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Daily Market Strategy - Positive start on Dhanteras

Anil Mascarenhas,  India Infoline News Service | Mumbai | October 21, 2014 08:30 IST

The opening is positive start. The Dow Jones rose 0.12% while the S&P 500 added 0.91%. Nasdaq Composite added 1.35%.

This Dhanteras, may divine blessings of Goddess Lakshmi bestow on you bountiful fortune...
 
Going with tradition, people will opt for making token purchases of valuable metals today.  The market will look at continuing with its gains clocked on Monday. News flow continues from the government and this time it is on the sensitive coal issue. Finance Minister Arun Jaitley said that the government will offer a pool of coal mines to private players via e-auction process and promulgate an ordinance to take back cancelled coal blocks.
 
Though this is not expected immediately, through the ordinance, the government retained the right of allowing mines to be allotted to private companies for mining coal and selling to others, says a report. The FM says this move cannot be termed denationalization of coal mines adding that the interests of Coal India would be protected.
 
The opening is positive start. The Dow Jones rose 0.12% while the S&P 500 added 0.91%. Nasdaq Composite added 1.35%.  IBM shares fell 7% after third-quarter earnings fell well short of Wall Street expectations.  Brent crude fell on Monday, dropping below $86 a barrel.
 
China economy grew at 7.3 per cent in the third quarter slightly ahead of estimates. Asian shares are mixed with Nikkei and Hong Kong's Hang Seng trading 0.5% higher. South Korea's Kospi is lower and China's Shanghai index is flat.
 
The government further extended the validity of industrial licences to as much as seven years from three on Monday to encourage domestic manufacturing. "As a measure of 'ease of doing business', henceforth, two extensions of two years each in the initial validity of three years of (an) industrial licence shall be allowed up to seven years," the department of industrial policy and promotion (DIPP) said in a notification.
 
Standard & Poor's Ratings Services believes these measures increase transparency in the pricing mechanism. However, any significant rise in global  oil and gas prices would test the government's resolve on deregulation, considering the roll-back of such policies in the past. The government on Oct. 18, 2014, deregulated diesel prices, resulting in the price of fuel dropping by about Indian rupee (INR) 3.4 per liter. The price will change monthly depending on global crude prices and the rupee's exchange rate to the U.S. dollar. India adopts a similar approach for pricing petrol.
 
Shares of Idea Cellular Ltd will be in focus after the company has posted a net profit after tax of Rs. 7558.80 mn for the quarter ended September 30, 2014 as compared to Rs. 4476.10 mn for the quarter ended September 30, 2013. 
 
Total Income has increased from Rs. 63859.10 million for the quarter ended September 30, 2013 to Rs. 76864.80 million for the quarter ended September 30, 2014.
 
Shares of HCC surged 7% at Rs28 after the company has bagged Rs. 393 Crore road contract on the Indo-Nepal border.
 
Shares of Jindal Steel and Power has hit 10% lower circuit at Rs 133 on reports that Central Bureau of Investigation (CBI) has registered a case for alleged cheating and criminal conspiracy related to one of its largest functional coal mines in Chhattisgarh.
 
Hindustan Zinc Ltd has posted a net profit of Rs. 21835.20 mn for the quarter ended September 30, 2014 as compared to Rs. 16402.50 million for the quarter ended September 30, 2013. Total Income has increased from Rs. 38260.10 mn for the quarter ended September 30, 2013 to Rs. 44990.30 mn for the quarter ended September 30, 2014.The stock surged 4% at Rs164.
 
Alembic Pharmaceuticals has posted consolidated net profit of Rs. 772.70 mn for the quarter ended September 30, 2014 as compared to Rs. 616.40 mn for the quarter ended September 30, 2013.The stock was up 4% at Rs. 402.
 
United Spirits has reported net loss of Rs. 55.58 crore for the three months ended June 30, 2014.The stock is trading up 3.72% at Rs. 2,464.
 
Canara Bank will raise up to Rs.85 crore through qualified institutional placement (QIP) in the current fiscal. The stock is trading up 2.32% at Rs. 392 as against the previous close of Rs. 384 on BSE.
 
Shares of Reliance Industries was down 1% at Rs 913, on reports that the company will not get the new gas price for its currently producing Dhirubhai-1 and 3 gas fields in eastern offshore KG-D6.
 
Report stated that the Indian government is meeting bankers to discuss a planned share sale in state-run ONGC.
 
YES Bank has successfully raised equivalent of USD 422 mn (USD 288 mn and EUR 103.5 mn) by way of Dual Currency Multi-tenor Syndicated Loan Facility. The said Facility shall be utilized for general corporate purposes.
 
