Eye on RBI policy meet this week; bet on these 2 Nifty stocks for 7-10% returns

The central bank could leave policy rates unchanged but hawkish comments from the governor would be slightly supportive for the currency.

  

On the domestic front, focus will now shift to this week's Monetary Policy Committee meeting. Expectation is that the central bank could hold rates unchanged, but hawkish comments from the governor would be slightly supportive for the currency.

Q1 FY19 results so far have been encouraging on a lower base due to Goods & Services Tax impact on earnings last year. In the coming week, around 450 companies will declare their corporate earnings. These include: Housing Development Finance Corporation (HDFC), Tata Motors, Oil & Natural GAs Corporation (ONGC), Tech Mahindra, Shree Cement, Axis Bank, Vedanta, UPL, Power Grid Corporation of India and Titan Company.

In the broader space, IDFC Bank, InterGlobe Aviation, Avenue Supermarts, Escorts, Idea Cellular, Central Bank of India, Godrej Consumer Products, IDFC, Dabur India, Bharat Electronics, Bank of India, Tata Global, Marico, Steel Authority of India and Wockhardt will announce earnings.

Investors will also keep an eye on macroeconomic data like India core infrastructure output for June, which will be released on Tuesday. India Nikkei Manufacturing Purchasers Managers' Index for July will be announced on Wednesday and Nikkei Services PMI for July on Friday.

India’s foreign exchange reserve for the week-ended July 27 and deposit and bank loan growth for the week-ended July 20 will also be released on Friday.

Larsen and Toubro (L&T)| CMP: Rs 1,311 | Target: Rs 1,450 | Return: 10 percent

L&T posted stellar set of numbers in Q1FY19. Consolidated PAT for Q1FY19 registered a strong growth of 36 percent on yoy basis to touch Rs. 1,215 crore.

While revenue came in at Rs. 28,283 crore for the quarter ended June 30, 2018, registering a growth of 18% on a y-o-y basis with pick up of execution momentum in project businesses, robust growth in services business and recognition of revenue on completed performances in Realty business under the newly introduced accounting standard for revenue recognition (IND AS 115). International revenue during the quarter at Rs 9,669 crore constituted 34% of the total revenue in line with previous year.

In Q1FY19, its key infrastructure segment, accounting for 43 percent of revenue, delivered 9.7 percent year-on-year growth due to improvement in execution. Apart from the power segment which saw a degrowth of 39 percent, which accounts merely 3.8 percent of the business, other segments such as heavy engineering delivered 29 percent growth, followed by a 37.4 percent growth in defence and a robust 38.5 percent growth in the hydrocarbon segment. Hydrocarbon, which accounts for 12.4 percent of the total topline witnessed a strong revival owing to higher oil prices and growth in capex.

Order flows of Rs 361.42 billion during the quarter, marking a growth of 37 percent, with pick-up in domestic ordering activity during Q1FY19 indicates better days for the firm ahead. The company has given 10-12 percent order inflow guidance for the current year, most of which is expected to come in the first half or by the third quarter of current fiscal.

The company has bagged new orders worth Rs 36,142 crore at the group level during the quarter ended June 30, 2018, recording a growth of 37%, International orders at Rs 9,404 crore constituted 26% of the total order inflow. Infrastructure, Hydrocarbon and Heavy Engineering businesses largely contributed to the growth in order inflows during the quarter.

Consolidated Order Book stood at Rs. 271,732 crore as at June 30, 2018 which provides strong visibility in terms of the revenue growth and profits over the next two years. International Order Book constituted 23% of the total Order Book. At CMP of Rs. 1,311 (Face value: Rs. 2), the stock trades at a P/E of 25x on FY18 EPS.

Going forward, L&T management is expecting order inflows to remain strong in FY19 ahead of the general elections in 2019. And with the execution improving and other businesses such as technology and finance making higher contribution, it should deliver double-digit growth in sales and earnings. We expect a target of Rs 1,450 in 9-12 months (25x at estimated FY19 EPS).

Asian Paints | CMP: Rs 1,434 | Target: Rs 1,600 | Return: 7 percent

Decorative paints business in India registered double digit volume growth in Q1FY19, aided by the low base effect of Q1FY18.

The Company witnessed 30.56 percent rise in consolidated profit at Rs 558.02 crore for the quarter ended June 2018. It has posted a net profit of Rs 427.41 crore in the corresponding quarter last year.

The company believes the GST rate reduction from 28% to 18% is a good move in the right direction and will help boost demand from small consumers. The company plans to pass on the benefit of rate reduction due to GST to consumers.

However, the management is cautious about the fact that the input prices have been increasing continuously, and they expect costs to inflate by at least 10% in the next quarter. The management has said that the price hikes taken in March 2018 and May 2018 (cumulatively 3.3%), only partially pass on the impact of the rise in RM costs. It expected to take further price increases to mitigate the impact. However, it has deferred the decision in lieu of the GST rate reduction.

