Stocks in the news: HDFC Bank, ACC, Jain Irrigation, M&M, Music Broadcast, Sagar Cements, Jain Irrigation

Here are stocks that are in news today:

HDFC Bank Financial Data Leak Case | HDFC Bank Says

Bank will continue to work closely with SEBI in this regard

Bank re-iterates commitment to highest standards of corporate governance

ACC Says

Not proceeding with merger with Ambuja Cements at this juncture

Merger with Ambuja Cements remains the ultimate objective

Currently there are constraints in implementing merger with mbuja Cements

Arrangement with Ambuja Cements for mutual purchase & sale of materials, svcs

Arrangement with Ambuja Cement will need shareholder approval

Arrangement with Ambuja Cements intended to maximise synergies & unlock value

On CNBC-TV18 Anil Singhvi, Fmr Ambuja MD

Don't think business compulsion behind merger being shelved at present

There is a 'bigger design' behind the merger being called off

Both cos failed at coming out with plan for minority shareholders

This is an effort to frustrate the minority shareholders

Other stocks and sectors in the news

Jain Irrigation subsidiary invests in Innova Food NV Belgium. CY17 turnover of the acquired co - Euro 23.6mn

Mahindra & Mahindra collaborates with LG Chem to for Lio-on battery technology to support EV revolution in India

IOB approves preferential issue of shares to GoI upto Rs 4694cr

Music Broadcast - Radio city and Apple music launch Bollywood countdown show

LT Foods - CRISIL upgrades long term and short term ratings of the Co

Sagar Cements board approves acquisition of hydel power plants (capacity of 4.3 MW and 4 MW) for a sum of 26.9cr

USL - ICRA upgrades ratings of various debt instruments

HDFC Bank says will work closely with SEBI in relation to whatsapp data leak

Simbhaoli Sugar says that in relation to the fraud case registered by OBC- co is in process of submitting the information and clarifications to the investigating agencies

PNB says quantum of unauthorized transactions can increase by USD 204.25 mn Clarifies that govt hasnt asked PNB to pay the fraud liabilities

Indiabulls Real Estate’s EGM on March 23 to seek shareholder approval for divestment of stake in Indiabulls Properties

IMAX inks a new five year pact with PVR Cinemas

JSW Steel, Monnet Ispat creditors OK Aion-JSW Offer for Monnet Ispat - ET

KKR sells 5.9% stake in Coffee Day Enterprises to raise Rs 405cr

RIL-BP’s USD 4bn investment plan in KG-D6 approved

PFC inks MoUs with UP power utilities to provide financial assistance of Rs 50,200cr

Amtek Auto creditors may offer to sell Amtek along with its units - mint

MORE WILL UPDATE SOON!!

Why blockchain is the ‘big’ thing in digital banking

Banks have centralized data and this is the reason behind all the delays.

Most of us have used banking services to transfer money and are always bothered by the lagging time between the transfers initiated to the amount received. But, have you ever contemplated the reason behind it? Banks have centralized data and this is the reason behind all the delays. The processing and confirming of all details of the transaction, take the time to transfer money from one account to another.

What if I tell you that now there is a way that the other side will receive the transferred money from the very moment it is transferred and simultaneously the database will get updated for all the parties on the basis of just an acknowledgment from us! Yes, this is possible if the data resides with all of the participants instead of a centralized location with the bank.

Blockchain in digital banking

The blockchain is a revolutionary mechanism that brings everyone to the highest level of accountability by ensuring that the data is reliable, secure and well synchronized among all the participants. There are no missed or delayed transactions, no human or machine-made errors, no transactions are done without consent from all the parties, and no mismatch and discrepancies in the past data. Blockchain as a mechanism is totally transparent and incorruptible. In fact, Blockchain maintains the record of every transaction not only in the main register but also in all the connected distributed registers.

