Daily Market Strategy - Hoping for happiness! Indices to open positive

The outlook is a flat to positive start. Whether it can sustain till the end of the day remains to be seen. Global cues are encouraging for now. Funds are showing more interest in large-caps which have shaved off value in the recent turmoil.

Jan 08, 2016 03:01 IST IIFL Anil Mascarenhas |

Daily Market Strategy, DMS
Your success and happiness lies in you. Resolve to keep happy, and your joy and you shall form an invincible host against difficulties. - Helen Keller
 
It could be a week best forgotten for the stock market world over as China’s woes had a cascading impact on sentiment world over. Thursday's selloff, which saw one of the worst shows in five months, resulted in Rs 2.5 lakh crore of investor’s wealth vanishing into thin air. Amidst all the gloom, Finance Minister Arun Jaitley says Indian economy has emerged as one of the fastest growing economies in the world indicating that the economy is firmly on the path of economic revival.
 
The outlook is a flat to positive start. Whether it can sustain till the end of the day remains to be seen. Global cues are encouraging for now. Funds are showing more interest in large-caps which have shaved off value in the recent turmoil. The currency movement will also be closely eyed even as the world keeps on watch on where crude prices are headed. Investors will prefer to remain a bit on the sidelines and probably look to play on counters which will announce their results in the coming week.
 
A challenging macro environment is here to stay. A conservative portfolio positioning would be a prudent approach given modest earnings growth and above-average valuations calls.
Sectors and stocks with low earnings and valuation risks should be on the buying list. Consumer staples, energy, and IT would be sectors to nibble on while financials, industrials and materials could be given a miss for the time being.
 
Auto stocks will be in focus in the coming days as Union Minister for Road, Transport & Highways, Nitin Gadkari will meet representatives of automobile companies on January 14 to allay their concerns about the Government’s move to directly move from BS IV emission norms to BS VI emission norms by April 2020.
 
German car maker Volkswagen reportedly said that it will not buy back any car models as its models and others sold under SKODA and Audi brands do not violate the Indian emission norms.
 
Saudi Arabia is reviewing an initial public offering (IPO) of Saudi Aramco, the world’s biggest crude oil producer, the kingdom’s deputy crown prince Mohammed bin Salman has been quoted as saying.
 
Among the stocks to watch include:
 
Wipro: Wipro has appointed a new COO Bhanumurthy BM and also assigned new roles to other veterans such as GK Prasanna as part of a newly-unveiled organizational structure, as per media reports.
 
Axis Bank Ltd: The Govt is considering diluting its 11.7% stake in Axis Bank it holds through the Specified Undertaking of the Unit Trust of India to meet shortfall in disinvestment proceeds and revenue collection during the current fiscal, according to reports. 
 
Mahindra & Mahindra: Mahindra & Mahindra expects to launch two more passenger cars/utility vehicles by the end of March to complete the planned launch of 10 vehicles during FY16, reports a business daily. 
 
Titan: Titan Co. expects to take a hit of up to Rs. 500 crore in FY16 due to the Government’s move to lower the transaction threshold of quoting permanent account number (PAN) to Rs. 2 lakh from INR 5 lakh earlier, reports a financial newspaper. 
 
Tata Steel Ltd: The company has announced that it is expecting India steel output around 10 mn tn in FY16, according to reports. The Kalinganagar plant will start commercial operations on April 1, the company was quoted as saying. 
 
Tech Mahindra Ltd: The company has entered into a strategic alliance with MetricStream Inc to deliver governance risk and compliance management applications across the globe, the city-based information technology services provider said. 
 
Cipla: As part of its ongoing transformation journey to simplify decision making and improve operational excellence, Cipla Ltd has announced the creation of a six member Management Council that will be the apex executive leadership team for the company. 
 
Jaiprakash Associates: Jaiprakash Associates has signed an agreement with Shree Cement to divest its stake in the 2.1-MT Bhilai Jaypee Cement for an enterprise (BJCL) value of Rs 21-22bn.
 
Bajaj Auto: The company is planning launch series of new products, double capacity at one of its plants and also to launch new a brand this year even as it targets to increase its domestic market share, as per media reports. 
 
Bharati Shipyard Ltd: The Board of Directors of the Company at its meeting held on January 07, 2016 have approved for issuance and allotment of 2647313 convertible warrants at Rs.22/- per warrant on preferential basis to M/s. Edelweiss Finance & Investments Limited in compliance with all statutory and relevant regulations.The Company has received 25% amount towards the issue price i.e. Rs.5.50 per warrant, totaling to Rs.1,45,60,221.50 from M/s. Edelweiss Finance & Investments Limited. 
 
Canara Bank: Canara Bank has informed BSE that as per the powers delegated by the Board of the Bank, the Bond Committee has decided to raise Basel III Compliant Tier -II Bonds amounting to Rs. 900 Crore (as Series - II) by way of Private Placement. Accordingly, the Bank has successfully raised Rs. 900 Crore under BASEL-III Compliant Tier-II Bonds on January 07, 2016 with a coupon of 8.40 % PA. 
 
