Wednesday, May 04, 2016

NIFTY INTRADAY VIEW ( 05 / 05 )

NIFTY INTRADAY LEVELNIFTY PROBABLE HIGHNIFTY PROBABLE LOW
R47766BULL78667640
R37743UP BREAKOUT78107697
R27734UP CAUTIONLEVEL FOR LONGLEVEL FOR SHORT
R17728SELL78237737
PIVOT7718 LAST DAYSTRONG BEAR LOW VOLATALITY
S17685BUYOPEN7724
S27679DOWN CAUTIONHIGH7749.0
S37671DOWN BREAK OUTLOW7697.0
S47647BEARCLOSE7706.55
NIFTY MONTHLY LEVELNIFTY DAILY VOLATALITY0.68%
R26082LONGNIFTY WEEKLY VOLATALITY3.83%
R15976SHORT EXITNIFTY WEEKLY HIGH7992.0
S15765LONG EXITNIFTY WEEKLY LOW7697.0
S25659SHORTNIFTY DAY MEAN7844.5

THE END SESSION ( 04 / 05 )

Key indices slide as global growth worries pull world stocks down


Data showing slowdown in growth in the services sector and weakness in global stocks triggered modest losses for Indian stocks. The barometer index, the S&P BSE Sensex, fell 127.97 points or 0.51% to settle at 25,101.73. The Nifty 50 index fell 40.45 points or 0.52% to settle at 7,706.55. Losses for metal stocks, public sector banks and index heavyweight ITC led losses for the two key benchmark indices. Concerns about global economic slowdown weighed on global stocks. With third straight day of losses, the Sensex and the Nifty, both, hit their lowest closing levels in more than three weeks.

The broad market depicted weakness. More than two stocks dropped for each stock that rose on BSE. 1,784 shares declined and 784 shares rose. A total of 119 shares were unchanged. Quite a few stocks forming part of the broad based BSE Small-Cap index registered losses exceeding 3%. 602 stocks constituting 78.69% of a total of 765 stocks forming part of the BSE Small-Cap index registered losses. The BSE Small-Cap index fell 0.98%. The BSE Mid-Cap index fell 1.22%. The losses for both these indices were higher than the Sensex's decline in percentage terms.

Metal and mining stocks edged lower in the wake of weaker-than-expected Chinese manufacturing data for April 2016. Shares of oil exploration and production (E&P) firms declined on lower crude oil prices. Index heavyweight and cigarette major ITC edged lower on reports that the Supreme Court today, 4 May 2016, told the tobacco industry to adhere to rules requiring stringent health warnings on cigarette packs. Index heavyweight and housing finance major HDFC edged higher, with the stock extending post-result gains. Yes Bank dropped after the private sector bank announced reduction in lending rate by 10 basis points across tenors.

Adani Ports and Special Economic Zone (APSEZ) fell 11.98% in a single trading session on equity dilution worries after the company's board of directors decided to seek shareholders' approval to raise funds by way of issue of equity shares/convertible bonds up to Rs 10000 crore. Tata Motors tumbled after the company revised downward the rate of growth in sales volume for April 2016 from the figures announced previously.

Meanwhile, the outcome of a monthly survey showed that growth in India's services sector eased last month due to a slower expansion in new business inflows. The seasonally adjusted Nikkei Services Business Activity Index dropped to 53.7 in April 2016 from 54.3 in March 2016. April data highlighted a general lack of pressure on the capacity of Indian service providers, as unfinished business declined. Services firms' sentiment weakened slightly in April, with the degree of optimism being modest by historical standards.

The Sensex fell 127.97 points or 0.51% to settle at 25,101.73, its lowest closing level since 11 April 2016. The index lost 168.66 points or 0.66% at the day's low of 25,061.04. The index rose 16 points or 0.06% at the day's high of 25,245.70.

The Nifty 50 index fell 40.45 points or 0.52% to settle at 7,706.55, its lowest closing level since 11 April 2016. The index lost 49.75 points or 0.64% at the day's low of 7,697.25. The index rose 2 points or 0.02% at the day's high of 7,749.

Total turnover on BSE amounted to Rs 2478 crore, lower than turnover of Rs 2736.89 crore registered during the previous trading session.

Among the sectoral indices on BSE, the S&P BSE Metal index (down 3.49%), the S&P BSE Industrials index (down 2.8%), the S&P BSE Realty index (down 2.29%), the S&P BSE Basic Materials index (down 2.08%), the S&P BSE Auto index (down 2.05%), the S&P BSE Telecom index (down 1.64%), the S&P BSE Consumer Durables index (down 1.33%), the S&P BSE Power index (down 1.27%), the S&P BSE Oil & Gas index (down 1.01%), the S&P BSE FMCG index (down 1%), the S&P BSE Capital Goods index (down 0.94%), the S&P BSE Bankex (down 0.86%), the S&P BSE Utilities index (down 0.79%), the S&P BSE Consumer Discretionary Goods & Services index (down 0.72%) and the S&P BSE Energy index (down 0.56%), underperformed the Sensex. The S&P BSE Finance index (down 0.23%), the S&P BSE Teck index (down 0.2%), the S&P BSE Healthcare index (down 0.02%) and the S&P BSE IT index (up 0.23%), outperformed the Sensex.

In overseas stock markets, European stocks reversed initial gains on concerns about global economic slowdown. Earlier during the global day, most Asian stocks edged lower amid renewed global growth concerns in the wake of weaker-than-expected Chinese manufacturing data. The Caixin China general manufacturing purchasing managers' index fell to 49.4 in April 2016 from 49.7 in March 2016. A reading below 50 indicates economic contraction. The data was released during trading hours in Asia yesterday, 3 May 2016. China's official manufacturing PMI, a competing gauge, came in at 50.1 in April 2016 compared with 50.2 in March 2016, according to data released by the National Bureau of Statistics on 1 May 2016. The Chinese economy is the world's second biggest economy after the United States.

Meanwhile, China's central bank reportedly set the yuan's daily reference rate nearly 0.6% percent weaker against the US dollar today, 4 May 2016, the biggest downward move since devaluing the unit in August last year. China rattled global investors with a surprise devaluation in August 2015, when it guided the normally stable yuan down nearly five percent over a week. China only allows the yuan to rise or fall two percent on either side of the daily fix, one of the ways it maintains control over the currency.
A surprise interest-rate cut by Australia's central bank has added to global economic jitters. The Reserve Bank of Australia yesterday, 3 May 2016, cut its benchmark interest rate by 25 basis points to record low of 1.75% in a bid to combat record-low inflation and a strong local currency. The decision was announced during trading hours in Asia.

Trading in US stock index futures indicated losses for US stocks at the opening bell. Trading in US index futures indicated that the Dow Jones Industrial Average could slide 112 points at the opening bell today, 4 May 2016. US stocks closed lower yesterday, 3 May 2016, led by declines in energy and materials stocks amid renewed global growth worries. Meanwhile, Cleveland Fed President Loretta Mester yesterday, 3 May 2016, said in a speech that waiting for global financial markets to calm down before raising interest rates may backfire and just lead to more volatility. Mester said she would like to see gradual interest-rate hikes this year. Mester is a voting member of the policy-setting Federal Open Market Committee (FOMC) this year. The FOMC next undertakes monetary policy review at a two-day meeting on 14-15 June 2016.

Sun Pharmaceutical Industries (Sun Pharma) fell 0.55% at Rs 802.75. The company during market hours today, 4 May 2016, announced that the company has signed an agreement with International Centre for Genetic Engineering and Biotechnology (ICGEB) to develop a novel botanical drug for treatment of dengue. Through this agreement, Sun Pharma commits development of Cissampelos pariera (Cipa), a botanical drug in collaboration with ICGEB. Through this agreement, Sun Pharma will follow up on earlier pre-clinical collaboration between ICGEB and erstwhile Ranbaxy Laboratories. Sun Pharma will develop Cipa, a botanical drug following a drug registration process similar to a new chemical entity, consisting of all required in-vitro, in-vivo, pre-clinical and clinical studies meeting all regulatory standards of India and other regulatory agencies worldwide.

