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Global equity rally building momentum as bond yields rise with return of 'risk on' trade. Gold falls as oil consolidates after sharp pullback, Dow tops 20000, with Nikkei hitting new 52 week highs!!

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Major headlines:

·         Higher debt limits room to cut fiscal deficit.

·         NPPA slashes prices of 33 essential medicines

·         Infrastucture sector may get a rise in budget allocation

INDEX PERFORMANCE

 

 

Indices

Support

Resistanes

Sensex

8525

8645

Nifty

27519

27820

 

Indian Indices: Asian indices opened flat after 2 days of huge rallies as the Japanese index hit new 52 week highs along with the Dow Jones index which easily topped 20000. The return of 'risk on' trade is seeing rise in US bond yields which is seeing money chase equities for higher return. Gold prices after a sharp rally saw un winding as defensive assets took a back seat, while oil consolidated after seeing a sharp upswing in the last week.

Nifty will test fresh 3 month highs as the markets open after a holiday on Thursday. The sharp move in the Nifty on expiry days caught most by surprise with 'bears being squeezed' as the Nifty closed above 8600.With foreign investors also joining the bull market expect any decline to be used as buying opportunity as money on the sideline would re enter. For today expect the broader mid cap stocks to outperform as risk returns with investors betting on the mid & small cap stocks.

The BSE Sensex is currently trading at 27955.18, up by 247.04 points or 0.89% after trading in a range of 27759.48 and 27959.38. There were 21 stocks advancing against 9 stocks declining on the index. The broader indices were trading in green; the BSE Mid cap index was up by 1.12%, while Small cap index was up by 0.94%.

 

MARKET INDICATORS

·           

 

Group ATopGainers

 

 

Company

Price (Rs)

% chg

IIFL

307.00

8.44

Ashokaley

92.15

6.41

Welcorp

90.15

5.93

Unitech

4.85

6.36

Group ATopLosers

 

 

IDFC

57.00

-3.72

Prestige

78.60

-3.62

TRENT

247.20

-2.60

Edelweiss

112.75

-2.08

Market Statistics

 

 

 

BSE

NSE

Advances

1487

1020

Declines

730

470

 

Technical view: Nifty easily closed above most resistances with 8570 now being the strong support & resistance now coming close to 8720. Bank Nifty also finds support @19260 while resistance now comes @ 19740.


Market Sentiment:

The market breadth on BSE was positive in the ratio of 1487:730, while 149 scrips remained unchanged.

 

Trading ideas: BANKBARODA (Buy above Rs 162 for target of Rs 170, SL at Rs 158.5): Stock has been consolidating in a trading band of Rs 153-160 from past ten trading sessions. Multiple attempts to close above Rs 160 went futile, as stock reversed direction from Rs 159-160 zone. On daily charts, stock not only managed to give a close above the crucial resistance of Rs 160, but also closed above all the major averages (100-200 DMA). We advise to Buy BANKBARODA above Rs 162, stop loss at Rs 158.5 and Target of Rs 170.


Rollover Analysis: Nifty has posted highest gains (eoe) since March 2016. For this series, Nifty Bank index outperformed Nifty Index by 1.88% after the lackluster December series. Call option writers were among the biggest loser's as the call base kept on shifting from 8200 to 8600. A huge short covering in 8500CE strike helped Nifty regain 8600 level for the first time since 01 Nov.2016. Long gamma positions were the flavor of the series.

FII's continued its selling spree in the Cash segment for the January series while forming long positions in Index Futures. Long/Short ratio of Index Futures was above 2x for almost entire series. Rollovers of Nifty/Banknifty stood at 73%/61% (1.91cr/20 lakh shares) as against 69%/68% (1.68c/19 lakh shares) previous expiry. Rollover is higher for both Nifty and Banknifty in terms of Open Interest and with rising cost of carry, a positive start to the new series can be expected. On the options front, February series has maximum calls base at 9000 strike (3.6mn shares) and maximum put base at 8400 strike (3.2mn shares) indicating a trading range ceiling and floor at the start of the month.

Nifty Movers: The top gainers on Nifty were BHEL up by 3.90%, Bank of Baroda up by 3.03%, Axis Bank up by 2.98%, Eicher Motors up by 2.45% and ICICI Bank up by 2.40%.

On the flip side, Bosch down by 1.39%, Wipro down by 1.38%, Kotak Mahindra Bank down by 1.02%, Lupin down by 0.97% and Cipla down by 0.82% were the top losers.

Top Sectoral& Stock Screening: The top gaining sectoral indices on the BSE were Oil & Gas up by 1.39%, PSU up by 1.38%, Capital Goods up by 1.28%, Bankex up by 1.27% and Consumer Durables up by 1.20%, while there were no losers.

The top gainers on the Sensex were Axis Bank up by 2.87%, ICICI Bank up by 2.48%, HDFC up by 2.12%, GAIL India up by 2.11% and Maruti Suzuki up by 2.03%.

 

 

On the global front: On the global front, Asian shares were mostly trading in red, with several markets shut. Japan reported national core CPI rose 0.2% year-on-year in December, below the expected 0.3% pace. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,650 and 27,900 levels respectively.

Global Signals: The Asian markets were trading mostly in red; Hang Seng decreased 13.39 points or 0.06% to 23,360.78, FTSE Bursa Malaysia KLCI decreased 5.86 points or 0.35% to 1,686.36 and Jakarta Composite decreased 5.17 points or 0.1% to 5,312.47.On the other hand, Nikkei 225 increased 30.04 points or 0.15% to 19,432.43.

South Korean markets are closed for holidays on Friday and Monday. Chinese markets are shut for the Lunar New Year holiday and will resume trade on Friday, February 3. Taiwan is also closed for Lunar New Year and will reopen on Thursday, February 2.

 

Union Budget 2017 expectation report by Sharetipsinfo.com

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The Union Budget is round the corner, Will this budget heal the demonetization pain?

 

The Finance Minister (FM) ArunJaitley will present NDA’s fourth budget under the current term on February 1, 2017. We believe that the government is likely to relax its FY2018E fiscal deficit target of 3% by 30-50 bps. This is likely to increase its spending ability by `50,000cr-`80,000cr in FY2018E. While this could move the focus away from fiscal discipline path, the possible gains of ~`1lakh crore by taxing the black money deposits would support the government’s spending in FY2018E. We are positive on the interest rate, as banks are expected to witness lower cost of funds by retaining the low cost deposits received through demonetization. Overall we expect 1) increase the tax slab limits to boost consumption, 2) Infrastructure spending to revive capex cycle, and 3) rural schemes to remove distress from rural economy.

Demonetization has created short term pain for the economy

The sudden liquidity crunch after the note ban has seen consumption sectors such as auto, real estate, building materials, consumer durables, etc., take a severe beating. The rural economy has also been adversely affected, as cash crisis led to a slowdown in the small scale businesses resulting in job losses. However, the economy is expecting remedial action through the budget.

One-off gain to maintain fiscal discipline

Over the last three years, government has achieved significant progress towards achieving Fiscal Responsibility and Budget Management (FRBM) Act target of 3%. The government is likely to step up rural infrastructure spending, which may partially pressurize its financials; however the one-off gain of ~`1 lakh crore by taxing the black money deposits supports these spends without pressurizing the financials. The collection of lower one-off taxes, however, may pose risk to FY2018E fiscal deficit.

Budget likely to take corrective measures

We believe that the government is likely to take corrective measures which would offer remedy to the demonetisation wounds. In our opinion, increase in individual income tax slab limits and reduction in corporate tax rate is expected to be the highlight of the budget in order to revive the consumption cycle. The PM’s address on December 30, 2016 announced various corrective measures to fix the rural economy, such as affordable housing, interest subvention, credit support for small businesses, etc. We expect more measures in the upcoming budget to remove distress from rural economy.