Results Watch: HDFC Bank, IIFL, BASF India, Biocon, Blue Star, Cairn, Dewan Housing Finance, Gujarat Alkalies and Chemicals, Gujarat Flurochemicals, Indoco Remedies, JSW Steel, KPIT Technologies, Kaveri Seed, Mahindra Composites, Mahindra CIE Automative, Mcleod Russel India and Mount Everest Mineral Water.
 
Trends in FII flows: The FIIs were net buyers of Rs10.4bn in the cash segment on Monday, while the domestic institutional investors (DIIs) were the net sellers of Rs1.66bn, as per the provisional figures released by the NSE.
 
Global Data: RBA Meeting's Minutes AUD, Gross Domestic Product (YoY) (Q3) CNY, Gross Domestic Product (QoQ) (Q3) CNY, Industrial Production (YoY) (Sep) CNY, NBS Press Conference CNY, Retail Sales (YoY) (Sep) CNY, Urban investment (YTD) (YoY) (Sep) CNY, All Industry Activity Index (MoM) (Aug) JPY, Trade Balance (Sep) CHF, Exports (MoM) (Sep) CHF, Imports (MoM) (Sep) CHF, Current Account (YoY) (Aug) EUR, Public Sector Net Borrowing (Sep) GBP, 9-Month Letras auction EUR, 3 Month Letras Auction EUR, RBA Deputy Governor Lowe Speech AUD, 10-y Bond Auction GBP, Redbook index (YoY) (Oct 17) USD, Redbook index (MoM) (Oct 17) USD, Existing Home Sales Change (MoM) (Sep) USD, Existing Home Sales (MoM) (Sep) USD, 4-Week Bill Auction USD, CB Leading Indicator (Aug) AUD, Westpac Leading Index (MoM) (Sep) AUD, Merchandise Trade Balance Total (Sep) JPY, Adjusted Merchandise Trade Balance (Sep) JPY, Exports (YoY) (Sep) JPY and Imports (YoY) (Sep) JPY.
 
Other news in the media:
 
The board of United Spirits approved reporting of erosion of more than half of its peak networth to BIFR, the tribunal for sick companies. (ET)
 
Yes Bank said it has raised USD422mn by way of dual currency multi-tenor syndicated loan facility. In a bid to strengthen its retail credit portfolio, YES Bank is also looking at entering the credit card business. The bank has a customer base of approximately 1 million and would look at launching its credit card business once the customer base hits the 1.5 million mark. (ET)
 
India moved a step closer to selling a stake in state-run oil company ONGC, keeping up Prime Minister Narendra Modi's momentum on economic reform after bringing prices of diesel and natural gas closer in line with the market. (ET)
 
Hindustan Construction Company (HCC) said it has bagged a Rs 3.93bn worth contract from the Union Ministry of Road Transport and Highways. (ET)
 
Country's largest two wheeler maker Hero MotoCorp plans to invest over Rs50bn across the globe, including manufacturing plants at Colombia and Bangladesh and new facilities at Gujarat and Andhra Pradesh. The Company aims to surpass 100 million units in cumulative production by 2020. (ET)
 
NTPC on commissioned a 110 kWp rooftop solar plant at its engineering office complex. The plant is expected to generate 1,70,000 kWh of energy annually and lead to carbondioxide reduction to the extent of 163 tonnes a year. (BL)
 
BGR Energy Systems Limited, a leading EPC and BoP company has received orders worth Rs2.50bn in the electrical sub-stations segment of its Electrical Projects Divison. (BS)
 
Panasonic Appliances India Company Ltd, a joint Venture between Japan-based Panasonic Corporation and Indian promoter P Obul Reddy Group, has decided to delist its equity shares from the stock exchanges. The Indian promoters has sold their entire equity shares of 16.94 per cent off market as intra promoter consolidation of shareholding to Panasonic Corporation for Rs262mn. (BS)
 
The US legislature's probe into ''abnormal'' increases in drug prices by 14 pharmaceutical companies, including India's Sun Pharmaceutical Industries and Dr Reddy's Laboratories, has gone to the next level. Congress (the legislature) has written to US health secretary (minister in their terminology) Sylvia Burwell, seeking 'immediate' and 'aggressive' action over the issue. (BS)
 
IDBI Bank has raised Rs25bn through Basel III compliant Additional Tier - I (AT - I) bonds to enhance its capital adequacy. The bank is also in international market to raise upto USD500mn through five year bonds. (BL)
 
Telecom operators could get spectrum within 90 days after payment following a government panel asking Department of Telecom to work out a mechanism for allocating the airwaves to successful bidders in a reasonable period. (BL)
 
The state task force on mining is likely to take a call on the fate of 18 iron ore and manganese mines awaiting express orders to restart operations. These mine leases have been off operations since the May 16 order of the Supreme Court. These mines awaiting second and subsequent renewal are under temporary closure and are awaiting express orders of the state government to restart operations. (BS)
 