Blockchain works on the concept of ‘Distributed Ledger,’ which means, all participants within the Blockchain have the same data set, and all data updates happen on consensus. For example, if you buy a vehicle, the vehicle manufacturer provides the same set of data to the bank, the authority, the dealer, and the individual. However, this data is stored in entirely different databases. Therefore, updates on anyone repository will not automatically reflect in all the other databases, which results in data duplication and possible manipulation. Blockchain fills this gap, all the participants will have the copy of the same database, thereby all participants have the similar version of the truth.

Once the data is written into the Blockchain, it cannot be modified; it can only be appended, thus leaving a complete trace of all the changes made. Blockchain will always have references to the previous appended data and a complete track of how data has changed over the period. Data will be encrypted, and one-way hashes will help validate if data was ever modified.

However, this is only possible if there is trust among all participants and the data is strongly encrypted and secured so that nothing can be manipulated. Security, consensus, and trust are the key ingredients to this possibility. If all the participants have the same encrypted datasets and applications and are aware of all the updates on the encrypted datasets, and take all the decisions in consensus, then they will ensure that the hackers can’t manipulate the data so easily and will find new techniques to hack (in terms of processing power and updating multiple databases). The blockchain is the technology that has the potential to make all of this possible.

Future potential of Blockchain

Blockchain technology is called as an era of the new Internet. According to a research report by Transparency Market Research. R3, Chain Inc, and IBM, “The global Blockchain technology market are expected to be worth US$20 bn by the end of 2024 as compared to USD 315.9 million in 2015. The overall market is anticipated to exhibit a CAGR of 58.7 percent.

Initially devised for Bitcoin– Digital Gold in 2008 (a use cases), Blockchain had evolved into something with different and higher potentials. BitCoin shows the durability and robustness of Blockchain.

So, are you ready for what more Blockchain has to show in future? Will it be a technology disruption that will eradicate the need for banks at all? Will this lead to a world that needs no currency printing anymore? Will Bitcoin do away with the current requirement of regulatory bodies and centralized systems?

MORE WILL UPDATE SOON!!

Sensex may reclaim 36K in 2018; These 4 stocks can be multibaggers in 2-3 years

We continue to have a moderate outlook for equity during the year given premium valuation, increase in interest cost and reduction in liquidity.

We maintain a target of 36000 on the Sensex subject to the full development of ongoing Q3 and changes in valuation given the global clampdown.

 To get stability in the domestic market, the global market has to come out of the phase of volatility. The main factors for the recent and sharp collapse in the global equity market was; premium valuation, rise in global bond yield prevailing to inflationary pressure and worries to US fiscal deficit.

Recently, a relief rally has initiated in the global market led by no hike in US Fed in the February meeting, good earnings results, and stability in bond yield.

Global investors were looking for a bargain gain after the last week's collapse which was a weakest weekly loss in the last 18 months.

Dow fell by 12 percent on an intraday basis from 26th Jan to 9th Feb. From this low, Dow has recovered by 5-6 percent during which US 10-years bond yield is holding at 2.9 percent, near the 5-years high. This relief rally will be spread to emerging market like India if this trend is maintained in the near-term.

 Top five sectors which you think are a good buy even at current levels and why?

Chemicals:

MNCs are diversifying their raw material or RM sourcing arrangement from China due to higher regulatory compliance requirement and adding India as an additional sourcing destination.

Additionally, higher allocation towards rural spending in union budget is likely to benefit players in agrochemicals and crop protection.

Auto sector:

After the initial hiccups in the 1HFY18 due to slews of government policy, we see some gradual recovery in the start of H2FY18. During 9MFY18, the sector has registered a growth of 11 percent which was largely led by 12% & 8% growth from the 2W & PV but in line from the pre demonetizations.

We expect the industry to registered 12 percent growth for FY19. We believe premiumisation in the 2W segment to continue followed by government push towards better road infra project and implementation of the scrappage policy will yield higher growth in the M&HCV sector.

Infrastructure:

Infrastructure is the growth driver of the economy. With the increased total capital outlay for infrastructure to Rs5.97lakh cr for FY19 and development of 35,000km of roads under phase 1 of Bharatmala will keep the outlook positive.