Before we try to gaze at what it might have in store, there are 4 points to be noted at the outset:

1) Deviating from the tradition of presenting the Union Budget on the last day of February, this year the Budget will be presented on the 1st day of February. This is primarily from the point of view of getting the Budget announcements implemented from the 'beginning' of the new fiscal instead of its implementation after a few months into the new fiscal.

2) Almost a century old practice of presenting a separate Railway Budget is getting done away with from this Budget onwards, as the Railway Budget presentation is getting merged with the Union Budget.

3) The Budget date is just a few days ahead of the elections in 5 states, which includes the politically crucial state of Uttar Pradesh. This holds significance considering the fact that the Union Budget (including the Railway Budget) is an event wherein various social and welfare schemes get announced, tax and fiscal incentives are given out, the influence of which on the voter community is debatable.

4) The Budget will be presented in the backdrop of the government's recent demonetization drive, which has had an impact of varying degrees across sectors and has perceptibly affected both – consumer and business sentiments.

Of the above, while points 1 & 2 are just facts-to-be-noted, point 3, though important, the decision w.r.t. the Budget presentation date is as yet pending with the Election Commission. However, whether the eventual date will have a significant bearing on the final contours of the Budget is difficult to guess, we believe it is point 4 that is of relevance this time around.

Reeling under the challenges posed by the government's demonetization drive, businesses and consumers at large have seemingly built high expectations from the Budget. These largely revolve around getting reliefs aimed at higher disposable income in the hands of the population and/or improving affordability, which in turn will aid in improving consumer sentiments and support business and economic growth.

Higher tax exemption limits, lower duties on products, higher tax incentives to encourage home buying, incentivize savings, etc. are among the usual desired expectations, which will help in meeting the objective of improving consumer and business sentiments to a certain extent. Apart from these, in wake of the short-term impact witnessed on the rural and the informal segments of the economy, the government is expected to enhance its focus here.

Notably, while the government has already expressed its intention to double farmers' income by the year 2022 and this Budget could spell few measures aimed at this, the MSME segment, which has also been adversely impacted on account of it representing a good part of the informal economy with cash being the primary exchange for transactions, is also expecting few relief measures to flow its way.

Focus on government's pet projects like Make in India, Digital India and Swachh Bharat are expected to continue to receive considerable attention considering the potential objectives that can be achieved through these. While the Make in India and Swachh Bharat campaigns can be a great source for job creation considering the investments that they could attract, strengthening of the Digital India campaign will support the government's initiative of transforming the Indian economy to a less-cash economy.

Efforts at job creation and lifting the rural economy, which has been particularly impacted post-demonetization, is likely to be amongst the key agendas, which could be addressed through greater focus on agriculture and micro small and medium enterprises (MSME) sectors. Increased emphasis on the latter will aid in the revival of investment cycle, which will boost credit demand in the system.

On the taxation front, the expectations of a largesse are high by consumers and the business community alike in wake of the pain inflicted by the recent demonetization drive and are looking up to the government to bring things back to normalcy in the economy. However, considering the fact that the government's financial gains in the near-term have been restricted from the demonetization drive, its capability to deliver an out-of-theordinary budget also gets curtailed.

Nonetheless, to alleviate the challenges recently cropped up in the economy, and also with an eye on the upcoming state elections, tweaking in personal income-tax slabs could be announced. Further, with the Finance Minister having indicated in his earlier Budget the reduction in corporate tax rate, the current Budget is an opportune time to initiate this move. The Service Tax, however, may be hiked to move towards greater alignment with the GST rates, which is expected to be implemented in 1HFY18.

On the Fiscal path front, while the government has targeted a fiscal deficit of 3% of GDP, considering that it will have to be the front-runner in pump-priming the economy in wake of lack of private investments, a 25-50 bps increase may be considered by the government.

In conclusion, we expect the Budget to keep its focus relatively higher on the rural economy and the various social and welfare measures related to healthcare, education, agriculture, etc. along with investments in infrastructure / housing. This is primarily in wake of the challenges thrown up by the demonetization drive and the upcoming state elections. But with the limited benefits yielded by the former to the government in the near-term, it is unlikely that the government has much scope to deliver a 'populist' budget. Nonetheless, in terms of sectors, we expect Infrastructure (Roads / Power / Cement), Housing (Banks / NBFCs), Agriculture (Agro-chemicals / Irrigation / Fertilisers / Tractors) and Rural (Consumer Durables / FMCG) to benefit from the budget announcements.

Lower interest rates + tax cuts = Consumption boost

We believe that government’s aim is to leave consumers with more disposable income and fuel the consumption demand. Therefore, increase in tax slabs and lowering corporate tax rate will play an important trigger, as interest rates have come off in a big way. With banks retaining low cost deposits, their cost of funds is expected to remain low for a long period, indicating that interest rates will also remain low going ahead. The low interest rate and low taxes would accelerate revival in consumption demand.

Budget conviction picks

With the focus on tax reduction we expect consumption sector is likely to be a direct beneficiary from this budget. We expect FMCG, consumer durables, automobile sectors to benefit going ahead. We prefer companies like ITC, P&G, Asian Granito, Mirza International, etc. in this space. We also expect the credit cycle to revive with lower interest rates and government’s impetus on housing sector and companies like Axis Bank, LIC Housing and DHFL to remain our best play. We like L&T, Powergrid and KEI industries in the infrastructure space. 

Nifty ends Jan F&O series at 8063, Sensex up 332 pts

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Major headlines

·         India’s petroleum products consumption growth strong

·         S&P advocates fiscal consolidation ahead of budget

·         India signs oil reserves pact with UAE

INDEX PERFORMANCE

 

 

Index

Close

% Chg

Sensex

27,708.14

1.21

Nifty

8,602.75

1.50

Indian Indices: Indian bourses extended early gains in late afternoon session as most of the sectoral indices rose amid higher opening in European counter parts. The Sensex rose by more than 189 points to trade above 27,500 mark, while the Nifty 50 reclaimed its crucial 8,550 level. The broader indices, BSE Mid cap and Small cap also traded with more than half a percent gains. 

Sentiments remained optimistic with report that Donald Trump and NarendraModi have discussed opportunities to strengthen the partnership between the United States and India in broad areas such as the economy and defense. Some support also came with report that Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 93.95 crore, while Domestic Institutional Investors (DIIs) also bought shares worth a net Rs 533.49 crore, on January 24, 2017.To boost digital payments, panel has suggested to provideAadhaar-enabled micro ATM infrastructure for 1.54 lakh post offices and 50 per cent subsidy on Aadhaar Pay, Biometric (FP & Iris) sensors should be given to all merchant points.

The BSE Sensex is currently closed at 27708.14, up by 332.56 points or 1.21% after trading in a range of 27439.68 and 27715.59. There were 21 stocks advancing against 9 stocks declining on the index.The broader indices were trading in green; the BSE Mid cap index was up by 0.64%, while Small cap index was up by 0.72%.

The CNX Nifty is currently shut up at 8602.75, up by 126.95 points or 1.50% after trading in a range of 8493.95 and 8607.00. There were 37 stocks advancing against 14 stocks declining on the index.

MARKET INDICATORS

·           

 

Top Movers (Group A)

 

 

Company

Cmp

% chg

Gainers

 

 

Bharatfin

749.20

10.70

Muthootfin

320.95

7.63

Bajfinance

1000.15

7.61

Welcorp

85.10

7.59

Losers

 

 

Wockard

663.00

-2.84

Tataelxsi

1463.00

-2.82

Ajantaphar

1708.20

-2.75

Bluedart

4483.05

-2.44

Market Statistics

 

 

 

BSE

NSE

Advances

1397

648

Declines

1190

811

 

Crporate Front:  India's demonetization drive is "a big failure" and has put the Indian economy back by at least a decade, an influential Chinese daily said on Wednesday. Prime Minister NarendraModi's November 8 announcement to scrap Rs 1,000 and Rs 500 notes was akin to "promising homeless people houses on Mars in one month's time.