In a separate announcement after trading hours today, 4 May 2016, the company announced that the two pivotal phase-3 clinical trials evaluating the efficacy and safety of the investigational IL-23p19 inhibitor antibody tildrakizumab (MK-3222) in patients with moderate-to-severe plaque psoriasis met their primary endpoints for both evaluated doses. The overall safety profile of tildrakizumab in both phase-3 clinical trials was consistent with the safety data observed in previously reported studies, the company said. The preparations for submission of a Biologics License Application to the US Food and Drug Administration (USFDA) are proceeding. The detailed findings from the phase-3 clinical trials will be presented at upcoming scientific meetings.

Index heavyweight and housing finance major HDFC rose 2.86% at Rs 1,131, with the stock extending post-result gains. HDFC's net profit rose 39.98% to Rs 2607.05 crore on 23.72% growth in total income to Rs 9225.72 crore in Q4 March 2016 over Q4 March 2015. The surge in net profit was due to profit on sale of a part of its stake in the life insurance joint venture to the company's joint venture partner Standard Life. The company announced its Q4 March 2016 results during market hours on 2 May 2016.

HDFC after trading hours today, 4 May 2016, announced said that it intends to raise Rs 1135 crore through private placement of senior secured redeemable non-convertible debentures. HDFC said that the coupon rate of debentures is 8.34% per annum with a tenor of 2 years and 10 months. The issue opens and closes on the same day on 6 May 2016. The object of the issue is to augment the long-term resources of the company.

Stocks of public sector banks declined. Andhra Bank (down 5.21%), Union Bank of India (down 5.19%), Allahabad Bank (down 5.05%), UCO Bank (down 4.94%), Canara Bank (down 3.59%), Corporation Bank (down 2.92%), Syndicate Bank (down 2.78%), Bank of Baroda (down 2.75%), Bank of India (down 2.45%), State Bank of India (down 2.23%), Punjab National Bank (down 1.93%), Punjab and Sind Bank (down 1.82%), IDBI Bank (down 1.62%), United Bank of India (down 1.55%), Dena Bank (down 1.36%), Indian Bank (down 1.09%), Bank of Maharashtra (down 0.68%) and Central Bank of India (down 0.55%) edged lower. Vijaya Bank rose 0.32%.

Stocks of private sector banks were mixed. Federal Bank (up 4.05%), HDFC Bank (up 0.89%), City Union Bank (up 0.84%), Kotak Mahindra Bank (up 0.49%), edged higher. IndusInd Bank (down 0.35%), Axis Bank (down 1.59%) and ICICI Bank (down 2.98%), edged lower

Yes Bank fell 1.53% at Rs 917.70 after the private sector bank announced reduction in lending rate by 10 basis points across tenors with effect from 1 May 2016. The bank's marginal cost of funds based lending rate (MCLR) for one-year loans now stands at 9.5%. All rupee loans sanctioned and credit limits renewed with effect from 1 April 2016 are priced with reference to MCLR, which is the internal benchmark of the concerned bank. Actual lending rates are determined by adding the components of spread to the MCLR.

Shares of oil exploration and production (E&P) firms declined on lower crude oil prices. Cairn India (down 5.43%), Oil India (down 2.82%) and ONGC (down 2.18%) edged lower. Lower crude oil prices will result in lower realization from crude sales for oil exploration firms.

Index heavyweight Reliance Industries (RIL) rose 0.15% at Rs 977.50. The stock hit a high of Rs 983.65 and a low of Rs 974.25 so far during the day.

Shares of public sector oil marketing companies also edged lower. Indian Oil Corporation (down 1.67%), BPCL (down 1.10%) and HPCL (up 1.07%) edged lower.
In the global commodities markets, Brent for July settlement was currently up 10 cents at $45.07 a barrel. The contract had declined 86 cents or 1.87% to settle at $44.97 a barrel during the previous trading session on renewed fears of an oil supply glut.

Metal and mining stocks edged lower in the wake of weaker-than-expected Chinese manufacturing data for April 2016. Steel Authority of India (down 8.46%), National Aluminium Company (down 7.36%), Hindalco Industries (down 5.83%), Vedanta (down 4.95%), NMDC (down 4.06%), Hindustan Zinc (down 3.36%), JSW Steel (down 2.73%), Bhushan Steel (down 2.28%) and Hindustan Copper (down 2.12%), edged lower. China is the world's largest consumer of steel, copper and aluminum.

Copper edged lower in the global commodities markets. High Grade Copper for July 2016 delivery was currently down 1.24% at $2.1915 per pound on the COMEX.
Tata Steel slumped 5.60% at Rs 328.95. Global metals group Liberty House Group yesterday, 3 May 2016, formally submitted a letter of intent to Tata Steel Europe containing its indicative bid for the entire issued share capital of Tata Steel UK. Liberty has put in the bid for all of Tata Steel's UK assets, excluding its Long Products division, which is in the process of being sold separately, and the Scottish Plate Assets that Liberty already acquired from Tata Steel. Tata Steel has put Tata Steel, UK on the block due to the deteriorating financial performance of the UK subsidiary.

The bid is based on Liberty's GREENSTEEL business model and would involve a transition from steelmaking in blast furnaces to recycling steel in electric arc furnaces over time while ensuring the company continues to meet key customers' quality requirements. Steelmaking would be ultimately powered by renewable energy sources. Liberty said in a statement that it believes that the UK steel industry can achieve long-term viability if based on an agile, sustainable, non-cyclical model which integrates liquid steel making from recycling with downstream production and the manufacture of advanced engineering products.

In order to take the bid forward Liberty has appointed an internal project team and a panel of leading external advisers to work on this acquisition, dubbed "Project GREENSTEEL Pluto".

Jindal Steel & Power (JSPL) fell 3.48% at Rs 66.60. The company's board of directors at its meeting held yesterday, 3 May 2016, approved the divestment of 1,000 megawatts (MW) power plant unit in Chhattisgarh of its power subsidiary Jindal Power (JPL) into a special purpose vehicle (SPV), for purposes of transferring the unit to JSW Energy through sale of the entire share capital and other securities of the unit in terms of the share purchase agreement for an enterprise value of Rs 6500 crore plus the value of net current assets as on the closing date. The valuation may vary based upon the achievement of power purchase agreements (PPAs) as prescribed in the agreement subject to minimum of Rs 4000 crore plus the value of net current assets as on the closing date, JSPL said in a statement. The announcement was made before market hours today, 4 May 2016. Shares of JSW Energy were up 0.08% at Rs 66.65.

Index heavyweight and cigarette major ITC fell 1.29% to Rs 312.80 on reports that the Supreme Court today, 4 May 2016, told the tobacco industry to adhere to rules requiring stringent health warnings on cigarette packs. The stock hit a high of Rs 319.35 and a low of Rs 310.40 in intraday trade. The tobacco industry should not violate any rule prevailing as of today, the two-judge bench reportedly said, and added that the Karnataka high court should hear all pleas challenging the new rules. Last month, Indian tobacco companies shut down production in protest against requirements that 85% of a cigarette pack's surface be covered in health warnings, up from 20%. The tobacco industry has taken the government to court, saying the rules are impractical and will boost smuggling of imported cigarettes. The government backs the stringent rules to cut tobacco consumption.

Tata Motors declined 6.76% at Rs 381.80 after the company revised downward the rate of growth in sales volume for April 2016 from the figures announced previously. The company announced that its total sales rose 8.9% to 39,418 units in April 2016 over April 2015. The company had earlier announced 9.9% growth in total sales in April 2016. The company announced the revised monthly sales volume data after market hours yesterday, 3 May 2016.

