Daily Market Strategy - Action All Around! Indices could recover at start

Anil Mascarenhas, IIFL | Mumbai | May 08, 2015 08:28 IST

After falling to calendar year lows, the indices could stage a brief recovery at start. Big numbers like HUL and Punjab National Bank are on tap.

Actions have consequences...first rule of life. And the second rule is this - you are the only one responsible for your own actions. - Holly Lisle

Multiple factors are playing out in the market and currency is one of them. The rupee breached the 64 mark against the US dollar adding to pressure in the market. With Put build-up at the 8000 levels, the market will find it difficult to push ahead for a while. The 30% return in calendar 2014 is history now as the Nifty has shed 3% till date in 2015. Brazil, Russia and China have delivered 17-23% in the same period.  
 
After falling to calendar year lows, the indices could stage a brief recovery at start. Big numbers like HUL and Punjab National Bank are on tap. Attention will continue on the currency movement too. April Export & Import numbers, and April Trade Balance will be in focus. The developments in Parliament will also be keenly eyed as Lok Sabha Budget session has been extended till May 13

Asian markets are trading positive for now. US markets closed in the green helped by the tech counters. Dow added 0.46%, S&P 500 was up 0.38% and Nasdaq gained 0.53%.
 
The government has referred the MAT issue to a committee headed by Justice (retd) AP Shah. Stating this in the Rajya Sabha on Thursday, Finance Minister Arun Jaitley said, “The Committee may look into the issue on a case-by-case basis in a retrospective manner.”
 
Indian Hume Pipe Company Limited board approved the proposed transaction in respect of development of Company's industrial land at Badarpur, New Delhi, admeasuring about 27,504.78 sq. mtrs. equivalent to 2,96,062 sq. ft. for Group Housing Residential project in terms of Development Rules and Gazette Notification dated May 13, 2013 of Master Plan Delhi 2021 (MPD - 2021) with a reputed developer having pan India operations.

Jet Airways Ltd stock ended lower by 9% at Rs. 357 on BSE. The airline has launched a premium cargo product branded FAST-TRACK(SM) that offers customers an express service on the airline’s domestic network to send urgent shipments within a defined timeframe.This new offering from Jet Airways Cargo will provide priority access to capacity, later bookings and guaranteed uplift with a money back guarantee in case of non-delivery of service.

Reliance Communication stock ended lower by 3% to Rs. 60.As one of such alternatives, the Company has invited certain Investment Banks to make proposals for running a process to monetise the valuable tower and fiber assets held in its subsidiary, Reliance Infratel Ltd. within the current financial year.

IT stocks bucked the trend as they attracted buyers in the backdrop of a weakening Rupee. On the positive front, TCS and HCL Technologies rallied over 3.5 percent each to Rs. 2,550 and Rs. 924, respectively. Wipro, Tech Mahindra and Infosys surged around a percent each to Rs. 539, Rs. 615 and Rs. 1,940, respectively.

Banking stocks were the major losers in the Nifty pack. Bank of Baroda tanked 5.5 percent to Rs. 153. Kotak Bank shed 3.7 percent at Rs. 1,301. Yes Bank and Punjab National Bank and Axis Bank slipped over 3 percent each to Rs. 794, Rs. 155 and Rs. 526, respectively. ICICI Bank dropped 2.5 percent to Rs. 304, and HDFC Bank declined over 2 percent to Rs. 950. IndusInd Bank and SBI were down 1.7 percent each at Rs. 261 and Rs. 789, respectively. Private housing lender - HDFC too was down over a percent at Rs. 1,150.

SKS Microfinance slipped 1.7% to Rs. 434 after Morgan Stanley Asia sold 690,000 shares of the company at Rs. 458.65 on the NSE yesterday.

Greaves Cotton recouped losses and surged nearly 4% to Rs. 138 even as the company's Q4 net dropped by 54 per cent to Rs. 23.74 crore as against Rs. 51.56 crore a year ago.

Future Retail plunged nearly 3% to Rs. 117 on the back of heavy volume.

Lycos Internet was locked at the 5% upper circuit at Rs 27, after the BSE traded stock was now listed on the National Stock Exchange (NSE) as well.

Phoenix Lamps flared up by nearly 4% to Rs. 114 after Suprajit Engineering made an open offer to buy additional 26 percent stake in the company. According to a release issued by the company to the BSE, Suprajit Engineering has proposed to buy upto 26 percent stake (72.85 shares) for a price of Rs. 100 per share

Thirumalai Chemicals hit the 20% upper circuit at Rs. 113.45 on the back Q4 turnaround. The company on a standalone basis reported a net profit of Rs. 12.25 crore for Q4FY15 when compared with a net loss of Rs. 5.98 crore in the corresponding quarter a year ago. The stock ended with a gain of 4.7 percent at Rs. 99.

MEP Infrastructure Developers tanked over 16% to Rs. 51 on the back of heavy selling at the counter.

Shemaroo Entertainment zoomed 5.6% to Rs. 206 after the company reported 81.7 percent jump in Q4 consolidated net profit at Rs. 12.77 crore in Q4FY15, as against Rs. 7.03 crore in Q4FY14.