Pharmaceutical:

Increasing focus of pharmaceutical companies to domestic market coupled with rapid urbanisation and consumer spending is giving a positive outlook for the sector as the market size is poised to grow to US$100 billion by 2025. Recent promotions given by the government to the healthcare segment will add to the performance of the sector.

IT Sector:

The outlook for the Indian IT sector is cautiously positive in 2018 as challenges remain amidst prospects of greater IT spending with global and US economy improving.

We expect that the early sign of recovery will lead to higher spending in the US banking sector which will result in revival in the BFSI.

Robust growth in the digital platform also indicates higher utilization in the large cap IT companies. We have a Hold rating on these companies valuing at a 5 years historical average.

 Top 4 stocks which you think could turn multibaggers in the next 2-3 years?

UPL:

UPL has achieved healthy revenue CAGR of 16 percent over FY12-17, with stable EBITDA at 17-19%, despite widespread changes in regional weather patterns or swings in commodity prices and currencies.

We expect PAT to grow at a strong CAGR of 14% over FY17-19 led by new launches in fast-growing geographies, backward integration, and sustained market share gains.

UPL, a leading global manufacturer of crop protection products having a presence across the agri-input value chain from seeds to post-harvest chemicals will be a key beneficiary from government higher allocation towards rural spending.

Ashok Leyland:

Ashok Leyland (AL) is the second largest commercial vehicle (CV) manufacturer in India. It has a strong presence in the M&HCV (Heavy Commercial Vehicle) segment with a market share of 34 percent as on FY17.

We believe AL to witness numerous tailwinds like Government’s road & infra spending, the strategy of defence and electric vehicles.

We expect AL’s revenue to grow at 18 percent CAGR over FY17-20E- factoring 11 percent volume growth in M&HCV and 22 percent in its LCV business.

KNR Constructions:

Order book continued to remain strong @ 2x TTM revenue and total outstanding order book stands at Rs 3,333cr as on Q3FY18. During the quarter KNR has received an order of Rs560cr in the state of Telangana for irrigation works.

We expect execution will ramp up going forward as most of the projects are now operational which continue to construct growth. Further, Government’s strong focus on developing road projects will keep the sector outlook positive.

Torrent Pharma:

With the acquisition of branded formulations business of Unichem Laboratories, Torrent is expected to strengthen its presence in the domestic market with further expansion in the chronic portfolio. In addition, recovery in US business will drive their growth going ahead.

MORE WILL UPDATE SOON!!

What to buy in a rangebound market? 5 stocks which could give up to 15% return

The index has some stiff resistance at 10615, where 20 and 50-days moving averages are seen. Thus, the index may see some profit booking above 10600, after a bounce back.

The Nifty opened in the positive and continued to see gains through the day to close at 10,583 levels, up by 0.87 percent on Monday. Following a bullish Dragonfly Doji candlestick pattern on the weekly chart, the index showed a follow-through action on Monday.

In the last couple of days, the broader markets too have participated in the rally. For the last three weeks, the price has largely been trading in a range of 10300 -10640 odd levels and is now approaching its upper end.

The index has some stiff resistance at 10615, where 20 and 50-days moving averages are seen. Thus, the index may see some profit booking above 10600, after a bounce back.

For the rally to continue, the index needs to cross and sustain above 10640 odd levels on the tradable basis. We expect the index to move towards 10736

which will fill the falling gap.

On the downside, breaking 10500 levels, the market will remain in the congestion zone and head towards 10350 levels.

Here is a list of top 5 stocks which could give up to 15% return:

Voltas Limited: BUY| CMP Rs 613| Stop loss Rs 580| Target Rs 700| Return 14%

The stock touched a high of 675 in December 2017 and then witnessed a decline to 555 levels. The fall corrected 61.8% Fibonacci retracement of the rally from 495 to 675 levels and witnessed a bounce back.