In the Industrial business, good demand conditions in the General Industrial and Auto Refinish segment helped performance of the Automotive coatings JV (PPG-AP). While the Industrial Coatings JV (AP-PPG) saw good growth across both – protective coatings as well as powder coatings segment.

Overall, International operations faced challenging conditions with issues like forex unavailability, difficult weather conditions impacting business performance.

The company expects the recent reduction in GST rate on paints from 28% to 18% to reduce price differential between organized and unorganized players and drive market share gains. The company is taking steps to pass on the benefit of the 10ppt GST rate reduction to consumers. This would entail re-stickering of all company owned inventory to reflect the GST rate adjusted price.

While the reduction in GST rate should automatically drive 10% reduction in MRP, actual benefit passed on to the consumer may depend on the competitive intensity within the dealer network as most paint products are sold below MRP.

The company remains hopeful of recovery in demand going forward on the back of upcoming festive season as well as demand recovery in key South India market. The company plans a capex of Rs. 1,000 crore in standalone books in FY19, of which Rs. 800 crore would be incurred for its under-construction greenfield facilities in Mysuru and Vishakhapatnam. Consolidated capex is likely at Rs. 1,200 crore.

At CMP of Rs. 1,434 (Face value: Re. 1), the stock trades at a P/E of 67x on FY18 EPS which is at premium to its peers in the sector. Overall the rally in FMCG stocks is owing to a rush by investors to grab a piece of India's consumer demand story which has rerated the valuation of FMCG companies to the highest in nearly three decades.

The sector's rich valuation is owing to a combination of strong fund inflows on and a relative lack of opportunity for investors.

The stock of Asian Paints has rallied in recent times owing to strong result in Q1FY19, we still believe there is upside as it is one of the strong play on India’s consumption theme with quality management pedigree. We believe the stock will always trade at a premium as it is a market leader with a gigantic scale achieved over the years. We expect a target of Rs. 1600 by FY19 end.

MORE WILL UPDATE SOON!!

See Nifty at 11,450 levels; 5 largecaps, 1 midcap that could return up to 20%

Financial Advisors expects sideways to bullish movement for the Nifty in coming sessions, within a range of 11,450 on the higher side and 11,100 on the lower side.

  

Indices are soaring higher into uncharted territory without any interruption. Momentum is seen in state-run banks, whereas Nifty Metal and Midcap indices bounced back from their lows.

The suggested Double Top Buy pattern on the Point & Figure chart has got achieved. The Nifty's 5-day simple moving average (DMA) stands around 11,159, which indicates that the bull run is intact unless the index trades below it. The benchmark index has a higher gap unfilled around 11,185 levels. So, the possibility of prices retracing to fill the gap cannot be ruled out.

The Nifty has also given a classical flag pattern breakout. The target as per the pattern is 11,400, which is supportive for the bulls. It previous high of around 11,171 levels can act as support too.

Looking at the options data, the highest put open interest is seen around 11,000 strike, followed by 11,200 strike. Maximum call OI is seen around 11,500 levels, followed by 11,400. The data signifies an immediate trading range between 11500 and 11,100 levels.

We expect sideways to bullish movement in coming sessions, within a range of 11,450 on the higher side and 11,100 on the lower side. Stock specific action can also be seen. If the Nifty closes below 11,120 levels, it can correct to 10,930/10,880 levels.

The Bank Nifty is trading higher after a breakout from the tight range of 27,200 and 26,650. We expect sideways to bullish movement in a 27,700-27,300 range. The psychological mark of 28,000 can act as a resistance, while support lies around 27,350 levels.

Here is the list of five stocks that could return up to 20 percent in the short term:

Hindustan Zinc | Buy Range: Rs 267-270 | Target: Rs 320| Stop Loss: Rs 255 | Upside: 20%

After giving a decent fall, scrip seems to be bottoming out near its channel support line. Consistent formation of Bull candle near its support line giving a hope to Bulls for making long position in the scrip.

Formation of inverted H&S where right shoulder is in progress which is price reversal pattern indicates up move in coming sessions. The weekly chart is showing parity with its historical levels.

Oversold stochastic is also lending support its price action. One can go long around Rs 267-270 levels with the stop loss (SL) of Rs 255 for the target of Rs 320.

Federal Bank | Buy Range: Rs 87-89 | Target: Rs 105 | Stop Loss: Rs 77 | Upside: 20%

Daily chart of stock reveals that demand is increasing and supply is diminishing. Rising trend line from lower levels is displaying trend reversal and creates a buying opportunity at the current juncture.

Breakout of Inverted H&S on chart augur well for the Bulls and indicate surge on the upside.

Apart from this, the sustainability of MACD Histogram along with positive territory signals optimism, suggest upside move in the counter in the coming sessions. We suggest buying Federal bank around Rs 87-89 with SL of Rs 77 target Rs 105.

