Morning Notes - LKP Securities

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Morning Notes
LKP Advisory
12-Jan-2015
9-Jan
8-Jan
% Chg.
Major Indices
9-Jan
8-Jan
% Chg.
FII's & DII's in equity
27,458
27,275
0.67%
CAC 40 Index
4,179
4,260
-1.90%
09-Jan
8,285
8,235
0.61%
DAX Index
9,649
9,838
-1.92%
S&P BSE MID CAP
10,426
10,421
0.05%
Dow Jones Industrial Average
17,737
S&P BSE SMALL CAP
11,198
11,186
0.11%
FTSE 100 Index
Indices
S&P BSE SENSEX
S&P CNX NIFTY
Rs.Crs
Buy
Sell
Net
FII' Investments
4182
4480
-298
1877
1577
17,908
-0.95%
DII's Investments
6,501
6,570
-1.05%
FII's contribution to the total turnover
42%
300
Nasdaq Composite Index 4,704
4,736
-0.68%
DII's contribution to the total turnover
17%
FII's in Derivatives
BSE Sectoral Indices
10,752
10,387
3.51%
Major Asian Indices
9-Jan
8-Jan
% Chg.
5,899
5,759
2.44%
Hang Seng Index
23,920
23,836
0.35%
09-Jan
14,691
14,434
1.78%
Nikkei 225
17,198
17,167
0.18%
Net
-62
831
574
-73
9,840
9,685
1.59%
KOSPI Index
1,925
1,905
1.05%
OI
12182
58563
49422
2920
S&P BSE CONSUMER DURABLES
9,709
9,629
0.83%
Shanghai Composite
3,285
3,293
-0.24%
Chg.OI
-3.6%
3.9%
2.1%
12%
S&P BSE FMCG
7,835
7,813
0.29%
Taiwan SE Index
9,216
9,238
-0.24%
FIIs' contribution to the total Derivatives turnover
S&P BSE AUTO
18,835
18,829
0.03%
8,145
8,146
-0.02%
Commodities (MCX)
9-Jan
8-Jan
% Chg.
Futures (NSE)
9-Jan
8-Jan
% Chg.
S&P BSE BANKEX
21,346
21,413
-0.31%
Aluminium (30JAN2015)
112
114
-1.36%
USDINR 28-JAN-2015
62.60
62.95
-0.56%
S&P BSE METAL
10,487
10,521
-0.32%
Copper (27FEB2015)
382
386
-0.87%
EURINR 28-JAN-2015
73.98
74.07
-0.13%
S&P BSE CAPITAL GOODS 15,462
15,525
-0.41%
Crude (16JAN2015)
2,983
3,055
-2.36%
JPYINR 28-JAN-2015
52.52
52.53
-0.02%
S&P BSE POWER
2,061
2,080
-0.92%
Gold (5FEB2015)
26,800
26,801
0.00%
FTSE100 (16-Jan-2015)
6581
6432
2.32%
S&P BSE REALTY
1,532
1,554
-1.39%
Silver (5MAR015)
36,833
36,954
-0.33%
S&P500 (16-Jan-2015)
2057
2038
0.94%
S&P BSE IT
S&P BSE TECk
S&P BSE HEALTHCARE
S&P BSE OIL & GAS
LTP
HINDUNILVR
865
48
5.9
INFY
2075
102
5.2
TECHM
2683
116
4.5
DRREDDY
3159
93
3.0
TCS
2510
66
2.7
BANKBARODA
Top Gainers
BSE Smallcap
Chg % Chg
864
48
5.9
INFY
2074
99
5.0
TECHM
2680
113
4.4
DRREDDY
3164
98
GODREJCP
1021
31
Company
LTP
VIDEOIND
191
PIPAVAVDOC
-5
-3.6
NTPC
140
-5
-3.2
BAJAJ-AUTO
2375
-75.4
-3.1
JINDALSTEL
153
-4.5
-2.9
1056
-21.9
-2.0
Chg % Chg
-2
-3.9
-5
-3.3
DLF
138
-5
-3.3
3.2
IDEA
147
-5
-3.2
3.1
JINDALSTEL
153
-5
-3.0
Company
LTP
Chg % Chg
32
20.0
4
7.7
6.6
59
3
6.0
APLLTD
473
25
5.5
Company
LTP
Chg % Chg
87
12
15.2
CANFINHOME
657
83
14.4
SASKEN
255
30
13.4
DCW
20
2
12.6
NOCIL
40
4
12.1
ASHOKLEY
LTP
Chg % Chg
59
65
DPL
138
140
57
EDELWEISS
LTP
DLF
NTPC
1053
CLNINDIA
Company
Company
Top Losers
BSE 100
HINDUNILVR
LTP
Top Losers
BSE Midcap
Top Gainers
BSE Midcap
Top Gainers
BSE 100
Company
Chg % Chg
Top Losers
CNX Nifty
Company
Top Losers
BSE Smallcap
Top Gainers
CNX Nifty
S&P BSE PSU
HMT
Chg % Chg
61
-4
-5.7
TILAKFIN
107
-6
-5.0
PMCFIN
57
-3
-5.0
ASHOKLEY
59
-2
-3.9
DCMSHRIRAM
149
-6
-3.6
Company
LTP
Chg % Chg
SHILPI
55
-8
-12.5
RANDER
11
-1
-10.0
CRESSAN
33
-2
-6.1
OSCAR
238
-15
-5.9
ORISSASP
155
-9
-5.7
Rs.Crs
Index Fut Index Opt Stock Fut Stock Opt
23%
Domestic Market View
Markets to make a cautious start; CPI, IIP data
eyed
The Indian markets surged over half a percent in last
session after Infosys third quarter earnings beat street
expectation with net profit rising 5 percent
sequentially to Rs 3250 crore, and revenues
increasing 3.4 percent to Rs 13796 crore. Today, the
markets are likely to make a cautious start following
muted trend seen in other Asian markets. Moreover,