Prestige Estates Projects rallied to a high of Rs. 266 in early trade on reporting 26% rise in total sales for Q4FY15. The company has sold 795 residential units in Q4FY15. The stock, however, ended 2% lower at Rs. 249.

Hero MotoCorp has posted a net profit of Rs. 4765.30 million for the quarter ended March 31, 2015 as compared to Rs. 5544.30 million for the quarter ended March 31, 2014. Total Income has increased from Rs. 66359.40 mn for the quarter ended March 31, 2014 to Rs. 68867.50 million for the quarter ended March 31, 2015.

Piramal Enterprises has posted a net profit after taxes, minority interest and Share of profit of associates of Rs. 954.00 mn for the quarter ended March 31, 2015 as compared to net loss of Rs. (3113.50) mn for the quarter ended March 31, 2014. Total Income has increased from Rs. 11071.00 million for the quarter ended March 31, 2014 to Rs. 13709.50 mn for the quarter ended March 31, 2015.

Results: Allahabad Bank, PNB, Indian Overseas Bank, Hindustan Unilever, Eicher Motors, Ajanta Pharma, Diamines & Chemicals, BSL Ltd, Bengal Tea, Apcotex Industries, Fedders Lloyd Corporation, Piramal Phytocare, Orient Cement, Neuland Laboratories, Morarjee Textiles, Magma Fincorp, Kirloskar Oil Engines, Kansai Nerolac Paints, Gillette India, Vardhman Textiles, Tips Industries, TCI Industries, Sundaram-Clayton Ltd, SML Isuzu Ltd, Shivalik Bimetal Controls, RSWM Ltd.

Global Data: Victory in Europe Day EUR, RBA Monetary Policy Statement AUD, Imports (YoY) (Apr) CNY, Exports (YoY) (Apr) CNY, Trade Balance (Apr) CNY, Unemployment Rate s.a (MoM) (Apr) CHF, Imports (MoM) (Mar) EUR, Industrial Production s.a. (MoM) (Mar) EUR, Industrial Production n.s.a. w.d.a. (YoY) (Mar) EUR, Trade Balance s.a. (Mar) EUR, Exports (MoM) (Mar) EUR, Current Account n.s.a. (Mar) EUR, Industrial Output Cal Adjusted (YoY) (Mar) EUR, Halifax House Prices (MoM) (Apr) GBP, Halifax House Prices (3m/YoY) (Apr) GBP, Consumer Price Index (MoM) (Apr) CHF, Consumer Price Index (YoY) (Apr) CHF, Industrial Output s.a. (MoM) (Mar) EUR, Industrial Output w.d.a (YoY) (Mar) EUR, Total Trade Balance (Mar) GBP, Goods Trade Balance (Mar) GBP, Trade Balance; non-EU (Mar) GBP, Consumer Price Index - Harmonized (YoY) (Apr) EUR, Consumer Price Index (YoY) (Apr) EUR, Housing Starts s.a (YoY) (Apr) CAD, Average Hourly Earnings (MoM) (Apr) USD, Unemployment Rate (Apr) USD, Labor Force Participation Rate (Apr) USD, Nonfarm Payrolls (Apr) USD, Average Weekly Hours (Apr) USD, Average Hourly Earnings (YoY) (Apr) USD, Participation rate (Apr) CAD, Net Change in Employment (Apr) CAD, Unemployment Rate (Apr) CAD, Wholesale Inventories (Mar) USD.

In other news in the media:
 
Muthoot Fincorp, the flagship company of Muthoot Pappachan Group is planning to raise Rs18bn through Private Equity and public issue of Non-Convertible Debentures in the current fiscal. (BS)
 
Biocon has made clinical progress in its partnered programmes with Mylan. (BS)
 
Jet Airways has launched a premium cargo product that offers customers an express service on the airline’s domestic network to send urgent shipments within a defined time frame. (BS)
 
Ramco Systems has raised US$52mn through qualified institutional placement to repay a portion of its debt, to support operational expenses to attract the right talent and to strengthen its marketing efforts in global markets. (BS)
 
Tata Motors Ltd has announced the closing of its Rs75bn rights issue. The issue was oversubscribed by 1.21 times and Tata Motors collected Rs90.4bn on applications. (BL)
 
Talcher coalfields of Coal India Ltd in Odisha remained closed for the second day on Thursday. A reconciliatory meeting is currently on at Angul between the district administration, the Chairman of CIL’s mining arm, Mahanadi Coalfields, and agitating villagers. (BL)
 
State Bank of India is open to inducting a new partner for its credit card business if its partner GE Capital decides to exit India. (ET)
 
Confectionery major Parle Products said it's aiming at garnering more revenues from its premium biscuit brands in the next 2-3 years as the sales in the mass-based category is declining. (ET)
 
Opto Circuits India said its US arm Cardiac Science has received US health regulator's clearance to market its new automated external defibrillator (AED) in the American market. (ET)
 
Finnish telecommunications software provider Comptel Corporation said it has secured operations support systems and business support systems deals worth over US$15 million from India's top telecom service providers, Bharti Airtel and Idea Cellular. (ET)
 
