Winning Strokes

The stock market closed the lackluster trading session on a flat note. The barometer index, the S&P BSE Sensex, fell 10.12 points or 0.03% to settle at 34,433.07. The Nifty 50 index fell 4.80 points or 0.05% to settle at 10,632.20.

The Sensex had hit a record high in early trade. Later, the movement of key indices was confined to a narrow range around the flat line till mid-morning trade before extending losses amid weakness in Asian stocks. Key indices pared losses and hovered in narrow range in negative terrain in afternoon trade. Indices trimmed intraday losses in mid-afternoon trade and closed the session near the flat line.

Overseas, European stocks edged lower as investors watch out for corporate earnings and fresh data. Asian stocks were mixed as investors booked profits in shares while oil prices hit three-year highs due to production cuts and a fall in inventories. US equities rose to record highs yesterday, 9 January 2018 as investors remained optimistic about the market heading into the corporate earnings season.

Back home, the Sensex fell 10.12 points or 0.03% to settle at 34,433.07, its lowest closing level since 8 January 2018. The index rose 122.44 points, or 0.36% at the day's high of 34,565.63, a record high. The index fell 131.56 points, or 0.38% at the day's low of 34,311.63.

The Nifty 50 index fell 4.80 points or 0.05% to settle at 10,632.20, its lowest closing level since 8 January 2018. The index rose 18.50 points, or 0.17% at the day's high of 10,655.50, a record high. The index fell 44.30 points, or 0.42% at the day's low of 10,592.70.

Among secondary indices, the S&P BSE Mid-Cap index fell 0.31%. The S&P BSE Small-Cap index dropped 0.04%. Both these indices underperformed the Sensex.

The breadth, indicating the overall health of the market, was negative. On the BSE, 1,596 shares declined and 1,331 shares advanced. A total of 127 shares were unchanged.

The total turnover on BSE amounted to Rs 5008.17 crore, lower than turnover of Rs 5458.26 crore registered during the previous trading session.

Among the sectoral indices on BSE, the S&P BSE Auto index (down 0.68%), the S&P BSE Consumer Durables index (down 0.65%), the S&P BSE Finance index (down 0.46%), the S&P BSE Consumer Discretionary Goods & Services index (down 0.4%), the S&P BSE Utilities index (down 0.39%), the S&P BSE Capital Goods index (down 0.37%), the S&P BSE Bankex (down 0.31%), the S&P BSE Basic Materials index (down 0.22%), the S&P BSE Power index (down 0.2%), the S&P BSE Industrials index (down 0.19%), the S&P BSE FMCG index (down 0.14%) and the S&P BSE Healthcare index (down 0.09%), underperformed the Sensex. The S&P BSE Oil & Gas index (down 0.02%), the S&P BSE Metal index (up 0.10%), the S&P BSE Telecom index (up 0.12%), the S&P BSE Energy index (up 0.17%), the S&P BSE Realty index (up 1.16%), the S&P BSE Teck index (up 1.46%) and the S&P BSE IT index (up 1.84%), outperformed the Sensex.

Banks witnessed selling pressure. Among private sector banks, Federal Bank (down 1.87%), RBL Bank (down 1.62%), Axis Bank (down 0.45%), Yes Bank (down 0.25%), Kotak Mahindra Bank (down 0.24%), ICICI Bank (down 0.19%), City Union Bank (down 0.03%) and HDFC Bank (down 0.01%), edged lower. IndusInd Bank rose 0.41%.

Among public sector banks, Bank of India (down 3.03%), Syndicate Bank (down 2.76%), Canara Bank (down 2.6%), IDBI Bank (down 2.14%), Punjab National Bank (down 2.09%), Union Bank of India (down 2.04%), Bank of Maharashtra (down 1.72%), Indian Bank (down 1.57%), Dena Bank (down 1.5%), Bank of Baroda (down 1.34%), Andhra Bank (down 1.21%), Vijaya Bank (down 1.18%), Allahabad Bank (down 1.09%), UCO Bank (down 1.09%), State Bank of India (down 1.07%), Central Bank of India (down 0.27%) and Corporation Bank (down 0.25%), edged lower. Punjab & Sind Bank (up 0.20%) and United Bank of India (up 1.37%), edged higher.

Retail stocks were in demand as investors' sentiment towards the sector improved after media reports sugggested that the Union Cabinet today, 10 January 2018, approved 100% foreign direct investment (FDI) through automatic route in single-brand retail. Future Enterprises (up 5.11%), Provogue (India) (up 4.93%),V-Mart Retail (up 3.44%), Shoppers Stop (up 2.32%), Trent (up 1.47%) and V2 Retail (up 1.27%), edged higher. Future Retail fell 1.61%.

Shares of coal mining major Coal India advanced 1.33% at Rs 308.10.

Pharma major Dr Reddy's Laboratories dropped 1.45% at Rs 2,422.80.

IT stocks advanced. TCS (up 2.93%), Wipro (up 2.50%), HCL Technologies (up 1.89%), Tech Mahindra (up 1.65%), Oracle Financial Services Software (up 1.26%), Hexaware Technologies (up 0.35%), Persistent Systems (up 0.22%) and MindTree (up 0.18%), edged higher. MphasiS fell 0.15%.

Infosys rose 0.46% at Rs 1,046.10. The company announced the successful conclusion of an advance pricing agreement (APA) with the US Internal Revenue Service (IRS). The APA will enhance predictability of the company's tax obligations in respect of its US operations. The company expects to reverse tax provisions of about $225 million made in previous periods which are no longer required. Further, the company expects to payout about $233 million due to the difference between the taxes payable for prior periods as per the APA and the actual taxes paid for such periods. This amount is expected to be paid over the next few quarters, Infosys said in a statement.