traders will be eyeing the major macro data of inflation
and industrial production to be announced later in the
day that will likely to set the tone for the Reserve
Bank of India’s (RBI’s) move on interest rates in its
next policy review in February. IIP data is likely to
expand to 2.2 per cent in November, while the CPI
inflation should accelerate to 5.4 per cent in the
month of December as compared to 4.4 per cent
reported in the month of November. Traders will get
support from report that the government plans to
allow resolution of disputes in infrastructure
development through arbitration in neutral places like
Singapore, London and Malaysia, a step aimed at
increasing the confidence of foreign investors in
putting money in a sector that is key to economic
growth but is struggling due to funds shortage. Gems
and Jewellery stocks will be buzzing with the jewellery
industry urging the government to reduce customs
duty on gold to 2 per cent, from 10 per cent at
present, in order to check smuggling of the precious
metal.
Domestic Market OverView
Benchmarks extend previous session jubilation
Friday’s session turned out to be a fabulous day of trade for the Indian equity markets, where
frontline gauges garnered gains of over half a percent. Hectic buying activity which took place during
last leg of trade mainly drove the markets higher, with frontline gauges ending near intraday high
levels, recapturing their crucial 27,450 (Sensex) and 8,250 (Nifty) bastions. Earlier, markets made
gap-up opening as sentiments remained up-beat with Finance Minister Arun Jaitley’s statement that
significant downward trend in inflation has been recorded in the second and third quarter of 2014-15.
The external environment has also largely turned in India’s favour. But, markets entered into red
terrain as investors turned nervous ahead of Infosys Q3 numbers. Meanwhile, selling by foreign
institutional investors continued and they were net sellers in Indian equities worth Rs 477 crore on
January 8, 2014, as per provisional stock exchange data.
Appreciation in Indian rupee supported the sentiments. The partially convertible rupee was trading at
62.37 per dollar at the time of equity market closing against the Tuesday’s close of 62.67 on the
Interbank Foreign Exchange. Meanwhile, shares of pharmaceutical companies remained on buyers’
radar on reports that the Indian and global companies are looking to invest over Rs 1,000 crore in
Gujarat’s pharma sector. Software and technology stocks also edged higher after Infosys’
consolidated net profit surged 13.04 per cent to Rs 3250 crore for the Q3 FY15 as compared to Rs
2875 crore in Q3 FY14. Moreover, the consolidated total income gained around 6.39 per cent to Rs
14636 crore in the quarter under review as compared to Rs 13757 crore in the corresponding quarter
previous year.
Global Market Overview
Asian markets end mostly in green on Friday
The Asian equity benchmarks ended mostly in green on Friday, with Japanese stocks rising for a
second day on speculation that central banks will support growth. China’s annual consumer inflation
hovered at a near five-year low of 1.5% in December, signaling persistent weakness in the economy
but giving policymakers more room to ease policy to support growth. The world’s second-largest
economy still faces formidable headwinds this year as a property market downturn persists and local
governments and companies are struggling to repay debt.
US markets closed lower following mixed jobs data
The US markets closed mostly lower on Friday as investors reacted negatively to the Labor
