Market Pulse

The stock market further trimmed gains in the mid-morning trade with the two key benchmark indices hitting intraday lows.

At 12.28 IST, the barometer index, the S&P BSE Sensex was trading at 33,847.59 up 100.81 point or 0.30%, while Nifty was seen at 10,399.15  up 40.30 points or 0.39%. 

Key indices opened the session on a stronger footing on firm global cues. Later, indices trimmed gains so far. Global stocks gained as worries about a potential trade war waned in the aftermath of US President Donald Trump's tariff announcement on steel and aluminum.

Among secondary indices, the S&P BSE Mid-Cap index advanced 0.59%, outperforming the Sensex. The S&P BSE Small-Cap index rose 0.28%, underperforming the Sensex.

The breadth, indicating the overall health of the market, was positive. On the BSE, 1,375 shares advanced and 932 shares declined. A total of 137 shares were unchanged.

Stocks of public sector banks edged lower. Bank of India (down 1.94%), Union Bank of India (down 1.19%), State Bank of India (down 0.57%) and Punjab National Bank (down 0.1%) declined. IDBI Bank (up 2.55%) and Corporation Bank (up 0.63%) gained.

Bank of Baroda was up 0.14%. The bank has kept its Marginal Cost of Funds based Lending Rate (MCLR) unchanged, applicable from 7 March 2018. MCLR for overnight loans will be 7.80%, for one month will be 7.85% and for three months will be 7.95%. The MCLR on 6-month loans will be 8.15% and for one-year loans the rate would be 8.30%, the bank said. The announcement was made after market hours yesterday, 5 March 2018.

Stocks of private sector banks advanced. IndusInd Bank (up 2.01%), Yes Bank (up 1.13%), Axis Bank (up 0.56%) and Kotak Mahindra Bank (up 0.35%) gained. HDFC Bank (down 0.2%) and ICICI Bank (down 0.03%) declined.

The Reserve Bank of India (RBI) stated on 5 March 2018 that it will inject additional liquidity of Rs 1 lakh crore in banks through longer tenor instruments to enable flexibility towards meeting their fund needs. This measure is to address additional demand for liquidity and with a view to provide flexibility to the banking system in its liquidity management towards March-end, the central bank said. This will be in addition to normal liquidity adjustment facility operations.

Realty stocks gained. Oboroi Realty (up 1.78%), D B Realty (up 0.99%), DLF (up 0.81%), HDIL (up 0.53%), Godrej Properties (up 0.49%) and Indiabulls Real Estate (up 0.39%) edged higher. Prestige Estates Projects (down 2.5%), Sobha (down 0.08%) and Unitech (down 0.14%) declined.

Jain Irrigation Systems rose 2.2% at Rs 113.95 after the company said it won an integrated drip irrigation project worth Rs 287.66 crore. The announcement was made during trading hours today, 6 March 2018.

Overseas, Asian stocks rallied, tracking gains in the US and Europe in the last session as concerns over a potential trade war faded.

US stocks rose yesterday, 5 March 2018, erasing earlier losses, as worries about a potential trade war waned. US President Donald Trump announced tariffs on steel and aluminum that sparked fears of a trade war.

Today's Calls:

#Yesterday,  the following news was sent to the Premium Members that the stock of Reliance Infrastructure Ltd had not broken the support of Rs.427. You can add the scrip for a short term target of Rs.470..Today, the stock of Reliance Infrastructure Ltd has made an intraday high of Rs.645.30 in the NSE and is now trading at around Rs.544. 

#HDIL (Rs.46.7), has bounced from its support of  around Rs.46, however it has broken a two year old support at Rs.47. So, the best price to average would probably above Rs.47. Or only if it gives a closing above Rs.47. Moreover, the derivative contracts (FUTURE & OPTION..BOTH) "FORTIS, HDIL, IDBI & ORIENTBANK" have crossed 95% of the market-wide position limit and are currently in the ban period. 

#Intraday  Sell NIFTY FUTURE at around 10435, SL: 10455, T: 10390. Target achieved at 10390 ==> Book Complete Profit. Call Closed!!

#The stock of MCX Ltd (Rs.781) has given a break out. Keep holding with a SL of Rs.777. This is for those who bought  yesterday at around Rs.770.

#Profit Booking was suggested in the share of P C Jewelers Ltd at around  Rs.348.  Wait for the dips to enter.

#TV Vision Ltd (Rs.16) bounced from its support. You can accumulate keeping Rs.15.7 as  the Ultimate Stop  Loss.

#Sell TATA MOTORS FUTURES at around Rs.355; SL  above Rs.359; T: Rs. 349. BOOK PROFIT at around Rs.352.4. Call Closed!!

#Intraday BUY BPCL at around Rs.443, SL: Rs.439.75,  T:Rs.449. Book PARTIAL PROFIT at around Rs.445.50

Join the Premium Service or Trade through my recommended BROKERAGE HOUSE with a minimum portfolio size of Rs.3 lakhs (to get Premium Service Free of charge) to stay ahead of others. 

~~With inputs from Capital Market - Live News

Market Pulse

Key benchmark indices edged lower in early trade tracking weakness in Asian stocks. at 1.42 pm, the Sensex slipped below the 34,000 level, while the Nifty is 112 points down. 

The S&P BSE Mid-Cap index fell 0.29%. The S&P BSE Small-Cap index dropped 0.21%. Both these indices outperformed the Sensex.

Overseas, Asian stocks edged lower as Chinese leaders headed into an annual parliament meeting. China's National People's Congress meeting kicked off with Premier Li Keqiang announcing 2018 growth target for the country at around 6.5%. Among economic data, the China's Caixin services purchasing managers' index (PMI) dipped to 54.2 in February from 54.7 in the previous month.

