● Nifty index continued its winning streak for the fourth consecutive day and registered a fresh all time high of 12293 level. It continued to make higher highs – higher lows for 7th session and rallied by 1.53% week-on-week basis. As a result, it formed a Bullish candle on weekly chart. The momentum oscillator RSI is sustaining above the trend line breakout on daily scale, indicating continuation in ongoing optimism in coming days too
● Till the time, Nifty sustains above its support zone of 12150 – 12200, we may see an up move towards 12400 levels
● On monthly options front, Max Put OI is at 12200 then 12000 strike, while Max Call OI is at 12300 then 12400 strike. We witnessed meaningful Put writing in 12250 and 12200 strike, while Call writing is seen at 12350 then 12400 strike. Option data suggests a shift in higher trading range in between 12100 to 12350 zones for next coming sessions
● India VIX moved up by 1.69% at 12.32 levels. Lower volatility could continue to provide the support to the index to attract fresh buying interest
● Bank Nifty ended the session on positive note and formed a small Bullish body candle on daily chart. It continued to make higher highs – higher lows for seventh consecutive session and concluded the week with the gains of 1.16%. It also sustained well above its consolidation breakout level on weekly chart, which is a positive sign for the index
● Considering overall chart structure, we maintain our positive stance on Bank Nifty for an up move towards 32750 and higher levels. While support is inching higher to 32000 mark
● Longs in Dish TV, Shriram Transfin, Torrent Power, Mindtree, Jindal Steel
● Shorts in Tata Motor DVR, Vedanta, Exide, Kotak Bank, Jubl Food
[9:08 PM, 12/22/2019] Raunaq Singh: From Advisory desk 23rd December 2019
Market Outlook: US markets ended the week on record high after US-China indicated the signing of first phase to be in January. Europe market also closed in green. Asian markets were trading half a percent higher. Back home in India, FIIs were net buyers of nearly Rs 5000cr in the last five trading sessions. Foreign investors have pumped $13.8 billion into Indian stock market this year, the biggest inflows since 2014. We expect the positive momentum to continue and Nifty is likely to be in the trading range of 12000 -12400.
Sensex Rebalancing: This will be effective from 23rd December.
Addition: Titan, Ultratech Cement and Nestle
Deletion: Yes Bank, Vedanta, Tata Motors & Tata Motors DVR.
Actionable: Buy Bajaj Finance, HDFC Bank & Pidilite.
SGX NIFTY: +7 (prev.close 12293)
NIFTY 50 : 12271
Sensex : 41681
FII: +339 Cr
DII: -285 Cr
Dollar: $ 71.12
Gold: $1483 per ounce
Crude: $66 per barrel
10 year US bond rate: 1.92
10 year Indian Bond rate: 6.60
Update: Reliance industries: Govt trying to block reliance industries from selling assets including sale of stake to Armaco due to ongoing court case on PMT fields profits which govt estimates to receive $4.5 billion but company says that tribunal not yet finalizes liability over the dispute, in which RIL held 30% stake and liabilities will be shared with partners in the fields.
KEC International: KEC wins new orders worth Rs.1540 cr across various business verticals.
Derivative View – VIX closed at 12.32. Max Put OI is at 12200 then 12100 strike, while Max Call OI is at 12300 then 12400 strike. Option data suggests a trading range in between 12100 to 12400 zone.
[9:08 PM, 12/22/2019] Raunaq Singh: News and Impact
Expect market to open on a positive note on account of global cues. U.S. equities finished the week at a record high (Dow gained 0.3%) as investors counted down to the holiday break. President Donald Trump’s impeachment has morphed into a standoff, yet U.S. lawmakers managed to pass spending bills Thursday to avoid a partial government shutdown. The signing of a first-phase U.S.-China trade deal was set for January.