Department's closely watched monthly jobs report. While a bigger than expected increase in
employment contributed to a drop in the unemployment rate, the report also showed a slowdown in
wage growth. The non-farm payroll employment climbed by 252,000 jobs in December compared to
economist estimates for an increase of about 245,000 jobs. The stronger than expected job growth
helped to push the unemployment rate down to a new six-year low of 5.6 percent. However, the
annual rate of average hourly earnings growth slowed to 1.7 percent in December, the slowest rate
of growth since October of 2012. The mixed data led to some uncertainty about the outlook for
monetary policy, leading some traders to cash in on the recent gains. Negative sentiment was also
generated by a pullback by the price of crude oil, which moved back to the downside after closing
higher for two straight days.
Dow Jones Industrial Average declined 170.50 points or 0.95 percent to 17,737.37, S&P 500
dropped 0.84 points or 17.33 percent to 2,044.81 and Nasdaq declined by 32.12 points or 0.68
percent to 4,704.07.
LKP Advisory
Index Futures
(OI in '000 Shares)
Future
Chg
Spot
Chg
Prem /
9-Jan
(%)
9-Jan
(%)
Disc
0.61
31.0
NIFTY
8,316
0.71
8,285
CNXIT
BANKNIFTY
11,446
3.74
11,400
3.46
18,709
-1.03
18,637
-0.34
Total Open Interest
9-Jan
Chg (%)
17,930
-3.5
45.9
29
14.5
72.0
2,248
-0.5
Increasing OI, Increasing Delivery Qty & Increasing Price in Stock Futures (Open Interest in '000 Shares)
Symbol
Total OI
9-Jan % Chg.
Increase
Del Qty
Spot
(Rs.)
Fut
(Rs.)
Spot
Chg (%.)
Fut
Chg (%.)
Prem /
Disc
HCLTECH
2,588
18%
1,002,713
61%
384
16%
141,841
55%
64%
339,733
1546
1553
0.7%
1.1%
7.5
70%
6,695
1261
1268
4.6%
4.5%
EXIDEIND
9,584
15%
2,025,462
7.0
39%
43%
869,775
190
191
2.1%
1.9%
INFY
8,646
11%
1.2
3,535,665
29%
82%
117,003
2074
2085
5.1%
5.3%
11.0
PTC
12,268
900
9%
998,739
47%
37%
306,887
94
95
0.1%
-0.1%
0.6
7%
127,319
41%
41%
44,779
1357
1366
2.6%
2.7%
8.6
7,583
5%
1,631,252
60%
58%
732,435
554
554
1.6%
1.8%
0.5
ULTRACEMCO
931
3%
238,852
70%
71%
58,136
2729
2735
0.1%
-0.2%
5.6
ANDHRABANK
17,632
3%
948,872
23%
19%
265,947
92
93
1.4%
1.4%
0.4
5,092
2%
676,709
23%
22%
54,023
436
437
0.6%
0.4%
1.6
Spot
(Rs.)
Fut
(Rs.)
Spot
Chg (%.)
Fut
Chg (%.)
Prem /
Disc
MINDTREE
BATAINDIA
WIPRO
SKSMICRO
Del Qty Cash Market
9-Jan
% Del.
Prev
% Del.
Increasing OI, Increasing Delivery Qty & Decreasing Price, (Open Interest in '000 Shares)
Symbol
Total OI
9-Jan % Chg.
CANBK
8,047
15%
445,854
21%
19%
117,459
441
435
-2.5%
-2.8%
-5.3
91
13%
17,312
49%
47%
6,275
3289
3312
-1.1%
-1.1%
23.0
OFSS
MOTHERSUMI
Del Qty Cash Market
9-Jan
% Del.
Prev
% Del.
Increase in
Del Qty
4,540
10%
886,334
50%
48%
134,433
438
440
-1.2%
-1.4%
2.7
13,052
9%
3,311,761
63%
75%
571,392
148
148
-3.1%
-3.2%
0.2
ADANIENT
5,332
7%
685,004
34%
21%
392,000
507
507
-1.0%
-1.5%
0.7
BANKBARODA
4,040
6%
285,124
34%
38%
4,044
1060
1063
-1.6%
-1.9%
2.0
ADANIPORTS
6,964
6%
1,694,241
43%
36%
487,323
331
333
-1.0%
-0.9%
2.2
DABUR
1,853
4%
288,040
54%
50%
18,404
229
231
-0.2%
-0.3%
1.5
47,454
4%
2,002,842
39%
39%
694,532
154
155
-1.7%
-1.6%
0.8
1,330
4%
76,606
34%
27%
2,490
914
912
-0.6%
-0.9%
-2.4
08-Jan
Change in OI
% Chg
IDEA
IDFC
SIEMENS
Open Interest Break-up
(Rs. in Cr.)
09-Jan
INDEX FUTURES
19,243
19,690
-447
-2.27
INDEX OPTIONS
104,054
104,404
-349
-0.33
TOTAL INDEX
123,297
124,094
-796
-0.64
STOCK FUTURES
60,218
59,543
675
1.13
STOCK OPTIONS
15,457
14,480
977
6.75
TOTAL STOCKS
75,675
74,023
1,652
2.23
GRAND TOTAL
198,973
198,117
856
0.43
FII's
123,087
120,047
3041
2.53
75,885
78,070
-2185
-2.80
Others
LKP Advisory
Corporate News