The price retested the low to form a double bottom pattern on daily chart. The rally in the last sessions has been on above average volumes, indicating buying participation, coming in at lower levels in the stock.

The price has crossed 20-days moving average which was acting as resistance during the decline phase - indicating a change in trend.

Currently, the price is trading at the neckline of double bottom formation and is likely to break out on the upside considering the price, recent movement, and overall structure. Thus, the stock can be bought at current levels and on dips to 600 with a stop loss below 580 for a target of 700 levels.

Persistent Systems Limited: BUY| CMP Rs 868| Stop loss Rs 825| Target Rs 1000| Return 15%

The stock has been largely range bound between 800 and 550 levels for almost last three years. In the last couple of months, the price had been consolidating at the upper end of the range.

Now, the price has formed a long-term base and gave a breakout from this accumulation pattern. The good part is that it happened on strong price momentum and high volumes indicating strong buying interest in the stock.

The price has also given a breakout from the Bollinger bands with the expansion of bands suggesting that the price is likely to move in the direction of the breakout.

MACD has given positive crossover with its average moving above the neutral level of zero suggesting the tart of a fresh uptrend. Thus, the stock can be bought at current levels and on dips to 835 with a stop loss below 825 and a target of 1000 levels.

Kalpataru Power Transmission Limited: BUY| CMP Rs 478| Stop loss Rs 450| Target Rs 550| Return 15%

The stock touched a high of 535 in the month of January and then corrected down to 401 levels. The fall corrected 61.8% Fibonacci retracement of the rally from 322 to 535 levels.

Also, the decline has tested its previous all-time highs and witnessed a bounce back. This pullback touched a high of 494 to again correct to 448, forming a higher low.

The price has moved above 50-days moving average (DMA) and closed above it. Daily Directional Indicators i.e. DI lines have given positive crossover with each other.

The relative strength index (RSI) has given a positive crossover with its average on the daily chart. Thus, the stock can be bought at current levels and on dips to 465 with a stop loss below 450 for the next target of 550 levels.

Ajanta Pharma Limited: BUY| CMP Rs 1425| Stop loss Rs 1350| Target Rs 1600| Return 12%

The stock had seen a sharp correction from the highs of 1595 levels to a low of 1236. The bounce back faced 1440 levels and corrected down to 1311 levels

and again saw a bounce back.

On the daily line chart, the price has formed a bullish double bottom pattern with slightly higher low. The price has moved above its 20-days moving average and closed above it with a bullish candlestick accompanied by above average volumes which suggest buying participation in the stock.

Thus, the stock can be bought at current levels and on dips to 1400 with a stop loss below 1350 for a target of 1600 levels.

Navin Fluorine International Limited: BUY| CMP Rs 805| Stop loss Rs 760| Target Rs 900| Return 12%

The stock has seen a long-term uptrend forming a higher top and higher bottom formation on the weekly chart. For the last couple of months, the stock has seen a correction from 880 to 730 odd levels.

The price has taken a support at its 100-days moving average which has acted as support on multiple occasion in the past. In the last couple of days, the stock has seen the high volume with positive price action suggesting buying participation.

The weekly directional indicators i.e. DI lines have given positive crossover with each other suggesting price correction is over. Thus, the stock can be bought at current levels and on dips to 795 with a stop loss below 760 and a target of 900 levels.

MORE WILL UPDATE SOON!!

Stay long in Nifty; Top 3 stocks which could give up to 27% return in the next 3-4 weeks

The upper end of the channel is placed at 10630, and a breakout from the upper end of the channel can trigger a short covering rally to levels of 10720-10820 which is being 50 percent and 61.8 percent Fibonacci retracement levels respectively.

The Nifty Index Futures has taken support at the lower end of the Broadening Wedge pattern and is currently consolidating in a channel pattern.

The upper end of the channel is placed at 10630, and a breakout from the upper end of the channel can trigger a short covering rally to levels of 10720-10820 which is being 50 percent and 61.8 percent Fibonacci retracement levels respectively.