TEN MOST ACTIVE FUTURES
Symbol

No.of Cont Traded

Last price

Open Interest

% chg in Op.Int
RELIANCE

35,331

938.55

33853250

0.73

SBIN

27,597

2,569.65

4328125

-3.63

JINDALSTEL

27,286

136.00

22281000

2.54

ONGC

20,629

418.95

19860000

-10.93

TCS

18,497

2,425.80

4871500

-2.51

ICICIBANK

18,101

1,533.20

8731250

3.20

HDFCBANK

16,544

899.40

34041500

1.75

DLF

16,140

115.45

22420000

-2.16

AXISBANK

15,758

419.45

22878750

14.06

LT

15,219

1,498.75

7845000

-4.46

TEN MOST ACTIVE OPTIONS

Option Type

Strike price

No.of Cont Traded

Open Interest

% Chg in Op.In
RELIANCE

CE

940

9,924

1140750

35.72

SBIN

CE

2,600

8,437

581125

20.72

RELIANCE

CE

960

7,273

1571500

2.91

TCS

CE

2,500

7,196

538250

21.36

SBIN

PE

2,500

6,326

201750

-7.03

INFY

CE

3,900

4,903

476625

-1.37

TCS

CE

2,600

4,782

547500

28.90

RELIANCE

PE

900

4,646

452000

-36.94

RELIANCE

PE

920

4,510

479500

2.84

INFY

PE

3,800

4,333

318500

-0.23

SUPPORT & RESISTANCE LEVEL

Company Name

S3

S2

S1

Close

R1

R2

R3

ACC

1,401

1,406

1,411

1,420

1,430

1,435

1,439

AMBUJACEM

210

211

212

213

215

215

216

ASIANPAINT

638

640

642

646

650

652

654

AXISBANK

S3

412

414

417

420

422

423

BAJAJ-AUTO

2,376

2,384

2,391

2,407

2,422

2,430

2,437

BANKBARODA

857

861

866

875

884

889

893

BHARTIARTL

398

399

400

402

403

404

405

BHEL

222

224

225

228

231

233

234

BPCL

677

681

686

694

703

707

711

CAIRN

273

274

275

277

278

279

280

CIPLA

597

599

600

604

608

610

612

COALINDIA

355

357

359

364

368

371

373

DLF

110

111

113

116

118

120

121

DRREDDY

2,938

2,946

2,954

2,970

2,986

2,994

3,002

GAIL

454

456

457

461

465

466

468

GRASIM

3,255

3,267

3,281

3,307

3,333

3,346

3,359

HCLTECH

1,464

1,473

1,482

1,500

1,518

1,528

1,536

HDFC

1,003

1,007

1,011

1,020

1,029

1,033

1,038

HDFCBANK

884

887

891

897

903

907

910

HEROMOTOCO

2,852

2,871

2,891

2,930

2,969

2,989

3,008

HINDALCO

142

143

144

146

148

149

150

HINDUNILVR

726

727

729

733

737

739

740

ICICIBANK

1,522

1,525

1,529

1,537

1,545

1,549

1,552

IDFC

137

137

138

140

141

142

142

INDUSINDBK

659

660

662

666

669

671

673

INFY

3,771

3,780

3,790

3,810

3,830

3,841

3,850

ITC

347

348

349

352

354

355

356

JINDALSTEL

127

129

132

137

142

144

147

JPASSOCIAT

29

29

30

30

30

31

31

KOTAKBANK

980

985

991

1,001

1,012

1,017

1,022

LT

1,478

1,482

1,487

1,495

1,504

1,508

1,512

LUPIN

1,355

1,362

1,370

1,385

1,400

1,408

1,415

M&M

1,234

1,239

1,244

1,255

1,266

1,271

1,276

MARUTI

2,977

2,983

2,989

3,001

3,013

3,019

3,025

NMDC

156

157

158

159

160

161

162

NTPC

142

143

144

145

146

147

147

ONGC

408

410

412

417

422

424

426

PNB

935

940

945

955

965

970

975

POWERGRID

133

134

134

135

136

137

137

RANBAXY

586

588

590

595

599

602

604

RELIANCE

915

919

924

934

944

949

953

SBIN

2,541

2,548

2,554

2,568

2,582

2,589

2,595

SSLT

232

233

235

238

241

242

243

SUNPHARMA

791

793

796

802

807

810

813

TATAMOTORS

485

487

489

493

497

499

501

TATAPOWER

86

86

87

87

88

88

88

TATASTEEL

443

445

447

450

454

456

458

TCS

2,376

2,388

2,401

2,426

2,450

2,463

2,475

ULTRACEMCO

2,412

2,422

2,433

2,455

2,476

2,487

2,498

WIPRO

541

544

548

555

562

566

570









 

 
 
 
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