US stocks closed well off session lows on Friday, 2 March 2018, helped by a sharp rise in health care shares. Stocks traded sharply lower earlier in the session on fears that President Donald Trump's announced tariffs on steel and aluminum could spark a trade war.

Closer home, the breadth, indicating the overall health of the market, was weak. On the BSE, 819 shares declined and 477 shares advanced. A total of 92 shares were unchanged.

Reliance Industries (RIL) was off 0.39% at Rs 944. RIL's step-down subsidiary Reliance Brands (RBL) has completed acquisition of additional 5.3% stake in equity share capital of Genesis Luxury Fashion (GLF) for a cash consideration of Rs 35.39 crore. With this acquisition, the stake of RBL in GLF's equity share capital has gone up to 46.6%. The announcement was made after market hours on Thursday, 1 March 2018. The stock market was closed on Friday, 2 March 2018 on account of Holi.

RBL is a subsidiary of Reliance Retail Ventures, one of the retail arms of RIL and is partner of choice for various international brands. RBL, inter alia, held 41.3% investment in equity shares of GLF.

Hero MotoCorp dropped 0.91% at Rs 3,546.70. The company's two-wheeler sales rose 20% to 6.29 lakh units in February 2018 over February 2017. Riding on robust demand for its popular range of two-wheelers, Hero MotoCorp delivered a strong sales performance in February 2018, thereby further consolidating its dominant market leadership. This sales performance by the company has been driven by strong growth in scooters, in addition to the continued momentum across the range of its motorcycle brands. The announcement was made after market hours on Thursday, 1 March 2018.

Wipro was down 0.43%. The company announced the expansion of its Live Workspace suite of offerings, providing enterprises with an anywhere, anytime, any device digital workplace. This will allow enterprises to offer their employees a choice when deciding which tools enable them to be more productive, creative and collaborative. The announcement was made after market hours on Thursday, 1 March 2018.

Coal India declined 1.17% at Rs 309.15. The company announced the provisional production and offtake of the company and its subsidiaries for the month of February 2018. The company achieved 89% of the targeted coal production at 54.46 million tonnes in February 2018. Actual offtake was 96% of the targeted offtake at 49.97 million tonnes in February 2018. The announcement was made after market hours on Thursday, 1 March 2018.

Meanwhile, Markit Economics will unveil the result of a monthly survey on the performance of India's services sector in February 2018 at 10:30 IST today, 5 March 2018. The Nikkei Services PMI in India increased to 51.7 in January, from 50.9 in the prior month.

Among key domestic events, in a big morale booster to the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) at the centre, the BJP along with its ally Indigenousn People's Front Of Tripura has secured a comfortable majority by bagging 43 out of 59 seats in the recently held assembly elections in Tripura. In Nagaland, the ruling Naga Peoples Front (NPF) emerged as the single largest party, securing 27 out of 59 seats. The BJP has secured 12 seats. In a rude shock, the Congress party has been wiped out from Tripura and Nagaland, having failed to secure a single seat in these two states. In Meghalaya, the Congress has emerged as the single largest party, securing 21 out of 59 assembly seats, followed by the National People's Party bagging 19 seats. The counting of votes for the assembly elections took place over the weekend.

Meanwhile, the developments in the Budget Session of Parliament will be closely watched. Both the Houses of Parliament which were adjourned on 9 February 2018 for a recess, resumes today, 5 March 2018. The second part of Parliament's Budget Session is likely to begin on a stormy note with the Congress and other opposition parties set to raise the issue of multi-crore financial scams involving public-sector banks in both the Houses. The second part of the session would primarily see discussions on the demand for grants for various ministries.

Today's Calls:

#Those are holding  the hares of Aban Offshore Ltd should exit the scrip if it breaks Rs.166 on closing basis on the downside. However, the long term investor can hold the stock with a final stop loss of Rs.159. The stock could show some positive movements in the coming days. However, keep your stop losses ready in case of the scip not performing as expected. 

#Those of you who have not booked profit in Tata Motor Ltd at around Rs.376.70, should exit the scrip if Rs.362 is broken on the downs (on closing basis). The 1st stop loss at Rs.167 has already been hit and hence non-risk taking traders can exit the scrip. 

#Those who are holding the shares of P C Jewelers Ltd (Rs.334) can continue to add in intraday declines, with stop losses at Rs.326/322. 

#The stock of 3i Infotech Ltd (Rs.5.90) is showing a good upward movement today. You can start averaging if it gives a closing above Rs.6.

#Intraday SELL Hindustan Unilever at around Rs.1299-1300; SL: Rs.1312, T: Rs.1285.  This is a pure chart based call. 

#Those who wants to opt for PROFIT SHARING MODE should note the following specifications:

1. They should have to open an account with BMA Wealth Creators Ltd, with a minimum portfolio size of Rs.3 lakhs (increase from Rs.1 lakh and then 2 lakhs, earlier).  The demat account holders of other brokerage houses will NOT be accepted nor will they be allowed to do "Phatka" in the accounts on their own. Mostly, DELIVERY based calls over a period will be executed. Those who believe in Daily Trading or Short Term Trading Only, should not opt for this Scheme. 

1. I or my venture can decide to part at any time or decide to call off the contract at any time, if it was seen that inspite of the my best efforts, the client is not satisfied or has some nagging issues or has joined the service with some ulterior motives in mind (like selling the free call to people at a price) or is too much argumentative inspite of not having much idea of equity investing,etc....

2. The percentage sharing ratio would be 70:30 between you and my firm for all accounts having portfolio size of Rs.5 lakhs and above. For the portfolios between Rs.3-5 lakhs,, the profit sharing ratio would be 65:35 between you and my firm. This ratio is not negotiable and is absolute. 