Tata Motors | Buy Range: Rs 267 | Target: Rs 320 | Stop Loss: Rs 248 | Upside: 20%

Strong support around Rs 260 levels suggests buying opportunity. Moreover, Bullish engulfing formation on weekly chart where current candle completely engulfs the previous candle is Bullish reversal pattern in nature and signals bullish tone in coming sessions.

While looking in a shorter time frame of the chart, it has formed Cup and Handle pattern which is also showing strength in the counter.

Indicator and oscillator are lending support to price action. One can take a long position at current level with the SL of Rs 248 for the target Rs 310 and Rs 330.

Karnataka Bank | Buy Range: Rs 113-115 | Target: Rs 133 | Stop Loss: Rs 103 | Upside: 18%

On a daily chart, the stock has formed Double bottom which is a bullish reversal formation indicates positive rhythm. Moreover, the stock has formed a Bullish Engulfing pattern which is also a Bullish reversal candlesticks pattern.

Trendline breakout is expected above 120 from where the momentum of upside can be seen in the counter. Furthermore, Momentum indicator RSI reading comes at 40 with a positive crossover which is a signal of optimism.

Based on the mentioned technical structure, we are expecting upside movement in the counter in coming sessions. We advise buying KTK bank around Rs 113-115 with SL of Rs 103 for the target of Rs 133.

DLF | Buy Range: Rs 183-185 | Target: Rs 215 | Stop Loss: Rs 168 | Upside: 17%

Price of DLF has seen a sharp rebound after hitting a low of Rs 168 where its key support is seen. The emergence of Tweezers bottom on the weekly chart is giving the possibility of a pullback on the higher side in coming sessions.

Moreover, Prices are forming Falling wedge pattern on the longer time frame of chart and resolute trend line breakout is expected to come above 192 from where it will increase its velocity.

RSI also gave trend line breakout after bottoming out near oversold zone and weekly MACD in uptrend along with declining histogram in negative territory thus supports bullish bias in the stock. We recommend buying DLF around Rs 184-185 with the stop loss of Rs 168 for the target of Rs 215.

MORE WILL UPDATE SOON!!

Top 10 moneymaking ideas by experts that could return 5-11%

The Nifty closed above 11,200 levels, which has opened target towards 11,350-11,450 levels on the Nifty.

  

The Nifty rose 2.4 percent for the week-ended July 27. Experts feel the rally is not over yet and see the index hitting fresh record highs in the August series.

The index finally broke out of the range to hit a fresh record high above 11,171. It closed above 11,200 levels, which has opened target towards 11,350-11,450 levels on the Nifty.

After the huge rally, the question that most investors are asking is whether the market is overbought now?

Experts feel the momentum has begun and the rally will take the index to fresh record highs before it halts. They advise investors to stay with the trend and not go short at current levels.

There is still a long way to go, we would rather re frame it as start of the new leg. With Friday’s gap-up opening, we see a breakout from previous highs with a breakaway gap indicating strong optimism to continue.

Since we have entered uncharted territory; it would be difficult to offer precise levels. We would not be surprised to see the index hastening towards 11,450–11,500 and beyond.

We sees 11,185 followed by 11,092 as immediate supports. Any possible decline towards these levels should ideally be used as a buying opportunity.

Here is a list of 10 moneymaking ideas by various experts that could return 5-11 percent in the next 1-2 months:

Motherson Sumi: Buy| CMP: Rs 320| Target: Rs 334-342| Stop Loss: Rs 307| Return 6-9%

On the daily chart, the stock is moving in a lower top lower bottom formation. The stock has formed a double bottom formation and has given a neckline breakout at Rs 308 levels.

Volumes are also increasing gradually which signals rising participation in the rally. The stock is well placed above its 100-day SMA which supports bullish sentiments ahead.

The daily strength indicator RSI and MACD both are in a bullish terrain which confirms strength in the near-term.

Century Textiles Ltd: Buy| CMP: Rs 938.65| Target: Rs 980-1000| Stop Loss: Rs 915| Return 5-7%

With current week's 7 percent gains, the stock has decisively broken out its nine weeks down sloping channel breakout at Rs 900 levels on the closing basis.

This breakout is accompanied by a rise in volumes which confirms trend reversal on the daily and weekly chart. The weekly strength indicator RSI has given a positive crossover from the oversold region.

GAIL India Ltd: Buy| CMP: Rs 378.65| Target: Rs 393-400| Stop Loss: Rs 366| Return 5-7%

With current week's 5 percent gains, the stock has decisively broken its resistance zone of Rs 377 levels on the weekly chart. The stock has also given its six months down sloping channel breakout at Rs 378 levels on the closing basis.

This breakout is accompanied by a rise in volumes which confirms trend reversal on the daily and the weekly chart. Currently, the stock is trading into a rising channel which supports a bullish trend in the short to near-term.