Housing Development Finance Corporation (HDFC) has offloaded nearly 7 million shares in HDFC Life to Azim Premji Trust for Rs 73.31
crore. Shares sold in two tranches represent 0.95% of the total issued and paid-up equity capital of HDFC Life. HDFC now holds 71.42% of
the total issued and paid-up equity capital of HDFC Life.

Tata Steel has reported marginal rise of three per cent in its December quarter sales at 21.29 lakh tonnes against 20.66 lakh tonnes in the
same period last year. Saleable steel production was at 22.21 lakh tonnes, up three per cent, against 21.50 lakh tonnes in the December
quarter last year. The company achieved the highest-ever pellet production of 1.03 million tonnes in the quarter.

Escorts has brought in a series of innovations to redefine the tractor market. Their Powertrac Euro series has created new standards in
aesthetics & comfort. Through XP Engine Series, the company has created benchmarks in fuel efficiency. Now, Escorts has launched a new
category of tractors called ‘Anti Lift Tractors’.

Oriental Bank of Commerce is planning to raise additional Tier 1 capital through Private Placement of ATI Bonds for Rs 500 crore with an
option to retain oversubscription of upto Rs 500 crore. The Bonds have been rated ‘ICRA AA- (Hyb)’ with Stable Outlook & CARE ‘AA-’ by
ICRA & CARE respectively.

ABB India, power and automation technologies provider, has won an order worth about Rs 256 crore from Ceylon Electricity Board (CEB) to
supply two new 220-kilovolt (kV) substations and upgrade an existing substation in Sri Lanka. The order was booked in the quarter ending
December 2014 by ABB India.

ABG Infralogistics has purchased the 49% shareholding held by PSA India in ABG Kolkata Container Terminal on January 08, 2015.
Pursuant to share purchase, ABG Kolkata Container Terminal has become a wholly owned subsidiary of the company.

Godawari Power and Ispat has paid Rs 10.00 crore to the debenture holder on January 08, 2015 towards pre-payment for 100 units of
Secured Redeemable Non-Convertible Debentures (SRNCD) of Rs 10.00 lakh each out of total 300 units of Rs 10.00 lakh each SRNCDs
listed on wholesale debt market platform of the exchange.

Petroleo Brasileiro SA and its Indian partners-Videocon Industries and Bharat Petroleum Corporation have discovered new oil
accumulation in Farfan area in the Sergipe Basin off Brazil’s Northeast coast. The discovery in the BM-SEAL-11 exploration block is one of
several in recent years in an area believed to hold more than 1 billion barrels of recoverable oil, or enough to supply all needs in the United
States for nearly 2 months.

NIIT Technologies, a leading global IT solutions organization has been successfully appraised at People Capability Maturity Model (PCMM)
Maturity Level 5 again. The appraisal was performed by KPMG India. Developed by the Software Engineering Institute (SEI) at Carnegie
Mellon University in Pittsburgh, USA, PCMM is a maturity framework that focuses on continuously improving the management and
development of the human assets of an organization.

Tech Mahindra, a specialist in digital transformation, consulting and business re-engineering, has signed a definitive agreement to acquire
SOFGEN Holdings (SOFGEN), a niche consulting and services company with worldwide presence specializing in Private / Wealth,
Commercial and Retail Banking solutions. The transaction is expected to close by March 2015, subject to regulatory approvals.

Pincon Spirit has obtained the In-Principal Approval from the Excise Department, Government of West Bengal for setting up of the Indian
Made Indian Liquor (Country Spirit) Plant in West Bengal. The Plant shall be set up in the Company's owned industrial land near Kharagpur,
West Bengal for catering to entire South Bengal Market of IMIL of Own Brand i.e., Pincon Bangla No. 1, which is one of the popular Brands
in West Bengal.

Bharat Heavy Electricals (BHEL) has successfully commissioned one more 600 MW thermal unit in Chhattisgarh. The unit was
commissioned at Jindal Power’s (JPL) upcoming 4x600 MW thermal power project located at Tamnar in Raigarh district of Chhattisgarh.
This is the third 600 MW unit of the project to be commissioned by BHEL. The first two units of 600 MW each were commissioned in March,
2014.
LKP Advisory

Tata Teleservices (Maharashtra) (TTML) has reported the subscriber figures as on December 31, 2014. The company’s total subscribers
stood at 11,060,276 of which Wireline contributed 795,442, FWT 707,669 and Mobile 9,557,165 subscribers.