 

Market Sentiment:

The market breadth on BSE was positive in the ratio of 1397: 1190, while 159 scrips remained unchanged.

Macroeconomic front:

Disruptions caused by demonetisation and the general caution on the part of buyers will hit property sales in India by at least 20-30 per cent in 2017, Fitch Ratings said in its latest report.

"We expect home prices also to decline this year because demand for residential property has weakened significantly in the fourth quarter of 2016, following the demonetisation of large denomination notes in November last year.

 

On the global front:

On the global front, European markets were trading in green as Santander's fourth-quarter profit beat estimates and investors resumed bets that Donald Trump's polices will help fuel economic growth in the United States over the next two years. Asian markets were trading in green. Back home, in scrip specific development, Indian Bank jumped after it reported around eight-fold jump in its net profit at Rs 373.48 crore for the quarter ended December 31, 2016, as compared to Rs 48.48 crore for the quarter ended December 31, 2015.


Commodity Updates:

Commodity Prices (MCX):

Commodity

Rs

% Chang

Gold

28544.00

-0.63

Silver

41161.00

-1.34

Crude oil

3610.00

-0.93

Natural Gas

224.70

-1.27

Alluminium

126.20

-0.83

Copper

406.30

-0.33

Top Sectoral& Stock Screening:The top gaining sectoral indices on the BSE were Consumer Durables up by 1.61%, Bankex up by 1.45%, Realty up by 1.41%, Capital Goods up by 1.10% and Oil & Gas up by 0.93%, while TECK down by 0.01% and IT down by 0.01% were the few losing indices on BSE.

Top Nifty Movers:The top gainers on Nifty were Kotak Mahindra Bank up by 5.47%, Zee Entertainment up by 4.11%, Bosch up by 4.03%, HDFC up by 3.41% and Yes Bank up by 2.88%. On the flip side, BhartiAirtel down by 2.59%, Wipro down by 1.41%, Tech Mahindra down by 0.78%, GAIL India down by 0.74% and Reliance Industries down by 0.71% were the top losers.

 

Global Signals:

All Asian markets were trading in green; KOSPI Index increased 1.18 points or 0.06% to 2,066.94, FTSE Bursa Malaysia KLCI increased 2.08 points or 0.12% to 1,682.77, Shanghai Composite increased 7 points or 0.22% to 3,149.55, Jakarta Composite increased 10.04 points or 0.19% to 5,302.13, Hang Seng increased 99.26 points or 0.43% to 23,049.12 and Nikkei 225 increased 269.51 points or 1.43% to 19,057.50. Taiwan Stock Exchange was closed on account of ‘Non Trading Day’.

All European markets were trading in green; France’s CAC increased 31.32 points or 0.65% to 4,861.35, UK’s FTSE 100 increased 33.5 points or 0.47% to 7,183.84 and Germany’s DAX increased 83.7 points or 0.72% to 11,678.64.

 

Persistent Stock Report: Know why stock market investors should invest in this share

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SECTOR:Computers software

Sensex:

27,698.17

 

CMP (Rs):

616

 

Target price (Rs):

775

 

52 Week h/l (Rs):

798/575

 

FV (RS)

2.00

 

Market cap ( cr):

4925.20

 

Avg volume(Nse)

92815

 

Industry P/E

17.90

 

 BOOK VALUE

204.91

 

EPS

38.13

 

BSE code:

533179

 

NSE code:

PERSISTENT

 

Prices as on 31 DEC,2016

 

Shareholding pattern

 

DEC‘16

(%)

 

Promoters                         

36.2

 

Institutions

59.5

 

Public & others

4.3

 

Performance rel. to sensex

 

 

Opm%

Npm

%

EPS

 

PERSISTENT

31.32

18.77

10.85

 

TCS

34.97

26.24

30.88

 

MPHASIS

27.53

20.12

7.32

 

NIITTECH

15.51

7.39

4.61

 

Company Overview:

 

Established in 1990, Persistent Systems (BSE & NSE: PERSISTENT) is a global company specializing in software product development services.  For more than two decades, Persistent has been an innovation partner for the world's largest technology brands, leading enterprises and pioneering start-ups. With a global team of 6,600+ employees, Persistent has 350+ customers spread across North America, Europe, and Asia. Today, Persistent focuses on developing best-in-class solutions in four key next-generation technology areas: Cloud Computing, Mobility, BI & Analytics, Collaboration across technology, telecommunications, life sciences, consumer packaged goods, banking & financial services and healthcare verticals.

Business Growth Outlook.

The PSL management expects Q4FY2017 to be strong, as it has acquired new logos for its digital business. Further, the recent partnership with Dell Boomi will drive its digital business going ahead.  The company has successfully completed the transition of the IBM IOT business and could be able to take the entire team into its Board. The management foresees traction in this IBM CE/CLM product and expects a strong growth in FY2018; for the nine months ended December 31, 2016, the partnership has fallen short of its revenue target of $50 million (contributed $48 million; the management expects some contribution to come by the end of FY2017).  Digital, Alliance and Accelerite will continue to deliver sustainable growth in the coming years. The management stated that the Services segment (43.9% of total revenue in Q3FY2017) has bottomed out and believes this business may do well in the coming quarters (for Q4FY2017, the management has indicated it could trim some tail-end clients).

 

 

 

 

Performance highlights:.

Investment Rationale:

Revenue beats estimate, but margins fall short of expectations:

During Q3FY2017, Persistent Systems’ (PSL) revenue grew at better-than-anticipated pace of 4.6% QoQ to $110.0 million, driven by a 6.9% QoQ growth in IP-led revenue and a 3.7% QoQ growth in IT Services (3.9% QoQ growth in volume and 0.2% QoQ drop in realisations). However, the company delivered lower-than-expected EBITDA margin at 15.9% (up 18BPS QoQ and down 284BPS YoY), owing to reduced billing days and higher provision for doubtful debt (relating to two customer accounts), partially offset by improvement in utlisation and benefit of currency depreciation. Forex gain increased by 327.3% QoQ, led by rupee depreciation, partially offset by lower other income (down 29.2% QoQ) and higher tax provision (up 140BPS QoQ), resulting in a 11.4% QoQ growth in the net profit at Rs81.9 crore (vs our estimate of Rs81.7 crore).

FY 17 Outlook:

All the investments for the IBM LoT deal have already been taken into account in the Q1 P&L; Therefore, revenue growth from now should lead to higher margins. Management feels that the impact on margins would be within the guided to range (<200bps) while quarterly fluctuations cannot be ruled out. A sales team will be hired but, as a percent of revenue, may hold at a similer level. The effective tax rate (ETE) for FY17 is expected at ~24-25%.

Financials :

 

Particulars

Q1FY17

FY 16

FY15

Sales

7018

23123

18913

Other Sales

105

352

309

EBITDA

1058

4171

3906

EBITDA Margin

15.1

18.0

20.7

EBIT

715

3206

2967

EBIT MARGIN

10.2

13.9

-183

PBT

968

3956

3900

Tax

-235

-985

-993

Tax Rate(%)

-24.3

-24.8

-25.5

Net Income

733

2974

2906

 

Highlights the fact:

1) SL is not perturbed about any hostile regulatory developments in relation to the current US visa regime, as the company has around 47% in terms of local US hires. In a major development with regard to potential change in the minimum wage hike, the management stated that the company will take a hit of $1.5-2 million per annum.


2) The management foresees traction in its Sentient and Concert products, and plans to launch these products during Q4FY2017.


3)Digital, Alliance and Accelerite will continue to deliver sustainable growth in the coming years.


4)The company has successfully completed the transition of the IBM IOT business and could be able to take the entire team into its Board. The management foresees traction in this IBM CE/CLM product and expects a strong growth in FY2018

 

Technically View:

 

The stock is currently trading around 50 days and 100 days, moving average that is all about good bullishmoov& uptrend signal on daily base. RSI &MFI is present at 58 and 69respectivally, which is showing the consolidationformation for the short term period. The stock is currently in the sideways formation and when it hold above 630 then someupside is expecting with major support is found 590 level. MACD line is greaterthen signal line 10 day Avg Volume is very high.

