Tit - bits
#The Indian market soared to new high in the
week ended January 17 as the BSE Sensex climbed Mount 42,000 for the first time. Optimism over the upcoming Budget on February 1 and the ongoing Q3FY20 earnings season helped bulls maintain their sway on the Dalal Street.
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| Photo: Moneycontrol.com |
The BSE Sensex is now trading 41,770.01 down 73.19 points (-0.42%) while the Nifty is seen at 12,293.70 down 55.90 points (-0.47%), after kissing record high. This is a normal correction in the large cap space, after touching new levels. However, it is interesting to note that the rally finally seems to be getting broad-based as Nifty Midcap and Smallcap indices managed to outperform the frontliners -- both indices eked out 4% gains in the week gone by, compared to the BSE Sensex and Nifty50 which gained 0.80% each.
Hence, my suggestions would be to use the dips in the market, to enter good small and mid cap counters. I don't foresee a too deep fall in the indices before the Budget on 1 February.
#The scrip of Wockhardt Ltd (Rs. 286) hit my 4th and 5th targets of Rs192 and Rs.196 respectively, as the scrip made an intraday high of Rs.297.90. The traders are suggested to book complete profits and wait for the dips to enter.
#The stock of United Bank of India Ltd (Rs. 9.10) today touched Rs.9.30. The traders should do well to accumulate the scrip in intraday dips.
#Meanwhile, Food Price Inflation surged to 14%, led by vegetables (60%), pulses (15%), meat and fish (9.6%), and eggs (8.8%).
At the same time, core inflation has stayed low, ruling out any possibility of a short time demand recovery. Now, though vegetable prices may stabilize in due course of time, if driven by seasonal factors, that may not be the case for cereals and pulses.
Inflation rates in cereals and pulses have seen a consistent rise in the past six months. They together have a larger weight than vegetables, in the index and the rise in their prices is unlikely to be a result of seasonal factors. Some of it may be due to the transmission of global food prices, which have been showing a rising trend in the last half year; though a bulk of the blame lies with government policy. In pulses, untimely imports flooded the markets and contributed to lower price realization last year, further leading to lower production this year.
In a significant development, the petroleum and natural gas ministry has begun interministerial consultations on its proposal to end the power sector's priority access to cheap domestic gas, setting up a gas trading platform and hiving off GAIL's pipeline business into a subsidiary. It will send the proposals to the Cabinet after the consultation process, which is expected to take a few weeks, said officials.
The ministry has proposed to permit use of cheaper domestic gas by just fertilizer makers, city gas distributors and liquefied petroleum gas (LPG) makers, they said.
On the last Friday, the percentage of deliverable quantity to the traded quantity for the shares of National Fertilisers Ltd, remained a whooping 72.54%, indicating that lot of accumulation is taking place ahead of budget.
#Meanwhile, Food Price Inflation surged to 14%, led by vegetables (60%), pulses (15%), meat and fish (9.6%), and eggs (8.8%).
At the same time, core inflation has stayed low, ruling out any possibility of a short time demand recovery. Now, though vegetable prices may stabilize in due course of time, if driven by seasonal factors, that may not be the case for cereals and pulses.
Inflation rates in cereals and pulses have seen a consistent rise in the past six months. They together have a larger weight than vegetables, in the index and the rise in their prices is unlikely to be a result of seasonal factors. Some of it may be due to the transmission of global food prices, which have been showing a rising trend in the last half year; though a bulk of the blame lies with government policy. In pulses, untimely imports flooded the markets and contributed to lower price realization last year, further leading to lower production this year.
In a significant development, the petroleum and natural gas ministry has begun interministerial consultations on its proposal to end the power sector's priority access to cheap domestic gas, setting up a gas trading platform and hiving off GAIL's pipeline business into a subsidiary. It will send the proposals to the Cabinet after the consultation process, which is expected to take a few weeks, said officials.
The ministry has proposed to permit use of cheaper domestic gas by just fertilizer makers, city gas distributors and liquefied petroleum gas (LPG) makers, they said.
Also, the cut in fertilizer prices by the NDA government is likely to perk up the top and bottom lines of fertiliser companies.
The revised domestic natural gas prices as per the New Domestic Gas Policy 2014 will remain operational from October 1, 2019 till March 31, 2020.
Therefore, my assessment is that the sticky Food inflation is not going anywhere in a hurry -- this gives ample ammunition to the investors to hunt for good Agri - based shares. On the last Friday, the percentage of deliverable quantity to the traded quantity for the shares of National Fertilisers Ltd, remained a whooping 72.54%, indicating that lot of accumulation is taking place ahead of budget.
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