Adani Ports and Special Economic Zone (APSEZ) tumbled 11.98% at Rs 207.65 on equity dilution worries after the company's board of directors decided to seek shareholders' approval to raise funds by way of issue of equity shares/convertible bonds up to Rs 10000 crore. APSEZ's consolidated net profit rose 38.34% to Rs 914.06 crore on 18% increase in total income to Rs 2161.65 crore in Q4 March 2016 over Q4 March 2015. EBITDA (earnings before interest, taxes, depreciation and amortization) excluding other income rose 12% to Rs 1225 crore in Q4 March 2016 over Q4 March 2015.

Cargo across all ports handled by the company rose 5% to 152 million metric tonnes (MMT) in the year ended 31 March 2016 over the year ended 31 March 2015. The company has given guidance of 10% to 15% growth in cargo volumes for the year ending 31 March 2017 (FY 2017). It has given guidance of 10% to 15% growth in net profit for FY 2017.

The Sensex and the Nifty edged lower for the third straight trading session. The Sensex has fallen 504.89 points or 1.97% in three trading sessions from its close of 25,606.62 on 29 April 2016. The Sensex has fallen 1,010.81 points or 3.87% in calendar year 2016 so far (till 4 May 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 2,610.12 points or 11.60%. The Sensex is off 3,474.60 points or 12.16% from a 52-week high of 28578.33 hit on 23 July 2015. The Sensex is off 4,922.01 points or 16.39% from a record high of 30,024.74 hit on 4 March 2015.

BANK NIFTY INTRADAY VIEW ( 04 / 05 )

BANKNIFTY INTRADAY LEVEL BANKNIFTY PROBABLE HIGHBANKNIFTY PROBABLE LOW
R416767BULL 1692716049
R316603UP BREAKOUT 1675116225
R216543UP CAUTION LEVEL FOR LONGLEVEL FOR SHORT
R116504SELL 1674516468
PIVOT16489  LAST DAYVERY STRONG BEAR
S116274BUY OPEN16571
S216234DOWN CAUTION HIGH16719.0
S316175DOWN BREAK OUT LOW16358.0
S416011BEAR CLOSE16388.7

BANKNIFTY


The Banking Sector Index

 BANKNIFTY DAILY VOLATALITY2.21%
 BANKNIFTY WEEKLY VOLATALITY4.07%
 BANKNIFTY WEEKLY HIGH17023.0
 BANKNIFTY WEEKLY LOW16358.0
 BANKNIFTY DAY MEAN16690.5

Tuesday, May 03, 2016

NIFTY INTRADAY VIEW ( 04 / 05 )

NIFTY INTRADAY LEVELNIFTY PROBABLE HIGHNIFTY PROBABLE LOW
R47910BULL79547648
R37840UP BREAKOUT78787724
R27814UP CAUTIONLEVEL FOR LONGLEVEL FOR SHORT
R17797SELL78707767
PIVOT7791 LAST DAYVERY STRONG BEAR
S17697BUYOPEN7825
S27680DOWN CAUTIONHIGH7890.0
S37654DOWN BREAK OUTLOW7735.0
S47584BEARCLOSE7747.0
NIFTY MONTHLY LEVELNIFTY DAILY VOLATALITY2.0%
R26082LONGNIFTY WEEKLY VOLATALITY3.32%
R15976SHORT EXITNIFTY WEEKLY HIGH7992.0
S15765LONG EXITNIFTY WEEKLY LOW7735.0
S25659SHORTNIFTY DAY MEAN7863.5

THE END SESSION ( 03 / 05 )

Benchmark indices edge lower for the second day in a row


IT, banking sector stocks, shares of public sector companies and index heavyweights ITC and Reliance Industries led losses for key benchmark indices triggered by weakness in global stocks. The barometer index, the S&P BSE Sensex, fell 207.27 points or 0.81% to settle at 25,229.70. The Nifty 50 index fell 58.90 points or 0.75% to settle at 7,747. World stocks fell after weak Chinese manufacturing data for April 2016. European stocks were hit additionally by strength in the euro against the dollar. The Sensex and the Nifty, both, hit 3-week closing low. The two key benchmark indices dropped for the second straight trading session.

State Bank of India (SBI) dropped after the bank announced reduction in lending rates by 5 basis points (bps) across tenures. Coal India edged lower as the company's coal production and offtake in April 2016 fell short of the company's internal target. Shares of public sector oil marketing companies (PSU OMCs) declined after the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas announced that the under-recoveries for the month of May 2016 on PDS Kerosene in Mumbai is expected to increase to Rs 9.12 per litre from Rs 8.73 per litre in April 2016.

Tata Steel eked out small gains on reports that the global metals group Liberty House will today, 3 May 2016, submit an indicative bid to buy Tata Steel's UK assets. Aurobindo Pharma surged on reports that a foreign brokerage has initiated coverage on the Aurobindo Pharma stock with an "outperform" rating. In overseas stock markets, European shares edged lower as the euro hit a roughly nine-month high against the dollar. Euro strength makes goods from European exporters more expensive to buy for holders of other currencies. Trading in US stock index futures pointed to losses for US stocks at the opening bell. Trading in US index futures indicated that the Dow Jones Industrial Average could slide 109.50 points at the opening bell today, 3 May 2016. Meanwhile, the San Francisco Federal Reserve President John Williams reiterated yesterday, 2 May 2016, his view that the US economy is ready for higher interest rates, but flagged the risk of broad-based declines in asset prices as a result.

Earlier during the global day, Asian stocks ended on a mixed note. Chinese stocks saw a divergent trend after the latest data showed deceleration in China's manufacturing activity in April 2016. In mainland China, the Shanghai Composite ended 1.85% higher. In Hong Kong, the Hang Seng index closed 1.85% lower. The Caixin China general manufacturing purchasing managers' index fell to 49.4 in April 2016 from 49.7 in March 2016. A reading below 50 indicates economic contraction. China's official manufacturing PMI, a competing gauge, came in at 50.1 in April 2016 compared with 50.2 in March 2016, according to data released by the National Bureau of Statistics on 1 May 2016. The Chinese economy is the world's second biggest economy after the United States. Meanwhile, Chinese leaders have called for strengthening the supervision of stock market and protecting investor interests, according to reports.

The Sensex fell 207.27 points or 0.81% to settle at 25,229.70, its lowest closing level since 12 April 2016. The index fell 244.03 points or 0.95% at the day's low of 25,192.94. The index rose 268.99 points or 1.05% at the day's high of 25,705.96.
The Nifty fell 58.90 points or 0.75% to settle at 7,747, its lowest closing level since 12 April 2016. The index fell 70.75 points or 0.9% at the day's low of 7,735.15. The index rose 84.35 points or 1.08% at the day's high of 7,890.25.

The market breadth indicating the overall health of the market was negative. On BSE, 1,476 shares declined and 1,164 shares rose. A total of 150 shares were unchanged. The BSE Mid-Cap index fell 0.85%. The decline in this index was higher than the Sensex's decline in percentage terms. The BSE Small-Cap index fell 0.28%. The decline in this index was lower than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 2718 crore, higher than turnover of Rs 2425.66 crore registered during the previous trading session.

Among sectoral indices on BSE, the S&P BSE Telecom index (up 2.09%), the S&P BSE Realty index (up 0.32%), the S&P BSE Industrials index (down 0.03%), the S&P BSE Consumer Discretionary Goods & Services index (down 0.23%), the S&P BSE Utilities index (down 0.3%), the S&P BSE Auto index (down 0.34%), the S&P BSE Basic Materials index (down 0.43%), the S&P BSE Capital Goods index (down 0.44%), the S&P BSE Power index (down 0.52%), the S&P BSE Consumer Durables index (down 0.57%), the S&P BSE Healthcare index (down 0.73%) and the S&P BSE Finance index (down 0.74%), outperformed the Sensex. The S&P BSE Teck index (down 0.97%), the S&P BSE Bankex (down 1.03%), the S&P BSE FMCG index (down 1.03%), the S&P BSE Oil & Gas index (down 1.04%), the S&P BSE Energy index (down 1.27%), the S&P BSE Metal index (down 1.34%) and the S&P BSE IT index (down 1.57%), underperformed the Sensex.