The weekly strength indicator RSI and the MACD both are in bullish terrain which confirms strength in near term.

HDFC Life: Buy| CMP: Rs 507.3| Target: Rs 535-545| Stop Loss: Rs 490| Return 6-8%

On the daily chart, the stock has given an ascending triangle breakout at Rs 506 levels. Volumes are also increasing gradually which signals rising participation in the rally.

The stock is well placed above its 20, 50 and 100-day SMA which supports bullish sentiments ahead. The weekly strength indicator RSI and the MACD both are in bullish terrain which confirms strength in near-term.

Arvind: Buy| LTP: Rs. 426.15| Target: Rs 469| Stop Loss: Rs 401.70| Return 10%

Last week, the stock prices finally come out of its congestion zone which in technical terms can be interpreted as a breakout from the ‘Triangle’ pattern. This was accompanied by higher than average daily volumes, providing credence to the breakout.

The stock has corrected a bit in the last couple of weeks, but we would rather construe this as a pull back and expect the stock to resume its uptrend. Hence, we recommend buying for an upside target of Rs.469 and stop loss at Rs.401.70.

Century Textiles Ltd: Buy| LTP: Rs 941.95| Target: Rs 998| Stop Loss: Rs 909| Return 6%

This stock has undergone massive price correction over the last few months. However, the correction got arrested recently and the stock slipped into consolidation mode.

On Friday, there was a decisive breakout seen from this short-term congestion and hence, we expect the stock to give a decent relief rally in next few days.

The weekly chart displays more strength and hence, one can look to go long for a positional target of Rs.998 in coming weeks. The stop loss needs to be fixed at Rs.909.

Phillips Carbon Black Ltd: Buy| LTP: Rs 234.85| Target: Rs 260 | Stop-loss: Rs. 220 | Return: 11%

After remaining on a sideways direction with negative biasness, Phillips Carbon registered a strong breakout from the crucial level of 20-days EMA placed at Rs 224 on the weekly chart.

Despite coming under pressure on the intraday basis, the scrip decisively managed to rebound at a new level, thus indicating a trend reversal on a short-term basis. The scrip also witnessed a significant volume breakout.

On the weekly price chart, the scrip registered a bullish candlestick pattern indicating a reversal in trend favoring upward momentum.

Further, the weekly RSI at 69 signaled a buying regime at a current level along with positive cues from MACD suggesting an upward shift.

The scrip is currently holding immediate resistance at Rs 291 and immediate support level at Rs 199. We have a BUY recommendation for Phillips Carbon which is currently trading at Rs. 234.80

Biocon Ltd: Buy | LTP: Rs 586| Target: Rs. 620 | Stop-loss: Rs. 553 | Return: 6%

Last week Biocon formed a reversal trend favoring upward momentum after consolidating on multiple price level of Rs 674-637 in the last six month.

Although it remained flat during an early trade of the week, it gained strong momentum towards the weekend to close above 200-days EMA levels seen at Rs 560. It also witnessed a substantial support from volume buildup in the same period.

The positive breakout on weekly basis aided the scrip to form a strong bullish candlestick pattern indicating a sustained trend at the current level.

The weekly RSI trend registered an upward momentum at 62 suggesting a buying regime along with MACD trading on a bullish momentum.

The scrip has a support at 521 levels and medium-term resistance level at Rs 637. We have a BUY recommendation for Biocon which is currently trading at Rs. 586.20

Cholamandalam Investment & Finance Co. Ltd: Sell | LTP: Rs 1463| Target: Rs. 1,395 | Stop-loss: Rs. 1,542 | Downside: 5%

Cholamandalam Investment mostly traded on a sideways direction favoring the negative biasness on its one-month price chart, and consolidated from Rs 1,608 levels towards a low of Rs 1,446.

Last week the scrip witnessed a setback as it slipped below crucial support of 200-days EMA level placed at Rs 1,476. Further, the volume growth remained to subdue to drop about 5 percent on an intraday basis.

The scrip trend indicated short-term consolidation which is seen with a formation of bearish candlestick pattern on its weekly price chart post-breach below important moving average level.

Further, the secondary momentum trend continued to indicate negative signal with RSI slipping below at 48 coupled with the bearish outlook from MACD trend.

The scrip is facing a resistance at 1600 levels and crucial support at Rs 1,274 levels. We have a SELL recommendation for Cholamandalam Investment which is currently trading at Rs. 1463.35.

Federal Bank: Buy| LTP: 90.65| Target: Rs 98| Stop Loss: Rs 84| Return 9%

This counter appears to have resumed its uptrend from the 8-day old consolidation phase after the huge single day up move it witnessed on 17th of July.

As the momentum appears to be very strong it should aim at bridging the bearish gap seen in the zone of 98 – 93 registered on 10th of May 2017. Hence, positional traders should buy into this counter for a target of Rs 98 with a stop below Rs 84 on a closing basis.

MORE WILL UPDATE SOON!!