Polyplex Corporation’s - wholly owned subsidiary - Polyplex (Asia), Singapore (PAPL) and step down subsidiary Polyplex Europa
Polyester Film San ve Ticaret, Turkey (PE), in which company has 51% stake, have entered into a Share Purchase Agreement (SPA), to
sell their respective stake, 100% in aggregate, in Polyplex Resins Sanayi Ve Ticaraet AS, Turkey (PR) to Indorama Netherlands BV, a
wholly owned subsidiary of Indorama Ventures Public Company, Thailand (IVL).

Europacific Growth Fund has sold 29.48 lakh shares of Bajaj Auto through the open market route. The shares were sold on an average
price of Rs 2,449.97 valuing the transaction to Rs 722.25 crore.

Cadila Healthcare is recalling 19,536 bottles of benzonatate capsules, used to treat coughs, in the US due to wet and/or leaking capsules.
The recall of the 19,536 bottles has been voluntarily initiated by the company through its US based subsidiary Zydus Pharmaceuticals USA
Inc. Furthermore, the recall has been initiated under Class-II, which FDA states as a situation in which use of or exposure to a violative
product may cause temporary or medically reversible adverse health consequences.

SpiceJet is likely to raise the first tranche of funds by January 10. The airline is facing an acute cash crunch and has pending dues of about
Rs 1,200 crore, including Rs 200 crore to the Airports Authority of India, which has threatened to put the airline on cash-and-carry mode if
dues are not paid.

Reliance Industries has reportedly finalised its 2015 diesel and jet fuel term contracts at lower premiums as compared to previous year.
The company has decided to sell 500 ppm sulphur diesel at a premium of about $1.30 a barrel above Middle East quotes, lower than the
$2.25 to $2.50 a barrel negotiated for last year. It also agreed to sell the 10 ppm sulphur diesel at a premium of about $2 a barrel above
Middle East quotes, lower than the $2.50 to $3 levels it achieved for 2014 term contracts.

SPML Infra has received an approval to raise funds through Qualified Institutional Placement (QIP) route up to Rs 75 crore. The
shareholders of the company in its Extraordinary General Meeting (EGM) held on January 06, 2015 has approved and authorized the board
of directors for the same.

Global rating agency Moody’s has upgraded Tata Steel’s corporate family rating to Ba1 with a stable outlook. The upgrade reflects the
group-wide refinancing and the improved liquidity which will support further growth of its highly profitable Indian operations.

Goa Carbon has reported production of 875 MT (million tonnes) of Calcined Petroleum Coke for the month of December 2014. Of the total
production achieved for the month, Goa plant produced 875 MT of Calcined Petroleum Coke.

National Buildings Construction Corporation (NBCC) has been entrusted Pradhan Mantri Gram Sadak Yojana (PMGSY) works valued
at Rs 1,236.88 crore in certain IAP districts of Odisha and a tripartite agreement in this regard will be signed on January 12, 2015 between
Ministry of Rural Development, Government of India; Department of Rural Development, Government of Odisha and the company.

Satluj Jal Vidyut Nigam (SJVN) has signed a Joint Venture Agreement (JVA) with six state power generating companies belonging to West
Bengal, Bihar, Uttar Pradesh, Punjab, Karnataka and Tamil Nadu for formation of a JV Company for mining coal from Deocha PachamiDewanganj Horisingha Coal Block located in Birbhum district of West Bengal State.
Economy

India requires Rs 26 lakh crore for infra financing for next 5 years: PHDCCI report
Industry body PHDCCI, in its latest report, has highlighted that Indian Government will have to undertake a massive provisioning of Rs 26
lakh crore for the next five years beginning 2015 to finance infrastructure projects to provide a fillip to 'Make in India' campaign and help the
economy attain 7-8 percent growth. Investment norms for pension funds and for insurance companies will have to be liberalised further to
utilise their corpus to part finance infrastructure projects.
LKP Advisory
The report further added that out of the estimated Rs 26 lakh crore almost 80 percent of the amount will be needed for for infrastructure
projects such as power, roads and urban infrastructure. In roads, investments would be driven towards building national highways and state
roads, whereas in power, generation will continue to account for the largest share of investments. Referring to urban infrastructure,
municipal bodies are likely to require significant investments for constructing urban roads, expanding its transport and revamping water
supply and sewerage infrastructure.