Most telecom stocks rose. Idea Cellular (up 1.91%) and Reliance Communications (up 1.33%), edged higher. Tata Teleservices (Maharashtra) (down 1.76%) and MTNL (down 2.39%), edged lower.

Bharti Airtel rose 1.97% to Rs 364.90. The company announced after market hours today, 3 May 2016, that its subsidiary Airtel M-Commerce Services has been renamed as Airtel Payments Bank after receiving necessary approvals from all concerned authorities. The company also unveiled a new logo to reflect its new identity. On 11 April 2016, Airtel Payments Bank became the first entity in India to receive a payments bank license from the Reserve Bank of India (RBI). The company plans to start rolling out its banking network in the second quarter of the current financial year. Airtel Payments Bank (which began operations in 2011 as Airtel M-Commerce Services) currently provides money transfer services and semi-closed wallet services (Airtel Money). The company has presence in 800 plus towns across India.

Shares of telecom tower company Bharti Infratel rose 1.83% to Rs 383.

Adani Ports and Special Economic Zone (APSEZ) rose 0.96% to Rs 235.90. On a consolidated basis, the company's net profit rose 38.34% to Rs 914.06 crore on 18% increase in total income to Rs 2161.65 crore in Q4 March 2016 over Q4 March 2015. EBITDA (earnings before interest, taxes, depreciation and amortization) excluding other income rose 12% to Rs 1225 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours today, 3 May 2016.

Cargo across all ports handled by the company rose 5% to 152 million metric tonnes (MMT) in the year ended 31 March 2016 over the year ended 31 March 2015. The company has given guidance of 10% to 15% growth in cargo volumes for the year ending 31 March 2017 (FY 2017). It has given guidance of 10% to 15% growth in net profit for FY 2017.

In a separate announcement, APSEZ said that its board of directors has decided to seek shareholders' approval to raise funds by issue of equity shares/convertible bonds for an aggregate amount of up to Rs 10000 crore. The board has also decided to seek shareholders' approval to issue secured/unsecured redeemable non-convertible debentures on private placement basis within the overall borrowing limits of the company.

Index heavyweight and cigarette major ITC fell 1.25% at Rs 316.90. The stock hit a high of Rs 323.25 and a low of Rs 314.50 in intraday trade.

Index heavyweight Reliance Industries (RIL) declined 1.04% at Rs 976.05. The stock hit a high of Rs 994.70 and a low of Rs 972.60 in intraday trade.

Tata Steel rose 0.48% at Rs 348.45 on reports that the global metals group Liberty House will today, 3 May 2016, submit an indicative bid to buy Tata Steel's UK assets. Tata Steel has put Tata Steel, UK on the block due to the deteriorating financial performance of the UK subsidiary.

IT stocks witnessed selling pressure. Hexaware Technologies (down 2.7%), Tech Mahindra (down 2.11%), HCL Technologies (down 1.84%), Oracle Financial Services Software (down 1.8%), TCS (down 1.78%), MindTree (down 1.73%), Wipro (down 0.86%) and Persistent Systems (down 0.64%) edged lower. MphasiS rose 0.28%.
Index heavyweight and software major Infosys fell 1.66% at Rs 1,180.75. The stock hit a high of Rs 1,212.05 and a low of Rs 1,174.30 in intraday trade.

Most pharmaceutical shares declined. Lupin (down 2.34%), Sun Pharmaceutical Industries (down 1.61%), Wockhardt (down 1.49%), Divi's Laboratories (down 1.32%), Cadila Healthcare (down 1.23%), Alkem Laboratories (down 1.16%), GlaxoSmithKline Pharmaceuticals (down 1.13%), Glenmark Pharmaceuticals (down 0.7%) and Cipla (down 0.37%), edged lower. IPCA Laboratories (up 0.08%), Strides Shasun (up 1.21%) and Piramal Enterprises (up 1.33%), edged higher.

Shares of Dr Reddy's Laboratories fell 1.69% at Rs 2,961.10, with the stock extending previous trading session's slide. The stock had declined 2.65% to settle at Rs 3,012.10 yesterday, 2 May 2016.

Aurobindo Pharma surged 4.19% at Rs 801.95 on reports that a foreign brokerage has initiated coverage on the Aurobindo Pharma stock with an "Outperform" rating. The brokerage has reportedly said in a research report that Aurobindo Pharma is a beneficiary of faster approvals for its drugs in the US. It added that all key plants of the company are compliant with the US Food and Drug Administration (USFDA) norms. The brokerage expects Aurobindo's US sales to rise at a CAGR of 20% over next two years. The US market contributes 80% to Aurobindo's profits, according to the brokerage.

Bank stocks edged lower. Among public sector banks, UCO Bank (down 2.8%), Bank of India (down 2.61%), Canara Bank (down 2.43%), Andhra Bank (down 2.27%), Punjab National Bank (down 1.66%), Bank of Baroda (down 1.64%), Corporation Bank (down 1.57%), Union Bank of India (down 1.43%), Syndicate Bank (down 1.16%), IDBI Bank (down 1.09%), Allahabad Bank (down 0.79%), Vijaya Bank (down 0.63%), Bank of Maharashtra (down 0.51%), Dena Bank (down 0.51%), Punjab and Sind Bank (down 0.42%), United Bank of India (down 0.26%), Indian Bank (down 0.1%) and Central Bank of India (down 0.06%), edged lower.

State Bank of India (SBI) fell 1.18% at Rs 184.20 after the bank announced reduction in lending rates by 5 basis points (bps) across tenures. SBI's Marginal Cost of Funds based Lending Rate (MCLR) for overnight loans will be 8.9%. MCRL for one-month loans will be 9% and for three-month loans it will be 9.05%. The MCLR on 6-month loans will be 9.1% and for one-year loans the rate would be 9.15%, the bank said. MCLR for two-year loans would be at 9.25% and loans with three-year maturity would carry an MCLR of 9.3%, the bank said. The announcement was made after trading hours yesterday, 2 May 2016.

All rupee loans sanctioned and credit limits renewed with effect from 1 April 2016 are priced with reference to the Marginal Cost of Funds based Lending Rate (MCLR) which is the internal benchmark of the concerned bank. Actual lending rates are determined by adding the components of spread to the MCLR.

Among private sector banks, ICICI Bank (down 2.47%), Yes Bank (down 1.4%), Kotak Mahindra Bank (down 1.39%), Axis Bank (down 0.46%), IndusInd Bank (down 0.33%) and HDFC Bank (down 0.04%), edged lower. Federal Bank (up 0.86%) and City Union Bank (up 1.91%), edged higher.

Shares of public sector companies declined. Bharat Heavy Electricals (Bhel) (down 2.58%), ONGC (down 1.24%), GAIL (India) (down 1.08%), NTPC (down 1.01%), Bharat Electronics (down 1%) and NMDC (down 0.51%) edged lower.

Shares of public sector oil marketing companies (PSU OMCs) declined after the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas announced that the under-recoveries for the month of May 2016 on PDS Kerosene in Mumbai is expected to increase to Rs 9.12 per litre from Rs 8.73 per litre in April 2016. BPCL (down 1.25%) and HPCL (down 0.74%) edged lower.

Indian Oil Corporation (IOCL) fell 1.61%. The company after market hours yesterday, 2 May 2016, announced that in accordance with the approval accorded by Cabinet Committee on Economic Affairs (CCEA) on 13 May 2013, the Government of India (GOI) has offered 1.21 crore shares to the eligible employees of the company at a discounted price of Rs 367.65 per share. In connection with this, action has been initiated by the company for sale of equity shares to the eligible employees by the GOI, IOCL said. The offer for sale of share shall remain open from 2 May 2016 to 10 May 2016, IOCL said. GOI is the principal shareholders of IOCL. It holds 58.57% stake in IOCL.

Shares of state-run coal mining giant Coal India fell 3.07% at Rs 279.85 as the company's coal production and offtake in April 2016 fell short of the company's internal target. Coal India and its subsidiaries on provisional basis achieved 90% of targeted production at 40.09 million tonnes and 83% of targeted offtake at 42.45 million tonnes in April 2016. The announcement was made after market hours yesterday, 2 May 2016.