3. The profit has to be shared in every 30 days. Any loss will be adjusted against the following profit. You should have sufficient cushion, to do either averaging of a stock if needed or pay the margin amount in case a scrip goes down. 

4. All the calls will be given through either Yahoo Messenger or Whatsapp. I have decided to close/ discontinue the Facebook Messenger for good, due to too much misuse by some people from my friends' list. 

~With inputs from Capital Market - Live News 

Winning Strokes

Photo: 63 Moons Technologies Ltd

#The stock of Urja Global Ltd closed at Rs.5.44 down 4.90% in the lower circuits. If you can recollect, I had penned an article on 30 January, 2018 titled: Urja Global  Ltd: A case of Unbridled Stock Manipulation or too much Euphoria.....? At that time the scrip was quoting at Rs.9.72. After that I wrote several times in this blog not to get carried  away by the synthetic euphoria generated by vested groups and that any price of the stock above Rs.2-3, does not merit any attention -- the share I believe is moving towards that level. Now where are the Electric car, Solar Energy and African story gone? Why are the promoters who gave a (long) positive interview in YouTube are silent?

If possible read the contents of this blog on a regular basis,  to stay ahead of others. This blog is not an investment journal, however, I believe you will get lot of tips and tricks that might help you in chalking out an investment road map, in Indian bourses.

#The stock of Tata Motors Ltd moved to Rs.376.25, before closing at Rs.370.85. Tata Motors witnessed an overall growth of 38 per cent in passenger and commercial vehicle sales last month with its new passenger cars - Tiago, Tigor, Nexon and the Hexa being the growth drivers. In the commercial vehicle sector, industrial developments, fresh tenders in car carriers, coal movement and  the petroleum sector were attributed as growth drivers by the company. An increase in demand from construction, logistics, e-commerce and FMCG applications have also contributed to the retail of CVs. The growth is a promising one, considering the CV industry has been collectively limping back from the slow down witnessed in sales in 2017. 

Tata Motors Ltd reported a surge in quarterly profit, driven by higher sales at its Jaguar Land Rover (JLR) business after an exceptionally weak quarter a year earlier.

Net profit for the quarter ended December 31 came in at ₹11.99 billion ($187.15 million) compared with ₹937.7 million in the same quarter a year ago; the biggest jump in seven quarters. Tata Motors Ltd reported a near 11-fold rise in fiscal third-quarter profit as a surprise turnaround in its India business helped offset a slowdown in its Jaguar Land Rover (JLR) unit. 

Those who have bought the stock today in intraday dip can look for  short term targets of Rs.182-184; next week.

#The stock of Aban Offshore Ltd today closed flat at Rs.169.90, amidst a decline in the crude oil prices in the international markets. However, oil analysts expect the price of crude to rise steadily this year, but remain in a tight band dictated by U.S. shale output growth on one side and OPEC supply restraint on the other, a Reuters poll showed on Wednesday. The survey of 37 economists and analysts forecast Brent crude would average $63 a barrel in 2018, slightly higher than $62.37 projected in the previous month's poll. "OPEC's level of compliance (with agreed production curbs) and the pace of U.S. shale's output growth are likely to be the key fundamental price drivers in 2018," Ashley Petersen of Stratas Advisors said. Meanwhile,  the top oil exporter Saudi Arabia is likely to cut prices for all crude grades it sells to Asia in April after demand for Middle East crude fell in last month’s trade, trade sources said on Thursday. 

Based on the historical trend, population growth and economic outlook, most of the international agencies and consultants were of the view that oil demand would reach 121 mmbpd by 2040. However, as the automotive industry becomes more incentivized to build electric vehicles (EVs), this is unlikely.

Surely, EVs won’t replace all ICEs overnight. That transformation would require over decades. Therefore, no one is claiming that oil demand in road transportation in particular will be wiped out suddenly.  Offshore drilling rigs are an intrinsic part of the oil discovery and exploration industry and Aban Offshore Limited is a major player in this sector. 

In another development, there were earlier media reports that Promoters of Aban Offshore Ltd have offered to pay up to $600 million in a one-time settlement to 17 banks to which it collectively owes nearly $2 billion. The banks, meanwhile, are willing to take up to a 50% haircut which translates to around $1 billion as a potential one-time settlement -- this means perhaps we are very close to a settlement. 

#The stock of 63 Moons Technologies Ltd (Rs.92.95), formerly known as Financial Technologies Limited, was recommended today at around Rs.94-95, for short term targets of Rs.117-121. 

It is pertinent to mention here that Venkat Chary, Chairman of 63 moons technologies said on January, '18: "There are no liabilities today. Nothing has been proven. Not one contract entered into on NSEL platform has been proved illegal or irregular as on today. If any wrongdoing is proved against NSEL then at most we can take it to bankruptcy. We, as a holding company, have invested Rs 40 crore in NSEL and we will lose only that amount".

63 moons technologies (formerly FTIL) has already filed a special leave petition (SLP) in the Supreme Court challenging the Bombay High Court verdict upholding an MCA order directing the merger of scam-hit NSEL with FTIL. 

In February 2016, the GOI had passed an order directing the merger of scam-hit National Spot Exchange Ltd (NSEL) with FTIL. The draft order was issued in October 2014. It was the first case of the government ordering the merger of two private sector companies (under Section 396 of the Companies Act 1956).  

Section 396 in The Companies Act, 1956:

Power of Central Government to provide for amalgamation of companies in public interest.