What the first-quarter numbers so far tell us: Rural India is recovering

Consumption sectors (FMCG, durables, autos), though on a soft base, post noticeable volume growth for a consecutive quarter.

  

While optically, numbers look interesting, investors should keep in mind that large number of manufacturing companies witnessed pre-GST destocking in the run-up to the GST deadline (July 1) in the year-ago quarter. Hence, part of upbeat topline growth is contributed by the soft base.

Further, as a caveat, while analysing these numbers, investors should consider that YoY numbers are not strictly comparable due to GST accounting impact, which lowers the reported topline numbers in the post GST quarters. For instance, the FMCG sector’s reported sales growth numbers were mediocre but the comparable growth has been in lower double digit.

So as a way around, for a comparable assessment, we looked at the sequential growth numbers for the last three post-GST quarters and found that cumulative sequential sales, operating profit and net profit growth numbers have been 10, 14 and 15 percent respectively. These suggest a steady recovery. However, sales numbers for the last two quarters have been at par with operating profit, which means the cycle of margin improvement has plateaued.

Our qualitative takeaways from earnings

Early results from the FMCG companies reflect upon steady recovery in volume and earnings, albeit on a weaker base, as trade conditions have nearly normalised. While consumer offtake has been strong for general trade and modern trade channels, CSD (canteen stores department) has been a laggard. Topline growth has been led by the sector leader Hindustan Unilever (HUL), which reported third consecutive quarterly result of double digit volume growth.

Even more noteworthy has been the higher growth pace for the rural areas. However, HUL’s management is still shy of calling it a trend. Bajaj Corp updated that rural offtake for their flagship product, Almond Drop hair oil, has been 30 percent higher than urban in both volume and value terms.

While improved rural sentiments aided by recent policy measures and positive fall out of monsoon season augurs well for the sector, key risk factors to note from the sector result are increased competitive intensity and crude linked raw material prices.

Majority of IT companies had a great start to the new fiscal. Albeit a quarter of wage hike and visa costs, the favourable currency movement (rupee depreciation) and efficiency improvement restricted the decline in operating profit margin. The outlook/guidance for the future shared by these companies looks extremely strong as many of them are actively participating in the transformation agenda of the enterprises with a strong digital offering. The share of digital in their business is inching up and this business is commanding a higher margin and growing much faster than the company’s average.

Results reported from two auto companies, Ashok Leyland and Bajaj Auto, indicate that demand in domestic market continues to be robust across all segments: 2W (two-wheeler), 3W (three-wheeler) and commercial vehicle (CV). Export markets are also looking very robust in terms demand. However, there seems to be huge competition in domestic 2W and CV markets forcing companies to enter into a price war, which in turn hurting the operating profitability. Further, the companies continue to face pressure from the significant rise in raw material (RM) prices.

The retail focused private banks reported in line performance on expected lines. Loan growth has been healthy for them, as well. The upward revision in MCLR (marginal cost based lending) is beginning to impact lending yields positively. A large bank mentioned about pricing power coming back to lenders. However, the same lender cautioned about the stress in the SME segment which is perhaps borne out by the weak number reported by a mid-sized SME focused bank. One of the mid-sized corporate lender surprised positively on asset quality after reporting extreme stress in previous quarter that had an industry wide impact due to RBI’s guidelines on bad debt recognition. The weakness in garnering CASA (low cost deposits) was a trend visible across banks and points to firming up of rates in the system.

An exception to this trend was Bandhan Bank. The youngest private bank posted CASA growth of 84 percent YoY taking its CASA ratio to 35 percent, albeit on a lower base. The bank mainly in micro lending posted stellar performance indicating buoyant conditions for those operating at the bottom of the pyramid. One of the largest consumer lending NBFC, Bajaj Finance, continued to reap benefits of its two pronged-strategy of focusing on urban aspirational mass as well growing rural demand. Competition is heating up in the retail lending space. However, since the credit pie is growing driven by rising penetration and increasing average loan size, there is enough space for growth.

From the agrochemical stable, Rallis reported its numbers last week. The pressure on account of strained supply from China continued in Q1, pushing up the raw material prices. With limited pricing power and high competition there was continued difficulty to pass on the high costs to consumers and margins were impacted, despite a healthy growth in topline.

Within the materials sector, metals companies which have reported results so far have seen benefits of higher metals prices and better demand, thereby reporting strong growth in revenues. Companies have also reported better realisation. Increase in demand has resulted in higher volumes and impacted margins positively on account of operating leverage. Despite higher input cost (coal and others) companies like Tata Sponge and Hindustan Zinc reported record production led by higher demand from the user industries.

Another sub-segment from the material sector and among the favourite sector for last fiscal, chemicals in its initial set of results appeared struggling due to plant shutdowns (Bhansali Engineering & Goa Carbon) and elevated input prices. Having said that the key differentiator in this heterogeneous sector remains the end market prospects. Improving realization for the products like Calcined petroleum coke (Goa Carbon) provides strong growth prospects for aluminium companies.

