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Friday, 30th April, 2015
Index Levels :
Market Trend (Nifty):
INDEX
SUPPORTS
NIFTY
(8181.50)
8140 / 8070 / 7970
SENSEX
(27011.31)
RESISTANCES
Period
8270 / 8310 /
Short Term Trend*
Current Trend
DOWN
UP ABOVE
8700
DOWN
UP ABOVE
8850
8350 / 8500
26900 / 26780 /
27250 / 27570 /
26500
28000
Medium Term*
Long Term Trend*
#as
Imtiaz Merchant’s Best Picks:
UPL
BHARAT FORGE
LUPIN
UP
DOWN BELOW
7300
*Trend Reversal Point (TRP) is based on close prices.
on 30th April 2015
COMPANY NAME
Trend Reversal Point
(TRP)Nifty close basis
SIZE
MID CAP
LARGE
CAP
LARGE
CAP
Indices:
SECTOR
CURRENT
PRICE
CAPITAL GOODS
INDUSTRIALS
HEALTHCARE
491
1254
1772
Domestic
Indices
Close
Points
% Chg
BSE Sensex
27011.31
-214.62
-0.79
Nifty
8181.50
-58.25
-0.71
Dollar/Rupee
63.58
0.29
0.45
Note: (Buying should be done from a medium to long term perspective)
Market Brief
Markets ended the Day, Week and the Month on negative note, primarily due to non-clearance of policies by
the Union Govt. in the Parliament, corporate results below expectation, hail storm damaging the crops,
earthquake in Nepal posing threats to Northern India, and selling off of equities by FII’s due to some
retrospective tax and non clarity on tax issues were instrumental in bringing the markets down. The undertone
for the market remains bearish with short and intermediate trend being down for quite some time now,
however, the long term trend is still up and the Bull-run is intact.
Technically, market is trading below the 200 Days Moving Average of 8270 on the Nifty and that is not good
news. More down side to the market appears to be a reality, though, in extreme short term, small throw-back
rallies are not ruled out. The market internals (breadth) are extremely dismal with the ratio of 4:1, i.e. with
every 4 stock, 3 stocks are declining. In terms of level, in the following week, if the market trades below 8140, it
will straight away test 8065 on the Nifty registered on January 7th, 2015, and below that it may swiftly test
7960, the low registered on 17th December, 2014. These levels can act as outside support for the market. On
the higher side, in the best case scenario, market may test 8350 to 8450 levels. Unless there is a drastic positive
change in the fundamental scenario in the micro or macro environment, the markets will consolidate for a
protracted period and decline further.
Investors are sincerely suggested to exit the weak and under-performing stocks in rallies and use declines to
buy fundamentally strong shares from Healthcare, Information Technology, Consumers and Consumer Durable
Goods and Auto Ancillary.
`
Advance/
Decline
BSE
Advance
NSE
Decline
AD
Ratio
UnChanged
1243
1350
0.92:1
112
616
771
0.8:1
59
Global Indices
Close
Points
% Chg
Dow Jones*
18035.53
-74.61
-0.41
NASDAQ*
5023.64
-31.78
-0.63
FTSE*
6946.28
-84.25
-1.20
Nikkei
19520.01
-538.94
-2.69
Hang Sang
28133.3
-267.34
-0.94
Straits Times
3487.39
0.24
0.01
#as
on 30th April 2015
Institutional
Activity
FII*
Buy
Sell
7711.13
10868.74
Net
(Cr)
-3157.61
DII**
4676.55
2215.75
2460.8
FII* Foreign institutional investor DII** Domestic institutional invest
News:
Govt withdraws PDMA, RBI Bill provisions from Finance
Bill
Finance Minister Arun Jaitley, on Thursday, withdrew the
clauses from the Finance Bill pertaining to setting up of
the proposed Public Debt Management Agency (PDMA)
and the amendments to the Reserve Bank of India Act
which would have taken away Mint Road's powers to
regulate government securities. The minister said
however that the government, in consultation with the
Reserve Bank, will prepare a roadmap to pursue a
separate debt management agency later in line with the
global practice. "Since the RBI has been handling public
debt management, the government in consultation with
the RBI will prepare a detailed roadmap separating the
debt management function and the market
infrastructure from the RBI and having a unified financial
market," Jaitley said. He made these remarks while
initiating the debate on the Finance Bill in the Lok Sabha.