On the macro front, data released by the government after market hours yesterday, 2 May 2016, showed that the core sector registered a strong growth of 6.4% in March 2016 over March 2015. The eight core industries comprising of coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity have nearly 38% weightage in the index of industrial production (IIP). The core sector registered a growth of 2.7% in the year ended 31 March 2016 over the year ended 31 March 2015.
The Sensex and the Nifty edged lower for the second straight trading session. The Sensex has fallen 376.92 points or 1.47% in two trading sessions from its close of 25,606.62 on 29 April 2016. The Sensex has fallen 882.84 points or 3.38% in calendar year 2016 so far (till 3 May 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 2,738.09 points or 12.17%. The Sensex is off 3,346.63 points or 11.71% from a 52-week high of 28578.33 hit on 23 July 2015. The Sensex is off 4,794.04 points or 15.97% from a record high of 30,024.74 hit on 4 March 2015.

Monday, May 02, 2016

NIFTY INTRADAY VIEW ( 03 / 05 )

NIFTY INTRADAY LEVELNIFTY PROBABLE HIGHNIFTY PROBABLE LOW
R47887BULL79737696
R37854UP BREAKOUT79037765
R27842UP CAUTIONLEVEL FOR LONGLEVEL FOR SHORT
R17834SELL79047800
PIVOT7811LAST DAYCONFUSION TREND
S17778BUYOPEN7823
S27770DOWN CAUTIONHIGH7830.0
S37758DOWN BREAK OUTLOW7777.0
S47725BEARCLOSE7805.9
NIFTY MONTHLY LEVELNIFTY DAILY VOLATALITY0.68%
R26082LONGNIFTY WEEKLY VOLATALITY2.76%
R15976SHORT EXITNIFTY WEEKLY HIGH7992.0
S15765LONG EXITNIFTY WEEKLY LOW7777.0
S25659SHORTNIFTY DAY MEAN7884.5

THE END SESSION ( 02 / 05 )

Sensex, Nifty hit lowest closing level in almost 3 weeks


Stocks of public sector banks and index heavyweights HDFC Bank, ITC and Infosys led losses for key benchmark indices on the first trading session of the week. The barometer index, the S&P BSE Sensex, fell 169.65 points or 0.66% to settle at 25,436.97. The decline for the Nifty 50 index was lower than the Sensex's fall in percentage terms. The Nifty fell 43.90 points or 0.56% to settle at 7,805.90. Data showing slowdown in growth in manufacturing sector in April 2016 and weakness in Japanese stocks weighed on the domestic bourses. The Sensex and the Nifty remained in negative zone throughout the trading session after opening with a downward gap. The two key benchmark indices hit their lowest closing level in almost three weeks.

Meanwhile, Minister of State for finance Jayant Sinha said in a written reply to a question in Lok Sabha on 29 April 2016 that the government is committed to implement General Anti Avoidance Rule (GAAR) in the country from 1 April 2017. He further said that the government will constitute a panel as mandated by the law and also provide for the guidelines on practical aspects relating to implementation of GAAR in due course.

Maruti Suzuki India edged higher after the company reported modest growth in sales volumes for the month just gone by. ICICI Bank edged lower on reports that a foreign brokerage has cut its earnings estimates for the private sector bank by 15% to 16% for FY 2017 and FY 2018. Federal Bank reversed intraday losses after an unnamed executive of the Kerala based private sector bank was quoted as saying that he expects addition to bad loans for the bank to be lower in FY 2017 compared with FY 2016. InterGlobe Aviation edged lower after announcing muted growth in Q4 earnings.

In overseas stock markets, Japanese stocks edged lower as the yen surged to 1-1/2-year high against the dollar. The Nikkei 225 Average ended 3.11% lower. The stronger yen makes Japanese exports less competitive and cuts into the value of repatriated earnings. Japanese stocks extended losses registered during the previous trading session triggered by the Bank of Japan's (BOJ) decision to keep its policies unchanged. Speculation was rife that the Japanese central bank would announce a further easing of the monetary policy to stimulate Japan's economy. Japanese markets were closed on Friday, 29 April 2016, for a national holiday. Many other Asian markets were closed today, 2 May 2016, for a holiday. Most European stocks rose as a sharp decline in the previous session prompted investors to look for bargains.

US stocks edged lower during the previous trading session on Friday, 29 April 2016, after weak consumer spending data for March 2016 and after the monthly Chicago Business Barometer index for April showed slowdown in the manufacturing sector. The Chicago Business Barometer decreased 3.2 points to 50.4 in April from 53.6 in March led by a fall in new orders and a sharp drop in order backlogs. It marked a slow start to the second quarter, with most measures down from levels seen a year earlier.
The Sensex fell 169.65 points or 0.66% to settle at 25,436.97, its lowest closing level since 12 April 2016. The index lost 265.48 points or 1.03% at the day's low of 25,341.14. The index lost 41.18 points or 0.16% at the day's high of 25,565.44.

The Nifty 50 index fell 43.90 points or 0.56% to settle at 7,805.90, its lowest closing level since 12 April 2016. The index lost 72.50 points or 0.92% at the day's low of 7,777.30. The index lost 20 points or 0.25% at the day's high of 7,829.80.

The market breadth indicating the overall health of the market was negative. On BSE, 1,327 shares declined and 1,283 shares rose. A total of 118 shares were unchanged. The BSE Mid-Cap index rose 1.1%. The BSE Small-Cap index rose 0.39%. Both these indices outperformed the Sensex.

The total turnover on BSE amounted to Rs 2411 crore, lower than turnover of Rs 2817.96 crore registered during the previous trading session.

Among sectoral indices on BSE, the S&P BSE Basic Materials index (up 1.29%), the S&P BSE Consumer Durables index (up 1.07%), the S&P BSE Metal index (up 1.02%), the S&P BSE Energy index (up 0.26%), the S&P BSE Oil & Gas index (up 0.25%), the S&P BSE Consumer Discretionary Goods & Services index (up 0.24%), the S&P BSE Utilities index (up 0.18%), the S&P BSE Auto index (up 0.16%), the S&P BSE Power index (up 0.05%), the S&P BSE FMCG index (up 0.02%), the S&P BSE Capital Goods index (down 0.05%), the S&P BSE Industrials index (down 0.16%), the S&P BSE Healthcare index (down 0.19%), the S&P BSE Finance index (down 0.49%), the S&P BSE Realty index (down 0.59%), the S&P BSE IT index (down 0.65%) and the S&P BSE Teck index (down 0.65%), outperformed the Sensex. The S&P BSE Telecom index (down 0.8%) and the S&P BSE Bankex (down 1.34%), underperformed the Sensex.

Mahindra & Mahindra (M&M) rose 0.3% to Rs 1,335.75 after reporting good auto sales in April 2016. The company's total automobile sales increased 14% to 41,863 units in April 2016 over April 2015. Sales in the domestic market rose 14% to 39,357 units in April 2016 over April 2015. Exports rose 11% to 2,506 units in April 2016 over April 2015.

The company's total tractor sales increased 19% to 21,386 units in April 2016 over April 2015. Sales in the domestic market rose 22% to 20,704 units in April 2016 over April 2015. Exports fell 32% to 682 units in April 2016 over April 2015. The company disclosed the sales volume data during market hours today, 2 May 2016.

Maruti Suzuki India (Maruti) rose 0.91% to Rs 3,829.55 after the company reported 13.3% growth in its total sales at 1.26 lakh units in April 2016 over April 2015. 

Domestic sales rose 16.2% to 1.17 lakh units in April 2016 over April 2015. Exports declined 13.7% to 9,524 units in April 2016 over April 2015. The company announced the monthly sales volume data during market hours today, 2 May 2016.

