Tuesday, January 02, 2018

Market Pulse
A bout of volatility was witnessed as key benchmark indices bounced back after hitting fresh intraday low in morning trade. At 11.13 IST, the barometer index, the S&P BSE Sensex, was seen trading at 33,843.01 up 30.26 points or 0.09%, while Nifty was seen at  10,447.95 up 12.40 points or 0.12%

Among secondary barometers, the BSE Mid-Cap index was down 0.65%. The BSE Small-Cap index was down 0.74%. Both these indices underperformed the Sensex.

The broad market depicted weakness. There were more than two losers against every gainer on BSE. 1,644 shares fell and 735 shares rose. A total of 91 shares were unchanged. Breadth was strong in early trade.

Metal shares declined. Hindustan Copper (down 2.35%), Steel Authority of India (down 2.21%), Jindal Steel & Power (down 2.18%), Bhushan Steel (down 2.16%), Vedanta (down 1.56%), JSW Steel (down 0.92%), Tata Steel (down 0.91%), National Aluminium Company (down 0.82%), Hindalco Industries (down 0.55%) and Hindustan Zinc (down 0.47%), edged lower. NMDC was up 0.71%.

Meanwhile, copper price edged lower in the global commodities markets. High Grade Copper for March 2018 delivery was currently down 0.64% at $3.2795 per pound on the COMEX.

Cement shares declined. ACC (down 0.41%), Ambuja Cements (down 0.13%) and UltraTech Cement (down 0.08%), edged lower.

Grasim Industries was down 0.93%. Grasim has exposure to cement sector through its holding in UltraTech Cement.

Motorcycle major Bajaj Auto gained 0.35% to Rs 3304.95 after total sales rose 30% to 2.92 lakh units in December 2017 over December 2016. Domestic sales rose 25% to 1.49 lakh units in December 2017 over December 2016. Exports rose 35% to 1.43 lakh units in December 2017 over December 2016. The announcement was made during market hours today, 2 January 2018.

Overseas, Asian shares were trading higher. Market in Japan is closed for holiday. US markets was shut yesterday, 1 January 2018, on account of New Year's Day.

Today's Calls:
#The market it seems will trade range bound till fresh triggers come. As long as the Nifty holds the 10400-10200 ranges the BULLS will not have to worry much. The broader market went in for small correction today, after a whirlwind rally during the last few weeks. India's fundamentals are moving towards better from worse and I believe, the rally will now be more seen in shares which have a story to tell, especially from those beaten down A and B groups. 

#Those who are holding the shares of Housing Development & Infrastructure Ltd (HDIL; CMP: Rs.62.50) can continue to add on declines due to the inherent fundamentals in the counter. The company has a HDIL has a market cap is only Rs.2,715.52 crore, as against its land holding of 200.47 Million Sq. Ft as of September 30, 2016. It boasts of being the Largest Land Bank Owner in Mumbai Metropolitan Region, which it can capitalize to cut its debt. JP Morgan noted HDIL’s balance sheet cost of land is at 50-70%  lower than market value. In November, 2017, there were media reports that the shareholders of HDIL had approved the issue of up to 2 crore warrants, convertible into equivalent number of equity Shares of Rs.10 each to Sarang Wadhawan. The issue is to be carried out in one or more tranches. The issue had been approved by the board of the company in an earlier meeting on November 14. The management intends to use the proceeds of the preferential issue of the warrants for long-term working capital purposes. The warrant issue increases the number of shares held to 45.4 crore, an increase of 4.6%. It expects margins of the company to be above 30% even under affordable housing price points.
In the November, 2017, another positive news came that Andhra Bank had withdrawn a plea against it in the National Company Law Tribunal. On October 30, Andhra Bank had filed an insolvency petition against city-based realtor on failure to repay Rs.55 crore invested by the bank in the HDIL's non-convertible debentures, as per media report. The company said that the aforementioned plea stands withdrawn as it has reached a settlement with the lender and has made part payment of its balance dues, it said in the BSE filing. I still hold the target of Rs.77-84-92-97-121  for the scrip. There could be some minor correction as the scrip of HDIL is a little overbought on the daily chart.