In the engineering space, companies like ABB and few others that have reported results have delivered better than expected growth in sales led by recovery in demand. Segments like railways, renewables, construction, power T&D have been driving the growth while industrial continues to be an area of concern. Also, exports are seen to be improving led by recovery in global demand and depreciating rupee.

In case of cement sector, prices continue to remain subdued despite a strong volume growth aided by pick-up in infrastructure activities. Amid rising cost pressures and increased competitive intensity, cement companies are laying more emphasis on optimising cost structure. Talking about individual companies, UltraTech’s increasing rural segment contribution has been noteworthy and it has improved to around 40 percent from 35-36 percent a few quarters back.

Among building materials, Havells management has indicated that real estate sector has seen a stabilisation of demand post the introduction of GST and RERA last year. However, a strong pick-up in real estate will take some more time.

MORE WILL UPDATE SOON!!

Life insurers' fixed income assets rise 46% in 3 fiscal years, equity assets up 29%

Data showed that at the end of FY18, life insurers held equity assets worth Rs 8.12 lakh crore, and fixed income assets worth Rs 24.5 lakh crore.

 

From FY15 to FY18, fixed income assets and equity assets of life insurance companies rose 46 percent and 29 percent, respectively, according to data sourced from the Life Insurance Council.

The data showed that at the end of FY18, life insurers had equity assets worth Rs 8.12 lakh crore (at market value), and fixed income assets worth Rs 24.5 lakh crore.

The total investment assets of life insurers at the end of FY18 stood at Rs 33.13 lakh crore, around 11 percent higher than at the end of the previous fiscal year.

Infrastructure assets held by life insurers stood at Rs 3.76 lakh crore, 8.5 percent higher than at the end of the previous year. In comparison, the capital that they deployed in the life insurance sector rose merely 3.5 percent to Rs 36,582 crore, as on March 31 this year.

The growth in these insurers' equity portfolio is a reflection of the growth witnessed by the domestic stock market. The benchmark Sensex index rose to 32,968.68 at the end of FY18, from 27957.49 at the end of FY15.

The distribution architecture, comprising of agents and new branches, remained largely unchanged. In FY18, only 156 new branches were added by life insurance companies.

One good news is that attrition of individual agents was kept under check. The number of individual agents stood at 2.08 million at the end of FY18, only 5,851 agents less than at the end of the previous year.

On an average, the life insurance industry loses 20,000-25,000 agents every year, primarily due to low commissions.

A reason for the lower reduction in the number of agents could be better commission rates. Overall, commission-related expenses grew 14.5 percent year on year to Rs 25,309 crore in FY18.

The data also showed that the renewals of linked products (Ulips) were higher than that of traditional products. Renewal premium for linked products rose 22.3 percent in FY18 to Rs 38,706 crore, while that of non-linked products increased 6.7 percent to Rs 2.25 lakh crore.

In all, the life insurance industry employed 265,727 direct employees, as at the end of FY18, compared to 249,794 people at the end of March 2017. Over and above this are individual agents and other distribution partners.

MORE WILL UPDATE SOON!!

Sensex hits record high even as some stocks sink to 52-week lows: Here's what to do

Experts said investors should avoid taking leverage bets and pick stocks just because it has corrected in double-digits in the recent past.

 

The Sensex hit a record high of 36,749.69 on Monday but traders are not rejoicing because more than 300 stocks on the BSE hit a fresh 52-week low. When markets scale fresh peaks, one ought to have seen more stocks hitting fresh 52-weeks highs. However, in the current scenario, it is the other way around.

Stocks which hit fresh 52-week lows on the BSE on Monday include: Hero MotoCorp, ICRA, Bajaj Auto, Swaraj Engines, Apollo Hospitals Enterprises, BEML, JK Cement and Sundaram Finance.

 

If you are stuck with stocks that are hitting fresh 52-week lows on a daily basis then your portfolio might need a re-look. Experts said investors should avoid taking leverage bets and pick stocks just because it has corrected in double-digits in the recent past. The emphasis should be given on quality.

Investor needs to very selective in the current phase and only add quality companies where valuations are reasonable. “Investors are advised to review their portfolio and stay invested only in quality companies. We favour consumer companies, private sector banks (HDFC Bank, IndusInd Bank)/NBFCs (Bajaj Finserv), auto/auto-ancillary companies (Rico Auto, JK Tyre & Industries and Apollo Tyres) and select IT services stocks (Infosys, Tata Consultancy Services, HCL Technologies and Persistent Systems).

We advise investors to switch on rallies into other outperformers instead of waiting by. Many mid and smallcaps still have over 25 percent downside visible.

Where is the market headed?