(1) Where the Central Government is satisfied that it is essential in the public interest that two or more companies should amalgamate, then, notwithstanding anything contained in sections 394 and 395 but subject to the provisions of this section, the Central Government may, by order notified in the Official Gazette, provide for the amalgamation of those companies into a single company with such constitution; with such property, powers, rights, interests, authorities and privileges; and with such liabilities, duties, and obligations; as may be specified in the order. 

THE QUESTION THEREFORE REMAINS, HOW PENALIZING THE LEGITIMATE SHAREHOLDERS OF A COMPANY BECOMES, A CAUSE OF PUBLIC INTEREST,ESPECIALLY WHEN A COURT CASE IS GOING ON AND NOTHING HAS BEEN ESTABLISHED??!! ......only because NSEL was a subsidiary of Financial Technologies, where the latter held 99.99% stake? Now what are the characteristics of a subsidiary? 

According to an article in The  Economic Times, 26 November, '12: 

Each of these is a separate, legal entity with its unique identity and can be owned, either wholly or partially, by the parent company. The reasons for creating a subsidiary vary. It is either borne out of necessity (the nature of the parent firm's business, expansion to other geographies, etc), is the result of acquisitions or forays in a new line of business, or is formed purely as a legal wall to limit the liability of one company if either firm fails. 

The argument that:  If such amalgamations are not done then any person will be free to commit future frauds simply by floating a company and hiding behind a corporate veil, is misplaced, why?

Because Section 396 under which the merger was determined to be necessary in public interest, was meant to be used only for "exceptional cases". A loss in subsidiary company, due to highhandedness of its management cannot be construed as "Unique" and is a handiwork of the parent company. This is Utopian and goes against the principle of corporate spirit of independent management functions; apart from vitiating the concept of limited liability.  

I am therefore, sure that the Honourable Supreme Court of India, will take a note of the same and declare the government of India's illogical fiat as null and void. On the flip side if the apex court goes the High Court way, then it would set a dangerous precedence violating the concept of limited liability and would only mirror the face of a fascist regime; hereto India has never seen or witnessed.

Meanwhile, the net profit of 63 Moons Technologies rose 1564.29% to Rs.2.33 crore in the quarter ended December 2017 as against Rs.0.14 crore during the previous quarter ended December 2016.

The company’s new name is inspired from the 63 moons that orbit Jupiter -- it seems at present the planetary adjustments are progressing in the right direction, to get it's name cleared out of Rs.5,600 crore NSEL money laundering mess.

Market Pulse

A divergent trend was witnessed in afternoon trade as the barometer index, the S&P BSE Sensex was trading with small losses while the Nifty 50 index was trading with minor gains. At 2.30 pm IST, the barometer index, the S&P BSE Sensex, was trading at 34,172.19 down 11.85 points  or 0.03%, while the Nifty was seen at 10,500.15 up 7.30 or 0.07%. Since tomorrow is HOLI and hence the traders are trying to play safe, and the market so, is lifeless, today. However, on Monday, I feel the market will show positive movements, post encouraging GDP numbers. Therefore, use the intra-day dips to accumulate good stocks at reasonable valuations. 

Auto and telecom stocks saw mixed trend. Gains triggered by by better-than-expected domestic economic growth were almost offset by losses due to negative Asian stocks.

Among secondary barometers back home, the BSE Mid-Cap index was up 0.06%. The BSE Small-Cap index was up 0.31%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was positive. On BSE, 1,368 shares rose and 1,155 shares fell. A total of 147 shares were unchanged.

Auto stocks saw mixed trend. Tata Motors (up 1.2%), Mahindra & Mahindra (M&M) (up 0.73%), Eicher Motors (up 0.93%) and Escorts (up 0.14%) gained. SML Isuzu (down 0.45%), Hero MotoCorp (down 0.63%) and TVS Motor Company (down 0.59%) fell.

Car major Maruti Suzuki India was down 0.06%. The company said that its total sales rose 15% to 1.49 lakh units in February 2018 over February 2017. The announcement was made during market hours today, 1 March 2018. Domestic sales rose 14.2% to Rs 1.37 lakh units in February 2018 over February 2017. Exports jumped 24.9% to 11,924 units in February 2018 over February 2017.

Commercial vehicles maker Ashok Leyland was off 0.07%. The company said that its total sales rose 29% to 18,181 units in February 2018 over February 2017. The announcement was made during market hours today, 1 March 2018.

Motorcycle maker Bajaj Auto was up 0.54% after the company said that its total sales rose 31% to 3.57 lakh units in February 2018 over February 2017. Bajaj Auto's domestic sales rose 35% to 2.14 lakh units in February 2018 over February 2017. Exports surged 26% to 1.43 lakh units. The announcement was made before market hours today, 1 March 2018.

On the macro front, India's Gross Domestic Product (GDP) growth further accelerated to 7.2% in Q3 December 2017, showing improvement from 6.5% growth in the preceding last quarter and 6.8% in the corresponding quarter last year. The GDP growth stood at 6.4% in April-December 2017, compared with 7.5% recorded in the corresponding period last year. The GDP growth estimate for 2017-18 has been revised upwards to 6.6% at second advances estimates level from 6.5% at first advance estimate level released in early January 2018.

Meanwhile, the output of eight core infrastructure sector comprising 40.27% of the weight of items included in the Index of Industrial Production (IIP), improved to 6.7% in January 2018 over January 2017.

Overseas, most Asian stocks declined, tracking overnight slide in US equities. Growth in China's manufacturing sector unexpectedly picked up to a six-month high in February. The Caixin/Markit Manufacturing Purchasing Manager's Index (PMI) edged up to 51.6 last month, from 51.5 in January. The 50-mark divides expansion from contraction on a monthly basis.