Expect positive sentiment in the market on the back of global cues and government’s Pre-Budget meetings raising hopes for further stimulus to spur economic growth. Further, persistent foreign fund inflows to help market further rally. FIIs were net buyers of nearly Rs6000cr in the last seven trading sessions. FIIs were net buyers of Rs339cr net buyers on Friday. Foreign investors have pumped $13.8 billion into Indian stocks this year, the biggest inflows since 2014. In the global market, US market hits all time high, both Europe and Asian markets surged to over year high. US-China trade agreement likely to be resolved trade tension between two largest countries.
Asian markets open on a strong note after the news that the China may cut tariff of US goods. Nikkei gained 0.5% and Hong Kong Index gained 0.3%. SGX Nifty is up 0.1%. Expect range bound market ahead of ChristMas Holiday and many Global market will shut from today. Traders buy on dips strategy after a market spiked to record high.
Major events today – RBI open market operation (OMO) worth Rs10000cr (positive for PSU Bank) today – hope of further decline 10-year G-Sec Yield. NIIT Tech board meeting today of share buy-back, Jharkhand State Election Results outcome, Changes Nifty and Sensex Index (below mention) , BPCL and Air India EOI today (Expressions of Interest) and Container Corporation Road show at Dubai.
Brokers Radar – Mindtree TGT raised BY CITI from 765 to 800, Morgan Stanly overweight on Power Grid TGT 237 from 229, Sun Pharma TGT Credit Swiss 450, M&M BUY Goldman Sachs at 672. Jefferies news Initiation of India Mart TGT 2500
Sectors – Banks, Metal and Tech
Actionable – Buy – SBI, ICICI Bank, Hindalco, Tata Steel
Market summary – Government likely to invite bids for stake sale in BPCL next month, Fitch affirms India at ‘BBB-‘; Outlook stable, Vedanta will definitely evaluate making bid for BPCL says Anil Agarwal. Govt. trying to stop Reliance from selling Assets of 20% stake worth $4.5bn. Banking Industry’s NPA situation to improve by Fiscal-End: SBI Chairman, Bharti Infratel-Indus Tower Merger may delay, DoT seeks Rs 1.72 lakh cr from GAIL in telecom dues
Next week outlook – The market clocked a record-high closing last week, and sustained its pre-Budget and Christ mass rally for the second consecutive week. The momentum was driven by easing US-China trade worries, a likely Brexit deal, no GST rate hikes, and hope of more measures in the forthcoming Budget 2020. The inflow of foreign money also lifted sentiment of nearly Rs6000cr net buyers last six trading sessions while DIIs preferred to book profits as they were net seller.
Important Events week ahead – FIIs flow, US-China trade deal – reports suggested that the phase one US-China trade deal is expected to be signed in January. Brexit – The market momentum may also get supported by the Brexit deal as it cleared the first step as it got approved by UK Prime Minister Boris Johnson in parliament on December 20 as Brexit deadline on January 31. Oil price movement as Brent crude spiked to 3-month high of $67/bbl, December F&O expiry. India VIX fell to 12.32 from 13.30 on a week-on-week basis, which could continue to provide the support to the index to attract fresh buying interest.
ICICI Bank – Media news that the ICICI Banks take 19% stake of Karvy Data as it has Rs630cr exposure in Karvy.
Reliance Infra – Reliance Infra wins Rs1250cr Damodar Valley Corp (DVC) arbitration award against DVC – Proceed may repay debt – Avoid ADAG stocks.
Bharti Infratel – Bharti Infratel-Indus Tower Merger may delay – Media news that the government is unlikely clear the proposed merger of Bharti Infratel with Indus Tower by the December 24 deadline which may force three major signatories Bharti Airtel, Vodafone Group, Vodafone-Idea to call of deal – Delay merger by the Govt. may negative on Vodafone Idea and Bharti Airtel as both the company need urgently raise funds to pay ADR dues.
