Nifty ends below 10,500, Sensex down nearly 300 pts; PSU bank index dips 2%

All that happened in the markets today.

9:12 AM

Trading ideas by Prabhudas Lilladher

BUY GAIL

CMP: Rs 475.90

TARGET: Rs 515

STOP LOSS: Rs 458

 

The stock has more or less made a double bottom formation in the daily chart and has given a good revival maintaining a positive bias. The indicators are all favourable with the MACD indicating a trend reversal and also the RSI has been in a positive trending mode to signify strength in the stock for still further more rise in the coming days. With good volume participation witnessed, we recommend a buy in this stock for an upside target of 515 keeping a stop loss of 458. READ MORE

9:10 AM

Nifty outlook by Prabhudas Lilladher

Nifty more or less continues to sustain above 10500 levels, however there is not much to talk about the clarity in trend unless we move past 10630 levels or a break of 10400 levels. The support for the day is seen at 10480 while resistance is seen at 10600. Bank Nifty continues to struggle with all ongoing domestic issues & hence this sector should take a while to stabilize.

9:01 AM

Derivative Strategy for Manappuram Finance by HDFC Securities

 

Buy Manappuram Finance February 110 call at Rs 2.5 

Stop loss: Rs 1.5 

Target: Rs 5

 

Rationale: We have seen long positions being built in Manappuram Finance futures today where we have seen open interest addition of 2% with price rise of 2%. In the option segment, 112.5 and 115 call added 42,000 Shares (117% Rise in Open Interest) and 66,000 Shares (10% Rise in Open Interest) in open interest today suggesting higher possibility of sharp price from here.

 

Recently Stock price has bounced back from 200 day moving average with higher volumes. Primary trend of the stock is bullish with higher tops and higher bottoms on the weekly charts.

8:59 AM

IDBI Capital on Eicher Motor

 

We expect growth of 17% in Royal Enfield sales over FY17-20E as we believe volume growth would be lower due to high base and lower demand from fewer states. However we strongly believe that RE’s brand appeal, consumer preference for premium bikes, 650 twin launches, and higher export volumes would certainly help the company to increase their sales in coming years. 

 

However, we do expect some margin pressure for coming quarters due recent increase in commodity prices. We expect consolidated revenue and earnings to grow ~22% and ~24% CAGR over FY17-FY20E with RoE of ~34% and average free cash flow generation of ~Rs22bn. We resume our coverage with BUY rating with target price of Rs 32,550

8:57 AM

IDBI Capital on Repco Home Finance

 

Given that the company is going through a transitionary rough phase, we have assigned a multiple of 2.7x (-2 standard deviation). We have a BUY rating on the stock with a target price of Rs 745

8:56 AM

Sebi suspects price rigging by PSBs, examines stock trading pattern

The Securities and Exchange Board of India (Sebi) is examining the trading pattern in the stocks of state-run banks, following the announcement of the government’s recapitalisation programme on January 25. READ MORE

Photo: Reuters

8:52 AM

PNB sheds Rs 81 bn in market value in 2 days; stock falls 12% on Thursday

 

Shares of state-owned Punjab National Bank dropped 12% on Thursday to Rs 128.4. The lender, in the epicentre of a $1.77-billion scam, has seen a market capitalisation erosion of Rs 81 billion in two days. Its stock has shed 21% — its worst two-day decline since May 2004.

 

Besides the government, which holds 57% stake in the bank, Life Insurance Corporation of India holds nearly 14% stake. It has affected other institutional investors like HDFC Mutual Fund and Lazard Emerging Markets. Small investors hold nearly 4% stake in the bank. READ MORE
 

8:51 AM

Equirus on Aurobindo Pharma

 

Management commentary (as well peers) over slowing tapering price erosion with price bottom in the US seems to be positive for the industry and could particulary help Aurobindo go grow going forward with 1) Injectable pipeline guided to grow at 30% and 25 products lined up in Oral side to be launched. We reiterate Long rating on the stock with Mar’19 target price of Rs 773 , set by ascribing 20P/E

8:49 AM

COMMENT: Jayant Manglik, president, Religare Broking

 

Markets have been struggling in a broader range for last six sessions and it shows indecisiveness among the participants. The government along with apex bank is trying every step to resolve issues in public sector banks but some negative news comes in every now and then, derailing the recovery. Trading becomes very difficult in such scenario due to erratic swings. We suggest keeping a close watch on global markets for cues and limiting leveraged positions until some clarity emerges

8:48 AM

MPC to stand pat on rates at least through 1HCY18

 

For policy perspective, CPI continues to remain the focus for the MPC. We expect MPC to maintain status quo, at least through 1HCY18, as it awaits clarity on monsoons, MSP hike decisions and sustainability of high crude oil prices post the winter squeeze. CPI inflation outturns in 1HFY19 will be crucial in assessing RBI’s next move. 

 

We expect CPI inflation to head towards 5.85% by June 2018 (as against 5.6% peak estimated by RBI). Overall, even as MPC has sounded vigilant on upside risks, we reckon that amid still-subdued capacity utilization levels, and ‘need to carefully nurture’ the nascent recovery, the MPC will be in wait-and-watch mode in the near term

 

(Source: Kotak Securities)

8:47 AM

Edelweiss on Solar Industries

 

We expect the stock to continue to fetch premium valuations with the impending uptick in return ratios - RoCE of 32% by FY20E (21% in FY18E). We raise our target multiple to 30x (earlier 22x to core business and NPV-based valuation for defence at 24x) and revise our target price to Rs 1,244 (Rs 842 earlier)

8:47 AM

Commodity picks by Tradebulls

 

Buy Zinc

 

MCX Zinc rallied from Rs 198.55 to Rs 229.85 within span of 2 months and then retraced back to Rs 216.60. The recent support of Rs 216.60 it took is exactly at 61.8% retracement and from there; again we are witnessing the positive momentum and is on the cusp of Rs 229.80. The momentum looks strong and it is trading well above its short term moving average of 20 days so we would recommend long position with stop loss of Rs 225 and target of Rs 238. CLICK HERE FOR MORE

8:46 AM

Jan export growth rate dips to 9.07%; trade deficit widens to 56-month high

 

Growth in exports reduced in January to 9.07%, from 12.03% in December.

 

With exports of $24.38 billion, the growth rate in January dipped to a single digit for the first time in three months. The rate in December more than halved to 12.4%, from November’s 30.5%. READ MORE

8:46 AM

ICRA comments on trade data

 

With the merchandise trade deficit for January 2018 being sharply higher than expected, we have revised our forecast for the FY2018 current account deficit to US$47-50 billion or nearly 2.0% of GDP, from the earlier expectation of US$ 42-44 billion

8:43 AM

Commodities Outlook by Tradebulls

 

The Commodity market is trading counter intuitive. All commodities barring natural gas exploded on higher US inflation data. Usually higher inflation means more aggressive US Fed. Higher inflation means higher interest rate from US Fed which pushes dollar stronger and lower gold prices. But yesterday commodity market, as well as stock market exploded which only means market perceives that US Fed will remain behind the curve.

The sharp price appreciation in bullions also comes from weak handed shorts in future markets who were forced to cover their bets. Gold is already trading above its important moving average and its next near term target is January’s high of $1365.87. Gold's next longer term upside price objective is the 2016 high of $1,377.50. With yesterday’s positive movement, more gains are likely in near term. READ MORE