In the last six months, the CNX Midcap and Smallcap indices have dropped 15-22 percent, whereas the benchmark indices are sitting pretty with gains of 3-6 percent. Midcaps have seen severe selling pressure and many stocks which had been market favourites in 2017 have lost close to 30-40 percent of their value in the last few months.

This, experts said, indicate a twin paced market behaviour. “It looks like investors are moving away from high beta stocks in the mid and smallcap space to more fundamentally driven largecaps.” But analysts’ are hopeful that the current divergence between the broader market and largecaps might not exit for long.

There is no denying that new highs are being driven by a handful of scrips. It is important to understand that such a divergent environment may not prevail for a long time if a prolonged uptrend in indices picks up once again beyond new lifetime highs.

The correction is healthy as the excesses of last year one-way rally are getting sorted out. Speculative stocks that ride the market momentum are hardest hit during the volatile phase. It looks like the market is re-evaluating excesses of FY18 and speculative stocks that ride the market momentum are hardest hit during the volatile phase. Market focus has shifted from chasing alpha to more fundamental risk aversion for the time being.

MORE WILL UPDATE SOON!!

5 largecaps to buy ahead of July expiry which may return 6-17%

If  Nifty sustains above 11,080 levels, one can expect the index to test its all-time high of 11,172 and then 11,230 levels.

 

The Nifty rallied in the latter half of Monday to close at 11,085, up 0.68 percent. The weekend cut in the Goods & Services Tax in over 100 items and recovery in the rupee-dollar boosted market sentiment.

The breadth was positive with a 2:1 ratio on the NSE. The BSE Mid and Smallcap indices outperformed with a gain of 1.3 percent and 0.9 percent for the day. The Nifty has been trading in a range of 10,920-11,080 for the last eight sessions.

In Monday’s session, the index managed to close above this range giving a breakout on the upside. If it sustains above 11,080 levels, one can expect the index to test its all-time high of 11,172 and then 11,230 levels.

On the downside, immediate support is seen at 11,000 and 10,920 levels. In Nifty options, maximum open interest (OI) is at 11,000 put and significant call writing was seen in 11,000 and 11,100 strikes suggesting that the market has support at lower levels.

Here is a list of 5 stocks that could return 6-17% in the next 1-2 months:

Maruti Suzuki India: Buy| CMP: Rs 9,701| Stop Loss: Rs 9,400| Target: Rs 10,700| Return 10.3%

The stock is in major long-term uptrend forming higher tops and higher bottoms. In the month December 2017 stock hit high of 9996 and then corrected down to 8255 levels. Looking at weekly chart stock has formed a double bottom pattern.

The rally from lower levels has been on above average volumes and long bullish candles indicating buying participation in the stock. For the last couple of weeks, the stock had been trading in a narrow range and formed bullish pole and flag pattern above the double bottom breakout level.

On Monday, the stock witnessed strong momentum and good volumes given a breakout from flag pattern. Daily MACD line has given positive crossover with its average suggesting start of a fresh uptrend in the stock.

Thus, the stock can be bought at current levels and on dips to 9600 with a stop loss below 9400 for a target of 10500 levels.

Endurance Technologies: Buy| CMP: Rs 1,305| Stop Loss: Rs 1,250| Target: Rs 1,450| Return 11%

The stock was long-term uptrend forming higher tops and higher bottoms from 518 in November 2016 to 1400 in January 2018. Since then the stock has been trading in a range and consolidating its gains.

It has formed a symmetrical triangle pattern which is generally expected to give in the direction of the previous trend. The last couple of sessions have witnessed bounce back from 200 day moving average with price momentum and high volumes.

Price has given breakout from Bollinger band on the upside with the expansion of band suggesting a continuation of the trend in the direction of the breakout. MACD line on the daily chart has given positive crossover with its average and on weekly chart turning up from equilibrium levels.

Thus, the stock can be bought at current levels and on dips to 1290 with a stop loss below 1250 for a target of 1450 levels.

Page Industries: Buy| CMP: Rs 28,514| Stop Loss: Rs 27,500| Target: Rs 30,300| Return 6.2%

The stock is in uptrend forming higher tops and higher bottoms on the daily chart for last six months. Rallies have been by good volumes while declines have been on below-average volumes indicating buying in the stock and market participants holding onto the stock.

On the daily chart, 20-days moving average is acting as support and resistance for the stock. From the recent high of 29,676 levels, the stock has again taken support at 20DMA. Thus, it can be bought at current levels and on dips to 28300 with a stop loss below 27500 for a target of 30300 levels.

Voltas: Buy| CMP: Rs 574| Stop Loss: Rs 550| Target: Rs 640| Return 11.5%

The stock had seen a sharp decline from high of 665 in the month of April this year to a low of 493. Low was formed on high volumes and long ranged bar suggesting value buying coming at lower levels.

The stock has formed a rounding bottom pattern between 560 and 493 odd levels on the short-term daily chart. Price has given breakout from Bollinger band on the upside with the expansion of band suggesting a continuation of the trend in the direction of the breakout.