US stocks ended lower on Wednesday, as Wall Street digested data that were seen as underlining the economy's robust health. Strong economy could warrant the Federal Reserve to turn more hawkish;but is if and only if the inflation starts to surge.

In the latest economic data, the pace of growth in the US economy was trimmed to 2.5% from 2.6% in the fourth quarter, largely because of a slower buildup in inventories of unsold goods.

Separately, the Chicago PMI came in at 61.9 in February. Pending-home sales fell 4.7% in January, the lowest reading since October 2014, and the biggest monthly decline since 2010.

Today's Calls:

#Buy the shares of 63 Moons Technologies Ltd (Erstwhile Financial Tech) at around Rs.94-95, for short term targets of Rs.117-121. SL: Rs.88.

#Those who are holding the shares of Tata Motors Ltd (Rs.372.70) can look for targets of Rs.382-384, if it is able to clear the resistance zone of Rs.376.70-377. 

In Q3FY18, though it came out with disappointing set of Jaguar Land Rover earnings, it's standalone performance was strong. Analysts retained their ratings but slashed earnings estimates. The domestic number are likely to remain buoyant as the Indian economy has started to gather steam. It is to be noted that 85% of Tata Motors' revenues comes from its Jaguar Land Rover (JLR) unit. Tata Motors' passenger and commercial vehicle business performance was strong for the December '18 quarter, as standalone profit stood at Rs.183.7 crore in Q3 against loss of Rs.1,045.9 crore in same period last year.

#A strong US, Chinese and Indian economy will definitely give legs to the Crude Oil Prices in the international markets and I believe $65 per barrel level which has been acting as a resistance since some time on the upside will be broken very soon. Hence keep accumulating the shares of upstream oil companies like Aban Offshore Ltd (Rs.169.30) on every decline, with suitable stop losses.

#Those who are holding the shares of TV Vision Ltd (Rs.17), should further average only above Rs.19 or  if the stock give a closing above Rs.19 on a closing basis. The fundamentals of the company are expected to improve going forward. At present the company which is operating 5 (five) TV channels is doing pretty well. 

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

Winning Strokes

Photo: Seeking Alpha

Today the Nifty as expected got support around 10400 range and closed at 10,492.85 down 61.45 points or 0.58%. The U.S. stocks gained Wednesday afternoon as Wall Street attempted to shake off a selloff in the previous session amid data that were seen as underlining strength in the economy, which is a good sign as the US is one the most powerful engines of world growth. I feel it is pertinent to mention here that the US interest rates will rise if and only if there is sudden uptick of the inflation, otherwise CY18 will be as usual with around 2-3 rate hikes by the US Federal Reserves. Therefore, all those talks that the US Federal Reserve may turn more hawkish and increase corporate borrowing costs to much higher level will not carry any value if the inflation remains steady.

Meanwhile, the Indian economy grew at 7.2% in October-December 2017, and is likely to expand by 6.6% in 2017-18, latest official estimates said on Wednesday, amid strong revival signs in consumption spending and investment activity. This is the best growth rate recorded in this year and much better than the Reuters poll of 6.9%. This has helped India regain the status of the world's fastest-growing major economy, replacing China. The Indian Economy is poised to move in a faster lane in the days ahead, recovering from the effects of demonetization and GST. The manufacturing sector grew 8.1% in the third quarter of 2017-18, from 6.9% in the previous quarter, and 8.1% in the same quarter of the previous year. The sector is projected to expand at 5.1% during the full year, inching towards last year’s 7.9% growth, indicating that factories and firms have moved on from the irritants caused by GST. We will definitely see positive movement in the markets tomorrow, especially in the auto sector due to such encouraging data.

#Those who are holding the shares of Tata Motors Ltd (Rs.370.20) should continue to add the scrip on every decline, because the transportation sector best mirrors the growth of any economy; as mentioned in my earlier write up. In Q3FY18, though it came out with disappointing set of Jaguar Land Rover earnings, it's standalone performance was strong. Analysts retained their ratings but slashed earnings estimates. It is to be noted that 85% of Tata Motors' revenues comes from its Jaguar Land Rover (JLR) unit. Tata Motors' passenger and commercial vehicle business performance was strong for the December '18 quarter, as standalone profit stood at Rs.183.7 crore in Q3 against loss of Rs.1,045.9 crore in same period last year.

#Today, a Buy was initiated in MCX Ltd at around Rs.780, SL: Rs.762,  T: Rs.820 on T+4 basis. Mrugank M Paranjape, MD & CEO of Multi Commodity Exchange of India (MCX) said that the bourse has started to witness positive increase in volume in the 45-50 days of Q4. He further said that volumes up 16% so far and Q4 average volume is close to pre-demonetisation levels.

“We used to clock about Rs 9,800 crore on bullion per demonetisation and that number throughout 2017 was roughly in the range of Rs 5,000 crore and that number has picked up by about Rs 1,000 crore in last 45 days. However, we have a good mix where we have energy, we have base metals and these two segments have done very well for us,” he said. Talking about products, he said we are hoping to get two more approvals from Sebi before end of FY18. We will look to launch two more products in April 2018, he added.

#Those who are holding the shares of Aban Offshore Ltd (Rs.171.05) can look for targets of Rs.191/206/218/230/247 in the coming days, as the strength of the US economy is likely to push up the crude oil prices above $65 per barrel within a short term.

Pre-Session: Weak global cues may trigger selling

28-Feb-18: Market may slide on opening bell, mirroring weak cues from Asian markets and overnight slump in the US stocks. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could fall 58.50 points at the opening bell.