SEBI releases discussion paper on revisiting the capital raising process
In a move aimed at boosting fund raising from the market and reducing the timeline for listing of shares, the Securities and Exchange Board
of India (SEBI), in its discussion paper on ‘Revisiting the capital raising process’ proposed e-IPO norms, where investors can bid for shares
through Internet and eventually on mobiles.
The market regulator is also planning to tweak rules that will help companies with market capitalization of Rs 250 crore or more to fast-track
rights issues and follow-on public offers (FPOs) subject to certain conditions. Under the current rules, companies must have a public market
cap of at least Rs 3,000 crore. Additionally, it has also proposed to drastically cut the timeline for listing of shares within 2-3 days of the IPO,
as against 12 days presently.
Besides, SEBI has proposed a fast-track route for already listed entities for raising funds through follow-on public offers (FPOs) or rights
offers, where funds can be raised from existing shareholders.
The regulator felt the need of reviewing capital-raising process from the markets as it had been observed that listed issuers preferred private
placements routes, including qualified institutional placement, over other offers such as FPOs or rights issues, mainly on account of shorter
time frame and lower cost involved.

RBI must cut interest rates to boost manufacturing: Commerce Minister
Concerned over the prevailing high interest rates in economy, Commerce and Industry Minister Nirmala Sitharaman has sought for reduction
in interest rates to provide level playing field to domestic industry. The minister has stressed that high interest rate has increased the cost of
capital for companies and barred their capital expansion plans.
Nirmala Sitharaman also urged the banks to focus more on lending small and medium enterprises units. During April to October period of
this fiscal, manufacturing output which accounts for around 75% of the IIP index, grew by marginal 0.7 per cent in the reported period as
against -0.1 per cent contraction in year ago period.
The Reserve Bank of India (RBI) targets to contain the CPI inflation at 8 per cent by March 2015 and 6 per cent by March 2016. Keeping
inflation battle at the top of agenda, the RBI has kept interest rate unchanged at 8 per cent since January 2014 despite industry and
government urging it to cut rates. Meanwhile, CPI inflation eased to 4.38 per cent in November as compared to 5.52 per cent in the previous
month and WPI inflation declined to five and half year low at 0 per cent. On the other hand, Indian GDP growth slowed down to 5.3 per cent
y-o-y to Rs 14.39 lakh crore in Q2FY15 as against 5.7 per cent in the previous quarter mainly due to sluggish investment and low demand.
The RBI is slated to review its monetary policy on February 3.

FDI hike would benefit Indian private non-life insurers: Moody's
In a positive development for insurance sector, global credit rating agency Moody`s Investor Service (MIS) underscored that increase in
foreign direct investment (FDI) limit by 23% to 49% in the sector is expected to alleviate the capital pressure on Indian private non-life
insurers. According to the rating agency, the widened access to foreign capital would also insurance to lower their dependence on domestic
funds.
The financial performance of non-life insurers has worsened in recent years in the face of intense competition even since de-tariffication
took place in 2007, which led to broad underwriting losses. As a result, the sector`s ability to generate internal capital has been undermined
thereafter.
LKP Advisory
In a cause of concern for the industry, while, the combined ratio (incurred losses + operating expenses as a percentage of premium) of
private non-life insurers was high, between 117.7% and 106.4% over the past five fiscal years, its average solvency margin ratios fell to 200
percent as of the end of September 2014 from 275 percent as of the end of March 2013, versus the regulatory requirement of 150%.
The government, back in December, approved promulgation of an ordinance to hike Foreign Direct Investment (FDI) cap in the insurance
sector to 49% from 26%. It then highlighted that the proposed hike in foreign investment limit to 49% in the insurance sector has potential to
attract up to $7-8 billion from overseas investors, giving a major boost to the segment.

