SKS Microfinance, State Bank BikJpr, Swiss Glasscoat, Thinksoft, TVS Motor, Wendt India, Wipro and Zensar Tech.

Fund activity: The foreign funds were net sellers of Rs2.92bn in the cash segment on Tuesday, according to SEBI data.

Global data: HSBC Manufacturing PMI (Jul) Preliminar CNY, Markit Manufacturing PMI (Jul) Preliminar EUR, Markit Services PMI (Jul) Preliminar EUR, Unemployment Survey (Q2) EUR, Markit Manufacturing PMI (Jul) Preliminar EUR, Markit Services PMI (Jul) Preliminar EUR, Markit Manufacturing PMI (Jul)Preliminar EUR, Markit PMI Composite (Jul) Preliminar EUR, Markit Services PMI (Jul) Preliminar EUR, Retail Sales n.s.a (YoY) (May) EUR, Retail Sales s.a. (MoM) (May) EUR, Retail Sales ex-Fuel (YoY) (Jun) GBP, Retail Sales (MoM) (Jun) GBP, Retail Sales (YoY) (Jun) GBP, Retail Sales ex-Fuel (MoM) (Jun) GBP, Consumer Confidence (Jul) EUR, Initial Jobless Claims (Jul 18) USD, Continuing Jobless Claims (Jul 11) USD, Markit Manufacturing PMI (Jul)Preliminar USD, New Home Sales (MoM) (Jun) USD , New Home Sales Change (MoM) (Jun) USD, EIA Natural Gas Storage change (Jul 18) USD, Kansas Fed manufacturing activity (Jul) USD, National Consumer Price Index (YoY) (Jun) JPY, National CPI Ex Food, Energy (YoY) (Jun) JPY, National CPI Ex-Fresh Food (YoY) (Jun) JPY, Tokyo Consumer Price Index (YoY) (Jul) JPY, Tokyo CPI ex Food, Energy (YoY) (Jul) JPY, Tokyo CPI ex Fresh Food (YoY) (Jul) JPY, Corporate Service Price (YoY) (Jun) JPY, Foreign bond investment (Jul 18) JPY and Foreign investment in Japan stocks (Jul 18) JPY. 

Other news in the media:

Wipro will continue to look at acquisitions to strengthen its presence in growth areas. (BS)

BGR Energy Systems has signed contracts worth Rs.3.03bn in various sectors including power, water, oil and gas. The company is looking at opportunities in other sectors in India and in the International market. (BS)

McLeod Russel India is in discussion with multiple consultants for a possible diversification in the periphery of tea and agriculture business and is expected to gather the responses from consultants in another three months period.(BS)

Cairn India would invest $200mn over the next three years in developing natural gas finds in its Rajasthan block. (BS)

NMDC Ltd aims to ramp up output by two-thirds in five years to 50mn tonnes a year, helped by the launch of new mining facilities and expansion of existing infrastructure.(BL)

BHEL has firmed up renewed plans for a big presence in renewable energy, especially solar energy. It wants to play a significant role in establishing ultra-mega solar photovoltaic plants of 1000 MW each. (BL)

JSW Energyis looking to raise up to Rs.50bn and is eyeing stressed projects for acquisition.(ET)

Cognizant said it has been selected by US-based professional association NAPHSIS to transform its Electronic Verification of Vital Events system. (ET)

Texmaco Rail & Engineering Ltd has decided to raise Rs.3bn for expansion and diversification. (ET)

Strides Arcolab has received the regulatory approval to market Tacrolimus capsules in the US market. (BS)

The Government said it would simplify procedures for green clearances while stepping up efforts to get Rs.350bn, stuck in litigations, released for afforestation. (BL)

The Reserve Bank said the FII limit for investment in government securities has been increased by $5bn within the total cap of $30bn. (ET)

The Government is attempting to raise domestic oil and gas production so as to reduce dependence on imports to meet its oil needs.(ET)