Maruti Suzuki: Maruti Suzuki has unveiled their latest offering in their flagship model, Maruti Suzuki DZire equipped with Auto Gear Shift (AGS) technology.
 
L&T: L&T Hydrocarbon Engineering (LTHE), a fully owned subsidiary of Larsen & Toubro, in consortium with McDermott has bagged an offshore contract from Oil & Natural Gas Corporation (ONGC) valued at Rs 24.50 billion. 
 
Bharat Heavy Electricals Ltd: BHEL, an integrated power plant equipment manufacturer, has commissioned two 220/20kV substations in Afghanistan on EPC basis. 
 
Bajaj Corp: FMCG firm Bajaj Corp reported 18.6% increased in net profit at Rs.49.6 crore for the third quarter ended December 31, 2015. The company's total income for the third quarter stood at Rs.213.1 crore, up 3.4% from Rs.206 crore in the year-ago period. 
 
Results: 8K Miles Software Services, Goa Carbon and Integrated Capital Services
Global Data: Retail Sales s.a. (MoM) (Nov) AUD, Labor Cash Earnings (YoY) (Nov) JPY, BOJ Deputy Governor Nakaso Speech JPY, Unemployment Rate s.a (MoM) (Dec) CHF, Industrial Production s.a. (MoM) (Nov) EUR, Industrial Production n.s.a. w.d.a. (YoY) (Nov) EUR, Current Account n.s.a. (Nov) EUR, Imports (MoM) (Nov) EUR, Exports (MoM) (Nov) EUR, Trade Balance s.a. (Nov) EUR, Exports, EUR (Nov) EUR, Imports, EUR (Nov) EUR, Trade Balance EUR (Nov) EUR, Consumer Price Index (MoM) (Dec) CHF, Consumer Price Index (YoY) (Dec) CHF, Total Trade Balance (Nov) GBP, Goods Trade Balance (Nov) GBP, Trade Balance; non-EU (Nov) GBP, Industrial Production (YoY) (Nov) EUR, NFIB Business Optimism Index (Dec) USD, Nonfarm Payrolls (Dec) USD, Average Hourly Earnings (YoY) (Dec) USD, Average Weekly Hours (Dec) USD, Unemployment Rate (Dec) USD, Labor Force Participation Rate (Dec) USD, Average Hourly Earnings (MoM) (Dec) USD, Building Permits (MoM) (Nov) CAD, Participation rate (Dec) CAD, Unemployment Rate (Dec) CAD, Net Change in Employment (Dec) CAD, Wholesale Inventories (Nov) USD, Consumer Credit Change (Nov) USD
 
Trends in FII flows: The FIIs were net sellers of Rs. 10.51 bn in the cash segment on Thursday. The domestic institutional investors (DIIs) were net sellers of Rs.1.90 mn as per the provisional figures released by the NSE.
 
Other news in the media:
 
Coal India arm Mahanadi Coalfields has crossed 100 MT production milestone and is taking steps to achieve the target of 150 MT output for the current fiscal. (ET)
 
Larsen &Toubro's hydrocarbon arm, in consortium with US-based engineering company McDermott, has bagged an offshore contract from ONGC worth Rs 24.5bn for the development of S1 deepwater fields situated off the east coast of India. (ET)
 
Maruti Suzuki India Limited (MSIL) has launched auto gear shift technology in top-end diesel version of entry-level sedan DZire tagged at Rs 839,000 (ex-showroom, Delhi). (BS)
 
Government is mulling selling part of its stake in Axis Bank, to meet its asset sales target. (BL)
 
Titan Co expects to take a hit of up to Rs 5bn this fiscal due to government's move to lower the transaction threshold of quoting PAN to Rs 200,000 from Rs 500,000 earlier. (BS)
 
Government of India has declined Reliance Power's request to reconsider restrictions on output from its mines in Moher and Moher Amlohri Extension blocks - linked to its Sasan UMPP as the case is in the court. (ET)
 
Jaiprakash Associates (JAL) has signed an agreement with Shree Cement to divest its stake in the 2.1-MT Bhilai Jaypee Cement for an enterprise (BJCL) value of Rs 21-22bn. (BS)
 
Tech Mahindra has entered into a strategic alliance with US-based Metric Stream to deliver governance, risk and compliance (GRC) solutions across the globe. (ET)
 
Mahindra & Mahindra Limited (M&M) is contemplating closing the current fiscal with the launch of two more passenger cars/utility vehicles, thereby completing the planned launch of 10 vehicles during the year. (BL)
 
Bajaj Auto will launch series of new products, double capacity at one of its plants and launch new a brand this year even as it targets to increase its domestic market share. (BS)
 