Bajaj Auto fell 0.42% to Rs 2,474.20 after the company announced that its total sales declined 2% to 3.30 lakh units in April 2016 over April 2015. Motorcycles sales rose 2% to 2.91 lakh units in April 2016 over April 2015. Sales of commercial vehicles dropped 24% to 38,211 units in April 2016 over April 2015. Exports declined 36% to 1.03 lakh units in April 2016 over April 2015. The company announced the monthly sales volume data during market hours today, 2 May 2016.

Index heavyweight and cigarette major ITC lost 1.2% at Rs 320.90. The stock hit a high of Rs 325.50 and a low of Rs 319.50 in intraday trade.

Index heavyweight and software major Infosys fell 0.84% at Rs 1,200.65. The stock hit a high of Rs 1,214 and a low of Rs 1,196.30 in intraday trade.

Stocks of public sector banks declined. Punjab National Bank (down 3.27%), Bank of India (down 2.54%), Canara Bank (down 2.31%), Allahabad Bank (down 2.23%), Bank of Baroda (down 1.61%), United Bank of India (down 1.53%), Bank of Maharashtra (down 1.34%), Punjab and Sind Bank (down 1.1%), Syndicate Bank (down 1.01%), Union Bank of India (down 0.98%), IDBI Bank (down 0.79%), Corporation Bank (down 0.78%), UCO Bank (down 0.75%), Dena Bank (down 0.67%), Vijaya Bank (down 0.47%), Andhra Bank (down 0.45%), Central Bank of India (down 0.37%) and Indian Bank (down 0.2%), edged lower.

State Bank of India (SBI) fell 1.35% to Rs 186.40. The bank after trading hours today, 2 May 2016, announced reduction in lending rates by 5 basis points (bps) across tenures. SBI's Marginal Cost of Funds based Lending Rate (MCLR) for overnight loans will be 8.90%. MRCL for one-month loans will be 9% and for three-month loans it will be 9.05%. The MCLR on 6-month loans will be 9.10% and for one-year loans the rate would be 9.15%, the bank said. MCLR for two-year loans would be at 9.25% and loans with three-year maturity would carry an MCLR of 9.30%, the bank said.
All rupee loans sanctioned and credit limits renewed with effect from 1 April 2016 are priced with reference to the Marginal Cost of Funds based Lending Rate (MCLR) which is the internal benchmark of the concerned bank. Actual lending rates are determined by adding the components of spread to the MCLR.

Stocks of private sector banks were mixed. IndusInd Bank (down 0.49%) and Axis Bank (down 0.07%), edged lower. City Union Bank (up 0.37%) and Kotak Mahindra Bank (up 0.39%) edged higher.

Index heavyweight HDFC Bank fell 1.37% at Rs 1,117.95 . The stock hit a high of Rs 1,130.70 and a low of Rs 1,115 in intraday trade.

Yes Bank rose 0.17% at Rs 945.25 after the Reserve Bank of India (RBI) gave its approval for the increase in investment limit by foreign Investors in the bank to 60% from earlier 49%. The Reserve Bank of India (RBI) made the notification on Friday, 29 April 2016. RBI notified on Friday, 29 April 2016, that foreign institutional investors (FIIs)/registered foreign portfolios investors (RFPIs) can now invest up to 60% of the paid-up capital of the bank from existing 49% under the Portfolio Investment Scheme (PIS). The RBI notified that the total foreign investment from all sources i.e. Global Depository Receipts (GDR)/American Depository Receipts (ADR)/Foreign Direct Investment (FDI)/Foreign Institutional Investors (FII)/ Registered Foreign Portfolios Investors (RFPIs)/Non-Resident Indians (NRI)/Persons of Indian Origin (PIO) in the company shall not exceed 60%. The central bank stated that Yes Bank has passed resolutions at its Board of Directors' level and a special resolution by the shareholders, agreeing for enhancing the limit for the purchase of its equity shares and convertible debentures by FIIs/RFPIs. The purchases could be made through primary market and stock exchanges.

ICICI Bank lost 4.08% at Rs 226.95 on reports that a foreign brokerage has cut its earnings estimates for the private sector bank by 15% to 16% for FY 2017 and FY 2018. The brokerage has reportedly maintained its neutral rating on the stock. Shares of ICICI Bank declined 1.47% to settle at Rs 236.60 during the previous trading session on Friday, 29 April 2016, after the bank reported increase in sticky loans. ICICI Bank's net profit declined 75.97% to Rs 701.89 crore on 14.51% growth in total income to Rs 18590.86 crore in Q4 March 2016 over Q4 March 2015. The result was announced during trading hours on Friday, 29 April 2016.

ICICI Bank has created a collective contingency and related reserve of Rs 3600 crore in Q4 March 2016 over and above provisions made for non-performing and restructured loans. This contingency provision is towards exposure to stress assets in certain sectors, including iron and steel, mining, power, rigs and cement. The weak global economic environment, the sharp downturn in the commodity cycle and the gradual nature of the domestic economic recovery has adversely impacted the borrowers in these sectors. Given the weak operating and recovery environment, it may take some time for resolution of stress on borrowers in these sectors, according to ICICI Bank.

Federal Bank reversed intraday losses after an unnamed executive of the Kerala based private sector bank was quoted as saying that he expects addition to bad loans for the bank to be lower in FY 2017 compared with FY 2016. The stock rose 1.31% at Rs 46.55. The stock hit a high of Rs 47.55 and a low of Rs 43.75 in intraday trade. The bank's net profit slumped 96.34% to Rs 10.26 crore on 1.76% rise in total income to Rs 2253.38 crore in Q4 March 2016 over Q4 March 2015. The result was announced on Saturday, 30 April 2016. Federal Bank's gross non-performing advances stood at Rs 1667.77 crore as on 31 March 2016 compared with Rs 1684.11 crore as on 31 December 2015 and Rs 1057.73 crore as on 31 March 2015. The ratio of gross non-performing advances to gross advances stood at 2.84% as on 31 March 2016 compared with 3.15% as on 31 December 2015 and 2.04% as on 31 March 2015. The ratio of net non-performing advances to net advances stood at 1.64% as on 31 March 2016 as against 1.66% as on 31 December 2015 and 0.73% as on 31 March 2015. The bank's provisions and contingencies fell 2.3% to Rs 388.64 crore in Q4 March 2016 over Q4 March 2015.

Index heavyweight and housing finance major HDFC rose 0.36% to Rs 1,092.75 after net profit rose 39.98% to Rs 2607.05 crore on 23.72% growth in total income to Rs 9225.72 crore in Q4 March 2016 over Q4 March 2015. The result was announced during market hours today, 2 May 2016.

HDFC's provisions for contingencies jumped 990% to Rs 545 crore in Q4 March 2016 over Q4 March 2015. The sharp surge in provisions is due to an additional provision of Rs 450 crore in Q4 March 2016 towards standard assets and other contingencies.
HDFC's loan book increased to Rs 2.59 lakh crore as on 31 March 2016, from Rs 2.28 lakh crore as on 31 March 2015. This is after considering the loans sold during the preceding 12 months amounting to Rs 12773 crore.

On consolidated basis, HDFC's net profit rose 30.76% to Rs 3460.46 crore on 15.52% growth in total income to Rs 17012 crore in Q4 March 2016 over Q4 March 2015. HDFC said that the company has sold 17.95 crore shares of HDFC Standard Life Insurance Company to Standard Life Mauritius Holdings 2006, in Q4 March 2016, resulting in a gain of Rs 1422.20 crore. The sale consideration has been received subsequent to the balance sheet date, HDFC said. The profit on sale has been accounted as excess of sale value over proportionate share in the net assets of the group.

InterGlobe Aviation edged lower after announcing muted growth in Q4 earnings. The stock lost 4.51% at Rs 1,023.80. The company's net profit rose 0.3% to Rs 579.31 crore on 7% growth in income from operations to Rs 4090.67 crore in Q4 March 2016 over Q4 March 2015. Earnings before interest, taxes, depreciation, amortization and aircraft and engine rentals (EBITDAR) rose 9.84% to Rs 1548.01 crore in Q4 March 2016 over Q4 March 2015. EBITDAR margin edged higher to 37.8% in Q4 March 2016, from 36.9% in Q4 March 2015. The result was announced after market hours on Friday, 29 April 2016.