However, failure to breakout from the upper end of the channel i.e. 10630 can lead to fresh selling dragging it to levels 10440-10280.

Moreover, the relative strength index (RSI) is currently at the neutral level of 50; a move above can lead to further short covering rallies.

Future Lifestyle Fashions Ltd: BUY| Target Rs 475| Stop Loss Rs 340| Return 27%

On the weekly chart, Future Lifestyle Fashions Ltd. (FLFL) is on the verge of a breakout from a Triangle pattern suggesting resumption of the Bull trend on cards. The neckline of the pattern is placed at 398 (as indicated on chart); breakout from the pattern higher volumes may trigger a bullish breakout.

On the daily chart, the stock is on the verge of a breakout from a consolidation phase started forming the affirming start of a bull trend.

The RSI has formed a positive divergence with respect to price after taking support at the 50 level. The stock may be bought in the range of 370-380 for targets of 440-475, keeping a stop loss below 340.

Castrol India Ltd: BUY| Target Rs 238| Stop Loss Rs 170| Return 20%

On the weekly chart, Castrol India Ltd has turned upwards after testing the lower end of the channel suggesting bullishness. Further, it is approaching upper end of the channel placed at Neckline of the pattern is at 213-228; sustained trade above the neckline with healthy volumes can extend the up move.

On the daily chart, the stock has broken out from a flag pattern on good volumes affirming strong bullishness. RSI has turned upwards breaking out of the upper band of the Bollinger Bands suggesting higher levels in the coming trading sessions.

The stock may be bought in the range of 195-200 for targets of 228-238, keeping a stop loss below 170.

JK Lakshmi Cement Ltd: BUY| Target Rs 510| Stop Loss Rs 400| Return 18%

On the weekly chart, JK Lakshmi Ltd. (JKLAKSHMI) is on the verge of a breakout from a Triangle pattern suggesting the start of a bull trend on cards.

Further, a sustained trade above 462 i.e. neckline of the pattern can extend the uptrend in the coming trading sessions. On the daily chart, it is making higher high and higher lows affirming the strength.

Further, RSI has also broken down from the lower Bollinger band suggesting lower levels.

The stock may be sold in the range of 430-435 for targets of 475-510, keeping a stop loss below 400.

MORE WILL UPDATE SOON!!

Remain long in Nifty with a stop below 10,450; 3 stocks which could give up to 8% return

Nifty may find strong support around 10450-10500 level, where Puts have been written. To conclude, our advice would be to remain long with the stop loss of 10450 level.

  

The Nifty rose sharply for the second consecutive day in a row to close at 10,583 level. On the last Friday, Nifty surpassed the resistance of its 5-days and 10-days exponential moving average (EMA) for the first time since 1st February 2018.

The Nifty also took support at the upward sloping trend line, which adjoins the bottoms of 28-Sept- 2017, 06th December 2018 and 22nd February 2018.

Last week, the Nifty formed a bullish candlestick pattern known as “Dragonfly Doji” on the weekly charts. This pattern signals indecision among traders.

It is formed when the security's high, open, and close prices are the same. The long lower shadow suggests that the forces of supply and demand are nearing a balance and that the direction of the trend may be nearing a major turning point. During the first two days of the March series, we have seen a buildup of long positions in the Nifty Futures’.

We have started new series with a 5 percent lower Open Interest (OI) in stock futures. The OI is the lowest in 3 months which makes it very light and gives us the confidence to say that the Nifty will do better than the last series.

For the short term, Nifty may find strong support around 10450-10500 level, where Puts have been written. To conclude, our advice would be to remain long with the stop loss of 10450 level.

The immediate resistance for the Nifty would be in the range of 10700-10750

Here is a list of top 3 stocks which could give up to 8% return in the short term:

HCL Infosystems Ltd: BUY| Target Rs. 68 | Stop-loss Rs 60| Return 8%

The stock is on the verge of giving the highest monthly close since November 2015. The stock price has given an ‘Ascending Triangle’ breakout on the monthly charts by closing above 54 level indicating primary uptrend.