Oil refineries will need to invest Rs800bn in upgrading petrol and diesel quality to meet cleaner Euro-IV/V fuel specifications by 2020. (BS)
 
India’s steel imports jumped 51.6% to 0.76mn tons last month compared with the year-ago period, government data showed. (BL)
 
Expressing concern over declining shipments, exporters body FIEO asked the government to review the incentives announced in the foreign trade policy. (BL)
 
Reserve Bank of India has allowed to Asset Reconstruction Companies (ARCs) long resolution period beyond eight years to ensure smooth working of restructuring package for stressed accounts. (BS)

TEN MOST ACTIVE FUTURES

Symbol

No.of Cont Traded

Last price

Open Interest

% chg in Op.Int

AXISBANK

32,612

529.35

21,201,000

-1.41

YESBANK

32,567

796.10

10,782,000

-2.71

SBIN

26,680

261.10

51,302,500

-3.98

RELIANCE

25,911

864.65

32,753,750

-0.60

ICICIBANK

25,618

306.35

39,636,250

-6.11

LT

25,414

1,575.55

7,565,750

-2.28

WOCKPHARMA

21,437

1,238.00

2,234,875

-3.80

AUROPHARMA

21,281

1,245.70

9,292,250

5.06

INFY

20,663

1,952.45

7,469,250

-2.33

TATASTEEL

18,540

369.40

17,055,000

-1.41

TEN MOST ACTIVE OPTIONS

Option Type

Strike price

No.of Cont Traded

Open Interest

% Chg in Op.In

RELIANCE

CE

900

6,360

1,169,750

11.06

INFY

CE

2,000

5,693

521,875

-2.41

RELIANCE

CE

880

4,765

534,000

21.57

RELIANCE

CE

920

3,190

598,000

9.22

RELIANCE

PE

840

3,004

265,750

29.16

TATASTEEL

CE

380

2,948

840,500

5.86

RELIANCE

CE

860

2,903

253,750

41.76

INFY

PE

1,900

2,878

250,750

38.44

ASHOKLEY

CE

70

2,692

5,104,000

36.76

RELIANCE

PE

860

2,664

336,750

15.23

SUPPORT & RESISTANCE LEVEL

Company Name

S3

S2

S1

Close

R1

R2

R3

Sensex Index

26,318

26,386

26,458

26,599

26,740

26,812

26,881

Nifty Index

7,975

7,995

8,016

8,057

8,099

8,120

8,140

ABB Ltd

1,344

1,352

1,359

1,375

1,390

1,398

1,406

ACC

1,401

1,413

1,425

1,449

1,473

1,485

1,497

Ambuja Cements

224

226

228

231

235

236

238

Bajaj Holdings

1,271

1,274

1,276

1,281

1,286

1,289

1,291

BHEL

222

224

225

228

231

233

234

Bharti Airte

383

385

388

393

399

402

404

Cipla

614

618

621

628

635

639

642

Dabur India

249

251

253

257

261

263

265

GAIL India

358

361

363

368

373

376

378

Grasim Ind.

3,452

3,464

3,477

3,502

3,528

3,541

3,553

HCL Tech

891

898

906

921

936

943

951

HDFC Bank

934

938

943

952

961

965

970

Hero Honda

2,316

2,325

2,335

2,354

2,373

2,383

2,393

Hindalco

131

132

133

134

136

137

137

Hindustan Unilever

856

858

861

866

871

873

876

ICICI Bank

295

298

300

305

309

311

314

Infosys Tech

1,906

1,915

1,924

1,943

1,961

1,971

1,980

ITC Ltd

318

319

320

323

325

326

328

L&T

1,542

1,549

1,555

1,568

1,581

1,587

1,594

MTNL

17

17

17

18

18

18

18

M&M

1,149

1,155

1,160

1,171

1,181

1,187

1,192

Maruti Suzuki

3,457

3,478

3,499

3,541

3,583

3,605

3,625

Mahindra Satyam

603

606

609

614

619

622

625

National Alumin

47

48

48

48

49

49

49

ONGC

308

311

314

319

324

326

329

Oriental Bank

180

182

184

189

194

196

198

PNB

151

152

154

156

159

160

161

Ranbaxy Labs

917

919

922

927

933

935

938

Reliance Capital

373

376

378

383

388

391

393

Reliance Comm

59

59

60

62

63

64

64

Reliance Energy

384

387

390

397

403

406

409

Reliance Inds

857

860

863

869

876

879

882

R Power

51

52

52

53

54

55

55

Siemens India

1,210

1,221

1,232

1,255

1,278

1,290

1,301

SBI

256

258

259

261

264

265

266

TCS

2,480

2,495

2,512

2,543

2,575

2,591

2,607

Tata Motors

475

478

482

488

495

498

501

Tata Power

70

70

71

72

73

73

74

Tata Steel

361

362

364

367

370

372

373

Tata comm

396

401

407

417

428

434

439

Wipro

528

531

533

538

543

546

548

Wire And Wireless

34

35

35

35

36

36

36

Zee Entertainment

307

308

308

310

311

312

313


 
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