The company achieved load factor of 85.1% in Q4 March 2016, up 230 basis points from the corresponding previous year quarter. The company has started getting deliveries of the A320neo aircrafts. InterGlobe Aviation's President and Whole-time Director Aditya Ghosh said that the A320neo powered by Pratt and Whitney's fuel-efficient geared turbo fan engines will enable the company to structurally reduce fuel costs, which are the single largest element of cost structure for the company.

Meanwhile, the outcome of a monthly survey showed that growth in India's manufacturing sector eased last month amid broadly stagnant inflows of new work. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) fell to 50.5 in April 2016 from 52.4 in March 2016. Indian manufacturers saw incoming new orders broadly stagnate in April, following three consecutive months of growth. New export orders expanded at the slowest pace since last October. Input cost inflation accelerated to the fastest since May 2015. Part of the additional cost burden was passed on to clients as selling prices rose further.

The Sensex has fallen 676.57 points or 2.59% in calendar year 2016 so far (till 2 May 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 2,944.36 points or 13.09%. The Sensex is off 3,140.36 points or 10.99% from a 52-week high of 28578.33 hit on 23 July 2015. The Sensex is off 4,587.77 points or 15.28% from a record high of 30,024.74 hit on 4 March 2015.

Sunday, May 01, 2016

NIFTY INTRADAY VIEW ( 02 / 05 )

NIFTY INTRADAY LEVELNIFTY PROBABLE HIGHNIFTY PROBABLE LOW
R47959BULL80117774
R37913UP BREAKOUT79527833
R27896UP CAUTIONLEVEL FOR LONGLEVEL FOR SHORT
R17885SELL79577855
PIVOT7843 LAST DAYBULL WITH LV
S17814BUYOPEN7844
S27803DOWN CAUTIONHIGH7889.0
S37787DOWN BREAK OUTLOW7789.0
S47741BEARCLOSE7849.8
NIFTY MONTHLY LEVELNIFTY DAILY VOLATALITY1.28%
R26082LONGNIFTY WEEKLY VOLATALITY2.61%
R15976SHORT EXITNIFTY WEEKLY HIGH7992.0
S15765LONG EXITNIFTY WEEKLY LOW7789.0
S25659SHORTNIFTY DAY MEAN7890.5

Saturday, April 30, 2016

THE WEEK AHEAD

Quarterly earnings of India Inc, global cues to dictate trend


Macroeconomic data, next batch of Q4 results of India Inc., trend in global markets, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), the movement of rupee against the dollar and crude oil price movement will dictate market trend in the near term. Stock markets in Hong Kong and China are closed on Monday, 2 May 2016, for a public holiday.

Investors will closely track the next batch of Q4 results of India Inc. HDFC announces its Q4 March 2016 result on Monday, 2 May 2016. Adani Ports and Special Economic Zone will announce its Q4 March 2016 result on Tuesday, 3 May 2016. Eicher Motors and Hero MotoCorp will declare their Q4 March 2016 results on Thursday, 5 May 2016.
Stocks of auto companies will be in focus as companies start unveiling monthly sales volume data for April 2016 from Sunday, 1 May 2016.

Stocks of public sector oil marketing companies (PSU OMCs) will be in focus as a fuel price review is due on Saturday, 30 April 2016. PSU OMCs undertake fuel price review twice during the month based on the trend in international oil market. The first price review takes place during the middle of the month and the second on the last day of the month.

Airline stocks will be in focus as a monthly review of jet fuel prices is due on Saturday, 30 April 2016. PSU OMCs review jet fuel prices on the last day every month based on the average imported crude oil price for the month. Jet fuel prices are directly linked to crude oil price.

In the primary market, the initial public offer (IPO) of dairy firm Parag Milk Foods opens for bidding on Wednesday, 4 May 2016. The issue closes on Friday, 6 May 2016. The price band of the IPO is Rs 220 to Rs 227 per share.

On political front, developments in budget session of Parliament will be closely watched. The second part of the budget session of Parliament commenced on 25 April 2016, after a month long recess and will conclude on 13 May 2016, during which government hopes to receive support of opposition parties in passage of key legislations including the Goods & Services Tax (GST) Bill.

Among domestic macro economic data, Markit Economics will announce the India Manufacturing PMI for April 2016 on Monday, 2 May 2016. The Nikkei India Services PMI will be declared on Wednesday, 4 May 2016.

On the global front, China's official April manufacturing purchasing managers' index will be announced on Sunday, 1 May 2016. April's non-manufacturing PMI will also be released on the same day. On Monday, 2 May 2016, Markit Economics will announce the Nikkei Japan Manufacturing PMI, Markit Eurozone Manufacturing PMI and the Markit US Manufacturing PMI. Markit Economics will announce Caixin China General Manufacturing PMI on Tuesday, 3 May 2016. The influential monthly US nonfarm payroll data for April 2016 will be released by the Labor Department on Friday, 6 May 2016.

THE WEEK THAT WAS

Market drops on weak global cues


Key benchmark indices dropped in the week ended Friday, 29 April 2016 on weak global cues. The barometer index, the S&P BSE Sensex, failed to hold onto the psychological 26,000 mark after regaining that mark the during the week. Key indices edged higher in three out of five trading sessions during the week. World stocks fell after the Bank of Japan left its main policies unchanged after the conclusion of a two-day monetary policy meeting, disappointing market expectations the central bank would take further extraordinary steps to stimulate Japan's economy.

In the week ended Friday, 29 April 2016, the 30-share S&P BSE Sensex fell 231.52 points or 0.9% to settle at 25,606.62. The losses for the Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty fell 49.50 points or 0.63% to settle at 7,849.80.

The BSE Mid-Cap index rose 24.28 points or 0.22% to settle at 11,042.92, outperforming the Sensex. The BSE Small-Cap index shed 58.25 points or 0.53% to settle at 11,020.59. The fall in this index was lower than Sensex's decline in percentage terms.

Trading for the week started on a weak note. Stocks of public sector banks, pharma and metal firms and index heavyweights Reliance Industries, HDFC and ITC led losses for key benchmark indices on Monday, 25 April 2016. The Sensex fell 159.21 points or 0.62% to settle at 25,678.93, its lowest closing level since 13 April 2016.

Key benchmark indices logged strong gains on Tuesday, 26 April 2016, reversing intraday losses, led by gains in banking stocks and index heavyweights HDFC, ITC and Infosys. The Sensex rose 328.37 points or 1.28% to settle at 26,007.30, its highest closing level since 1 January 2016.

A divergent trend for various index constituents resulted in small gains for the two key benchmark indices on Wednesday, 27 April 2016. The Sensex rose 56.82 points or 0.22% to settle at 26,064.12, its highest closing level since 1 January 2016.

A disappointment from the Japanese central bank, which held off from expanding monetary stimulus, pulled global stocks lower, with Indian stocks witnessing a sharp slide on Thursday, 28 April 2016. The Sensex slumped 461.02 points or 1.77% to settle at 25,603.10, its lowest closing level since 12 April 2016.

Key benchmark indices logged small gains in a volatile trading session on Friday, 29 April 2016. The Sensex rose 3.52 points or 0.01% to settle at 25,606.62, its highest closing level since 27 April 2016.

Among the 30-share Sensex pack, 22 stocks declined and the rest of them rose in the week ended Friday, 29 April 2016.

HDFC Bank (up 3.77%), Adani Ports and Special Economic Zone (up 3.36%) and Cipla (up 1.03%) edged higher from the Sensex pack.

State Bank of India (down 5.48%), HDFC (down 3.77%) and Hero MotoCorp (down 3.32%) edged lower from the Sensex pack.

