Winning Strokes: Think Different

Key benchmark indices suffered severe losses amid a broad-based sell-off in index pivotals. The barometer index, the S&P BSE Sensex, lost 550.51 points or 1.51% to settle at 35,975.63. The Nifty 50 index lost 150.05 points or 1.36% to settle at 10,858.25. The Nifty settled below the psychological 11,000 mark.

Photo: Samachar Plus

Sentiment was weak after the rupee dropped to a new low amid sustained foreign fund outflows and surging crude oil prices. Investors were also cautious ahead of the three-day Reserve Bank of India (RBI) policy review scheduled to begin Wednesday. The RBI's Monetary Policy Committee (MPC) will meet between 3 to 5 October 2018 for the fourth bi-monthly monetary policy for 2018-2019. The resolution of the MPC will be unveiled at 14:30 IST on 5 October 2018.

In the global commodities markets, Brent for December 2018 settlement was up 17 cents at $84.97 a barrel. The contract had fallen 18 cents, or 0.21% to settle at $84.80 a barrel during the previous trading session.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 73.24, compared with its close of 72.91 during the previous trading session. Rupee hit a record low of 73.4175 against the dollar in early deals amid worries that surging oil prices will stoke inflationary pressures and widen India's current and trade deficits.

Among secondary equity barometers, the BSE Mid-Cap index lost 1.11%. The BSE Small-Cap index rose 0.20%.

The market breadth, indicating the overall health of the market, was positive. On BSE, 1453 shares rose and 1212 shares fell. A total of 153 shares were unchanged.

Among the sectoral indices on BSE, the S&P BSE Auto index (down 2.9%), the S&P BSE Teck index (down 2.38%), the S&P BSE IT index (down 2.23%) underperformed the Sensex. The S&P BSE Metal index (up 1.74%), the S&P BSE Oil & Gas index (up 0.63%), the S&P BSE Capital Goods index (up 0.23%) outperformed the Sensex.

Yes Bank gained 5.79% on bargain after the steep declines in recent weeks. In a recent press update, the bank noted that it is fully geared for the MD & CEO's succession and pursuant to the board of directors meeting dated 25 September 2018, the two external experts of the search & selection committee will be finalized by 7 October 2018. The committee, assisted by a global leadership advisory firm, will evaluate both internal and external candidates and make suitable recommendations to the board of directors for onward submission to RBI.

Over the past few days, some unfounded speculations regarding the bank's asset quality have been brought to its notice, according to the bank. In this context, the management clarifies that the asset quality continues to be stable and reiterated its credit cost guidance at 50-70 bps for FY19 (76 bps for 

FY18).

The bank has a liquidity coverage ratio of ~101% as on September 30, 2018, which is 11% points in excess of the minimum regulatory requirement of 90%. The Bank's average daily LCR for Q2 FY19 was ~100%. The bank's liquidity position will further benefit from the recent RBI measures (announced on September 27, 2018) to ease systemic liquidity which will take effect on October 01, 2018, noted the bank further.

Hathway Cable & Datacom jumped 9.09% after media reports suggested that Reliance Industries has initiated talks to acquire Hathway Cable. The acquisition talks are underway in a bid to speed up the commercial launch of Reliance's GigaFiber high-speed home broadband services, reports added.

Reliance Industries lost 2.13%. With reference to media reports titled, "RIL in talks to buy Hathway, bring broadband home to you", the company clarified to bourses today that it is unable to comment on media speculation and rumors and it would be inappropriate on its part to do so. The company evaluates various opportunities on an ongoing basis. There is no information which has not been announced to the stock exchanges and which should have been announced by the company.

MOIL gained 6.39% after the company said that it has fixed/revised prices of different grades of manganese ore and other products, effective from 1 October 2018. The announcement was made after market hours on Monday, 1 October 2018. Stock markets were closed yesterday, 2 October 2018 for local holiday.

MOIL said that in line with the business practice of fixing/revising prices Manganese Ore, the company has fixed/revised prices of different grades of Manganese Ore, effective from 1 October 2018. The prices of Ferro Grade, SMGR (Mn 30% & Mn 25%), Chemical Grade and Fines have been increased by about 10% on the existing prices prevailing since 1 September 2018. A discount of 10% will be offered on the prices effective from 1 October 2018 on specific grades of materials i.e. BGF534, DBL456 & BGL523 for dispatches during October 2018.

The basic price of Electrolytic Manganese Dioxide (EMD), has been increased by Rs 9000 PMT on the existing price prevailing since 1 July 2018. Ferro Manganese/ Ferro Manganese Slag and some identified grades of Manganese Ore will continue to be sold on e-auction basis as well as through Metal Mandi (M3) of MSTC.

Overseas, most European stocks rose on Wednesday as investors kept an eye on Italian politics and spending plans. Most Asian stocks declined. Markets in China and South Korea were closed for a public holiday.