The stock price is trading above its 20, 50, 100 and 200-DMA, which indicates bullish setup for medium to long term. Oscillators and momentum indicators are showing strength in the medium and long-term charts.

The recent price fall of 10 percent seems to be a running correction in overall bullish trend. We recommend buying HCL Infosystems for the upside target of Rs68, and a stop loss below Rs60.

Tata Global Beverages Ltd: BUY| Target Rs 290 | Stop-loss Rs 260 | Return 6%

The stock has made a Bullish Trend Reversal from the support of the long-term trend line. It has closed above its 5-days EMA Resistance.

The RSI has formed a positive divergence on the daily chart, which indicates selling momentum is slowing down and a rise in trend reversal is on the cards.

The stock has been an outperformer for last 1 year and holds bullish trend on the monthly chart. We believe this recent fall of 20 percent from high is a good buying opportunity for the short term. We recommend buying Tata global for the upside target of 290, keeping a stop loss below Rs260.

Century Textiles: BUY| Target Rs. 1300| Stop-loss Rs 1170| Return 6.60%

Century Textiles reversed northwards after forming a Double Bottom around Rs 1150 level to close above 5-DMA of Rs 1180 level.

The stock price has made a Bullish trend reversal “Doji” pattern on the weekly charts. The RSI has formed a positive divergence on the daily chart indicating that the selling momentum could be slowing down which could lead to a trend reversal.

The recent price fall of 17 percent seems to be a running correction in overall bullish trend. On the higher side, the stock will face resistance around Rs 1,300 which was the recent high. We recommend buying Century Text for the upside target of 1300, and a stop loss below Rs 1170.

MORE WILL UPDATE SOOON!!

Most trusted stocks! Top 20 smallcap stock from 4 MFs schemes which survived the fall

Stretched valuation in the broader market was an overhang but investors should focus on stocks which can deliver growth in the next 2-3 years. With the recent corrections, most of the smallcaps appear less expensive.

The S&P BSE Smallcap index plunged by about 8 percent while there are many stocks which saw a double-digit cut of up to 40 percent so far in the year 2018. But, look who stood the test of time were many smallcap equity funds.

More than 20 equity funds outperformed the S&P BSE Smallcap equity index in the same period. The S&P BSE Smallcap index slipped by about 8 percent compared to 2 percent fall seen in the net asset value (NAV) of HDFC Small Cap growth fund, followed by 4 percent decline seen in the SBI Emerging Business.

Indiabulls value Discovery slipped by about 5 percent, and L&T Emerging Business also witnessed a similar decline which was still lower than 8 percent fall seen in the S&P BSE Smallcap index.

The broader market started underperforming even before the Budget was announced. The selling got further accelerated soon after the Budget was announced and sudden rise in US treasury yields which led to some money moving out of equity markets to bonds globally.

The Small & Midcap stocks which were trading slightly ahead of their long-term averages got hit the most once investors started booking profits at higher levels.

“This group (small & midcap) was the biggest beneficiary of the largely indiscriminate rally last year and is likely to lose most of its accrued gains as prices readjust with underlying fundamentals.

For everyone else, our recommendation would be to take eyes off of the ticker tape and focus only on clean underlying earnings

We have collated a list of top 20 stocks which helped fund managers to beat the index at a time when most stocks collapsed in double digit. The list includes stocks like Sonata, Redington, Aarti Industries, KEC International, Dilip Buildcon, and TV Today Network.

Additionally, P&G Hygiene, Elgi Equipment’s, GE Shipping, Kirloskar, Solar Industries, and Divis Laboratories. Sterlite Technologies, Hexaware Technologies, Gujarat Heavy Chemicals, Elgi Rubber, Jubilant Lifesciences, Phillips Carbon, Rane Holdings, Ramco Cements, Ipca Laboratories, Lakshmi Machine, HEG, and Carborundum Universal.

