Tuesday, December 12, 2017

Market Pulse
Key benchmark indices witnessed a downward trend in early trade. The Sensex is now trading at 33,379.02 down 76.77 points or 0.23%. The Nifty is now trading at 10,291.20 down 31.05 points or 0.30%.

The S&P BSE Mid-Cap index fell 0.1%. The S&P BSE Small-Cap index declined 0.04%. Both the indices outperformed the Sensex.

Overseas, Asian stocks edged higher following a strong lead from Wall Street overnight. US equities closed higher yesterday, 11 December 2017, reversing earlier weakness following a terror incident near New York City's Times Square. The Dow Jones Industrial Average and the S&P 500 notched record closing highs.

The US Federal Reserve's Federal Open Market Committee (FOMC) starts its two-day meeting on interest rates later in global day today, 12 December 2017. The US Federal Reserve will announce its interest rate decision tomorrow, 13 December 2017. The Federal Reserve left the target range for its federal funds rate unchanged at 1% to 1.25% during its November 2017 meeting as widely expected.

Closer home, the breadth, indicating the overall health of the market, was positive. On the BSE, 634 shares rose and 588 shares declined. A total of 47 shares were unchanged.

Asian Paints fell 1.91% at Rs 1,106.50. The company said that it purchased the balance 49% stake in the kitchen solution provider company, Sleek International, from Ahuja Family and the shareholders agreement dated 8 August 2013 with the Ahuja Family has been terminated. Sleek has now become a wholly-owned subsidiary of the company. The announcement was made after market hours yesterday, 11 December 2017.

On 8 August 2013, Asian Paints had announced that it acquired 51% stake in Sleek from the Ahuja family by entering into a shareholders agreement with the Ahuja family and Sleek.

On macro front, the government will announce industrial production data for October today, 12 December 2017. India's industrial production increased by 3.8% year-on-year in September, following an upwardly revised 4.5% gain in the previous month in August.

The government will announce today, 12 December 2017, inflation data based on consumer price index (CPI) for November. Consumer prices increased 3.58% year-on-year in October, above 3.28% in September.

Today's Calls:
#Intraday Sell Indian Bank Ltd at around Rs.385.5, SL:N Rs.389, T: Rs.378.

#Intraday Sell Pidilite Industries Ltd at around Rs.893, SL: Rs.901, T: Rs.878-872. Book Partial Profit around Rs.885.
1st target of Rs.878, almost achieved--made a low of Rs.878.60, till now. Book Full Profit at around Rs.874.80.

#Suzlon Energy Ltd (Rs.13.85) is consolidating around the price range of Rs.13.85-13.80. Suzlon Energy had in June, '17 approved allotment of 79.70 lakh shares on conversion of 2,046 foreign currency convertible bonds, maturing in July 2019, at ₹15.46 each. The conversion rate for the equity share allotment is ₹60.225 per dollar. Following the allotment, the paid-up capital of the company has increased to ₹1,038.41 crore.
Meanwhile, the auction in the Wind and Solar Energy space has commenced. Moreover, due to less capacity addition in FY18, there are chances of energy prices firming-up in the coming days. Moreover, India has an ambitious target of 175,000 megawatt (MW) of renewable power by 2022. India, at present, has an installed capacity of 60,157 MW renewable power and a rapid development is expected in the next five years.
Besides, aiming to address the quality issues in India’s rapidly growing renewable energy sector, the union ministry of new and renewable energy (MNRE) has come out with a new policy for “testing, standardisation and certification” of products in the renewable energy sector. The policy also aims to develop standards for all renewable energy equipment in line with the international practices.The concerns of the government are not ill-founded as voices have been raised about poor quality Chinese solar modules— rejected by developers—being sold in the Indian market at a discount. This is likely to help the reputed players in this space, like Suzlon Energy Ltd. I am looking for targets of Rs.19-22, by March, '18.
Most of its non-auction based order book has power purchasing agreements (PPAs) and is executing them. The rest of the orders are in the process of obtaining PPAs. So, the whole 1,562-megawatt (MW) order book (231MW solar and 1,331MW wind) is intact and executable.
In terms of commissioning volumes, the market is expected to see slower growth in the current fiscal, compared with the year gone by. But Suzlon expects to continue to gain market share—it aims to increase it from 32% in 2016-17 to 40% in the current fiscal—helping it outdo industry performance. In another development, Brent crude oil prices have climbed past $65 a barrel on Forties pipeline shutdown. This has pushed the shares of my recommended Aban Offshore Ltd to around Rs.207 today. This development is likely to give a positive movement to the shares of Renewable Energy companies like Suzlon Energy Ltd.
Anyway, the FCCBs has been priced at around Rs.15.46 and hence in any case the share should move above Rs.15. Or in the current scenario, the share price should invariably trade above Rs.15, the 1st resistance coming at Rs.15.20. Yesterday, the percentage of  Deliverable Quantity to Traded Quantity
in Suzlon Energy Ltd was whooping 38.51% -- this shows that large scale accumulation is going in the scrip by the informed investors.

#Jai Balaji Industries Ltd today hit the Upper Circuits at around Rs.22.05 and is now trading at around Rs.21. The scrip which was recommended around Rs.12-14, gave good returns to the investors in the short term. However, I would suggest non-risk taking investors to book full profits in Jai Balaji Industries Ltd at around Rs.21-22 and shift to Uttam Galva Steels Ltd at around Rs.23.50-24, which has a similar story, but has not moved up. Having said that, if you are thinking of taking too much risk in Jai Balaji Industries Ltd, then you can hold the scrip with a SL of Rs.18.6 -- there is a very strong resistance at Rs.24.
Meanwhile, the Billionaire Lakshmi Mittal’s ArcelorMittal recently said that its 29% equity stake in Uttam Galva Steels Ltd will not impede them from participating in bidding for stressed steel assets in India. 

#Today Shilpi Cable Technologies Ltd tanked to around Rs.13, but according to my close sources the company is functioning normally. In case if you are too apprehensive after buying the share, then please do put at SL at Rs.12.50. I on the contrary feel that the downside is limited, and it has huge upside, especially when the Sensex is above 33k.

#Today Unitech Ltd touched Rs.8.30, due to sustained buying, however, I feel for the time being you should book complete profit and let the stock to stabilize before it again jumps above Rs.8.30. I think you have read the media reports that Unitech Ltd's management has moved the honouable Supreme Court after NCLT recently invoked the provisions of the Companies Act, allowed the central government to take over the Unitech Limited and appoint its nominee directors in the Board of the firm.

#P C Jewellers Ltd recommended at around Rs.396, last Thursday, today touched Rs.450.90. I feel most of you by now have booked profit in the counter. If you remember, I have recommended this stock several times in this blog. If I can recollect correctly, I started recommending this stock from around Rs.82-84, in this blog.

#Those who are still holding the shares of SKM Egg Products Ltd (Rs.90), should keep a SL at Rs.86. The poultry is expected to do well in the coming days, with the rise in population. But I am not too bullish in this scrip, as of now.

#The shares of Prakash Industries Ltd, an integrated steel player with mines, today touched Rs.154.80. I  had recommended this stock several times in this blog starting from Rs.41-42; during the last few years. The steel sector is showing a turnaround and most of players is expected to do well in the coming few months.

#Energy Development Ltd (Rs.28) is on fire today. You can hold the stock with a strict stop loss of Rs.26. This is Amar Singh and Jaya Prada company. In stock market you need to buy and hold a scrip with appropriate stop losses in place, to make money on a consistent basis.

~~with inputs from Capital Market - Live News

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