India should use low oil prices to cut down oil subsidy: Kaushik Basu
Amid falling global crude oil prices, World Bank Chief Economist Kaushik Basu has stated that the sharp decline in global crude oil prices
gives India a rare ‘window of opportunity’ to contain widening fiscal deficit through carry out the much-needed economic reforms like cutting
down oil subsidy. Kaushik Basu added that drop in oil prices would have differential impact on different countries, but for a country like India
it is an opportunity to use this window of low oil prices to put in fiscal consolidation.
By adding further, Kaushik Basu asserted that India does spend a lot of money in oil subsidy and if at this point of time the subsidy is cut
down, price would not rise sharply. On oil price outlook, he stated that unlike in 2008 when the oil prices fell and bounced back within six
months, this time oil prices to remain moderately low over the next year. He is also of the view that the reforms could get the country back
to higher growth rate and prepare it for any global economic crisis in the future.
The price of Brent crude oil has fallen below $50 a barrel for the first time since May 2009. Since 2010, global oil prices have stayed above
$100 a barrel level as the world oil supply was on track and in line with the demand till 2014. However, over the past few years, countries
like the United States and Canada in order to reduce their over dependence on imported oil started exploring other alternatives such as
shale gas. Shale usage in US and Canada coupled with the weakening of economies in Asia and Europe led to a sudden fall in oil demand.
Source: Reuters, Ace Equity & LKP Research
LKP Advisory
Tech View
CNX Nifty
Technical View
Nifty witnessed a 50 point jump on Friday’s trade but failed to cross 8300 level. Nifty’s upside was majorly fueled by Infosys which came
out with good set of numbers and closed with 5 percent gains. Nifty continues to trade below its 50 DMA which indicates that it is likely
to face pressure at higher levels. The sector participation was not encouraging with Bank Nifty closing with minor loss. The index is
expected to open with muted start and witness increased volatility today on account of macro-economic data like IIP and CPI numbers
being released which will influence further direction in Nifty.
IMPORTANT LEVELS FOR THE DAY
Support
BSE
NSE
BANKNIFTY
S1
27,122
8190
18423
S2
26,826
8104
18129
R1
27,602
8329
18898
R2
27,898
8415
19191
Pivot
27,362
8,260
18,660
Resistance
.
LKP Advisory
Tech View
PIVOT POINTS
Scrip Name
CMP
RB2
RB1
PP
SB1
SB2
ACC
Scrip Name
CMP
RB2
RB1
PP
SB1
SB2
1399
1441
1416
1396
1375
1350
GAIL
435
459
445
434
423
409
ADANIENT
507
540
523
508
494
477
GLENMARK
735
775
754
738
721
700
ADANIPORTS
331
356
344
334
324
312
GMRINFRA
17
18
18
17
17
17
ADANIPOWER
45
47
46
45
44
43
GODREJIND
285
295
289
284
279
273
ALBK
127
133
130
127
125
121
GRASIM
3405
3516
3464
3421
3379
3326
AMBUJACEM
224
234
229
225
221
216
HAVELLS
273
282
277
273
269
264
ANDHRABANK
92
95
93
92
90
89
HCLTECH
1546
1635
1588
1551
1513
1467
APOLLOHOSP
1125
1165
1142
1123
1103
1080
HDFC
1113
1163
1138
1118
1097
1073
APOLLOTYRE
224
235
229
225
220
215
HDFCBANK
976
993
982
974
966
956
ARVIND
267
286
276
267
259
249
HDIL
68
73
71
69
66
64
ASHOKLEY
59
65
62
59
57
53
2992
3052
3017
2990
2962
2928
ASIANPAINT
813
850
831
815
800
781
HEXAWARE
209
221
213
207
200
193
1170
1232
1192
1159
1126
1086
HINDALCO
155
158
156
154
152
150
495
522
508
496
484
470
HINDPETRO
589
624
607
593
579
562
BAJAJ-AUTO
2376
2563
2472
2398
2325
2234
HINDUNILVR
865
921
882
850
818
779
BANKBARODA
HINDZINC
AUROPHARMA
AXISBANK
HEROMOTOCO
1060
1115
1088
1066
1045
1018
163
171
167
164
161
157
BANKINDIA
293
306
299
294
289
283
IBREALEST
69
74
71
69
67
65
BATAINDIA
1357
1429
1383
1346
1308
1262
ICICIBANK
342
361
351
343
335
325
BHARATFORG
929
964
945
930
915
896
IDBI
72
76
74
73
71
69
BHARTIARTL
356
373
365
358
351
343
IDEA
148
160
154
149
144
138
BHEL
255
270
262
256
249
242
IDFC
154
162
158
155
151
147
BIOCON
416
428
421
416
410
403
IFCI
36
38
37
36
36
35
BPCL
679
701
690
680
670
659
IGL
452
486
469
456
442
426
CAIRN
243
250
246
243
240
235