DoT seeks Rs 1.72 lakh cr from GAIL in telecom dues – DOT has sought Rs 1.72 lakh crore in past statutory dues from state-owned gas utility GAILndia Ltd following the Supreme Court’s ruling on revenues that need to be taken into consideration for payment of government dues. Sources with direct knowledge of the development said DoT sent a letter to GAIL last month seeking Rs 1,72,655 crore in dues on IP-1 and IP-2 licences as well as Internet Service Provider (ISP) licence – Negative for GAIL
Addition and deletion in BSE Sensex and Nifty indices – Titan Company, UltraTech Cement, Nestle India will be included in BSE Sensex with effect from today. On the other side, Tata Motors, Tata Motors DVR, Vedanta and Yes Bank will be removed from the index. In BSE Sensex 50 index, UPL and Dabur India will replace Indiabulls Housing Finance and Yes Bank while in the BSE 100 index, InterGlobe Aviation, Info Edge and SBI Life Insurance will replace Glenmark Pharma, Cadila Healthcare and Edelweiss Financial Services.
Watch on SBI, PNB, BoB – Banking Industry’s NPA situation to improve by Fiscal-End: SBI Chairman – State Bank of India Chairman Rajnish Kumar said most banks will be in a good position with respect to stressed assets by March and there is no dearth of liquidity in the system for lending – Positive for SBI, PNB, Canara Bank, BoB.
Reliance Industries – Govt. trying to stop Reliance from selling Assets of 20% stake worth $4.5bn- Government is trying to stop Reliance Industries from paring its assets including a plan to sell a 20% stake to Saudi Aramco worth $4.5bn. The demand was made in an ongoing court case against Reliance Industries and British Gas, – Media report – Any sharp decline will be a buying opportunity.
Bharat Bond ETF Oversubscribed 1.7 Times; Garners Rs 12,000 Crore – The ambitious Bharat Bond exchange traded fund has closed for subscription on Friday with over-subscription of 1.7 times, garnering Rs 12,000 crore to be utilised for capex of public sector undertakings. The base size of issue is Rs 7,000 crore – Expect positive for PSU stocks like BEL, NTPC, Coal India, ONGC
Ipca Laboratories it has entered an agreement with a leading product development partnership, Medicines for Malaria Venture to co-develop a novel antimalarial co formulation named “Atoguanil” – Positive for IPCA Labs.
BPCL – Vedanta will definitely evaluate making bid for BPCL – Vedanta Resources will definitely consider making an offer for state-run BPCL when the bids will be invited, its executive chairman Anil Agarwal said on Friday – Positive for BPCL
Friday, Nifty gained marginally by 12 points to yet again close at all-time high of 12272 – fourth day in a row. Nifty soared 351 points (3%) in the last two consecutive weeks. Elsewhere in Asia, stocks were mixed in a subdued Friday session following further record highs on Wall Street and ahead of Christmas holiday while European market gained half percent. Bank Nifty gained half percent to all time high as led by banking major HDFC Bank, ICICI Bank and SBI. PSU Bank Index was biggest gainer today after the 10-year bond yield fell by 15bps to 6.60%.
Watch on PSU Bank – Government likely to invite bids for stake sale in BPCL next month.
PSU Banks momentum expected continues as fall in 10-year G-Sec Yield after RBI announced Rs10000cr OMO – The RBI will buy Rs100bn of the 6.45% 2029 debt and sell an equal amount of notes maturing next year in an auction on Monday. 10-Year G-Sec Yield slipped by 14bps at 6.61%. Fall in 10-year will be positive for PSU Bank like SBI, PNB, Canara Bank, BoB. Among the private Banks – ICICI Bank will be positive as benefit of treasuries exposure.
NLC India commissions unit 1 of new Neyveli Thermal Power – Station NLC India commissioned unit 1 of new Neyveli Thermal Power Station with the use of country’s first lignite-fired power boiler of two units of 500MW each – Positive for NLC India
Embassy REIT Said to Pick Kotak, Morgan Stanley for Fundraising – Embassy Office Parks REIT picked Kotak Mahindra Bank Ltd. and Morgan Stanley to help raise funds for a potential acquisition of commercial property assets in India – Expect positive for Embassy REIT.
