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Friday, 15th May, 2015
Index Levels :
Market Trend (Nifty):
INDEX
SUPPORTS
NIFTY
(8262.35)
8200 / 8090 / 7960
SENSEX
(27324)
RESISTANCES
Period
8300 / 8360 /
Short Term Trend*
Current Trend
DOWN
UP ABOVE
8510
DOWN
UP ABOVE
8850
8415 / 8510
27150 / 27000 /
27560 / 27610 /
26750 / 26400
28100
Medium Term*
Long Term Trend*
#as
Imtiaz Merchant’s Best Picks:
BHARTI AIRTEL
MARUTI SUZUKI
PIDILITE INDS.
UP
DOWN BELOW
7300
*Trend Reversal Point (TRP) is based on close prices.
on 15th May 2015
COMPANY NAME
Trend Reversal Point
(TRP)Nifty close basis
SIZE
LARGE
CAP
LARGE
CAP
LARGE
CAP
Indices:
SECTOR
CURRENT
PRICE
CONSUMER
AUTO
INDUSTRIALS
392
3670
595
Domestic
Indices
Close
Points
% Chg
BSE Sensex
27324
117.94
0.43
Nifty
8262.35
38.15
0.46
Dollar/Rupee
63.50
-0.145
-0.23
Note: (Buying should be done from a medium to long term perspective)
Market Brief
Markets on Friday ended with marginal gains and the week ended on almost flat note. This is the third
week that markets have not registered any substantial gain or fall, signaling indecisiveness in the
market, this is primarily due to mixed news flows with some positives and few negatives. Poor exports
despite weakening rupee are a bad signal but at the same time the imports have also fallen. Rising
crude oil prices and increase in domestic petrol and diesel prices are worry-some. With important
reform bills still pending in the Parliament is also a cause of concern in the near term. Optimism in the
Global markets have given some solace to our market and restricted a complete sell-off.
Indian equity markets are very critically poised and have been trading in a tight range between 8000
and 8360 on the Nifty. Further news flows will determine the direction for the market, although, short
and the medium term trend are down, hence, bad or negative news flows will bring down the markets
sharply. In terms of technical level, a close below 8000 will prove very fatal for the market and it will
witness a prolong correction and eventually Nifty could test 7400 – 7500, which is also justified from
price to earning perspective. However, in event of positive news flows, if the market breaks out 8360,
it will witness a swift throwback rally that would initially test 8500.
Investors are advised to exercise caution and as suggested earlier, exit from under performing stocks
and remain at-least 20 to 25 percent in cash. Deep corrections should certainly be used for buying
since the bull market is still intact, it is only the short and the intermediate trend which is down, and is
instrumental in keeping the markets jittery and volatile.
`
Advance/
Decline
BSE
Advance
NSE
Decline
AD
Ratio
UnChanged
1459
1255
1.16:1
103
779
620
1.26:1
80
Global Indices
Close
Points
% Chg
Dow Jones*
18272.56
20.32
0.11
NASDAQ*
5048.29
-2.51
-0.05
FTSE*
6960.49
-12.55
-0.18
Nikkei
19732.92
162.68
0.83
Hang Sang
27822.28
535.73
1.96
Straits Times
3463.10
7.32
0.21
#as
on 15th May 2015
Institutional
Activity
FII*
Buy
Sell
3595.53
3633.84
Net
(Cr)
-38.31
DII**
1799.79
1236.19
563.6
FII* Foreign institutional investor DII** Domestic institutional invest
News:
India at 100 on human capital index, Finland leads pack
India has been ranked at a lowly 100 position on the global
Human Capital Index, which measures countries on
development and deployment of human capital. Finland has
topped the 124-nation list. India is ranked lower than all its
BRICS peers — Russia, China, Brazil and South Africa — and
smaller neighbours like Sri Lanka, Bhutan and Bangladesh. But
Pakistan follows at 113. In the top 10 of the list, compiled by
the World Economic Forum, Finland is followed by Norway,
Switzerland, Canada, Japan, Sweden, Denmark, the
Netherlands, New Zealand and Belgium. WEF said the list has
been compiled on the basis of 46 indicators about "how well
countries are developing and deploying their human capital,
focusing on education, skills and employment". "It aims to
understand whether countries are wasting or leveraging their
human potential," it added. On India, the report said that
although the educational attainment has improved markedly
over different age groups, its youth literacy rate is still only
90%, well behind the rates of other emerging economies.
"India also ranks poorly on labour force participation rate due
to its large informal sector," WEF added. The major countries
ranked above India include France (14th rank), the US (17), the
UK (19) and Germany (22). Among BRICS nations, Russia comes
on the top at 26th position, followed by China (64), Brazil (78)
and South Africa (92).
The countries with a better score than India also include
Kazakhstan, Armenia, Kyrgyz Republic, Chile, the Philippines,
Serbia, Mongolia, the UAE, Macedonia, Azerbaijan, Tajikistan,
Mauritius, Barbados, Brazil, Guatemala, Honduras, Cambodia
and Tunisia. WEF said 14 countries have reached 80% human
capital optimisation while 38 score 70-80%.