VALUATION & OUTLOOK:

 

The  Companyhave marginally tweaked our revenue estimates for FY2017/FY2018, led by higher-than-expected revenue growth in Q3FY2017, sharpening focus on IP and Digital businesses, and some green shoots in the Services business. However, we have broadly maintained the earnings estimates for FY2017/ FY2018 in anticipation of higher investments (on account of ongoing shift in the business model and intensifying competition).

 

We continue to remain positive on PSL, as the company has been continuously focusing on strengthening its digital capabilities to remain relevant to customers in the ongoing IT industry transition. The stock is currently trading at a reasonable valuation of 14.0x FY2018 earnings estimates.

 

We retain our Buy recommend in this script with a price target of Rs 765-775 in the very short term outlook. So Entry would be around 610-620as recomanded in this counter.

 

Global indices rally as US$ rebounds with yields, metals turn on the heat with huge upsurge in Copper prices.

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Major headlines:

·         FRBM panel for liberal view on fiscal  deficit

·         RBI Central Board okayed design of Rs 500, Rs 2000 notes in May

·         Airtel gets board nod to raise up to Rs 10000 cr via NCDs

 

INDEX PERFORMANCE

 

 

Indices

Support

Resistanes

Sensex

8389

8488

Nifty

27380

27504

 

Indian Indices: Asian indices are trading in the green with an over 300 point upsurge in the Japanese 'Nikkei" index as the yen weakens against the US greenback. Metals saw a huge surge led by copper prices as globally the 'risk on' trade re emerged with the US $ bouncing back & treasury yields on the US 10 year rising.


Nifty seems set to hit 8500 today on expiry of derivative contracts for the January series with 'bears being squeezed' as the index rallies over 3.6% for the month touching levels last seen on 10th November 2016.The better than expected results, improving macro data have downplayed the 'devil of demonetization' which had seen the Nifty hit 7900 due to the fear factor. For today expect banks, metals & energy stocks to gather further momentum as Nifty will test 8500 & above.


The BSE Sensex is currently trading at 27487.70, up by 112.12 points or 0.41% after trading in a range of 27439.68 and 27514.49. There were 19 stocks advancing against 11 stocks declining on the index.The broader indices were trading in green; the BSE Mid cap index gained 0.37%, while Small cap index was up by 0.59%.The CNX Nifty is currently trading at 8512.30, up by 36.50 points or 0.43% after trading in a range of 8493.95 and 8519.25. There were 35 stocks advancing against 16 stocks declining on the index.

MARKET INDICATORS

·           

 

Group ATopGainers

 

 

Company

Price (Rs)

% chg

Bharatfin

722.15

6.70

Welcorp

83.70

5.82

Deltacorp

128.00

5.05

Muthootfin

311.50

4.46

Group ATopLosers

 

 

Kajariacer

570.30

-2.53

Wockpharm

667.10

-2.24

TRENT

242.35

-1.90

Ashokley

87.20

-1.75

Market Statistics

 

 

 

BSE

NSE

Advances

1249

1168

Declines

633

307

 

Technical view: Nifty has crossed the 100 DMA @ 8425 which will now act as support while 8598 will be the next resistance the level from where the Nifty corrected after the event of 'demonetization' on 10th November 2016.Bank Nifty also closed near the 100 DMA @ 19037 which should be crossed today.

Market Sentiment:

The market breadth remained in favour of advances, as there were 1,249 shares on the gaining side against 633 shares on the losing side while 121 shares remain unchanged.

 

Trading ideas :Indian Bank (Buy above Rs 258 for target of Rs 270, SL at Rs 252): Stock has been trading in a narrow trading band of Rs 242-252 from the past eight trading sessions. In yesterday's trading session, Indian bank managed to break out from the consolidation, and closed above the resistance of Rs252. Volumes have been impressive, and the stock is poised to move towards target of Rs 270. We advise to Buy Indian Bank above Rs 258, stop loss at Rs 252 and Target of Rs 270.

 

MacroeconomicFront: The Indian Government has said that India will soon submit a proposal at the World Trade Organisation to start discussions on trade facilitation agreement in services before the WTO ministerial meeting in Argentina.


Corporate Snippets: Ajanta Pharmasaid that there is no import alert by the USFDA on the company's manufacturing unit in Aurangabad and it continues to supply to the US market.

 

Lupinhas launched generic version of contraceptives Ortho-Cyclen tablets after getting approval from the US health regulator.

 

BASF,whose global business portfolio includes chemicals, agricultural solutions, and oil and gas, plans to launch five products for rice crop protection in India.

 

Cyientsaid its subsidiary has signed a definitive agreement to acquire 100% equity in the Certon Software Inc. in an all-cash deal.

Top Sectoral& Stock Screening: The top gaining sectoral indices on the BSE were Metal up by 1.27%, Consumer Durables up by 1.03%, Realty up by 0.94%, Bankex up by 0.64% and Capital Goods was up by 0.60%, while TECK down by 0.15%, Power down by 0.03% and IT was down by 0.02% were the few losing indices on BSE.

Nifty Movers:The top gainers on Nifty were Tata Steel up by 2.38%, Zee Entertainment up by 1.77%, HDFC up by 1.63%, Hindalco up by 1.39% and Yes Bank was up by 1.31%. On the flip side, BhartiAirtel down by 2.61%, Idea Cellular down by 1.38%, BHEL down by 0.72%, AurobindoPharma down by 0.64% and Infosys was down by 0.59% were the top losers.

 

 

 

 

On the global front:On the global front, all the Asian equity indices were trading in green at this point of time taking cues from the US markets, as corporate results reignited investors’ optimism in economic growth, while a surge in commodities prices bolstered raw-materials companies. The US markets coming out of their consolidation mood rallied in last session.

 

Global Signals:All the Asian markets were trading in green; KOSPI Index gained 2.12 points or 0.1% to 2,067.88, FTSE Bursa Malaysia KLCI rose 2.42 points or 0.14% to 1,683.11, Shanghai Composite jumped 7.36 points or 0.23% to 3,149.92, Jakarta Composite increased 10.08 points or 0.19% to 5,302.17, Taiwan Weighted added 23.9 points or 0.25% to 9,447.95, Hang Seng edged higher 39.76 points or 0.17% to 22,989.62 and Nikkei 225 was up by 206.09 points or 1.1% to 18,994.08.

 

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How to earn money from stock market tips from experts


Get LIVE STOCK MARKET TIPS FOR SURE PROFIT FROM INDIAN SHARE MARKET


Stock trading is a very risky affair that too if anyone is untrained and inexperienced in this market. But any person who has an eye for details and is a quick learner than earning some quick cash is not that difficult.Once upon a time stock trading was a simple job of buying stocks and then selling them according to one’s own conviction. But now in present time the scenario has changed drastically. The use of technical analysis which is a form of use science used to predict the probable future prices of stocks from previous data has enabled experts to provide great tips and insights into the world of stock market. This is how the tips provided by the experts help us in maintaining a strong footing in the stock market

Working Mechanism - Technical and qualitative analysis is performed based on historical data regarding the price movement which is plotted on some chart. The main reason for the popularity of these charts is the ease with which they can be understood and interpreted by everyone.