Watch on NIIT Tech on Monday – Company to consider share buy-back on Monday Board meeting
Reliance, Shell JV to Return Panna-Mukta Oil Fields To ONGC – The JV that operated the Panna, Mukta and Tapti oil and gas fields for 25 years will return the assets to ONGC. The PMT JV includes ONGC with 40 percent stake, and Reliance Industries and Royal Dutch Shell’s unit holding 30 percent each – Positive for ONGC and Reliance Industries.
HDFC Bank – HDB Financial Plans to Raise Up to INR8.55b Bonds – Company plans to issue as much as Rs855cr notes Dec. 26 – Positive for HDFC Bank as HDB is a subsidiary of HDFC Bank.
Motherson Sumi – Fitch affirms SMRP BV at ‘BB+’ outlook stable – Positive for Motherson Sumi as SMRP BV is a subsidiary of Motherdson Sumi
Cadila Healthcare inspected Ahmedabad Topical Manufacturing Facility. No observation 483 issued – Positive for Cadila
Bajaj Consumers Care names Jaydeep Nnadi as CEO – Positive for Bajaj Consumers
Glenmark Pharma announced that Seqirus Pty. Ltd. (Seqirus) has received marketing approval for Ryaltris from the Therapeutic Goods Administration (TGA), Australia. – Positive for Glenmark Pharma
Suzlon Energy has yet to meet a key condition in its race to meet a deadline early next month to seal a Rs113bn debt restructuring, raising questions about its ability to stave off bankruptcy – Avoid Suzlon, poor balance sheet and huge debt.
Ratnamani Metal gets Rs124cr export order for SC pipe supply – Positive for Ratnamani Metal
RBI calls for more steps to push growth – RBI governor Shaktikanta Das has called for fiscal policy to work in coordination with monetary policy, even as another member of the monetary policy committee (MPC) called for relaxing the fiscal deficit target for the current fiscal – RBI may cut interest rate in the next policy meeting.
Tata Chemicals acquires remaining 25% partnership interest from the Andover Group – With this acquisition, the Company has increased its ownership in Tata Chemicals (Soda Ash) Partners, the soda ash producing operating entity, from 75% to 100% – Positive for Tata Chemical
Dilip Buildcon gets appointment date from NHAI for Karnataka project – The cost of the project is Rs2,283.50cr for a period of 30 months. Operation period is for a period of 15 years from COD – Positive for Dilip Buildcon.
Dwarikesh Sugar commissioned its new 100 KLPD distillery plant at its Dwarikesh Nagar unit, Bundki, in Bijnor District – Positive for Dwarikesh Sugar after incrased production
Phone Airwave Auction Likely in May – The Digital Communications Commission has approved Telecom Regulatory Authority of India’s recommendations on airwave auction including on pricing, CNBC-TV18 reports – Positive for Indian Telecom stocks like Bharti Airtel
M&M board restructuring – M&M has announced following changes at senior management level: Mr Anand Mahindra to become Non-Executive Chairman (from Executive) w.e.f Apr-20. Dr Pawan Goenka appointed as MD & CEO (from MD) till 1st Apr 21 (was MD till 11th Nov 2020). Dr Anish Shah (currently Group President – Strategy) appointed as CFO from Apr-20 to Apr-21. Dr Shah would also be Additional Director of the company. – Restructuring of board will be positive for M&M.
Government plans to auction $73b of Phone Airwaves March-April – Total 8,305 megahertz of airwaves will be put on block, incuding 6,050 Mhz 5G airwaves, India’s Telecom Secretary Anshu Prakash says in New Delhi. Airwaves to be auctioned are worth Rs5.22tn ($73.3bn) at base price
Fitch lowers India GDP growth to 4.6% in FY20 – Fitch Ratings cut India’s GDP growth forecast for 2019-20 fiscal year to 4.6 per cent. Fitch said growth will gradually recover to 5.6 per cent in FY21 and 6.5 per cent in the following year with support from easing monetary and fiscal policy and structural measures – It is inline with expectation – RBI has already cut GDP growth forecast .
Dividends – Cholamandalam Investment and Board Meetings – NIIT Tech