The government will announce data on third quarter gross domestic product (GDP) after market hours today, 28 February 2018. GDP growth had recovered to 6.3% in Q2 September 2017 from 5.7% recorded in Q1 June 2017.

Markit Economics will unveil the results of a monthly survey on the performance of India's manufacturing sector for February 2018 at 10:30 IST today, 28 February 2018. The Nikkei India Manufacturing Purchasing Managers' Index, or PMI, had fallen to 52.4 in January 2018, reflecting a slower growth after the index reached a 5-year high at 54.7 in December 2017.

Overseas, Asian stocks fell across the board following a sharp pullback in US stocks after US Federal Reserve Chairman Jerome Powell's hawkish comments to Congress. Weaker than expected economic data from China and Japan also dampened sentiment.

China's official manufacturing purchasing managers' index fell to 50.3 in February from 51.3 in January, government data showed Wednesday. The fall left the gauge the closest to the 50-point mark separating growth from contraction since August 2016.

Japanese industrial production fell 6.6% in January from a month earlier, following December's 2.9% increase, according to the Ministry of Economy, Trade and Industry.

US stocks ended sharply lower on Tuesday, 27 February 2018, following the first public appearance of Jerome Powell as Federal Reserve chairman, replacing Janet Yellen. Powell conveyed an upbeat picture of the US economy but the market focused on his emphasis on coming rate hikes in 2018 and an end to easy-money policies as the central bank tries to stave off once-dormant inflation.

Closer home, foreign portfolio investors (FPIs) sold shares worth a net Rs 906.86 crore yesterday, 27 February 2018, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 1046.67 crore yesterday, 27 February 2018, as per provisional data.

Among corporate news, Cipla and Roche Pharma India announced that the two companies have entered in to an agreement under which Cipla will promote and distribute tocilizumab (Actemra) and Syndyma, the 2nd brand of Roche's cancer therapy, bevacizumab (Avastin) in India. This partnership is in line with Cipla and Roche's efforts to improve healthcare and increase access to innovative, life-changing medicines in India, particularly to patients who currently do not have access to them. The announcement was made after market hours yesterday, 27 February 2018.

Umang Vohra, MD & Global CEO Cipla said that the prevalence of cancer and rheumatoid arthritis is widely spread across India, and Cipla can contribute to provide broader access to innovative medicines like tocilizumab and bevacizumab.

Tata Consultancy Services announced that Bank Muscat, the flagship financial services provider in the Sultanate of Oman, has gone live with TCS BaNCS Universal Banking for its fund and investment banking operations. This deployment is a strategic upgrade to its earlier platform solution and will provide extensive capabilities for multiple asset classes such as funds, equities, fixed income and money markets. The announcement was made after market hours yesterday, 27 February 2018.

TCS Financial Solutions has been a strategic partner of Bank Muscat for the past 15 years and TCS BaNCS' advanced breadth and depth of this additional functionality will position the bank for higher growth and operational efficiency. This TCS BaNCS' upgrade will optimize the Bank's operational efficiency and processes. The new solution will both enhance workflows and reduce time taken on fund and investment banking operations.

Domestic stocks suffered modest losses, snapping two-day gains, in a volatile session yesterday, 27 February 2018. The barometer index, the S&P BSE Sensex, fell 99.36 points or 0.29% to settle at 34,346.39. The Nifty 50 index fell 28.30 points or 0.27% to settle at 10,554.30.

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The Indian Economy and  Tata Motors Ltd

The Indian economy is slowly limping back to normalcy after that stupidity called "Demonetization" was executed, followed by GST. So now, the obvious question is: where should a stock market guy keep focus? To say in short it is the auto sector. You ask me why?

The logic is: if an economy starts to do well then Factories would be running at full capacity catering to newer clients everyday. These institutions will have to ship their goods to market, either by Road or Railways or by Air. 

Hence, there would be an anticipated boom in the commercial vehicle segment. Or in other words, if manufacturers' profits are rising, it implies that they are producing more. If they produce more, then they have to ship more goods to consumers/customers.

Hence, if an investor is looking for signs of health in manufacturers, he or she should look at the performance of the companies that ship their output to market, the means of transportation and find out their leader, because here the 1st movement will take place. 

Now, tell me who are the leaders in commercial vehicle segment in India? Tata Motors and Ashok Leyland, isn't it?

So, if we discard Ashok Leyland Ltd then Tata Motor Ltd comes out as a clear barometer to the Indian economy.  Therefore, it would be safe to buy the shares of Tata Motors Ltd (Rs.372.55) from the market in intraday dips and keep holding, with appropriate stop losses.  

It is worth mentioning here that, two averages: the transportation average and industrial average should be moving in the same direction in case of a booming economy. When the performance of the averages diverges, it is a warning that change is in the air.

A corollary to this would be: if the Indian economy starts to perform well, then the transportation index should also race with the former. 

Market Pulse

#Buy the shares of the Tata Motors Ltd at around Rs.375-376, for short term targets of Rs.396-421. Tata Tiago for the first time outsold Maruti Suzuki Celerio and Hyundai Eon to become the eight-largest selling cars in January 2018, according to a data based on SIAM domestic sales.  For Tata Motor Futures, the 1st resistance comes at Rs.379 followed by Rs.384.

#BSE Sensex is now trading at 34,393.47 down 52.28 points or 0.15% while the NSE is seen at 10,557.80 down 24.80 points or 0.23%. In case of Nifty_Spot, my view is that: as long as it does not break the rock solid support of 10400, the BULLS have nothing much to worry. The large caps will more or consolidate around the current range while the action would be seen in the broader market. Accumulate good stocks on market dips.