Picking a Stock - Good volume of stocks and also high volatility are some essentials required to gain from the trading in the stock market. Identification of the correct stock as well as fixing of a stop-loss point is of utmost importance.Every trader has to maintain the stop-loss in order to avert big losses. In general the stop-loss level is held stable at 1.5-2%. This signifies that when the stock below this percentage of the purchase price the sock is sold. Experts usually advice traders to maintain a stop-loss level of about the one third level of their expected margins of profit. After any stock has been identified to be bought, experts suggest traders to study its price trends as well as the volumes.The norm is that an uptrend is signified by a high volume with higher price. But exceptions do happen as several people misinterpret the stock volumes because in certain case if both the prices and the volume keep on increasing,it indicates the end of the rally of the stock

Identifying Stock Trends – It is very important to identify stock trends. But it is a very difficult task as the trends do not follow a simple straight line in all occasions. No stock falls continuously on one day and rises continuously on the nest day. All the experts of the stock market us e take the help of various criteria to identify a stock which has high potential. Some of the most popular analytical tool used by experts is the moving average or Fibonacci retracement or even the index of relative strength method. Though these techniques may sound a bit overwhelming, experts are able to use modern software to provide very apt predictions about the stock market.

The Resistance and support levels – Many technical experts always suggest traders to use and maintain support as well as resistance levels while buying or selling stocks. And it is very easy to plot a support as well as a resistance curve and also finding their original values.It is a well-known fact that stock prices always move in a zigzag pattern and have various highs and lows in each and every trading cycle.The support level is always plotted against the low prices which occur in a day and the resistance  level is plotted against the high price of the day.

Further we discuss some of the main quantitative tools used by the experts to define the market trends–

Moving Average Method – The method of 200-day moving average is one of the most widely used tools by experts. This method involves plotting the 200-day consolidated moving average over the very price of the shares present in the price chart.

Index of Relative Strength (RSI) – RSI is mainly used by experts to compare the rate of the recent gains which have taken place against the recent losses occurred during that period. It is done just to asses if any stock has been overbought or has been oversold.

Fibonacci Retracement –An assumption is mainly built up this trend. The assumption is that the market always retraces a certain percentages which are easily predictable by the experts. When the market retraces then they easily produce a buy or even a sell call which is dependent on the very trend predicted.

Nifty ends at 8476, Sensex up 258 pts; Bharti down

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Major headlines

·         Tata Communications net jumps over 12-fold in Dec Quarter

·         India hopes to complete oil storage talks with UAE on Tuesday

·         Top execs of UAE’s Etiad to quit but airline says committed to strategy

INDEX PERFORMANCE

 

 

Index

Close

% Chg

Sensex

27,375.58

0.95

Nifty

8475.80

1.00

Indian Indices: Indian equity benchmarks continued to extend their gains in late afternoon session on the back of healthy buying in Power, Capital Goods and Auto counters. Sentiments remained positive with SBI’s research report Ecowrap, which said that the Government is likely to make sweeping recast of direct taxes in the ensuing Budget to give a boost to the economy following demonetisation. Some support also came with the report that the government is likely to set fiscal deficit target in the range of 3.3-3.4 percent of GDP for the financial year 2017-18 in the upcoming Budget or will target a fiscal deficit of 3.5 percent of GDP -- same as that of 2016-17. 

However, investors remained cautious with credit rating agency Care’s report that upcoming budget is expected to come up with some major changes to the tax framework for individuals and corporate following the demonetisation measure. Meanwhile, a high-level committee the government had set up to review fiscal responsibility rules recommended a framework to allow greater fiscal space for the government to spend more on development.

The BSE Sensex is currently closed at 27375.58, up by 258.24 points or 0.95% after trading in a range of 27140.85 and 27315.48. There were 24 stocks advancing against 6 stocks declining on the index.The broader indices were trading in green; the BSE Mid cap index was up by 0.49%, while Small cap index was up by 0.62%.The CNX Nifty is currently  shut at 8475.80, up by 84.30 points or 1.00% after trading in a range of 8398.15 and 8454.95. There were 42 stocks advancing against 9 stocks declining on the index.

MARKET INDICATORS

·           

 

Top Movers (Group A)

 

 

Company

Cmp

% chg

Gainers

 

 

Trent

243.60

15.38

Kajariacer

585.10

6.08

CESC

736.75

5.76

TVSMotor

401.20

5.50

Losers

 

 

KTKBank

113.90

-4.92

DEN

88.25

-4.23

GSFC

110.45

-4.08

Suzlon

17.04

-2.80

Market Statistics

 

 

 

BSE

NSE

Advances

1397

648

Declines

1190

811

 

Market Sentiment: The market breadth on BSE was positive in the ratio of 1397: 1190, while 159 scrips remained unchanged.

 

Crporate Front:

The Union Cabinet on Tuesday approved interest waiver for November and December 2016, for farmers who have taken short term crop loans from cooperative banks for the Rabi sowing season.

Macroeconomic front:

Initial inquiry reports of recent rail accidents may point to sabotage, but a former Railway Minister and officials held the "faulty financing model" and delay in implementing the required technological measures responsible for the poor infrastructure of the railways that may also be responsible for some train accidents.

 

On the global front:

On the global front, European markets were trading in green as investors wait for fresh economic data and earnings reports. Asian markets were trading mostly in green. Back home, in scrip specific development, Lupin was trading in green after the company launched its Norgestimate and Ethinyl Estradiol Tablets USP, 0.25 mg/0.035 mg having received approval from the United States Food and Drug Administration (USFDA) earlier to market a generic version of Janssen Pharmaceuticals, Inc.’s Ortho-Cyclen 28 Tablets (Norgestimate/Ethinyl Estradiol).


Commodity Updates:

Commodity Prices (MCX):

Commodity

Rs

% Chang

Gold

28727.00

-0.26

Silver

41601.00

-0.22

Crude oil

3641.00

0.69

Natural Gas

226.10

2.68

Alluminium

126.30

0.16

Copper

399.25

0.25

Top Sectoral& Stock Screening:The top gaining sectoral indices on the BSE were Power up by 1.36%, Capital Goods up by 1.18%, Auto up by 1.15%, PSU up by 1.11% and Oil & Gas up by 1.07%, while IT down by 0.34%, TECK down by 0.20% and FMCG down by 0.15% were the top losing indices on BSE.

Top Nifty Movers:The top gainers on Nifty were BHEL up by 2.96%, Idea Cellular up by 2.52%, Tata Power up by 2.45%, Ultratech Cement up by 2.29% and AurobindoPharma up by 2.09%. On the flip side, Yes Bank down by 2.04%, Hindustan Unilever down by 1.50%, HCL Tech down by 1.31%, BhartiAirtel down by 1.03% and Infosys down by 1.02% were the top losers.

 

Global Signals:

Asian markets were trading mostly in green; Shanghai Composite increased 5.78 points or 0.18% to 3,142.55, FTSE Bursa Malaysia KLCI increased 6.37 points or 0.38% to 1,677.68, Taiwan Weighted increased 23.9 points or 0.25% to 9,447.95, Jakarta Composite increased 41.61 points or 0.79% to 5,292.58 and Hang Seng increased 51.34 points or 0.22% to 22,949.86. On the flip side, Nikkei 225 decreased 103.04 points or 0.55% to 18,787.99 and KOSPI Index decreased 0.23 points or 0.01% to 2,065.76.

All European markets were trading in green; UK’s FTSE 100 increased 3 points or 0.04% to 7,154.18, France’s CAC increased 6.24 points or 0.13% to 4,827.65 and Germany’s DAX increased 10.62 points or 0.09% to 11,556.37.

 

 

US$ falls to 2 month lows as emerging markets rebound with stocks & currencies seeing pullback.

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Major headlines:

·         Buying support lifts Indian equities

·         HCL Tech Q3 net rises 7.8 % at Rs 2070 cr

·         Government to use geo spatial tech to build smart cities

 

INDEX PERFORMANCE

 

 

Indices

Support

Resistanes

Sensex

8389

8488

Nifty

27380

27504

 

Indian Indices: Asian indices ex Japan opened in the green as the US$ weakness saw the Dow Jones close in the red albeit marginally. This US$ weakness saw emerging markets bounce very strongly with the Brazilian 'Bovespa" hitting fresh 52 week highs. The Bovespa has in this month moved up over 13% as value buying emerges in emerging markets.