The House is expected to approve the Bill later in the
day, giving effect to the tax proposals. Sources said that
the entire chapter on PDMA (Chapter VII) in the Finance
Bill is being dropped, in addition to the changes
proposed in sections 45U and 45W of the RBI Act. There
will also be no changes in the RBI Act as of now. While
section 45U deals with definitions of terms such as
securities, money market instruments, derivatives, repo
and reverse repo, section 45W deals with RBI's power to
regulate such instruments and decide on repurchase
rates for them.
NEWS PERSPECTIVE
Bubble risk grows as China's stock boom defies gravity
What do a ketchup maker, a precious metal distributor
and a medical device company have in common? They
are the new poster kids of a boom in China's equity
market - and a potential headache for policymakers, as
valuations defy fundamentals. Fuelled in part by cheap
credit and a crackdown on shadow banking, mom and
pop buyers - who make up about 60% of the Chinese
equities investor base - have been snapping up shares in a
rally that has seen the benchmark Shanghai stock index
double in six months. The surge comes even as annual
economic growth in the world's second-largest economy
slowed to a six-year low of 7% in the first quarter, hurt by
a housing slump and a downturn in investment and
manufacturing. The rally has taken money managers by
surprise and analysts are voicing concern that "bubble"
markets are likely to force authorities to impose cooling
measures. "We think this is a bubble brewing in some
counters, bearing in mind the disappointing economic
backdrop," said Grace Tam, a markets strategist at JP
Morgan Asset Management in Hong Kong. "Authorities
may likely take measures if this rally continues."
Despite the frothiness in some counters, the broader
market is in line with their 10-year averages, compared
with some Asian markets such as India which are more
than fairly valued and facing some investor fatigue. China
watchers said a crackdown on shadow banking and the
tepid performance of the property sector - a favourite
investment option - means more investors could continue
plowing money into equities. "The animal spirits among
retail investors are well and truly out," said Sherwood
Zhang, an Asia-focused portfolio manager at US- based
Matthews Asia. Less than 6% of Chinese households
invest in equities compared to an overwhelming twothirds of wealth parked in the property sector, according
to Gavekal Dragonomics. To be sure, authorities are
allowing some of the money flow into other markets such
as Hong Kong to let off some steam domestically. On
Wednesday, sources told Reuters that China might launch
a trial scheme that would allow individuals into the
Shanghai free trade zone to invest overseas. The stocks
rally has surprised many institutional investors, who are
still underweight China. Surveys of mutual funds with
about $1 trillion of assets under management are
underweight between 140-600 basis points relative to the
benchmark, according to Goldman Sachs. "Unless we see
regulators coming out and trying to stamp this rally, we
may see the markets going on further," said Zhang at
Matthews Asia.
`
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
WELCORP
7.17
KPIT
15.36
IBREALEST
6.63
HEXAWARE
9.05
RELIGARE
6.55
ATUL
8.19
GODREJIND
6.18
SRF
6.04
#as
on 30th April 2015
%
`
Nifty ends below 8,200 on April F&O expiry
Benchmark indices ended lower for the second straight day, amid weak global cues, on losses in FMCG, IT, select financials
and auto stocks as investors remained risk-averse in view of the expiry of April series of derivatives contracts. Worries
over government's combative stance on capital gains tax, delay in passage of key reform-centric legislative proposals,
weak Q4 corporate earnings and gloomy monsoon forecast which is likely to further dent rural demand kept the riskappetite under check.
Global cues turned weak on lower-than-expected growth in the US economy for the first quarter at 0.2%, significantly
lower than 2.2% posted in the previous quarter and cautious comments from the Federal Reserve. The 30-share Sensex
ended down 215 points at 27,011 and the 50-share Nifty closed down 58 points at 8,182.