Issues including impact of FTAs signed by India, ways to promote start-ups and boost economic growth were deliberated upon during the meeting between Commerce Ministry and the industry chambers. (BS)
 
A minimum dividend of 30 per cent, declaration of special dividend and issue of bonus shares are the new guidelines from the central government as the owner for central public sector enterprises (CPSE). (ET)

TEN MOST ACTIVE FUTURES

Symbol

No.of Cont Traded

Last price

Open Interest

% chg in Op.Int

RELINFRA

22,273

567.70

10,407,800

-4.29

LT

19,236

1,207.50

13,223,400

-0.36

RELIANCE

19,228

1,016.10

28,326,500

1.06

SBIN

16,338

209.80

84,064,000

2.32

MARUTI

14,947

4,288.00

2,153,375

6.78

TATASTEEL

14,668

250.55

31,422,000

-2.34

TATAMOTORS

14,211

343.90

30,168,000

-0.33

RELCAPITAL

13,746

420.20

13,456,500

0.40

JETAIRWAYS

13,118

745.55

3,727,800

11.16

ICICIBANK

12,692

246.20

55,627,400

1.92

TEN MOST ACTIVE OPTIONS

Option Type

Strike price

No.of Cont Traded

Open Interest

% Chg in Op.In

RELIANCE

CE

1,040

4,425

1,033,000

58.56

LT

CE

1,300

3,349

755,400

11.22

SBIN

CE

230

3,047

6,414,000

11.78

SBIN

CE

220

2,956

2,886,000

37.04

MARUTI

PE

4,300

2,584

58,625

14.11

RELINFRA

CE

600

2,523

1,114,100

12.91

RELIANCE

PE

1,000

2,437

462,500

1.43

TATASTEEL

CE

270

2,383

2,026,000

33.29

MARUTI

CE

4,500

2,359

88,625

229.77

RELIANCE

CE

1,060

2,351

497,500

25.16

SUPPORT & RESISTANCE LEVEL

Company Name

S3

S2

S1

Close

R1

R2

R3

Sensex Index

24,585

24,650

24,718

24,852

24,985

25,054

25,119

Nifty Index

7,490

7,509

7,529

7,568

7,607

7,627

7,646

ABB Ltd

1,042

1,045

1,049

1,056

1,063

1,067

1,071

ACC

1,284

1,288

1,292

1,300

1,308

1,312

1,316

Ambuja Cements

193

194

195

198

200

201

202

Bajaj Holdings

1,645

1,648

1,652

1,658

1,665

1,668

1,672

BHEL

146

148

150

154

158

160

161

Bharti Airte

315

317

318

321

324

326

327

Cipla

626

629

633

639

646

649

652

Dabur India

260

261

263

266

270

271

273

GAIL India

365

366

368

370

373

374

375

Grasim Ind.

3,491

3,505

3,519

3,548

3,577

3,592

3,606

HCL Tech

810

813

817

824

831

835

838

HDFC Bank

1,042

1,045

1,048

1,053

1,058

1,061

1,064

Hero Honda

2,468

2,479

2,491

2,513

2,536

2,547

2,558

Hindalco

75

75

76

77

78

78

79

Hindustan Unilever

805

808

812

820

827

831

835

ICICI Bank

243

244

245

247

249

250

251

Infosys Tech

1,038

1,041

1,045

1,051

1,058

1,061

1,064

ITC Ltd

306

307

308

310

311

312

313

L&T

1,187

1,191

1,196

1,206

1,216

1,221

1,226

MTNL

20

20

21

21

21

22

22

M&M

1,160

1,168

1,177

1,194

1,210

1,219

1,227

Maruti Suzuki

4,127

4,161

4,197

4,267

4,337

4,373

4,406

Mahindra Satyam

500

503

506

511

517

520

523

National Alumin

36

37

37

37

38

38

38

ONGC

221

222

224

227

230

231

232

Oriental Bank

122

123

124

127

130

131

132

PNB

102

103

103

105

107

107

108

Ranbaxy Labs

771

774

778

784

790

794

797

Reliance Capital

401

405

410

419

428

433

437

Reliance Comm

79

80

80

81

82

83

83

Reliance Energy

549

553

557

565

573

577

581

Reliance Inds

999

1,002

1,005

1,012

1,018

1,021

1,024

R Power

54

54

55

55

56

56

57

Siemens India

1,093

1,104

1,115

1,136

1,157

1,168

1,178

SBI

206

207

208

210

212

213

214

TCS

2,357

2,360

2,363

2,370

2,377

2,380

2,383

Tata Motors

329

332

336

343

350

354

357

Tata Power

65

65

65

66

67

67

68

Tata Steel

240

242

245

250

255

258

260

Tata comm

418

420

422

426

431

433

435

Wipro

543

545

547

550

553

555

556

Wire And Wireless

34

34

34

35

35

36

36

Zee Entertainment

410

411

412

415

418

419

421


 
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