Nifty saw a smart pullback from the 8350 levels as short covering coupled with fresh buying emerged at lower levels. Metals lead the rally with energy stocks as the Nifty closed near the high point of the day @ 8400.For today expect another gap up opening with Nifty attempting to hit 8450 as the Rupee strength improves sentiment.


The BSE Sensex is currently trading at 27240.98, up by 123.64 points or 0.46% after trading in a range of 27140.85 and 27254.39. There were 26 stocks advancing against 4 stocks declining on the index.The broader indices were trading in green; the BSE Mid cap index was up by 0.53%, while Small cap index was up by 0.54%.The CNX Nifty is currently trading at 8433.75, up by 42.25 points or 0.50% after trading in a range of 8398.15 and 8437.50. There were 43 stocks advancing against 8 stocks declining on the index.

 

MARKET INDICATORS

·           

 

Group ATopGainers

 

 

Company

Price (Rs)

% chg

Trent

223.60

6.37

Fortis

191.50

5.22

Tatacomm

703.70

4.67

Cyient

483.80

3.83

Group ATopLosers

 

 

GSFC

107.35

-6.77

KTKBANK

113.50

-5.26

DEN

89.25

-3.15

Voltas

328.20

-3.04

Market Statistics

 

 

 

BSE

NSE

Advances

1426

1168

Declines

706

307

 

Technical view: Nifty has rebounded from the 200 DMA @ 8317 which now acts as strong support while resistance comes @ 8428 which is the 100 DMA. Bank Nifty is the under perfomer& finds support @ 18723 which was the yesterday low & will face resistance @ 19042 which is the 100 DMA.


Market Sentiment:

The market breadth on BSE was positive in the ratio of 1426:706, while 125 scrips remained unchanged.

 

Trading ideas: SAIL (Buy above Rs 61.5 for target of Rs 65, SL at Rs 59.5): The stock has broken out from a rising channel rectangle pattern on the weekly chart. The price outburst is accompanied with expansion in trading volumes. The stock has also breached past its immediate previous peak of Rs60.55. Other momentum oscillators are also indicating strength in the current up move. We advise to Buy SAIL above Rs 61.5, stop loss at Rs 59.5 and Target of Rs 65.

 

MacroeconomicFront: The Commerce Ministry has said that the online portal launched for government purchases of goods and services would result in savings of Rs 40,000 crore annually for the exchequer. Commenting on the issue, a Commerce Ministry Official told the media, "Demand aggregation for most of the common use goods and services is estimated to result in annual savings to the tune of Rs 40,000 crore per annum."


Corporate Snippets: Reliance Industries is in talks to raise as much as USD2.25bn (Rs153bn) in what could be one of the biggest offshore debt issues by an Indian corporate as the energy-to-retail conglomerate seeks to replace existing high-cost borrowings as well as build a war chest for its aggressive expansion strategy in telecom.

 

Manpasand Beverages Ltdis planning to increase its production capacity to more than double in the next 12-18 months. The company will set up four new manufacturing plants having total production capacity of 0.2mn cases per day as against the current 0.17mn cases per day.

Top Sectoral& Stock Screening:  The top gaining sectoral indices on the BSE were Capital Goods up by 1.25%, Consumer Durables up by 1.01%, Power up by 0.99%, PSU up by 0.91% and Metal up by 0.88%, while IT down by 0.55%, TECK down by 0.41% and FMCG down by 0.11% were the losing indices on BSE.

Nifty Movers: The top gainers on Nifty were Idea Cellular up by 2.66%, BHEL up by 2.26%, Coal India up by 1.99%, IndusInd Bank up by 1.97% and Larsen & Toubro up by 1.97%.  On the flip side, Hindustan Unilever down by 1.86%, HCL Technologies down by 1.67%, BhartiAirtel down by 1.41%, Infosys down by 1.12% and TCS down by 0.24% were the top losers.

 

 


On the global front: On the global front, Asian shares were trading mostly in green, as investors continue to digest what Donald Trump means to their holdings. Japanese equities are a noted laggard as the yen leads broad currency gains in the dollar, rising nearly a full yen from late-Friday levels in the US.

 

Global Signals:The Asian markets were trading mostly in green; Shanghai Composite increased 2.74 points or 0.09% to 3,139.51, FTSE Bursa Malaysia KLCI increased 6.49 points or 0.39% to 1,677.80, Jakarta Composite increased 29.6 points or 0.56% to 5,280.56, Taiwan Weighted increased 34.8 points or 0.37% to 9,458.85 and Hang Seng increased 76.5 points or 0.33% to 22,975.02. On the other hand, Nikkei 225 decreased 83.47 points or 0.44% to 18,807.56 and KOSPI Index decreased 3.65 points or 0.18% to 2,062.34.

 

INDIAN STOCK MARKET VIEW FOR THE WEEK JAN 23, 2016 – JAN 29, 2016

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Events to watch this week

  • Trump sworn in as US president
  • China’s Xi: No one will win a trade war
  • IMF sees fast US growth
  • Draghi: ECB rates to stay low for an extended period

The Week ahead:

  • Global flash purchasing managers’ indices are released on Tuesday, 24 January
  • US existing home sales data are reported on Tuesday, 24 January
  • The UK Q4 gross domestic product is released on Thursday, 26 January
  • The US Q4 GDP is released on Friday, 27 January

For the week,Global equities were little changed on the week as markets awaited clearer policy signals from the incoming US administration. Steady US 10-year-note yields of 2.42% greeted the new president, virtually the same yield that prevailed when Barack Obama was first sworn in eight years ago. West Texas Intermediate crude fell slightly from a week ago, to $52.60 per barrel from $53, while global Brent crude dropped to $55.40 from $56. Volatility, as measured by the Chicago Board Options Exchange Volatility Index (VIX), rose to 12.4 from 11.20 a week ago.

NIFTY- 8,349.35
CRUDE OIL-Rs 3,642barrel
GOLD-Rs 28,612 gram
Rs/$-Rs 68.18

MARKET ROUND UP

Indian equity benchmark indices the S&P BSE Sensex and the Nifty 50 index closed the week ended Friday, 20 January 2017 on sour note. The trading for the week was lacklustre during four trading sessions from Monday, 16 January to Thursday, 19 January 2017, with a range-bound trading, amid mixed global cues. Albeit, a noticeable slide on the bourses on Friday, 20 January 2017, pulled key indices lower.

The slide on the last trading session of the week is attributable to the caution ahead of US President-elect Donald Trump's inauguration later in the global day on Friday, 20 January 2017. Markets across the globe await a clear cut direction from Trump on US' economic policies.

The Sensex lost 203.56 points or 0.74% to settle at 27,034.50. The Nifty declined 51 points or 0.6% to settle at 8,349.35.

In the broader market, the BSE Mid-Cap index shed 0.43%, with the decline in this index lower than the Sensex's decline in percentage terms. The BSE Small-Cap index bucked the market trend by advancing 0.56% during the week.

Macro Economic Front:

On the Economic Front,data showed during market hours on Monday, 16 January 2017 that inflation based on wholesale price index (WPI) rose 3.39% in December 2016 from 3.15% in November 2016. Another data showed after market hours on Friday, 13 January 2017 that India's trade deficit declined 9.9% to $10.37 billion in December 2016 over December 2015.

The International Monetary Fund (IMF) on Monday, 16 January 2017, cut India's economic growth estimate for 2016-17 to 6.6% from its earlier projection of 7.6% due to the impact of the government's move to scrap some high value currency notes in early November.

Major Action &Announcement:

TCS rose 1.57%. The company announced a partnership with Aurus, Inc., a global leader in innovative payments technology, to deliver payment solutions for retailers using TCS OmniStore, a first of its kind unified store commerce platform. The announcement was made after market hours on Monday, 16 January 2017.