Daily MACD has moved above neutral level of zero suggesting bottoming process is complete and the stock likely to see the start of a new uptrend. Thus, the stock can be bought at current levels and on dips to 570 with a stop loss below 550 for a target of 640 levels.

Pidilite Industries: Buy| CMP: Rs 1,050| Stop Loss: Rs 1,010| Target: Rs 1,190| Return 17%

The stock is in long-term uptrend forming tops and higher bottoms on the weekly chart. After touching high of 1195 in the month of May, stock corrected down to 1019 levels. Here price has taken support at 50% retracement of the rise from 845 to 1195.

Also, the price has taken support at 89-day exponential moving average and holding above it. Relative strength index has given positive crossover with its average on the daily chart.

Thus, the stock can be bought at current levels and on dips to 1040 with a stop loss below 1010 for a target of 1190 levels.

MORE WILL UPDATE SOON!!

Buy Indian Oil Corporation, target Rs 170

Indian Oil Corporation appears to have formed a strong base around Rs 150 where it is attracting huge buying interest as pointed out by long lower shadows on weekly charts.

        

After the recent correction from the highs of Rs 177, Indian Oil Corporation appears to have formed a strong base around Rs 150 where it is attracting huge buying interest as pointed out by long lower shadows on weekly charts.

Hence, sustaining above this level it can initially target Rs 170. A stop loss suggested for the trade is a close below Rs 154.

MORE WILL UPDATE SOON!!

Accumulate Havells India, target Rs 590

We feel traders shouldn’t miss this chance and accumulate fresh long in the range of Rs 555-560 for target of Rs 590.

 

After a strong up move from Rs 520 to Rs 580 levels, Havells India has retraced marginally. It has reached close to its price support zone placed around Rs 555, offering a fresh buying opportunity.

We feel traders shouldn’t miss this chance and accumulate fresh long in the range of Rs 555-560 for target of Rs 590. It closed at Rs 560.05 on July 16, 2018.

MORE WILL UPDATE SOON!!

Technical View: Nifty forms strong bullish candle; 11,080 next key level to watch

Option band signifies an immediate trading range in between 10,929 to 11,080 zones, experts said.

  

The Nifty50 recouped some of its previous day's losses to close the session above psychological 11,000-mark on Tuesday, forming strong bullish candle on the daily charts.

The rally was backed by oil & gas, banking & financials, metals and pharma stocks. All sectoral indices closed in the green except IT index which fell a percent.

The broader markets, which were badly hit in the previous session, also participated in the rally with Nifty Midcap index rising more than 2 percent.

The Nifty50 after opening higher at 10,939.65 wiped out early gains to hit an intraday low of 10,925.60, but managed to recoup those losses in morning trade itself and reclaimed psychological 11,000-mark in later part of the session. The index hit an intraday high of 11,018.50, before closing 71.10 points higher at 11,008.

The closing above 11,000-mark is a good thing but to maintain that momentum, the index has to close above 11,080 levels and then only it can be able to march towards its earlier life time high of 11,171 seen in January, experts said.

"It was heartening to see Nifty50 strongly recoiling after testing erstwhile breakout point present around 10,930 levels before bulls signed off the session in style with a strong bullish candle.

He said on the back drop of today’s move it appears that the last three sessions of corrective consolidation phase is a mere pause in the ongoing strong uptrend as advance decline ratio also tilted in favour of bulls during the course of the day.

Momentum in the indices shall pick up further on a close above 11,080 which shall also confirm the end of recent corrective swing there by paving the way for new life time highs which may not be difficult as Bank Nifty which was looking relatively stronger registered a bullish engulfing formation thereby erasing Monday's losses.

Hence, traders are advised to create fresh long positions with a stop below 10,925 on closing basis and look for bigger targets around 11,171.

Nifty is forming wave extension on the upside on the daily chart. "This means that the bulls are likely to push the index towards north.

India VIX fell by 0.52 percent to 12.88 levels.

On the option front, maximum Put open interest (OI) was seen at 10,600 followed by 10,800 strike while maximum Call OI was at 11,000 followed by 11,200 and 11,100 strikes. Significant Put writing was seen at all the strikes from 10,800 to 11,000 while Call unwinding was seen at 11,000 strike.

Option band signifies an immediate trading range in between 10,929 to 11,080 zones, experts suggest.

Nifty index managed to hold immediate support of 10,925-10,929 zones and recovered towards previous day’s high of 11,020 zones.

It retested previous breakout zones and a hold above 11,000 could extend its move towards 11,080 then 11,171 levels while on the downside supports are seen at 10,929 zones.

Bank Nifty formed a Bullish Belt Hold candle on daily scale and managed to reclaim above 27,000 zones.

Now it has to continue to hold above 26,750 zones to extend its move towards 27,165 then 27,400 levels.

MORE WILL UPDATE SOON!!