#There is no stopping of P C Jewellers Ltd today as the stock touched Rs.346, intrayday on the news that market watchdog Securities and Exchange Board of India (SEBI) has issued an order against Mumbai-based Abhirati Trading but the order did not hold Vakrangee Limited responsible for any misdeed in the ongoing alleged campaign against the IT company.

#Buy Aban Offshore Ltd at around Rs.173-174, T: Rs.T: Rs.191/206/218. SL: Rs.166. Crude oil started the week with gains thanks to comments from Saudi Arabia’s Energy Minister Khalid al-Falih and reports of a slowdown in exports from Libya’s Mellitah oil terminal.

WTI was trading at US$63.63 a barrel at the time of writing and Brent crude was changing hands at US$66.98, after on Saturday Al-Falih said that Saudi Arabia’s oil production over the first three months of 2018 would be much lower than the amount allowed under the 2016 production cut agreement. Al-Falih added that exports were estimated to average 7 million bpd in the three-month period.

At the same time, the minister said he hoped OPEC and its partners could relax the production restrictions in 2019 and progress on the permanent cooperation framework that was mentioned earlier this year. Following these comments, Brent crude briefly jumped over US$67 a barrel, but later in the day eased down again. U.S. production, near record highs, put a cap on the gains.

Pre-Session: Shares may extend gains

27-Feb-18: Market is seen opening higher tracking positive cues from Asian markets. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could rise 51 points at the opening bell.

Overseas, Asian shares were trading higher following gains on Wall Street overnight. The US market rose on Monday, 26 February 2018, in a broad-based rally led by technology shares. In the latest economic data, US new home sales fell 7.8% in January 2018 from the previous month, to an annualised pace of 593,000, the Commerce Department said.

Investors are focusing on the US Federal Reserve chairman Jerome Powell's congressional testimony on monetary policy and the economy. Powell will testify on the central bank's semi-annual report on monetary policy and the economy on Tuesday, 27 February 2018, before the US House of Representatives' Financial Services Committee.

Closer home, foreign portfolio investors (FPIs) sold shares worth a net Rs 1119.51 crore yesterday, 26 February 2018, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 1409.45 crore yesterday, 26 February 2018, as per provisional data.

Among corporate announcements, Punjab National Bank (PNB) has revealed additional unauthorised transactions related to the scam by billionaire diamantaire Nirav Modi and his uncle and business partner, Mehul Choksi, increasing the estimated size of the fraud by $204.25 million (about Rs 1322 crore). The disclosure was made to stock exchanges late yesterday, 26 February 2018.

ACC and Ambuja Cements announced after market hours yesterday, 26 February 2018, that they are not proceeding with the merger proposed in May last year. There are certain constraints to implementing the merger at present, said the cement majors in separate stock exchange filings. The merger, however, remains the ultimate goal, the companies maintained.

The boards of both companies have approved an arrangement for sale and purchase of materials and services on mutually agreed terms in a bid to maximise synergies and unlock additional value for shareholders, the statements added. ACC and Ambuja Cements will disclose the details of the arrangement to its shareholders when it seeks their nod via postal ballot.

Domestic stocks jumped yesterday, 26 February 2018, tracking positive global stocks. The barometer index, the S&P BSE Sensex, surged 303.60 points or 0.89% to settle at 34,445.75. The Nifty 50 index gained 91.55 points or 0.87% to settle at 10,582.60. Both the Sensex and the Nifty hit 3-week closing high.

Today's Calls:
#Buy the shares of the Tata Motors Ltd at around Rs.375-376, for short term targets of Rs.396-421. Tata Tiago for the first time outsold Maruti Suzuki Celerio and Hyundai Eon to become the eight-largest selling cars in January 2018, according to a data based on SIAM domestic sales.  For Tata Motor Futures, the 1st resistance comes at Rs.379 followed by Rs.384.

#In case of Nifty_Spot, my view is that: as long as it does not break the rock solid support of 10400, the BULLS have nothing much to worry. The large caps will more or consolidate around the current range while the action would be seen in the broader market.

#There is no stopping of P C Jewellers Ltd today as the stock touched Rs.346, intrayday on the news that market watchdog Securities and Exchange Board of India (SEBI) has issued an order against Mumbai-based Abhirati Trading but the order did not hold Vakrangee Limited responsible for any misdeed in the ongoing alleged campaign against the IT company.

#Buy Aban Offshore Ltd at around Rs.173-174, T: Rs.T: Rs.191/206/218. SL: Rs.166. Crude oil started the week with gains thanks to comments from Saudi Arabia’s Energy Minister Khalid al-Falih and reports of a slowdown in exports from Libya’s Mellitah oil terminal.
WTI was trading at US$63.63 a barrel at the time of writing and Brent crude was changing hands at US$66.98, after on Saturday Al-Falih said that Saudi Arabia’s oil production over the first three months of 2018 would be much lower than the amount allowed under the 2016 production cut agreement. Al-Falih added that exports were estimated to average 7 million bpd in the three-month period.
At the same time, the minister said he hoped OPEC and its partners could relax the production restrictions in 2019 and progress on the permanent cooperation framework that was mentioned earlier this year. Following these comments, Brent crude briefly jumped over US$67 a barrel, but later in the day eased down again. U.S. production, near record highs, put a cap on the gains.