NEWS PERSPECTIVE
SEBI permits Madras Stock Exchange to exit business
Market regulator, Securities and Exchange Board of India (SEBI)
has passed an order providing exit to the 78-year old Madras
Stock Exchange Limited (MSE). The exchange will be 14th Stock
Exchange to exit under SEBI's exit policy, which came into effect
in May 2012. The policy mandated Regional Stock Exchange
(RSEs) a minimum net-worth of Rs 100 crore and an annual
trading of Rs 1,000 crore and gave two years to comply or exit
the business. In May 2014, MSE made a request to SEBI for its
exit as a stock exchange after an Extra Ordinary General
Meeting of the shareholders, a special resolution was passed for
voluntary exit. On Thursday, Rajeev Kumar Agarwal, whole time
member, SEBI, passed an Order, in which he stated that from
the valuation report and undertaking of MSE, it is observed that
all the known liabilities have been brought out and there is no
other future liability that is known as on date. MSE is one of the
oldest RSEs in India and has been one of the largest in terms of
cash volumes in the 90s.
According to the Section 13 arrangement with National Stock
Exchange (NSE), the collective turnover of the MSE listed
companies which are trading at NSE platform, in 2012-13 was at
around Rs 8,000 crore and this was expected to increase to Rs
19,907 crore in 2017-18. Industry experts questioned about the
future of small investors. They noted there were 250
companies, which are fully compliant and mostly MSMEs, while
half of them have listed in NSEs and other exchanges, the
balance didn't shift leaving small time investors, who have
invested a few thousand rupees and to around 50 brokers who
depend on this exchange for survival & livelihood?.Since these
companies have become unlisted there is no reverse book
building process and prices of these companies have been
quoted much below the price.
Taking advantage of the situation a private agency sent out a
letter to the shareholders. One such letter, to buy shares of a
Chennai based company is is available with Business Standard,
stating that the company "is ready to make a best offer if the
shareholder is wish to sell and please to make a best offer, if
you wish to sell your holdings. We will send you payment by
person. Kindly note that this offer is for a limited quantity of
shares required by us. You therefore request to respond
immediately to take our attractive offer and payment terms".
Insiders at MSE said prospect for the Exchange to survive was
"very good" but SEBI's norms has "forced" MSE to exit. He
claimed MSE can do trading volumes of around Rs 1,000 crore
per annum, if the trading platform would have gone on stream.
Earlier senior officials from MSE said three major challenges it
faces --upgradation of technology which is getting outdated
fast, marketing and expansion and to meet SEBI's mandate. To
meet these challenges, the Exchange can raise around Rs 100
crore from a Private Equity or through a private placement.
MSE had an in-principle tie-up with NSCCL for clearing and
trading operations and EOI received from companies listed with
MSE to trade on the new platform. In the last five years,
collective trading volume of the 60 companies, which are listed
in MSE and were allowed to trade on NSE, estimated to be
around Rs 25,000 crore.
`
ITE – 35* Top Gainers & Losers
Gainers
Losers
Stocks
%
Stocks
%
SIEMENS
56.37
HERO MOTOCO.
11.99
LUPIN
37.25
ONGC
10.97
SUN PHARMA
33.79
BAJAJ AUTO
9.97
BHARAT FORGE
33.09
GAIL (INDIA)
7.18
# % = 3 months Return
ITE – 211** Top Gainers & Losers
Gainers
Losers
%
Stocks
Stocks
%
Risa Internatio.
CCL Inter
Tide Water Oil
HFCL
47
34
27
26
Dynamatic Tech.
Tata Elxsi
Wockhardt
SSPDL Ltd
95
94
85
76
Hitachi Home
62 Apollo Tyres
25
Hexaware Tech.
56 Gati
23
Siemens
54 V-Guard Inds.
21
Century Ply.
48 Atul
19
PC Jeweller
47 Petronet LNG
18
Gillette India
46 Guj Gas Company
18
# % = 3 months Return
BSE Top Gainers & Losers
Gainers
Losers
Stocks
%
Stocks
JUBLFOOD
11.36
HDIL
-7.12
ALOKTEXT
11.15
PUNJLLOYD
-6.20
NATCOPHARMA
8.61
NCC
-5.25
SCI
8.22
EDELWEISS
-4.69
#as
on 15th May 2015
%
`
Rate-cut hopes drive markets higher; Nifty ends above 8,250
Benchmark indices finished higher on hopes of economic reforms as the government defends the key reforms coupled
with an anticipated rate-cut in the view of the softening inflation data. The 30-share Sensex gained 118 points to end at
27,394 and the 50-share Nifty climbed 38 points to finish at 8,262. Market breadth on the BSE ended positive with 1,455
advances against 1,233 declines.
Going ahead, analysts expect this range-bound movement in markets to end over the next few sessions. "For past two
weeks, the Nifty has been trading roughly in a broader range of 8,100-8,300 while stocks are witnessing erratic moves in
both directions due to prevailing earning season. We expect this prevailing uncertainty to end in the coming sessions with
either side decisive break in the index. Meanwhile, uphold stock specific trading approach and keep a balanced trading
portfolio," said Jayant Manglik, President-retail distribution, Religare Securities in a post market note.