Infosys declined 2.7%. The company announced its internal carbon price at $10.5 per ton of CO2e, at an event organized by the Carbon Pricing Leadership Coalition (CPLC) in Zurich. A significant milestone for Infosys, the price will be applicable for a period of two years and will represent the cost of decarbonizing 1 ton of CO2e. The announcement was made after market hours on Monday, 16 January 2017.

State Bank of India (SBI) advanced 0.04%. The bank said that it concluded the issue of $500 million fixed rate senior unsecured notes having a maturity of 5 years at a coupon of 3.25% payable semi-annually. The announcement was made after market hours on Tuesday, 17 January 2017.

Maruti Suzuki India fell 0.51%. The company launched the much awaited premium urban compact vehicle for the millennials, IGNIS. The announcement was made after market hours on Friday, 13 January 2017.

Mahindra & Mahindra (M&M) lost 2.1%. The company announced its foray into Turkey, through the acquisition of HisarlarMakinaSanayiveTicaretAnonimSirketi (Hisarlar), a farm equipment company based in Turkey. The announcement was made during market hours on Friday, 20 January 2017.

Coal India lost 3.51%. The board of directors of Central Coalfields, a subsidiary of Coal India approved revision of coking coal prices on 14 January 2017. The increase in price is done by subsuming the washery recovery charge (WRC) which was being charged separately in the case of non-linked washery grade coking coal keeping in view the observation of ADRM. The announcement was made on Saturday, 14 January 2017.

NTPC fell 0.32%. The company said that first unit of 250 megawatts (MW) of Nabinagar Thermal Power Project of 1000 MW capacity of Bhartiya Rail Bijlee Company, BRBCL-a subsidiary of NTPC was declared on commercial operation from 15 January 2017. The announcement was made during market hours on Monday, 16 January 2017.

Tata Steel advanced 1.84%. CARE Ratings downgraded the credit ratings of the company's unsecured non-convertible debentures (NCDs), long term unsecured rupee loan and unsecured subordinated perpetual securities by 1 notch citing uncertainties relating to the disposal/restructuring of Tata Steel UK business. The announcement was made at the fag end of market hours on Thursday, 19 January 2017.

Global Front:

In Overseas Markets,UK Prime Minister Theresa May in a speech on Tuesday, 17 January 2017, indicated Britain will press for a firm exit from the European Union. May said she'll put the terms of the country's exits from the EU to a parliamentary vote. Setting out a vision that could determine Britain's future for generations and the shape of the EU itself, May answered criticism that she has been coy about her strategy with a 12-point plan for what has been dubbed a hard Brexit.

Among economic data in US, industrial output accelerated last month at its strongest pace in two years. The housing-market index from the National Association of Homebuilders showed that builder sentiment slipped in January after notching its highest reading of the business cycle in December. Despite the drop, the January number was the second-highest reading of the cycle.

The European Central Bank held rates and its bond-buying program steady at its Thursday's (19 January 2017) meeting. The bank's President Mario Draghi said the governing body stood ready to intervene further if conditions worsened.

Global Economic News:

Trump vows to restore America’s promise
In his inaugural address, President Donald Trump pledged to transfer power from Washington, D.C., back to the American people. He called for defending the US’s borders while rebuilding its infrastructure. Every decision, whether on trade, taxes or immigration, will be made to benefit American workers and families, he said. While he expects other nations to put their interests first as well, he said the United States will reinforce old alliances and build new ones.

China’s Xi warns on trade war risks
In the first appearance by a Chinese leader at the World Economic Forum in Davos, Switzerland, President Xi Jinping defended globalization. He cautioned other countries against pursuing protectionist policies, adding that no one will emerge as a winner in a trade war. On the domestic front, Xi said that the economy has entered a new normal, driven by household consumption. He affirmed a 6.7% 2016 economic growth target, in the middle of the government’s 6.5%–7% range, but the slowest since 1990.

IMF ups US growth forecast
The US economy will grow 2.3% this year and 2.5% in 2018, according to freshly revised International Monetary Fund forecasts. The IMF raised its forecast by 0.1% for 2017 and 0.4% for 2018. The global growth outlook remained steady from October estimates of 3.4% this year and 3.6% in 2018. The fund estimates that the global economy expanded 3.1% in 2016.

Banks heading for the Brexit?
This week, several banks announced plans to move staff out of London in the wake of Brexit, including HSBC and UBS. Meanwhile, Germany’s Handelsblatt reported that Goldman Sachs may relocate half of its London staff of 6,500. Some jobs will move to New York, while approximately 1,000 could move to Frankfurt, the paper reported. UK prime minister Theresa May this week outlined her plan to put Brexit to a vote in Parliament before triggering Article 50. She said she expects the United Kingdom to leave both the European Union’s single market and its customs union.

GLOBAL CORPORATE NEWS

Draghi says rates to stay very low even after halting asset sales
Interest rates will stay low or head even lower for an extended period, European Central Bank president Mario Draghi said on Thursday, after the Governing Council left its monetary policy unchanged. Draghi looked past a recent uptick in European inflation measures and said the ECB is ready to increase the size of its quantitative easing program, if needed. The Bank of Canada too held policy steady this week, though Governor Stephen Poloz maintained that a rate cut is an option if the Canadian economy takes a hit from more protectionist US policies. Poloz’s dovish tone sent the Canadian dollar lower. US Federal Reserve chair Janet Yellen said Thursday that the Fed is close to its goals and that she expects to hike rates "a few times” this year. Futures markets have just over two 25-basis-point hikes priced in at present. Yellen added that allowing the economy to run persistently hot would be risky and unwise.

NEW 52-WEEK HIGH BSE (A):

 

Adani Power

38.95

CESC

703.00

GAIL

471.20


NEW 52-WEEK LOWS BSE (A):

RCOM

30.85

DIVISLAB

710.10


MAJOR WEEKLY GAINERS IN BSE A CATEGORY:

SUZLON

15.36

GUJARAT STATE

13.06

DEN NETOWORK

10.15


MAJOR WEEKLY LOSERS IN BSE A CATEGORY:

MMTC

-8.28

NHPC

-7.18

TV 18

-6.71



Eyes will be set on the certain US economic data releases are:

Monday (23 Jan)
No Major Data
Tuesday(24 Jan)
Existing Home Sales

Wednesday(25 Jan)
MBA Mortagage Applications
Thursday(26 Jan)
Jobless Claims& New Home Sales
Friday(27 Jan)
Consumer Sentiment

Fundamental Pick of the week:

Accumulate PTC India Financial Services Ltd For Target Rs.50.00

Investment Rationale

* PTC India Financial Services (PFS) is a non-banking finance company promoted by PTC India (60% stake). PFS has been granted the status of Infrastructure Finance Company by RBI. It offers wide range of debt and equity linked financing products meeting the financing needs of power projects and is exclusively devoted to power sector.

* PFS, initially, had the largest exposure to thermal power projects at ~60% till FY12, primarily sourced as a reference from parent company PTC India. The company is now able to garner business on its own with focus on small and medium renewable power projects, which constitute 44% of the overall loan book and garner better yields.

* NIMs (~6%), ROE (~16-20%) , ROAs(~3%) have remained stable for the company . Asset quality has deteriorated over FY15 with G/ NNPAs of 3.4/2.3% in FY16 due to slip up in a couple of accounts.

Recommendation

Accumulate PTC India Financial Services Ltd @ 41-42 Stoploss 38 Target 50 CMP 41.60


Indian Market Outlook:

The Indian markets posted modest gains in the last session despite choppy trade, as investors remained optimistic of upbeat corporate earnings results. Today, the start is likely to be soft to cautious on mostly unsupportive global cues. However, markets may see recovery in latter trade and shore up with India emerging as the 'sweet spot' along with neighbour China to rev up the global economic growth at the World Economic Forum (WEF) Annual meet in Davos. Along with China, India was also applauded as a major driving force for world growth with leaders and economists emphasising the need for increased regional cooperation. IT and pharma stocks will be under pressure ahead of Donald Trump's swearing-in as US President today. There will be caution on talks of pricing pressure on pharma, and new H1B norms for IT companies. The aviation stocks will be in action, as more than three dozen airports across India, which today do not handle a single flight, may get connected under the government’s UDAN (UdeDeshKaAamNaagrik) scheme. Bids by interested airlines have been received to connect 43 such new airports for 190 routes. There will be lots of individual result reactions too, to keep the markets buzzing for the day.


