Winning Strokes: Think Different

The market declined sharply, extending yesterday's steep fall. Investors were nervous after US President Donald Trump imposed 10% tariffs on an additional $200 billion worth of Chinese imports, and warned of duties on more products if China took retaliatory action. Domestic shares spent most of the trading session in negative territory although the reaction was a little muted. However, selling pressure intensified in the last hour of trade.

The Sensex fell 294.84 points or 0.78% to settle at 37,290.67, its lowest closing level since 2 August 2018. The index rose 159.93 points, or 0.43% at the day's high of 37,745.44. The index fell 342.66 points, or 0.91% at the day's low of 37,242.85.

The Nifty 50 index fell 98.85 points or 0.87% to settle at 11,278.90, its lowest closing level since 2 August 2018. The index rose 33.70 points, or 0.30% at the day's high of 11,411.45. The index fell 108.80 points, or 0.96% at the day's low of 11,268.95.

Among secondary barometers, the BSE Mid-Cap index fell 1.49%. The BSE Small-Cap index fell 1.51%. Both these indices underperformed the Sensex.

The market breadth, indicating the overall health of the market, was weak. On BSE, 881 shares rose and 1805 shares fell. A total of 162 shares were unchanged.

Among the sectoral indices on BSE, the S&P BSE Realty index (down 3.13%), the S&P BSE Power index (down 2%), the S&P BSE Industrials index (down 1.77%), the S&P BSE Telecom index (down 1.75%), the S&P BSE Bankex (down 1.68%), the S&P BSE Utilities index (down 1.68%), the S&P BSE Metal index (down 1.49%), the S&P BSE Auto index (down 1.47%), the S&P BSE Finance index (down 1.42%), the S&P BSE Capital Goods index (down 1.36%), the S&P BSE Basic Materials index (down 1.31%), the S&P BSE Consumer Discretionary Goods & Services index (down 1.17%), the S&P BSE Oil & Gas index (down 1.08%), the S&P BSE Energy index (down 0.92%) and the S&P BSE Teck index (down 0.82%), underperformed the Sensex. The S&P BSE Healthcare index (down 0.72%), the S&P BSE IT index (down 0.7%), the S&P BSE Consumer Durables index (down 0.42%) and the S&P BSE FMCG index rose 0.86%), outperformed the Sensex.

Banks shares declined. Among private sector banks, Federal Bank (down 3.09%), Axis Bank (down 2.81%), ICICI Bank (down 2.07%), City Union Bank (down 1.84%), IndusInd Bank (down 1.13%), Kotak Mahindra Bank (down 1.11%) and RBL Bank (down 0.21%), edged lower. HDFC Bank (up 0.05%) and Yes Bank (up 1.43%), edged higher.

Among public sector banks, Union Bank of India (down 9.11%), Indian Bank (down 8.33%), Canara Bank (down 7.66%), Syndicate Bank (down 5.84%), Andhra Bank (down 5.08%), Punjab National Bank (down 4.46%), State Bank of India (down 4.06%), Bank of India (down 3.91%), IDBI Bank (down 3.02%), Central Bank of India (down 2.01%) and Allahabad Bank (down 1.11%), edged lower. Bank of Maharashtra (up 0.95%), United Bank of India (up 4.44%), Corporation Bank (up 6.19%), Punjab & Sind Bank (up 6.35%) and UCO Bank (up 6.98%), edged higher.

State-run Bank of Baroda slumped 16.03% after the government's decision to merge it with Dena Bank (up 19.75%) and Vijaya Bank (down 5.69%) failed to enthuse investors.

Bank of Baroda said it has received a communication from Ministry of Finance, Government of India that the Alternative Mechanism (AM) after consultation with Reserve Bank of India (RBI), has decided that Bank of Baroda, Vijaya Bank and Dena Bank may consider amalgamation of the three banks. Accordingly, a meeting of board of directors to consider the amalgamation will be convened by the bank shortly. The announcement was made during trading hours today, 18 September 2018.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 72.715, compared with its close of 72.495 during the previous trading session.

President Donald Trump will impose 10% tariffs on $200 billion worth of Chinese imports, and those duties will rise to 25% at the end of the year, according to a Monday announcement. The White House removed about 300 goods from a previously proposed list of affected products, including smart watches, some chemicals and other products such as bicycle helmets and high chairs. Beijing has already warned that it will retaliate against the measures.

The US has already levied tariffs on $50 billion worth of Chinese products. Beijing responded with measures targeting $50 billion on American goods, raising fears about damage to the US farm industry. Earlier this month, reports suggested that the US was seeking to restart trade talks with China.

Meanwhile in the US, the New York Fed's Empire State index fell 7 points to 19 in September.

In the global commodities markets, Brent for November 2018 settlement was up $1.25 a barrel at $79.30 a barrel. The contract had fallen 4 cents, or 0.05% to settle at $78.05 a barrel during the previous trading session.

#The scrip of ARSS Infrstructure Projects Ltd recommended to the Premium Members at around Rs.26 today hit the buyer freeze at Rs.28.10 in the BSE. We are looking for targets of Rs.32-35 in the coming days. 

#Profit booking was suggested in the scrip of BHEL some days back at around Rs.81-82. The scrip today broke a major support and closed at Rs.73.85 in the NSE. The short term traders should stay away from this stock for the time being, because of China factor. 

#The scrip of Rana Sugars Ltd touched the upper circuits today, before closing at Rs.5.15. The sugar stocks were on uptrend during the last few days following the government of India's policy of hiking the price of ethanol by 25%.

#The stock of Bajaj Hindustan Sugar Ltd recommended to the Premium Members at around Rs.8.50 on last Sunday, hit another buyer freeze today at Rs.11.20 in the NSe. For the targets and other details you need to join the Premium Services.

#Profit booking was suggested in the stock of 63 Moons Technologies Ltd (Rs.85.05), after it touched an intraday high of Rs.87.25 in the NSE. The stock was recommended several times in this blog during the last few months, starting from Rs.67 to Rs.77.

#The correction seems to be over for the scrip of Mandhana Industries Ltd (Rs.6.75) after its whirlwind rally from Rs.4.65, following good quarterly numbers. If the bounce happens then we can look for targets of Rs.9.7-14. Accumulate on dips after the scrip price stabilizes. 

#The share of Vijaya Bank  Ltd (Rs.56.50) was recommended today to the Premium Members today for short term target of Rs.72 on the premise that it has only  4.1% of NPL as compared to 11% of Dena Bank Ltd (Rs.19.10); and therefore is better placed to get benefited due to its merger/association with a large bank like Bank of Baroda (Rs.113.10).

#At a time when PSBs are thinking in terms of lending to companies that eventually failed to service their debts, the state owned Life Insurance Corporation of India (LIC), country’s largest life insurance company, has made significant investments in some of these companies. To know the names of few promising ones from the list, you need to join the Premium Service. Also, if you have lost money in earlier pursuits, then don't lose hope, bring fresh funds; I will help you recover your losses (But no margin trading please). This is the best time to kick-start your investment, especially when most of the stocks in the small and mid cap segments are at attractive valuations. What is needed is cherry picking from the lot.....!! 

#The share or Monnet Ispat &  Energy Ltd recommended in this blog around Rs.11-12 levels got locked in the Upper Circuit today at Rs.24,55. The scrip has doubled from the recommended price in the last couple of months. 

#For more on the markets and to make money on consistent basis, you need to join the Premium Information Service or trade through my recommended brokerage house. There is a Discount Scheme going on, both on the Yearly Subscription and Life Time Subscription Packages. 

~~with inputs from Capital Market - Live News