Monday, April 16, 2018

Winning Strokes
The Sensex and the Nifty logged modest gains on first trading day of the week. The barometer index, the S&P BSE Sensex, rose 112.78 points or 0.33% to settle at 34,305.43. The Nifty 50 index rose 47.75 points or 0.46% to settle at 10,528.35. The Sensex and the Nifty advanced for the eight straight trading session. Market sentiment got a boost after India's annual WPI-based inflation eased to 2.47% in March, helped by a fall in food prices. The Sensex and the Nifty, both, attained their highest closing levels in almost seven weeks.

A bout of volatility was seen in early trade as the key benchmark indices cut losses after a gap-down opening triggered by negative Asian stocks. The Sensex regained the psychological 34,000 level soon after an initial slide pulled it below that level in opening trade. Stocks recovered further lost ground in morning trade. Indices extended losses in mid-morning trade on fresh selling in index pivotals. Indices recovered sharply in afternoon trade after India's annual wholesale price inflation slightly eased in March. Stocks advanced in late trade and hit fresh intraday high.

Overseas, Asia and European stocks were mixed as investors assess airstrikes against Syria over the weekend and focus on the start of earnings season in the US as well as speeches by Federal Reserve officials. US stocks fell on Friday, 13 April 2018 as weakness in shares of banks and finance firms added to the political and trade tensions weighing on the market.

US President Donald Trump declared mission accomplished via Twitter on Saturday, a day after the US, France and the UK launched military strikes targeting three chemical weapons facilities in Syria in retaliation for a suspected poison gas attack in Douma on April 7. Meanwhile, Russian President Vladimir Putin reportedly warned on Sunday that further Western attacks on Syria would bring chaos to world affairs, as Washington prepared to increase pressure on Russia with new economic sanctions.

Back home, the Sensex rose 112.78 points or 0.33% to settle at 34,305.43, its highest closing level since 27 February 2018. The index rose 148.81 points, or 0.44% at the day's high of 34,341.46. The index fell 293.31 points, or 0.86% at the day's low of 33,899.34.

The Sensex has risen 1,286.36 points, or 3.90% in eight trading sessions from its low of 33,019.07 on 4 April 2018.

The Nifty 50 index rose 47.75 points or 0.46% to settle at 10,528.35, its highest closing level since 27 February 2018. The index rose 59.55 points, or 0.57% at the day's high of 10,540.15. The index fell 84.25 points, or 0.80% at the day's low of 10,396.35.

The S&P BSE Mid-Cap index rose 0.34%. The S&P BSE Small-Cap index rose 0.56%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was negative. On the BSE, 1,416 shares fell and 1,253 shares rose. A total of 207 shares were unchanged.

Among the sectoral indices on BSE, the S&P BSE Realty index (up 1.82%), the S&P BSE Healthcare index (up 1.11%), the S&P BSE FMCG index (up 0.96%), the S&P BSE Basic Materials index (up 0.78%), the S&P BSE Consumer Discretionary Goods & Services index (up 0.72%), the S&P BSE Finance index (up 0.72%), the S&P BSE Power index (up 0.67%), the S&P BSE Utilities index (up 0.56%) and the S&P BSE Capital Goods index (up 0.44%), outperformed the Sensex. The S&P BSE Bankex (up 0.3%), the S&P BSE Industrials index (down 0.13%), the S&P BSE Oil & Gas index (down 0.14%), the S&P BSE Energy index (down 0.15%), the S&P BSE Consumer Durables index (down 0.21%), the S&P BSE Telecom index (down 0.51%), the S&P BSE Teck index (down 0.69%) and the S&P BSE IT index (down 0.78%), underperformed the Sensex. The S&P BSE Metal index settled on a flat note. The S&P BSE Auto index rose 0.33%, matching the Sensex's rise in percentage terms.

Index heavyweight and housing finance major HDFC rose 1.64% to Rs 1,870.70. The stock hit a high of Rs 1874.50 and a low of Rs 1834.70 in intraday trade.

Index heavyweight and cigarette major ITC rose 1.42% to Rs 264.50. The stock hit a high of Rs 264.90 and a low of Rs 260.75 in intraday trade.

Private sector banks rose. Kotak Mahindra Bank (up 1.88%), RBL Bank (up 1.74%), HDFC Bank (up 0.55%), Yes Bank (up 0.31%), City Union Bank (up 0.28%), Axis Bank (up 0.06%) and IndusInd Bank (up 0.06%), edged higher. Federal Bank (down 0.2%) and ICICI Bank (down 0.28%), edged lower.

Public sector banks declined. Allahabad Bank (down 2.17%), Punjab National Bank (down 2.07%), Dena Bank (down 1.27%), Indian Bank (down 1.11%), Bank of Maharashtra (down 1.04%), Bank of India (down 0.99%), United Bank of India (down 0.82%), State Bank of India (down 0.76%), Punjab & Sind Bank (down 0.66%), Vijaya Bank (down 0.61%), Bank of Baroda (down 0.6%), Central Bank of India (down 0.5%) and Canara Bank (down 0.34%), edged lower. IDBI Bank (up 0.07%), Union Bank of India (up 0.1%), Corporation Bank (up 0.49%) and Andhra Bank (up 1.4%), edged higher.

UCO Bank fell 6.49% to Rs 20.90 on reports CBI filed a case against former bank chairman Arun Kaul relating to an alleged Rs 621 crore bank loan fraud case.

Reliance Industries (RIL) fell 0.17% to Rs 937.25. RIL's subsidiary Reliance Jio Infocomm (RJIL) has signed a ~JPY 53.5 billion Samurai term loan with 7 year bullet maturity (the Facility). The Facility is guaranteed by RIL and will be used for funding RJIL's ongoing capital expenditure. The Facility will be shortly launched into syndication. The announcement was made on Saturday, 14 April 2018.