TECHNICAL VIEW:

S3

S2

S1

NIFTY

R1

R2

R3

8,235

8,280

8,318

8,349.35

8,454

8,499

8,540


Nifty not able to go anywhere through the week and is stuck in a small range between Gann levels 8373-8465. Imp levels to watch today are 8397-8460 either side rally will happen after a long consolidation during the week. Lower supports on breach of 8397 is 8373-8348-8301. Over all the bullish trend we got from the lows of 7893 had fizzled out and to regain strength Nifty has to close the week ab 8465. There is no major support form the Nifty components except Banking and Financials which also now looks tired. 

BankNifty support 19072 and hurdle 19220. Either side will see a rally. Yesterday saw weakness and was choppy with in a range and trying to get direction.

Conclusion:

Nifty index traded sideways for most past of the passing week but steep sell-off on Friday i.e. 20th January made it settle at the weekly lowest levels. The sell off was due to Donald Trump’s inauguration as the 45th US President. Market participants were seen taking a cautious stance ahead of the same. Overall markets bias remains in favor of the bulls; hence, dips from the current levels can be utilized to accumulate good quality stocks for medium to long-term. For the up coming week, we expect Nifty index to trade in range 8250-8500. Auto and Bankex top our preferred list of sectoral pivots.


IPO- BSE Limited issue opens on 23rd January

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The issue opens on January 23, 2017 and closes on January 25, 2017


BSE Limited is the owner and operator of the Bombay Stock Exchange (BSE), India's largest stock exchange by number of companies listed. The BSE was established in 1875 as the first stock exchange in Asia. Today, the BSE has more than 5,000 companies listed on it - the highest in any exchange around the world. The world's two leading global exchanges, Deutsche Bourse and Singapore Exchange are strategic partners in BSE Limited. 

The issue opens on January 23, 2017 and closes on January 25, 2017

Details of the BSE IPO

Issuer: BSE Limited

Issue opening date: January 23, 2017

Issue closing date: January 25, 2017

Price band: Rs805 to Rs806 per share

Lot size: 18 equity shares and in multiple thereafter

Issue size: Rs1,241.89 crore to Rs1,243.43 crore

Issue allocation: QIB - 50%; NIB - 15%; Retail - 35%

Mode of payment: ASBA is mandatory (cheques will not be accepted)

GCBRLMs: Edelweiss Financial Services Ltd, Axis Capital Ltd, Jefferies India Pvt Ltd and Nomura Financial Advisory and Securities (India) Pvt Ltd

BRLM: Motilal Oswal Investment Advisors Pvt Ltd, SBI Capital Markets Ltd and SMC Capitals Ltd

Registrar: Karvy Computershare Pvt Ltd

Listing: Proposed to be listed on the National Stock Exchange


Company’s competitive strengths

  • Strong brand equity with a track record of innovation
  • Diversified and integrated business model; active relationship with market participants
  • State-of-the-art infrastructure and technology
  • Financial strength and diversified sources of revenue
  • About the company

    BSE Limited is the owner and operator of the BSE, India's largest stock exchange by number of companies listed. The BSE was established in 1875 as the first stock exchange in Asia. The BSE is one of India's leading exchange groups. Today, the BSE has more than 5,000 companies listed on it - the highest in any exchange around the world. The companies listed on the BSE command a total market capitalisation of $1.64 trillion as of September 30, 2015. The world’s two leading global exchanges, Deutsche Bourse and Singapore Exchange, are strategic partners in BSE Limited.

    The BSE offers trading in Equity, Debt, Derivatives, Mutual Funds and SME Equity. The S&P BSE Sensex is India's most widely tracked stock market benchmark. The BSE also offer services such as Risk Management, Clearing, Settlement, Market Data services, IT services & solutions, and licensing index products like the S&P BSE Sensex. The BSE also provides depository services through its arm Central Depository Services Ltd (CDSL).

    Objects of the issue

    • To achieve the benefits of listing the equity shares on NSE and;
    • For the sale of equity shares by the selling shareholders.

     

    FAQs on IPO

    1. What is an IPO or public issue?

    An initial public offering (IPO)/public issue is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public. This paves the way for listing and trading of the issuer’s securities.

    The shares are initially issued in the primary market at an offering price determined by the lead manager(s)/the merchant banker(s) to the IPO.

    The primary market consists of a syndicate of investment banks and broker dealers that the lead managers assemble and that allocate shares to institutional, high net worth individuals (HNI) and individual/retail investors.

    2. What is a price band?

    As far as IPOs are concerned, a price band is a value-setting method whereby a seller indicates an upper and lower cost range, between which the buyers/investors are able to place their bids. The price band's floor and cap provide guidance to the buyers.

    3. Who decides the price band?

    It is up to the company to decide on the IPO price or the price band, in consultation with the lead managers.

    The basis of IPO price is disclosed in the offer document. The issuer is required to disclose in detail about the qualitative and quantitative factors justifying the IPO price.

    4. How is the IPO price determined?

    The IPO price is normally based on such factors as the company’s financials, products and services, income stream as well as the demand for the shares and current market conditions.

    The lead managers must determine a fair offering price, which takes into consideration the need for the company to raise capital while offering the new issue at a price which represents a fair value of the shares.

    5. What is a Red Herring Prospectus?

    A Red Herring Prospectus (RHP) is a document submitted by a company (issuer) as part of a public offering or an IPO of securities (either stocks or bonds).

    6. Who is a retail investor as far as IPO is concerned?

    A retail individual investor means an investor who applies or bids for securities of or for a value of not more than Rs 2,00,000.

    7. Can a retail investor also bid in a book-built IPO?

    Yes. He can bid in a book-built IPO for a value not more than Rs 2,00,000. Any bid made in excess of this will be considered in the HNI category.

    8. Can bids in a book-built IPO be changed/revised?

    Yes. Investors can change or revise the quantity or price in the bid using the form for changing/revising the bid that is available along with the application form. However, the entire process of changing or revising the bids shall be completed before the IPO closes.

    9. How can investors know the number of shares allotted to them?

    In case of fixed price issues, investors are intimated about the CAN/Refund order within 10 days of the closure of the IPO.

    In case of book built IPOs, the basis of allotment is finalised by the book-running lead managers within two weeks from the closure of the issue. The registrar then ensures that the demat credit or refund as applicable is completed within 6 working days of the closure of the issue.

    10. Which are the reliable sources for me to get information about response to IPOs?

    In the case of book-built issues, the exchanges (Bombay Stock Exchange/National Stock Exchange) display the data regarding the bids obtained (on a consolidated basis between both these exchanges).

    The data regarding the bids is also available category-wise.

    11. How do I know if I am allotted shares? And by what timeframe will I get a refund if I am not allotted?

    Investors are entitled to receive a Confirmatory Allotment Note (CAN) in case they have been allotted shares within 6 working days from the closure of a book Built issue. The registrar has to ensure that the demat credit or refund as applicable is completed within 6 working days of the closure of the book-built issue.

    The lead managers also publish an advertisement at least in an English national daily with wide circulation, one Hindi national paper and a regional language daily circulated at the place where registered office of the issuer company is situated.

    12. How long will it take after the issue for the shares to get listed?

    The listing on the stock exchanges is done within seven days from the finalisation of the issue.

    Ideally, it would be around three weeks after the closure of the book-built issue.

    In case of fixed price issue, it would be around 10 days after closure of the issue.

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