INDIACEM
84
92
88
85
82
78
CANBK
441
472
457
445
433
418
INDUSINDBK
802
828
813
801
790
775
CENTURYTEX
528
551
539
530
520
509
INFY
2074
2303
2153
2032
1911
1761
CESC
688
721
705
692
678
662
IOB
60
63
61
60
58
56
CIPLA
632
660
644
632
619
603
IOC
342
355
348
342
336
329
COALINDIA
375
391
383
377
371
363
IRB
238
248
242
238
233
228
1920
1984
1951
1925
1899
1866
ITC
357
376
366
359
351
341
CROMPGREAV
191
199
193
189
185
179
JINDALSTEL
153
169
161
155
149
142
DABUR
229
236
232
230
227
224
JISLJALEQS
66
70
68
67
65
63
DISHTV
68
75
71
68
65
61
JPASSOCIAT
26
29
28
27
26
24
1702
1775
1730
1694
1657
1612
JPPOWER
12
12
12
12
12
12
138
154
145
138
131
123
100
104
102
100
98
96
DRREDDY
3164
3251
3190
3142
3093
3033
JSWSTEEL
1013
1060
1036
1017
998
975
EXIDEIND
190
198
193
189
185
181
JUBLFOOD
1376
1404
1385
1370
1355
1336
FEDERALBNK
149
153
151
149
148
146
JUSTDIAL
1467
1520
1485
1456
1428
1393
COLPAL
DIVISLAB
DLF
LKP Advisory
JSWENERGY
Tech View
Scrip Name
CMP
RB2
RB1
PP
SB1
SB2
Scrip Name
CMP
RB2
RB1
PP
SB1
SB2
KOTAKBANK
1361
1399
1376
1357
1339
1316
TATACHEM
442
457
449
444
438
430
141
148
145
142
139
135
TATACOMM
425
441
433
426
419
410
67
70
68
67
66
65
TATAGLOBAL
156
162
158
156
153
149
473
489
480
474
467
459
TATAMOTORS
522
534
527
521
515
508
LT
1500
1554
1526
1504
1482
1454
TATAMTRDVR
343
362
352
345
337
327
LUPIN
1421
1445
1430
1417
1405
1390
TATAPOWER
80
82
81
80
79
77
M&M
1238
1265
1249
1236
1224
1208
TATASTEEL
400
413
406
400
394
386
M&MFIN
315
338
327
318
309
298
TCS
2512
2591
2537
2494
2451
2397
MARUTI
3468
3576
3517
3469
3421
3361
TECHM
2680
2815
2721
2646
2571
2478
MCDOWELL-N
2857
2911
2879
2854
2828
2797
TITAN
373
383
378
373
368
363
MCLEODRUSS
223
231
227
224
220
217
UBL
904
931
915
902
889
873
37707
39266
38510
37899
37287
36531
81
85
83
81
79
77
NHPC
19
19
19
19
18
18
2729
2801
2764
2733
2703
2666
NMDC
135
142
139
136
134
130
UNIONBANK
230
237
233
230
226
222
UNITECH
KTKBANK
L&TFH
LICHSGFIN
MRF
NTPC
140
150
145
142
138
133
OFSS
3289
3392
3337
3292
3248
3193
ONGC
351
376
361
348
335
ORIENTBANK
321
334
327
320
PETRONET
214
227
220
PFC
281
288
PNB
207
215
POWERGRID
138
PTC
RANBAXY
RCOM
17
18
18
17
17
16
332
348
340
333
326
317
320
VOLTAS
246
252
248
245
242
238
314
306
WIPRO
554
575
563
552
542
529
215
210
203
YESBANK
764
809
785
766
747
723
284
281
278
274
ZEEL
361
377
369
362
355
347
210
207
203
198
142
140
138
137
135
94
98
96
94
92
90
631
650
639
630
621
610
77
83
80
78
75
72
315
328
322
317
312
306
RELCAPITAL
467
492
480
470
459
447
RELIANCE
860
879
866
856
845
832
RELINFRA
485
515
500
487
475
460
RPOWER
61
64
62
61
60
59
SAIL
79
83
81
79
77
75
SBIN
303
312
308
304
301
296
SIEMENS
914
957
937
921
905
885
1061
1096
1077
1061
1046
1026
SSLT
208
220
214
209
205
199
SUNPHARMA
830
851
839
829
819
807
SUNTV
354
361
357
353
350
345
SYNDIBANK
128
134
130
127
125
121
LKP Advisory
ULTRACEMCO
UPL
RECLTD
SRTRANSFIN
UCOBANK
The information in this documents has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true and is for general
guidance only. While every effort is made to ensure the accuracy and completeness of information contained, the company makes no guarantee and assumes no liability for
any errors or omissions of the information. No one can use the information as the basis for any claim, demand or cause of action. LKP Securities Ltd., and affiliates, including
the analyst who have issued this report, may, on the date of this report, and from time to time, have long or short positions in, and buy or sell the securities of the companies
mentioned herein or engage in any other transaction involving such securities and earn brokerage or compensation or act as advisor or have other potential conflict of interest
with respect to companies mentioned herein or inconsistent with any recommendation and related information and opinions. LKP Securities Ltd., and affiliates may seek to
provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this
report, as on the date of this report or in the past.
LKP Securities Ltd. Ph: (91-22) 66351234 FAX: (91-22) 66351249 E Mail: [email protected] web: http://www.lkpsec.com
LKP Advisory

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