“Markets ended the day and the week on a positive note. Bargain hunting at lower levels helped markets gain about 1%
for the week. On-schedule debt repayment by Greece eased related concerns which also led to cooling of US bond yields,
which had hit highs early in the week. Delay in passing the GST Bill had an impact on the markets, we believe. Going
ahead, remaining quarterly results, distribution of monsoon and pick-up in investment activity, if any, will dictate market
sentiment and so will expectations of a US rate hike,” points out Dipen Shah, Head of Private Client Group Research, Kotak
Securities.
RUPEE - The rupee is trading strong by five paise at 63.60 against the dollar tracking firm local equities amid sustained
dollar selling by exporters.
KEY STOCKS - On the sectoral front, BSE FMCG, Healthcare, IT, Consumer Durables, Teck indices gained up to 1%.
However, BSE Metal, Realty and Power indices lost sheen in today’s session and ended lower.
Rate sensitive stocks gained in today’s session as sustained fall in consumer inflation prices gave boost to hopes of a ratecut by Reserve Bank of India. SBI, Axis Bank, M&M, Tata Motors, Bajaj Auto, Maruti Suzuki and HDFC twins ended higher
up to 2.5%. Shares of Tata Steel, Indian multinational steel-making company headquartered in Mumbai, lost 0.5% as the
company anticipates to take a non-cash write-down of the goodwill and assets in the consolidated financial results in the
fourth quarter for the year ended March 31,2015 of nearly Rs 6,500 crores, mostly associated to the loss-making long
products business in UK.
`
Shares of Bharti Airtel, India’s largest telecom services provider, has gained 1.5% after it decided to commence 4G services
trials for its existing customers located in Chennai, according to media reports. Vedanta Resources reported a significantly
wider full-year net loss due to a hefty writedown of its oil and gas business due to tumbling oil prices. Reacting to the
news, Vedanta lost nearly 2%.
Oil exploration major RIL was down 0.7% on decline in crude oil prices. However, GIL which gained yesterday on signing
MoU with Dhamra LNG Terminal (DLTPL) has dipped today on profit taking and shed 0.5 %. The Cabinet Committee on
Economic Affairs (CCEA), led by Prime Minister Narendra Modi, on Wednesday approved the disinvestment department’s
plan to sell stakes in Indian Oil and NTPC as part of the Centre’s Rs 41,000-crore divestment target for public sector
undertakings. NTPC dropped over 2%.
Ranbaxy Laboratories is accused in a lawsuit of conspiring with a web of lawyers and consultants to manipulate the US
Food and Drug Administration (FDA) and block competition in the generic drug business. Sun Pharma which has acquired
Ranbaxy ended with marginal gains.
BROADER MARKETS - In the broader market, both the BSE Midcap and Smallcap indices were up nearly 0.4% and 0.6%
each. Suzlon Energy moved higher by 6% after the wind turbine maker said that has bagged an order to set up a 90 mw
wind project from ReNew Power, for an undisclosed amount. Shares of Strides Arcolab were trading higher by 4% after a
pharmaceutical company said that it has received approval from the US health regulator for Lamivudine and Zidovudine
tablets. Shares of Multi Commodity Exchange of India (MCX) gained 5% after reporting a 12.6% year-on-year (y-o-y)
growth in standalone net profit at Rs 49.30 crore for the quarter ended March 31, 2015 (Q4). Jubilant FoodWorks rallied
11% after reporting 6.6% growth in same-store growth (SSG) for the quarter ended March 31, 2015 (Q4). The company,
which operates Domino's Pizza and Dunkin Donuts chains, had recorded 3.4% negative SSG growth in the year-ago
quarter. Shares of Sequent Scientific climbed over 5% after the Reserve Bank of India (RBI) said that foreign investors can
now invest up to 32.46% of the paid up capital of the pharmaceutical company.
`
‘Markets are directionally efficient, meaning that today’s price
reflects what is currently known about the future direction of
the markets.’
*ITE-35 index is a well diversified Index with 35 stocks large size companies developed by Pragmatic Wealth Management research group. The
ITE-35 Index commensurate with the Sensex & Nifty.
** ITE -211 is a broad based index constitutes 211 companies from large, mid and small size companies spread over 9 ethically permissible
sectors. This is parent (macro Index) and it commensurate with BSE- 500 and S&P CNX 500
Caution: We do not encourage intraday trading and Derivative trading. Stocks should only be sold upon procuring the delivery.
Disclaimer: The recommendations made herein do not constitute an offer to sell or a solicitation to buy any of the securities mentioned. No representations can
be made that the recommendations contained herein will be profitable or that they will not result in losses. Readers using the information contained herein are
solely responsible for their actions. Information is obtained from sources deemed to be reliable but is not guaranteed as to accuracy and completeness. The above
recommendations and Newsletters are based on the theory of Technical & Fundamental Analysis Combined. © Pragmatic Wealth Management Pvt. Ltd.