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P C Jeweller Ltd: Buy

CMP of Spot: Rs.332.35

Lot Size of Futures: 1500

CMP of March Futures : Rs.334.50

Premium: Rs.2.15

Change in OI: 3.91%

Short term Targets for Future: Rs.360/377

For Future-->S1, S2 and S3: Rs.327/Rs.321/Rs.315

For Future-->R1, R2 and R3: Rs.341/Rs.347/Rs.354

For Spot-->T1, T2 and T3: Rs.374/Rs.424/Rs.496

Triggers:

#PC Jeweller Limited started operations in April 2005 with one showroom at Karol Bagh, New Delhi and is today one of the fastest growing jewellery retail chain with 85 showrooms across 68 cities and 20 states. According to my sources, the company is planning to open 15 more retail counters across India.
Not only that: after lurking inflation fears in the US and meltdown of the real estate sector in India, followed by introduction of LTGT by the FM in this budget, people are shifting to gold. This is likely to keep the demand for Gold buoyant  in the coming months.

#Chief Financial Officer (CFO) of the company in an interview said that the company will stick to its strong fundamentals and their expansion plans are on track. He also clarified about having no business agreement with Vakrangee Ltd and that none of the company's promoters have sold any stake in the firm.

Vakrangee Ltd, a banking and financial services provider, on January 25, 2018 purchased 20 lakh shares of PC Jeweller Ltd for ~Rs.112 crore through an open market transaction.
The shares were acquired at an average price of Rs.561.71, which amounted to ~0.51% stake in the company. This price somewhat gives us the idea as to where the share price of P C Jewller Ltd can shoot in the short term. 

#The impact of Nirav Modi and Mehul Choksi scam though had been seen in stock price of many

Photo: Zee Business

jewelry firms on 16 February, '18, but PC Jeweller reversed the trend on that day and emerged as the top gainers in this sector. The share price of this company jumped by nearly 7% during the day.

#PC Jewellers Ltd also recently clarified that the company does not use the instruments of LUT/LOC etc in its business transactions. Moreover, it does not have any international transactions in diamond. It procures all its diamond from local markets on cash basis only.

#Though post Nirav Modi scam, bankers will become more alerted in terms of credit transfer, and considering the process of investigation, however for the companies like P C Jewelers Ltd fundamentals will speak and it will have minimal impact on getting loan from banks/financial institutions.
There is another silver lining too: according to Kotak Institutional Equities, exposure of 18 banks’ overall book (12 public sector banks and six private sector ones) to the gems and jewellery sector is only about 1% --- for now, the problem appears limited to PNB. Hence, there is no reason to get too much anxious on the credit delivery front by the banks to the Jewelry sector.

#It is pertinent to mention here that the stock of P C Jewelers Ltd fell from around Rs.580 - plus which is made in late January, 2018 and hence the change of appreciation from the CMP is very bright. It is also likely to benefit from dilution of Nirav Modi brand, due to elimination one of its major competitors in the gems and jewelry segment.

#The company stressed that it’s expansion plans are on track as planned. “We are moving ahead as per our laid down business plans of opening new stores and working on launching new collections. The company continues to witness very good footfalls and sales in this quarter as well,” it said in a clarification to the stock exchanges, early this month. PC Jeweller further said none of the company’s promoters has sold any stake in the firm (mentioned earlier) or pledged its shares as collateral with any institution. 

#With 60% of gold demand coming from rural India, the Union Budget’s focus on boosting rural and farm incomes could benefit big brands such as Titan Co Ltd and PC Jeweller Ltd. 

#There is a belief in the market that the implementation of the Goods and Services Tax (GST) has enhanced bullion purchases from organised vendors. The GST, touted as the country's biggest indirect-tax reform since Independence, introduced a 3% levy on gold from July 1, 2017 nudging customers to shift purchases to organised high-street bullion businesses from street-corner jewellers. In other words the retail jewellery segment is now witnessing a major shift of customers toward the organised players, and PCJ is a major beneficiary of the same.  The New Delhi-based Jeweler is therefore, expecting good growth in SSG (same stores sales growth) as well as in new stores segments. 

#Jewelry demand generally picks up a month before Dhanteras and continues till April-May every year due Festive and Wedding seasons; which keeps the demand for the yellow metal buoyant. Hence, going forward we could see robust performance of the company.

#The company is showing enviable performance during the last two quarters, viz.Q2FY18 and Q3FY18. PC Jeweller Ltd last month reported a 52% increase in its net profit at Rs.162.71 crore for quarter ended December on higher sales. The company, which has 84 retail jewellery stores across the country, had posted a net profit of Rs.106.97 crore in the year-ago period, the company. It is to be remembered that PC Jewellers Ltd posted a 40.83% jump in standalone net profit at Rs.150.59 crore for the quarter ended September on strong sales. Net profit was Rs.106.93 crore in the same period of the previous year.
The company said that the rollout of the goods and services tax (GST) as a very major structural change, has resulted in a major "disruption" for unorganised players in all the sectors of the economy. "Demonetisation and implementation of GST are helping us increase market share as the industry is getting organised," the company said in last November. Therefore, similar performance is likely to be exhibited in Q4FY18 too according to my sources, who refused to be named.

#Lastly, the story of investment in Gold is not Rich Vs Poor, as is commonly perceived but as a means or avenue to store wealth by a section of Indian population, especially the housewives -- and this has been going on since centuries. Hence, its demand as a hedge against inflation in the short term, in countries like UK, USA and India is expected to continue. 
2ndly, the branded jewelry stores are a play on India's ever growing retail sector, where I find immense potential after the government of India gave their consent for FDI in multi-brand retailing. 
Who knows, whether in future the International jewelry brands like Harry Winston, Cartier, Buccellati, Tiffany & Co, etc will partner with reputed Indian brands like P C Jeweller or not. If this happens then the stock of P C Jewelers Ltd might cross Rs.1000 (one thousand), as well. Also, it is worth mentioning here that Tiffany jewels are not only famous in America but now in Asia as well.

Bibliography:
i) The Economic Times
ii) Zee Business
iii) The Times of India
iv) The Hindu BusinessLine
v) Live Mint