Stretched valuation in the broader market was an overhang but investors should focus on stocks which can deliver growth in the next 2-3 years. With the recent corrections, most of the smallcaps appear less expensive.

If the correction is so high and it is in high-quality stocks, it is advisable to maintain or average the respective stocks.

It is also a good time to measure your portfolio risk and accordingly add high-quality blue-chips and reduce high beta stocks. Higher exposure to defensive stocks which are available at fair valuation will work in the long-term.

MORE WILL UPDATE SOON!!

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Nifty for week (Feb 26, 2018 – Mar 02, 2018)

Nifty closed the week on positive note gaining around 0.40%.

As we have mentioned last week, that support for the index lies in the zone of 10400 to 10500 where break out levels and medium term moving averages are lying. If the index manages to close below these levels then the index can drift to the levels of 10000 to 10100 where the index has taken multiple supports in the month of November-2017 & December-2017 and long term moving averages are lying. During the week the index manages to hit a low of 10303 and close the week around the levels of 10491.

Support for the index lies in the zone of 10400 to 10500 where break out levels and medium term moving averages are lying. If the index manages to close below these levels then the index can drift to the levels of 10000 to 10100 where the index has taken multiple supports in the month of November-2017 & December-2017 and long term moving averages are lying.

Resistance for the index lies in the zone of 10650 to 10750 from where the index has opened gap down. If the index manages to close above these levels then the index can move to the levels of 10900 to 11000 from where the index broke down after consolidation.

Broad range for the week is seen from 10000 on downside & 11000 on upside.

MORE WILL UPDATE SOON!!

Nifty Bank for the week (Feb 26, 2018 – Mar 02, 2018)

Nifty Bank closed the week on positive note gaining around 0.50%.

As we have mentioned, last week that support for the index lies in the zone of 25000 to 25100 from where the index broke out of triple top pattern. If the index manages to close below these levels then the index can drift to the levels of 24400 to 24500 where long term moving averages are lying. During the week the index manages to hit a low of 24782 and close the week around the levels of 25302.

Support for the index lies in the zone of 25000 to 25100 from where the index broke out of triple top pattern. If the index manages to close below these levels then the index can drift to the levels of 24400 to 24500 where long term moving averages are lying.

Minor resistance for the index lies in the zone of 25700 to 25800. Resistance for the index lies in the zone of 26200 to 26300 from where the index has opened gap down. If the index manages to close above these levels then the index can move to the levels of 26700 to 26900 where trend-line joining earlier highs is lying.

Range for the week is seen from 24700 to 24800 on downside & 25700 to 25800 on upside.

MORE WILL UPDATE SOON!!

FIIs create shorts in March series; Nifty to find support near 10,400 in coming week

DII flows have supported the index against selling by FIIs. However, the current US$INR pullback would concern the market if it moves beyond 65.5.

The Nifty50 recovered from the important support of 10,300. The current pullback is expected to stay for some time considering the cool off in volatility in the Indian and US markets.

The US Volatility index has declined sharply from 40-18% while India VIX has declined from 18-14%. This would give a lot of comfort to equity markets.

In addition, Nifty futures open interest has declined sharply by 25 percent in the last series. Nifty futures outstanding positions have come down to 10-month mean levels now.

This means the index may have limited downsides after the major correction in the last series. The decline in volatility was seen along with the addition of positions at 10300 and 10400 Put strikes. Both strikes have added.

This means volatility writers have become active at this crucial value area of Nifty while the Nifty should trade with a positive bias for some time.

Noticeable, Call base on higher side is placed at 10700 strikes. The current pullback may eventually extend towards these levels

DII flows have supported the index against selling by FIIs. However, the current US$INR pullback would concern the market if it moves beyond 65.5.

Bank Nifty: Short covering trend can be seen above 25500 levels:

The bank index ended the February F&O expiry on a dismal note. However, it ended the week on a positive note well above 25300 on the back of short covering.