Index heavyweight Reliance Industries (RIL) dropped 5.41%. RIL's consolidated net profit rose 15.93% to Rs 7398 crore on 10.95% fall in total income to Rs 62010 crore in Q4 March 2016 over Q4 March 2015. The result was announced after trading hours on Friday, 22 April 2016. Strong operating performance from refining and petrochemicals businesses coupled with favorable exchange rate movement was partially offset by lower contribution from oil and gas business. The decline in revenue was led by the 41.4% decline in benchmark oil price which averaged at $30.4 per barrel in Q4 March 2016 as compared to $51.9 per barrel in Q4 March 2015. Based on standalone performance, the gross refining margin (GRM) increased to $10.80 per barrel in Q4 March 2016 from $10.10 per barrel in Q4 March 2015.

RIL did not specify when exactly it would start commercial roll out of telecom services. RIL said that the commercial roll out is expected in coming months. Reliance Jio Infocomm (RJIL) launched full-scale service offerings for the RIL group employees, partners, vendors and associates on a trial basis on 28 December 2015. RIL's telecom business is being carried out through its subsidiary RJIL.

Maruti Suzuki India slipped 0.59%. The company reported 11.72% fall in net profit to Rs 1133.60 crore on 10.62% rise in total income to Rs 15426.90 crore in Q4 March 2016 over Q4 March 2015. The company's board of directors has recommended a final dividend of Rs 35 per share for the year ended 31 March 2016. The company's sales volumes rose 3.9% to 3.6 lakh vehicles in Q4 March 2016 over Q4 March 2015. Loss of 10,000 units due to Jat reservation agitation in Haryana, increased advertising expenses and lower other income impacted profits during Q4 March 2016. Maruti's other income dropped 62.11% to Rs 121.20 crore in Q4 March 2016 over Q4 March 2015. The result was announced during market hours on Tuesday, 26 April 2016.

IT stocks were mmixed. Infosys (down 0.25%) and Wipro (down 0.72%) fell. TCS gained 4.67%. The S&P BSE IT index slipped 0.14% during the week.

Global credit rating agency Moody's Investors Service said in a sector report that it expects the Indian IT services sector to maintain global market share gains despite headwinds. According to Moody's, economic stability in developed countries will fuel growth for the global IT services outsourcing industry, benefiting Indian IT services companies in particular. However, currency volatility will pressure growth estimates for the Indian IT services sector, according to Moody's. While revenue is predominantly denominated in US dollar and euro for the Indian IT services sector, the cost base remains primarily denominated in Indian currency, resulting in a potential mismatch.

Axis Bank fell 0.51%. The bank's net profit fell 1.2% to Rs 2154.28 crore on 9.75% rise in total income to Rs 13592.97 crore in Q4 March 2016 over Q4 March 2015. The Q4 March 2016 results were announced after trading hours on Tuesday, 26 April 2016. The bank's management in a conference call on Tuesday, 26 April 2016 said that it expects bad loans to rise and credit costs to be sharply higher in the current financial year. The bank's gross non-performing assets (NPAs) stood at Rs 6087.51 crore as on 31 March 2016 as against Rs 5724.05 crore as on 31 December 2015 and Rs 4110.19 crore as on 31 March 2015. The ratio of gross NPAs to gross advances stood at 1.67% as on 31 March 2016 as against 1.68% as on 31 December 2015 and 1.34% as on 31 March 2015. The ratio of net NPAs to net advances stood at 0.7% as on 31 March 2016 as against 0.75% as on 31 December 2015 and 0.44% as on 31 March 2015. The bank's provisions and contingencies jumped 64.59% to Rs 1168.33 crore in Q4 March 2016 over Q4 March 2015. Axis Bank created a contingency asset provision of Rs 300 crore in Q4 March 2016 taking the cumulative balance of contingency asset provisions to Rs 480 crore as on 31 March 2016. The cumulative value of net restructured advances as on 31 March 2016 stood at Rs 8072 crore, constituting 2.25% of net customer assets, compared to Rs 7745 crore, constituting 2.31% of net customer assets as on 31 December 2015.

Bharti Airtel rose 2.99%. The company's consolidated net profit rose 2.78% to Rs 1290.30 crore on 8.43% rise in total income to Rs 24983.10 crore in Q4 March 2016 over Q4 March 2015. The result as per the International Financial Reporting Standards (IFRS) was announced after market hours on Wednesday, 27 April 2016. Stable currencies in most of the geographies resulted in lower forex and derivative losses of Rs 190 crore in Q4 March 2016 compared to Rs 1081 crore in Q4 March 2015. Bharti Airtel's bottom line during the quarter was impacted due to higher exceptional expenses.

Meanwhile, Bharti Airtel before market hours on Friday, 29 April 2016 said that it will undertake buyback of shares only after the approval from Delhi High Court for the scheme of amalgamation of its wholly owned subsidiary with the company. Bharti Airtel said that the scheme of amalgamation of Augere Wireless Broadband India (Augere), a wholly owned subsidiary with the company is under consideration for approval by the Delhi High Court. Bharti Airtel's board of directors at its meeting held on 27 April 2016, approved the proposal to buyback the shares on a proportionate basis through a tender offer. The buyback shall be up to an aggregate amount not exceeding Rs 1434 crore at a price of Rs 400 per share translating into approximately 3.58 crore shares, representing 0.9% of the total paid up equity share capital of the company.

ICICI Bank dropped 6.09% to Rs 236.60 and was the top loser from the Sensex. ICICI Bank's net profit declined 75.97% to Rs 701.89 crore on 14.51% growth in total income to Rs 18590.86 crore in Q4 March 2016 over Q4 March 2015. The result was announced during market hours on Friday, 29 April 2016. The bank's gross non-performing advances (net of write-off) stood at Rs 26221.25 crore as on 31 March 2016 compared with Rs 21149.19 crore as on 31 December 2015 and Rs 15094.69 crore as on 31 March 2015. The ratio of gross non-performing advances to gross advances stood at 5.82% as on 31 March 2016 compared with 4.72% as on 31 December 2015 and 3.78% as on 31 March 2015. The ratio of net non-performing advances to net advances stood at 2.98% as on 31 March 2016 as against 2.28% as on 31 December 2015 and 1.61% as on 31 March 2015. ICICI Bank said that the increase in non-performing assets was primarily due to the continuing challenges in the operating and recovery environment and the Reserve Bank of India's (RBI) objective of early recognition of stress and provisioning for the banking sector. The RBI has directed India's banks to review certain loan accounts and their classification over a period of two quarters starting from Q3 December 2015. ICICI Bank said that it has now completed the exercise of review of classification of cases highlighted by RBI.

Drug maker Lupin rose 3.18%. The company announced on Thursday, 28 April 2016. that it has re-introduced Methergine (methylergonovine maleate) Oral Tablets 0.2mg in the US for the prevention and management of postpartum hemorrhage. Methergine is the only FDA-approved oral uterotonic and is a preferred oral agent in the management of PPH, according to guidelines issued by the American Congress of Obstetricians and Gynecologists (ACOG).

On the global front, the Bank of Japan unexpectedly held off from expanding monetary stimulus on Wednesday, 27 April 2016. The Bank of Japan (BOJ) voted to keep its current level of asset purchases unchanged and rates on hold while announcing a ¥300 billion ($2.69 billion) lending program to support banks in the region hit by this month's Kyushu earthquake. Speculation was rise that the Japanese the central bank would announce a further easing of the monetary policy to stimulate Japan's economy.

Meanwhile, the Federal Reserve left interest rates unchanged after the conclusion of a two-day monetary policy meeting on Wednesday, 27 April 2016. The Fed's signal that it was in no rush to raise rates relieved investors. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2% inflation, the Fed said in its monetary policy statement. The US central bank's mandate centers on maximizing employment and keeping inflation at a 2% target level, which is considered a healthy level of price increases.
Data on Monday, 25 April 2016 showed that German business sentiment deteriorated unexpectedly in April. The Ifo's business climate index slipped to 106.6 in April from 106.7 in March, bringing it further below levels seen at the end of last year. The Ifo's measure of the current business situation dropped to 113.2 in April from 113.8 in March, but its gauge of business expectations rose to 100.4 from 100 the previous month. The German economy is the Europe's biggest economy.