The reversal of the tax provisions will have a positive impact on the consolidated basic EPS for the quarter ending 31 December 2017 by about $0.1. The company also expects its overall effective tax rate to be lower by about 100 basis points for future periods covered under the APA. The announcement was made after market hours yesterday, 9 January 2018.

#Today also TV Vision Ltd hit another buyer freeze at Rs.23.75 in the NSE. The stock has been hitting upper circuits from the day (8th January, '18) it was recommended around Rs.21. The next target comes around Rs.47 .

#Today after a long time the stock of Housing Development & Infrastructure Ltd or HDIL (Rs.64.80) closed above key resistance zone. During intraday however, the stock moved to Rs.66.35. The company has got huge land bank of around Rs.20 crore sq. ft in Mumbai Metropolitan Region, whose valuation on a rough estimate basis is more than 15 times its debt. The management is looking to monetize a part of it to cut its debt of around Rs.2500 crore (approx).  The growth in the real estate market in Mumbai has been stagnant, quite sometime especially after demonetization, however the things have started to look much better after RERA began to weed out fly by night builders, limiting the competition. Moreover, the builders who have large land parcels are better placed because getting loans to buy land is extremely difficult now and also does not offer tax benefits. Over and above banks usually charge 0.5-2 points higher interest rate for land loans over the home loan rate. An investment in land can offer multi-fold returns provided one is ready to lock in money for 5-10 years. Many people buy land because there is some development coming up in the area like a highway or an airport and that the price will appreciate. With 2nd airport coming up in Navi Mumbai and Metro line is being extended to beyond Andheri, we can hope that the land price in this 7-island-land-locked city is likely to shoot northwards in the coming days. 

Meanwhile, the Board of Housing Development & Infrastructure Ltd (HDIL) had earlier considered and approved issue of upto 2,00,00,000 (Two Crore) share warrants convertible into equity shares to Mr. Sarang Wadhawan, Promoter of the Company on preferential basis subject to the approval of Shareholders. When preferential issue comes, I feel no shareholder will object, especially when capital infusion is concerned. 

There are some key developments in the real estate sector, according to a business website: 

(i) Second-half of 2017 sees new launches drop below sales for the first time in a decade. 40,832 units launched between July–December 2017, down 41% Y-O-Y | Sales at 1,07,316 units, down only 2% Y-O-Y. 

(ii) Unsold Inventory shrinks by 19% to 5.28 Lakhs Y-O-Y | Unsold inventory was at its peak of 7.2 lakh units in 2014.Unsold inventory in Mumbai shrunk by 25% at 1.16 lakh units 

(iv) Mumbai (Bombay) sees maximum sales and new launches in 2017. However, units sold are 3 times more than new apartments launched. | Mumbai : New units sold at 62,256; Mumbai: New launches at 23,253.

(v) Average property prices fallen by 3% across cities | Pune sees the most decline at 7% year-on-year | Mumbai residential prices too crack by 5% in 2017. 

Final Takeaways: New launches falling below sales is a healthy sign of reducing demand – supply gap | Unit sizes reducing across all 8 cities, to keep prices affordable | Effects of demonetisation tapering off | PMAY yet to make any significant market impact on the buyer | An uptick in buyers investing in properties abroad.

Therefore, worst phase may be over for the realty sector, which was disrupted by the triple ripple of demonetisation, implementation of Real Estate Regulation Act (RERA) and Goods and Services Tax in 2017. However, experts feel the spill-over effect will continue even in 2018 and that revival will be slow. “Recovery will be gradual and it will take three to five years for the sector to be back to normal,” says Anuj Puri, chairman of ANAROCK, a real estate consultancy.
Besides, on the daily chart the stock of HDIL is looking bullish, except that it is in the F&O ban list and its short term oscillators are slightly overbought. I am looking for a target of Rs.72, this week and hence accumulate on all declines. 

#The group company of TV Vision Ltd, Sri Adhikar Brothers Television Network Ltd also hit the UPPER CIRCUITS and closed at Rs.31.10. However, it needs to close above the resistance zone of Rs.31-32, to start the next level of upmove. It was recommended around Rs.28-29.50. 

#The scrip of Suzlon Energy Ltd (Rs.14.60) today touched its 2nd target of Rs.17 (intraday high Rs.17.10). The investors should do well to book complete profits and wait for the dips for re-entry.

#The scrip of Pincon Spirit Ltd after hitting a high of Rs.49.25, below the resistance zone of Rs.51 to close at Rs.45.25. What to do with  this scrip? Join either my associate brokerage house or subscription to my Premium Service, to stay ahead of others.

#Today, the scrip of Aban Offshore Ltd rose to Rs.257.30 intraday, piggybacking on the crude oil price rise and also about the media speculation that the promoters are offering $600 mln for one-time settlement to lenders. The stock if you remember was recommended some months back at around Rs.178--179.

#Tomorrow, I will be recommending a short term momentum counter in this blog, from the small/mid cap space. Hence, the risk taking investors can keep an eye on this blog, the next day.

#Those who have a portfolio size of more than Rs.1.50 lakhs can come to me - we will make money together on a profit sharing basis. Also, from 16th January, '18, the subscription charge of my Premium Service would be increased to Rs.18,000 per month. If you do not have sufficient experience in the stock market  then, I would suggest you to not to dribble here without the help of an expert. You would either not be able to get optimum returns on your investments or you might burn your finger too often. It is not that experts don't make mistakes in the stock market, but their percentage is low as compared to a novice or a newcomer or who does not have much time for research. Believer me, these days with information boom, making money from the markets on consistent basis has become very difficult and tricky. 

~ with inputs from Capital Market - Live News