TEN MOST ACTIVE FUTURES

Symbol

No.of Cont Traded

Last price

Open Interest

% chg in Op.Int

SBIN

33,946

2,544.90

4432625

-1.63

ICICIBANK

30,646

1,507.45

10748250

1.66

RELIANCE

29,478

1,032.95

19207000

-3.48

AXISBANK

26,883

2,006.15

6653250

-4.38

TCS

21,055

2,549.85

3117500

2.26

YESBANK

20,888

535.90

10549000

3.21

INFY

19,796

3,346.95

2924375

-1.69

HINDALCO

16,206

193.50

25216000

-6.83

TATASTEEL

13,341

556.50

16516000

-0.94

HDFCBANK

12,875

838.70

30825500

-2.63

TEN MOST ACTIVE OPTIONS


Option Type

Strike price

No.of Cont Traded

Open Interest

% Chg in Op.In

SBIN

CE

2,600

8,115

509500

2.46

RELIANCE

CE

1,040

7,653

1186000

-0.71

TCS

CE

2,600

6,637

173000

6.30

TCS

CE

2,500

5,886

162750

-42.16

TCS

CE

2,550

5,750

76875

-19.71

AXISBANK

CE

2,100

5,646

204000

-21.91

INFY

CE

3,400

5,261

465125

-10.42

INFY

CE

3,300

5,147

414500

-32.55

SBIN

PE

2,500

4,940

301375

13.14

AXISBANK

PE

2,000

4,606

211000

-1.17

SUPPORT & RESISTANCE LEVEL

Company Name

S3

S2

S1

Close

R1

R2

R3

ACC

1,423

1,430

1,438

1,454

1,470

1,478

1,486

AMBUJACEM

210

211

213

216

219

221

222

ASIANPAINT

590

593

595

600

605

607

610

AXISBANK

S3

1,973

1,983

2,002

2,022

2,032

2,041

BAJAJ-AUTO

2,081

2,088

2,095

2,110

2,125

2,132

2,139

BANKBARODA

841

845

849

857

864

868

872

BHARTIARTL

349

350

351

354

356

357

358

BHEL

231

232

233

235

237

238

239

BPCL

591

594

598

606

613

617

621

CAIRN

342

343

344

346

348

349

350

CIPLA

435

436

438

441

445

446

448

COALINDIA

377

379

381

384

388

390

392

DLF

209

211

212

215

218

219

221

DRREDDY

2,698

2,704

2,711

2,725

2,739

2,746

2,753

GAIL

431

433

434

438

442

443

445

GRASIM

3,269

3,285

3,301

3,334

3,367

3,383

3,399

HCLTECH

1,521

1,526

1,532

1,542

1,552

1,557

1,562

HDFC

1,025

1,027

1,030

1,035

1,040

1,043

1,045

HDFCBANK

829

831

833

836

839

841

843

HEROMOTOCO

2,528

2,538

2,547

2,567

2,586

2,596

2,605

HINDALCO

190

191

191

193

195

196

197

HINDUNILVR

628

629

630

632

634

635

636

ICICIBANK

1,492

1,495

1,499

1,506

1,513

1,517

1,520

IDFC

154

155

156

158

159

160

161

INDUSINDBK

549

551

553

557

561

563

565

INFY

3,275

3,292

3,310

3,345

3,380

3,398

3,415

ITC

350

351

352

354

355

356

357

JINDALSTEL

287

289

291

294

298

299

301

JPASSOCIAT

64

65

65

66

67

67

68

KOTAKBANK

919

923

927

935

943

947

951

LT

1,636

1,641

1,645

1,654

1,663

1,667

1,672

LUPIN

1,074

1,078

1,082

1,090

1,098

1,103

1,107

M&M

1,182

1,185

1,189

1,197

1,205

1,209

1,212

MARUTI

2,457

2,465

2,473

2,490

2,507

2,515

2,523

NMDC

174

174

174

175

176

177

177

NTPC

148

148

149

150

151

151

152

ONGC

400

401

402

405

408

409

410

PNB

900

904

909

918

927

932

937

POWERGRID

135

135

136

137

137

138

138

RANBAXY

555

556

558

561

564

566

568

RELIANCE

1,019

1,022

1,025

1,031

1,037

1,040

1,043

SBIN

2,503

2,512

2,521

2,540

2,558

2,568

2,577

SSLT

292

293

293

295

297

298

299

SUNPHARMA

740

743

745

749

753

755

758

TATAMOTORS

478

480

482

486

489

491

493

TATAPOWER

102

102

103

103

104

105

105

TATASTEEL

545

547

550

555

560

563

565

TCS

2,538

2,548

2,559

2,580

2,601

2,612

2,622

ULTRACEMCO

2,394

2,408

2,422

2,450

2,478

2,492

2,506

WIPRO

558

561

564

571

577

580

583



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