Meanwhile, RIL on Sunday, 15 April 2018 said that the company in conjunction with JM Financial Asset Reconstruction Company submitted a resolution plan for Alok Industries. The plan did not meet with the approval of the Committee of Creditors of Alok Industries as required under the Insolvency and Bankruptcy Code, RIL said.

Most IT stocks rose. Oracle Financial Services Software (up 2.98%), MindTree (up 1.83%), Hexaware Technologies (up 1.18%), TCS (up 1.07%) and HCL Technologies (up 0.88%), edged higher. Wipro (down 0.15%), Persistent Systems (down 0.41%) and MphasiS (down 1.72%), edged lower.

IT major Infosys fell 3.10% to Rs 1,132.80 after the company's operating margin outlook fell short of market expectations. The result was declared after market hours on Friday, 13 April 2018. Infosys' consolidated net profit fell 28.1% to Rs 3690 crore on 1.6% increase in revenues to Rs 18083 crore in Q4 March 2018 over Q3 December 2017. Q4 March 2018 operating margin improved to 24.7% from 24.3% in Q3 December 2017. The result are under International Financial Reporting Standards (IFRS).

On a consolidated basis, net profit grew 11.7% to Rs 16029 crore in the year ended 31 March 2018 over the year ended 31 March 2017. Revenues were Rs 70522 crore in the year ended 31 March 2018, a year on year (YoY) growth of 3% in reported terms and a growth of 5.8% in constant currency terms. Operating margins were reported at 24.3% in the year ended 31 March 2018.

On a consolidated basis, Infosys expects revenues to grow 6%-8% in constant currency in the fiscal year ending 31 March 2019 (FY 2019). It expects revenues to grow 8.2%-10.2% in rupee terms in FY 2019. Operating margin is expected in range of 22%-24% in FY 2019.

On 13 April 2018, Infosys entered into a definitive agreement to acquire WongDoody Holding Company, Inc., a US-based digital creative and consumer insights agency for a total consideration of up to $75 million including contingent consideration and retention payouts, subject to regulatory approvals and fulfillment of closing conditions.

On the macro front, the annual rate of inflation, based on monthly Wholesale Price Index (WPI), stood at 2.47% (provisional) in March 2018 (over March 2017) as compared to 2.48% (provisional) for the previous month and 5.11% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 2.47% compared to a build up rate of 5.11% in the corresponding period of the previous year, the Ministry of Commerce & Industry said in a statement today, 16 April 2018.

Meanwhile, India is set to get a normal monsoon this year, with average rainfall likely to be 97%, the India Meteorological Department (IMD) announced today, 16 April 2018. Between 96% and 104% of the long-period average is considered a normal monsoon, and the margin of error is 5%.

India's merchandise exports fell 0.7% to US$ 29.11 billion in March 2018 over a year ago. Meanwhile, merchandise imports moved up 7.1% to US$ 42.80 billion. The trade deficit jumped 28.6% to US$ 13.69 billion in March 2018 from US$ 10.65 billion in March 2017. The data was released by the Ministry of Commerce and Industry after market hours on Friday, 13 April 2018.

Merchandise exports in rupees declined 1.9% to Rs 189271 crore, while imports moved up 5.8% to Rs 278297 crore in March 2018 over March 2017. The trade deficit rose to Rs 89026 crore in March 2018 compared with Rs 70127 crore in March 2017.

India's merchandise exports increased 10% to US$ 302.84 billion, while merchandise imports surged 19.7% to US$ 459.67 billion in April-March 2018. An increase in imports was driven by a 25.7% jump in oil imports to US$ 109.11 billion. India's merchandise trade deficit galloped to US$ 156.83 billion in April-March 2018 from US$ 108.92 billion in April-March 2017.

#The stock of Mandhana Industries Ltd is now trading at around Rs.6.60 in the NSE. I expect it to reach Rs.9, by October, '18. There were earlier media reports that NCLT's, MUMBAI BENCH hass granted EXTENSION of CIRP for further period of 90 days beyond period of 1st 180 days Also, I was told by an unconfirmed source that "Being Human" brand is unofficially owned by Salman Khan's sister: Alvira Khan Agnihotri and according to the same source, "There are talks of changing the brand ambassador, following the recent court verdict on Black Buck case". I however could not independently verify this information. 

#The stock of P C Jewellers Ltd, is now trading at around Rs.300.75, after touching a high of around Rs,314 last week. The stock was recommended to the Premium members at around Rs.297. What to do with this scrip? 

#The scrip of Lanco Infratech Ltd today closed at Rs.1.05 in the NSE. The stock which was recommended around Rs.1.1-1.15 is not performing as expected; in the short term. So, what to do? What is the latest development in the company? 

#The stock of MBL Infrastructure Ltd today made a high of Rs.26.15. It was recommended as a buy last week to the Premium Members to be bought today. In NSE it made a low of Rs.22.75. I hope most of them are sitting at a profit today, after buying during intraday dips. 

#I have recommended a micro cap IT stock and a hidden Jewelry micro-cap stock to the Paid Members. I will disclose the name of the stock either at the end of this month or by the middle of next month. Both the stocks looks to me to be a turnaround story. If you want to know the names of the shares, then you should either trade through my recommended brokerage house or subscribe to my Premium Service. I  have introduced a SPECIAL DISCOUNT SCHEME for the SMALL INVESTORS and for EARLIER SUBSCRIBERS of my Premium Service. This will be open till 30th of this month. 

~~with inputs from  Capital Market - Live News

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