News Views & Events 3rd April 2013

News:

Ø  Reliance Jio Infocomm, the telecom arm of RIL, will get access to Reliance Communications' national and international optic fibre for an up-front payment of Rs.1,200 Crs. The amount will be paid to RCOM as soon as it readies the network for RIL's use.

 

Ø  US-based MSD Pharma, has asked the Delhi High Court to bar Glenmark from selling two popular anti-diabetic drugs, triggering yet another legal battle between an Indian generic company and a member of Big Pharma.

 

Ø  Cash-Rich Piramal Lines Up Big Infra Play Set to invest over Rs.1,000 Crs in road and renewable energy projects.

 

Ø  A Metropolitan Magistrate court in Mumbai has summoned the top management of logistics major Arshiya International for non-payment of dues to lessors.

 

Ø  ONGC Videsh, the overseas arm of state-owned ONGC, aims to raise up to $1 billion through a dollar issue this month to fund its recent acquisition in Azerbaijan.

 

Ø  NTPC signed three loan agreements aggregating to Rs.1,870 Crs with Punjab and Sindh Bank (Rs.570 Crs), Andhra Bank (Rs.300 Crs) and Canara Bank (Rs.1,000 Crs) recently".

 

Ø  Kirloskar Brothers Limited (KBL),has signed a memorandum of understanding with Mechanical and Electrical Department (MED) and Ministry of Water Resource and Irrigation of Government of Egypt to train MED's engineers and technicians.

 

Ø  Govt Likely to Re-tender Road Projects Dumped by GMR & GVK.

 

Ø  Hero MotoCorp commenced exports to Africa, Latin and Central America.

 

Ø  The CAG is likely to resume audit of Reliance Industries' spending on the KG-D6 gas block as issues over scope of the scrutiny are "more or less resolved".

 

Ø  IMFA, has adopted a new organisation structure. The new structure entails two business units – one for ferro alloy and another for power. Company's captive chromite mining activity will now come under the ferro alloys business unit.

Key events for the day:

Ø  Timken India IPP opens and closes today. Promoters to sell 42.65 lakh shares, price band Rs 115-120/shares.

Ø  Release of in CPI Flash Estimates Euro Zone.

Ø  Release of Construction PMI in UK.

Ø  Release of ADP Non-Farm Employment Change, ISM Non-Manufacturing PMI, Crude Oil Inventories in US.

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First Morning Technical Call 3rd April 2013

MARKET OUTLOOK

Nifty (5748): CNX Nifty closed higher for the fourth consecutive day as support based buying was witnessed from lower levels and till 5700 is held on lower side 5788 & 5831 could be possible levels with RELIANCE, RELINFRA, RELCAPITAL and RCOM in focus. RELIANCE telecom unit Reliance Jlo Infocomm and Reliance Communications announced the signing of a definitive agreement for approx. Rs 1200 crore as one time indefeasible right to use (IRU) fees for sharing nationwide intercity fiber optic network infrastructure. For the day Nifty has hold 5725 and cross 5760 to target 5788 & 5831, in case 5765 fails to cross and below 5725 then selling pressure till 5680 & 5650 is possibility after 4days of rally. Pharma stocks were in demand with SUNPHARMA and LUPIN making all time high while DIVISLAB, GLENMARK and DRREDDY gaining. DRREDDY Rs.1839 has closed highest in 30trading session and looks very good to cross Rs.1970 which is all time high.

SENSEX (19041): Sensex closed positive on Tuesday after two weeks, which is slightly positive for the index. Sensex for the day has to cross 19150 and sustain 18940 in order to make any attempts to move above 19300-19500 in the day s to come. Sensex failing to hold onto current levels and sliding below the crucial pivot support 18940 then correction till 18600-18700 levels.

 TECHNICAL CALLS 

BUY NAVNEET PUBLICATIONS Rs.60 : NAVNEET has been making higher highs and higher lows for the past three consecutive trading sessions. The stock has probably formed a temporary bottom and is now looking good to give a falling trend line breakout above 61 levels. The stock has witnessed decent volumes in the past few days and the stock looks well poised for an up move of at least 8-10 % on the upside. The stock is also one of our value picks for an upside target of Rs.75 in the long term.

BUY RELIANCE INFRASTRUCTURE Rs.352: RELINFRA stock has corrected from Rs.572 to a low of Rs.315 where stock has corrected 37% last Quarter and post exit from Nifty on 1^st April stock is seeing good buying. Now 23.6% retracement comes around Rs.375 and 38.2% is Rs.413. RELINFRA is an oversold stock which can see value buying and short covering could give reasonable rally.

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Derivatives Strategist 3rd April 2013

Data Feeler: Nifty future witnessed consolidation for the first half of trading session with taking support around 5700 area and then strong short covering rally was seen towards 5770 levels in the later half with buying seen across the board. As mentioned yesterday that Nifty after a big fall in last few trading sessions may now witness some relief rally towards 5800-5850 levels and any dip can be seen as buying opportunity. Nifty future for the day, if sustains above 5780 levels then bounce back may be continued towards 5820-5850 levels. Whereas sustaining below 5720 levels only may put selling pressure in the market. Looking at the option concentration data for April series, maximum put OI is concentrated at 5600 followed by 5700 strike price and maximum call OI is at 5900 followed by 6000/5800 strike prices. Bank Nifty for the day has immediate support around 11350 levels whereas sust aining above 11500 levels may witness rally towards next hurdle around 11850 levels.

 

Put Call Ratio based on Open Interest of Nifty moved up from 0.97 to 1.03 levels. Historical Volatility of Nifty moved down from 15.98 to 15.83 levels and Implied Volatility also moved down from 14.50 to 14.09 levels.

 

Nifty future saw increase in OI by 9.2% with a rise in price by 0.7%. Market witnessed buying interest across the board especially in Metal, Oil & Gas, CG, HC, PSU, CD, Power, IT, Banking, Tech and Realty sector stocks. Nifty future closed at premium of 19 points as compared premium of 22 points in previous trading session.

 

The market turnover increased by 15.2% in terms of number of contracts traded vis-à-vis previous trading day whereas in terms of rupees increased by 16.4%.

Indication

 

Derivative Calls: Buy on REC & DRREDDY.

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