Rollovers were in line with expectations. However, PSU banks witnessed a carry forward of short positions whereas private sector banks have seen closure of these positions

A huge chunk of open interest is seen building in 25500 Call since last week. Despite the index moving above 25300 from 24700. Closure of these positions is missing, which is likely to keep the index move in check near 25500.

However, 25500 remains a key pivotal level above which the short covering trend is likely to extend. On the lower side, sizeable additions is seen in 25000 and 25200 strike Puts indicating major short-term support

IVs have cooled off in recent days and moved towards 14% from levels of 20%. We feel IVs are likely to remain choppy, which will provide support in case of any major sell-off.

In price ratio terms, Bank Nifty/Nifty has taken support near 2.40 levels. We feel the ratio is likely to move towards 2.45 levels on the back of short covering, which can be seen above 25500.

Yield surge continues to keep EM recovery in check:

The surge in yield mainly from US continuous to be the driving force for the risk sentiment globally. As the yield surge picked pace post heavy bond auctions and hawkish fed minutes the risk assets like equity took a breather from its recent recovery trend.

For the recent sell-off, US & MSCI EM has retraces over 50% of losses, while slightly weak recovery seen is seen in European indices and but Indian markets haven’t seen any meaningful recovery as continued negative news flows adversely impacted the recovery.

From a fund, flow standpoint action in most EM’s remained thin. While Taiwan saw an inflow of US $ 80 million, South Korea and India saw outflows of over US $ 350 million (as per provisional data) & US $ 100 million respectively. Indonesia, Thailand, and the Philippines also saw marginal outflows.

In the F&O space, short creation by FIIs was mainly seen in index future space (key addition in Bank Nifty) and OI totalled over the US $ 650 million. In the index option space as well addition was seen on the Call side to hedge portfolio while FIIs sold US$ 350 million

The focal point will continue around the abatement of the yield surge trend. Without this dynamic in place, sustainable recovery is not likely. Caution is warranted as the Dollar is moving higher on the back of increasing cross-currency swaps. Usually, the dollar scarcity scenario is not supportive of FII money inflows.

MORE WILL UPDATE SOON!!

Top 10 companies where CLSA is overweight on in its model portfolio; do you own any?

Ten stocks on which CLSA maintains its overweight stance include names like ICICI Bank, SBI, HDFC, ICICI Pru Life, IndusInd Bank, L&T, Astral, Sadbhav, Godrej Properties, and Sobha.

Indian markets might have given stellar returns in the year 2017 but that didn’t get rolled over in the year 2018 with respect to macro indicators.

A worsening macro as evident in rising bond yields, which capture fiscal concerns and inflation, remains a key worry. We raise the weight on IT Services in our model portfolio to neutral keeping in mind the macro worries..

Ten stocks on which CLSA maintains its overweight stance include names like ICICI Bank, SBI, HDFC, ICICI Pru Life, IndusInd Bank, L&T, Astral, Sadbhav, Godrej Properties, and Sobha.

The low base of demonetisation helps the YoY comparison in Jan-18 but the monthly indicators are not as good as those in Dec-17. CLSA’s two-year growth analysis suggests that growth in certain categories, such as cement, diesel, and steel, came off marginally.

The encouraging trend in tractors and partially in two-wheelers (2Ws) as well offers visibility on the expected rural demand recovery. “On an absolute level, the 12-14% demand growth trend in cement keeps us optimistic on the housing market recovery theme as well,” the report added.

CLSA has been underweight on IT Services as the growth outlook has been weak due to structural reasons. “While that view has not changed, we believe that the worsening macro situation in India and the possibility of cyclical growth recovery in the US makes a case for the underweight to be cut.

The global investment bank added TCS and L&T Technology Services to the model portfolio with 3ppt each. This has been funded by removing Tata Steel from the portfolio and bringing down RIL to neutral weight.

The property remains CLSA single-biggest overweight sector with 6ppt and this signifies our confidence in our view of a housing market recovery. “Financials and Industrials remain the other overweight sectors. Staples, Materials, and Telecom are the underweights,

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