Monday, December 18, 2017

Market Pulse
The key indices held firm and hovered close to their intraday high in late afternoon trade as assembly elections results in Gujarat and Himachal Pradesh showed that BJP will return to power for a sixth straight term in Gujarat and will overthrow Congress rule to form government in Himachal Pradesh. 

At 3:05 IST, the barometer index, the S&P BSE Sensex was at 33,652.61 up 189.64 points or 0.57%. The NSE was seen at 10,394.50 up 61.25 points or  0.59%75.

The BJP has been ruling in Prime Minister Narendra Modi's home town Gujarat for the last two decades and a win today will boost its chances to form government at the Centre once again in the 2019 general elections.

However, the way the INC under the newly elected president Rahul Gandhi came back bagging 70-plus seats suspending the BJP's one sided winning moves, cannot be taken lightly and I am sure it has been taken seriously by the political analysts. Though the BJP won in Gujarat, it is a vote against NDA's stupid and announcement based policies. In Himachal Pradesh, it is a rotation of sorts, which happens every-time like in Tamil Nadu -- so it is a sort of no-brainer.

Coming back to the Gujarat elections, I had earlier spoken of the BJP not doing too well in PM's home turf, especially when some of the political PUNDITS were giving 135 plus to the party in power.

Narendra Modi is an announcement minister -- recently during his visit to my home state Assam and to other North Eastern states, a Rs.90,000 crore package was announced; but no one knows from where the money will come from!! According to the media reports, the NDA government is on the verge of exceeding its fiscal deficit targets. 

In spite of a BJP win in  Gujarat, I sincerely THANK and HUG the GUJARATI diaspora for listening to some of us and vote according to that chosen strategy. 

Interestingly in this context I am reminded of Renuka Choudhury and Telugu Desham episodes - while the former never won an election after my virulent campaign against her through this blog, the latter made an emphatic come back in the last election defeating the INC; after my appeals to the Telugu masses did not go begging. I hope in future too, I would get your unflinching help and support, to dethrone the tyrants and demagogues.

Anyway, coming back to the day's highlight: the Indices had slumped in early trade after early trends of Gujarat assembly election results showed a close fight between incumbent BJP party and rival Congress party. Market soon reversed losses in morning trade as concerns eased following BJP crossing past simple majority mark in its stronghold Gujarat state. Market extended gains in mid-morning trade as BJP win was confirmed in both the states. Stocks held firm in late afternoon trade.

The S&P BSE Mid-Cap index rose 1.17%. The S&P BSE Small-Cap index gained 0.92%. Both these indices outperformed the Sensex.

The broad market depicted strength. There were almost two gainers for every loser on BSE. 1,621 shares rose and 812 shares fell. A total of 134 shares were unchanged.

Most capital goods stocks gained on renewed buying. ABB India (up 1.8%), Bharat Electronics (up 1.67%), BEML (up 0.87%), L&T (up 1.34%), and Siemens (up 1.77%) gained. Bharat Heavy Electricals (Bhel) (down 0.17%), Havells India (down 0.4%), and Thermax (down 0.17%) declined.

Realty stocks were mixed. DLF (up 1.23%), Sobha (up 5.68%), NBCC (up 0.62%), and Housing Development & Infrastructure (HDIL) (up 1.22%) edged higher. D B Realty (down 0.29%), Indiabulls Real Estate (down 0.49%), Oberoi Realty (down 1%), Unitech (down 0.3%) and Godrej Properties (down 0.03%) declined.

Ramky Infrastructure rose 3.61% after the company said it allotted 1.2 crore warrants to promoters and non-promoters. The announcement was made after market hours on Friday, 15 December 2017.

Poll in Himachal Pradesh took place in single phase on 9 November 2017, while in Gujarat, poll was scheduled in two phases on 9 and 14 December 2017.

On the macroeconomic data front, India's merchandise exports surged 30.5% to $26.2 billion in November 2017 over a year ago. Meanwhile, merchandise imports increased 19.6% to $40.02 billion. The trade deficit rose 3.2% to $13.83 billion in November 2017 from $13.01 billion in November 2016.

India's services exports improved 7.9% to $14.15 billion in October 2017 over October 2016. Meanwhile, India's services imports galloped 13.3% to $8.70 billion in October 2017. India's services trade surplus rose 0.3% to $5.45 billion in October 2017 from $5.43 billion in October 2016.

Overseas, Asian stocks were mixed. Japan's export growth accelerated in November to mark a full year of annual gains. The 16.2% export growth in November, showed acceleration from a 14% year-on-year increase in the previous month, according to the Ministry of Finance.

China's central bank raised interest rates on reverse repurchase agreements, or reverse repos, used for open market operations by 5 basis points for the 14-day tenor, following upward adjustments on other tenors last week.

US stocks rose to all-time highs on Friday, 15 December 2017, as expectations of a Republican tax bill passing increased. The plan will likely cut the corporate tax rate to 21% from 35%.

Today's calls:
#Today most of the bank stocks were moving high. My recommended SBI  (Rs.119) and PNB (Rs.178) were both in spirited form. In this context, I have taken positions in Dena Bank Ltd at around Rs.24.20 on the hopes that the NCTL's actions would make it look much better 3-6 months down the line. I have kept targets of Rs.36--37 for the same.

#Today MBL Infrastructure Ltd (Rs.24.40) rose on the hopes of early settlement with the NCTL. According to my sources, after the CMD, Mr.A Lakhotia resigned citing personal grounds, the company is looking at the court's decision. The shares of the company has a book value of around Rs. 168.69, which means even if the company gets liquidated (say) the shareholders stands to get around 7x CMP or in other words on an invesment of Rs.1 lakh the investors stands to gain Rs.7 lakhs (albeit minus any additional liability) . Today the share made an intraday high of Rs.24.90, with volumes above 1 lakh in the NSE.

#I had recommended Aban Offshore Ltd to some of my clients for intra-day play, which it achieved. The stock touched Rs.195.05, intraday. However, those who are still holding the stock can continue add on declines, with a SL at Rs.186, as the crude oil prices have more or less remained near the yearly highs.

~~with inputs from Capital Market - Live News
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