The issue of capital gains tax took a new turn when five foreign portfolio investors (FPIs) filed a writ petition against
income-tax department’s minimum alternate tax (MAT) demand in Bombay High Court today. The matter will now be
heard on May 6. Continued selling by foreign institutional investors (FIIs) amid tax concerns has cost India the most
favoured emerging market (EM) tag in April. Foreign flows into Indian stocks so far this month are $1.8 billion, much lower
as compared to peers South Korea ($3.9 bn), Taiwan ($3.4 bn) and Brazil ($2.3 bn), show data from Bloomberg.
The markets are shut on Friday on account of Maharashtra Day.
In the broader market, both the BSE Midcap index ending flat and Smallcap index, closing down 0.1% performed better
than the front-liners. Market breadth in BSE ended negative with 1,387 declines against 1,305 advances. Meanwhile,
foreign institutional investors were net sellers in Indian equities worth Rs 718.31 crore on Wednesday, as per provisional
stock exchange data.
EXPERT VIEW
In the May series, the Nifty can witness a reversal in its current negative trend as a pattern of bottom out formation is
seen at its multiple supports of 8,145-8,160 zones with short covering activity, analysts say."Now, the index needs to cross
and hold above 8,340 to witness a bounce back move towards 8,550-8,635 levels. However, if it fails to hold 8,145 levels,
then weakness may continue towards the 8,000 levels," said Chandan Taparia, derivatives analyst (equity research) at
Anand Rathi in a post market note."Among sectors, Capital Goods, Cement, Telecom, Metals, Oil & Gas, FMCG,
Infrastructure and Banking topped the sector-wise rollovers. Lower rolls were seen in Realty, Media, Fertilizers and
Automobiles sector stocks," he adds.
`
BUZZING STOCKS
Seven out of the 12 sectoral indices of BSE ended lower. BSE Metal and FMCG indices down 1.6% and 1.2% each were the
top losers followed by BSE Auto and IT indices, down 1% and 0.8% each. BSE Realty index up 1.5% was the top gainer. Axis
Bank was among the biggest gainers in today’s session and ended up 3.1%. Axis Bank has extended its previous day's gains
after the bank’s net profit grew 18% to Rs 2,181 crore on the back of a 20% in net interest income and 21% increase in
other income. RIL gained 1.6% and ONGC ended down 0.6% on government’s decision to ease the norms of gas field
development as this move is likely to benefit the oil and gas exploration companies.
Among pharma stocks, Cipla gained 1.4%, Sun Pharma gained 0.4% and Dr Reddys Lab was down nearly 2%. In its
clarification to BSE, Sun Pharma has neither substantiated nor confirmed the media reports which said that the pharma
major is considering spending upto seven billion dollars on mergers and acquisitions. Housing finance major, HDFC lost
around 2% extending losses since yesterday after it posted marginal 8% growth in standalone net profit for the March
quarter at Rs 1,862 crore. HDFC Bank ended flat and ICICI Bank gained 0.6%. According to media reports, HDFC Bank has
sold loans worth Rs 550 crore of Essar Steel to asset reconstruction companies at a discount of 40%.
SBI lost 0.8%. SBI has signed an MoU with National Insurance Company to roll out accidental death and disability cover for
savings bank holders covered under the Pradhan Mantri Suraksha Bima Yojana. FMCG majors, ITC and HUL have shed
around 1.8% and 0.7% each while the selling-pressure on IT stocks has grown in strength after US economy grew at a
surprisingly low rate of 0.2% in the first quarter. The US is the major market for frontline IT companies. Infosys declined
0.9%, Wipro ended down 0.2% and TCS dropped 0.5%.
BHEL has successfully commissioned the first 500 MW unit at the 2x500 MW Chandrapur Super thermal Power Project of
Maharashtra State Power Generation Company Limiied in Maharashtra. The stock ended down with gains of nearly 3%.
Bharti Airtel ended down nearly 2% after the consolidated net profit fell 12.6% to Rs 1255.3 crore in the March quarter
compared with Rs 1436.5 crore in the December quarter.
Auto stocks like Tata Motors, falling for second straight day and M&M declined over 2% each. Media reports have cited
CEO of Italy's Pininfarina saying that the car design company is yet to reach an accord with M&M over a possible sale.
`
‘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 are based on the theory of Technical & Fundamental Analysis Combined. © Pragmatic Wealth Management Pvt. Ltd.