#Those who are holding the shares of Reliance Naval and Engineering Ltd (CMP: Rs.63; Intraday high: Rs.72.65) can book some profits and hold the rest with a SL at Rs.61.50. This scrip has given wonderful returns to  the short term shareholders. Reliance Naval and Engineering Ltd recommended to the Premium Members and also in this Free Blog closed with a gain of 32.28% yesterday.

#Most analysts expect the government to focus on increasing government expenditure on rural economy as well as introduce a measure to kick-start investment cycle in the economy. I have taken some shares of Genera Agri Corp Ltd (BSE Code: 590133; GENERAAGRI; Group XT) pivoted on this theory. I am expecting the scrip to touch Rs.35-41 in the short to medium. However, this is a high-risk-high-gain game. The stock has fallen from around Rs.220-plus in 2013-14 to the CMP of Rs.9.10 and therefore has a much chance of appreciation in this BULL MARKET RALLY.

#Those who are holding the shares of Suzlon Energy Ltd (Rs.15.70) from Rs.13.60, can continue to hold with a SL at Rs.15. This, the government is likely to give a push in the renewal energy sector. The scrip is likely to touch Rs.17-19, in the pre-budget rally.

#Those who are holding the shares of MBL Infrastructure Ltd (Rs.26.80), can continue to add on declines, as the government of India is likely to bring out a change in the existing Bankruptcy and Insolvancy act, which will make the promoters of the company eligible to bid. The medium term target for the scrip is Rs.110-plus. The stock has already risen from the recommended price of Rs.24.40. It will give you multibagger returns going forward. So, risk taking investors can accumulate the scrip on all declines.

#Unitech Ltd (Rs.11.15) made an intraday high of Rs.12.25 today. Those who are holding the shares of the company from Rs.5, can book complete profits and wait for a close above Rs.12.20, for fresh entry. This company like HDIL also has huge land bank scattered across India, unlike the former whose land bank is concentrated mostly in Mumbai Metropolitan Region.

#Buy the shares of Reliance Industries Ltd at around Rs.910-911, for intra-day targets of Rs.915-920. For the short term delivery based buying, the targets could be Rs.945-951. Oil prices posted their strongest opening to a year since 2014 on Tuesday, with crude rising to mid-2015 highs amid large anti-government rallies in Iran and ongoing supply cuts led by OPEC and Russia.

#Buy the shares of Punjab National Bank Ltd at around Rs.166-167, for short term target of Rs.177-180. According to the Economic Times, 2 January, 2018, North Block will soon announce a reforms road map for PSBs, tying performance parameters to funds the lenders would receive as part of recap plan. Moreover, putting branch rationalisation plan on fast track, Punjab National Bank has placed 300 branches under watch and asked them to either shape up within a year or face closure or merger.

#The government of India, especially the likes of Sanju Verma, who shifted to the BJP from the AAP (don't know her next destination, as this fickle lady keeps on changing her location...LOL), after trying her luck in other sectors too, like HDFC Bank, is seen to tom-tom about the all time high of the Indian bourses.
But with very little retail participation and not much improvement in the number of demat account holders, I don't think this in any case reflects "The Bharat of Villages and Towns".
It is pertinent to mention here that only around 2% of Indians hold Demat accounts and the Narendra Modi Government did very little during their tenure of more than 36 months to beef up the sentiments of Indian Capital Markets. 

I am increasing the subscription charge of my Premium Services to Rs.18,000 per year from 16th January, 2017. So, rush for further details on the same at: suman2005s@rediffmail.com or sumanm2007s@gmail.com.

~~with inputs from Capital Market - Live News
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