Italy last week unveiled a 2019 budget deficit target that has met stiff opposition from European Union officials, who say it will violate the bloc's fiscal rules. Italy's coalition government proposed a budget that would increase the deficit to 2.4% of gross domestic output in 2019, well above the initial target of 0.8% proposed by the country's previous centre-left government. The current target range for this year is 1.6%. The deficit blowout revived fears of the eurozone debt crisis and put pressure on the euro.

Meanwhile in the UK, the Conservatives' annual party conference was under way with Prime Minister Theresa May facing pressure over her proposal for future UK-EU relations, known as the Chequers plan, which has already been rejected by EU leaders. Any additional signs of political instability in Europe could weigh on the US, where multinational firms have a large amount of revenue exposure to the region.

In US, the Dow Jones Industrial Average hit a record high on Tuesday as it rallied for a second day, boosted by gains in Intel and optimism around global trade. Stocks were coming off strong gains from the previous session after Canada joined the US and Mexico in a new trade deal. The United States-Mexico-Canada Agreement, or "USMCA" for short, will see all three countries compromise on certain trade aspects. More market access will be granted to US dairy farmers, while Canada has agreed to effectively cap automobile exports to the States.

Trade war remains in focus for the markets. Following the new USMCA deal to replace the current North American Free Trade Agreement, eyes are now on Washington's ongoing trade fight with China. Investors will be looking to China, to see if Beijing and Washington can compromise on certain trade elements.

#Yesterday's call Yes Bank Ltd at around Rs.185 and Rs.200 call at Rs.15 gave good returns to the investors. The stock rose to Rs.222.95 in the NSE before closing at Rs.212.75 in the NSE up 5.92%. The Premium Members were asked to book profits around Rs.220 after the 1st target was achieved. You can hold the scrip with a SL at Rs.202.
I have started to give calls on Twitter during the market hours, because this seems to be a better one than Facebook for micro-blogging. My Twitter handle is suman2009s

#Today a buy call was initiated in the shares of Global Offshore Services Ltd at around Rs.12.80 for medium to long term basis. It is in the business of transport of personnel to rigs or  platforms from onshore bases and vice-versa; delivery of cargo or  material to rigs or platforms; anchor handling operations;towing of rigs, etc. The fact that crude oil prices are moving up in the international market is positive for the sector.
However, since this is a high-risk-high-gain stock, kindly don't enter the counter without placing a SL at Rs.9.60. If the things work as expected then this stock can make you millionaire. 

#Today a buy call given to the Premium Members on Premier Explosives Ltd at around Rs.180. If you could remember, that I used to give regular buy call on this company during 2003-2007 period, when it used to hover around Rs.18-35. Now I am recommending the same stock almost 6  times that price. This is how the stock market rewards long term investors. The stock  rose to Rs.214 intraday giving good returns to the Premium Members. The scrip closed at Rs.189.65 in the NSE, up 7.88%.
Join the Premium Services and get such calls on your Whatsapp, during the market hours. One or two Right Trade/s will give you back what you Paid as subscription charges. You can send me mails at: suman2005s@rediffmail.com.

Premier Explosives is a manufacturer of high-energy materials for the defence and mining sectors. It is the first private entity to develop and manufacture solid propellants for missiles. Bharat Dynamics has been procuring booster grains from Premier Explosives for use in the manufacture of Akash missiles. Amar Nath Gupta (promoter) bought 25,38,599 shares through market purchase from August 23 to August 27, 2018.

#The stock of Bharat Electronics Ltd (BEL) was given a buy to the Premium Members on 2nd October, '18 to be bought on the next day, i.e. 3rd October, '18 at Rs.82.70. The scrip made a high of Rs.84.75 today, before closing at Rs.83.40 on the NSE. You can still buy the scrip for targets of Rs.102/119. SL: Rs.75.
Public sector major Bharat Electronics Ltd (BEL) is planning to grab its pie on the Rs 90 billion-worth opportunity Indian Space Research Organisation (Isro) is opening up for the industries in the next few years. BEL is working in strategic areas like homeland security solutions, smart cities, cyber security, unmanned systems, satellite integration and composites in line with the emerging needs of the customers, said M V Gowtama, Chairman & Managing Director of BEL in a communication to the shareholders.

#In the Forex market the Indian Rupee dropped to a new low amid sustained foreign fund outflows and surging crude oil prices. This gives a general indication that the RBI is likely to increase the repo rate in the next meet. Hence, as a precautionary measure, I would suggest you to stay away from the rate sensitive sectors, like Real Estate, Construction, Auto, etc for the time being. 

#The Nifty Spot today closed at 10858.25 down 150.05 points. I feel the negative trend is likely to continue with occasional bouts of spikes, which should be used either to come out long positions or to initiate fresh shorts. According to my estimation, with a rate hike fear looming on the horizon, the Nifty Spot is likely to test 10586 in the Extreme Case, on the downside. However, the individual shares are likely to shine. Hence, stock picking is very important in this kind of market. Tomorrow we could witness a bounce of 10 - 15 points bounce on Nifty during the opening hours. 

~~with inputs from Capital Market Live News....