Choppiness to set in; find your sunshine The sun may not shine on all in the market. Attention of global investors will mostly be on today’s speech by Federal Reserve Chairwoman Janet Yellen and ECB President Draghi. The RBI meanwhile released its Annual Report FY14 which stated that the economy could grow in the range of 5 to 6% in FY15. High and persistent inflation has become a key risk to growth and to overall macroeconomic stability, the RBI report stated. The market interprets it as less possibility of an interest rate cut unless of inflation comes down. The outlook is a positive start with indices set to take initial cues from the global markets. US indices closed higher with S&P 500 at a record high. The Dow and S&P 500 added around 0.3% while Nasdaq gained marginally. Existing-home sales and manufacturing reports were better than expected. Hopes of dovish comments from Janet Yellen also improved sentiment. Asian markets are mixed. Nikkei 225 is flat while Hang Seng is down 1% while Shanghai index was lower by 0.46%. Trading ideas (Time period: 1-3 days) SBI (BUY, above Rs2460, Target Rs2560, SL Rs2410): SBI had been going through a phase of sideways correction after a sharp rally from February to May 2014. This decline got arrested around 38.2% retracement support of its earlier upmove. The same also coincides with its 100-DMA, suggesting a near term bottom for the stock. Following a consolidation in last one week, the stock formed a Piercing Line pattern in yesterday’s trade, which is considered a bullish candlestick reversal pattern. This formation appears during a downtrend, which reassures the possibility of bottom formation. (Duration 7 days) Derivative strategies (Time period: Till expiry) Buy FUT BPCL Aug above 690 for the target price of Rs705 with a stop loss placed at Rs681. Lot size: 500 Remarks: Net maximum profit of Rs7,500 and net maximum loss of Rs4,500. Corporate Snippets Hearing on a patent dispute between Reliance Industries Ltd and Italy-based Cobarr SpA Km on the latters patent on a polymeric material has been adjourned by the Intellectual Property Appellate Board, as the Italian firm has filed four miscellaneous petitions which it sought to be considered before the main petition. (BS) Reliance Communications plans to revamp its company-owned 100 retail outlets, known as Reliance World Store to experience zones, and will continue expanding its retail presence through franchisees. (BS) Ranbaxy Laboratories will have to pay a hefty fine of around Rs2.42bn to the US authorities on account of violations found at its API manufacturing factory in Toansa. The facility is currently banned from supplying products to the American market. (BS) In a top management reshuffle, Jyothy Laboratories Ltd said its Joint Managing Director K Ullas Kamath has been entrusted with an additional responsibility of Chief Financial Officer of the company. (BL) Larsen & Toubro said it has bagged contracts worth Rs18.32bn from various business segments since July. (BL) The Ministry of Environment and Forests has given environment clearance to Cairn India to raise crude oil production from its prolific Rajasthan block by 50% to 300,000 barrels per day. (ET) Tata Motors has launched its low budget Nano car in Bangladesh, two years after it announced plans to capture the market in the neighbouring country. (BL) Muthoot Group which already has a presence in the school education and higher education space, has now added one more school to its portfolio. The group has launched its Paul George Global School, which would be ready for the academic session 2015. (BS) Axis Bank has informed that the board of directors has approved issuance of long term bonds/non-convertible debentures up to Rs60bn on a private placement basis. (ET) Godrej Company Limited has indicated its interest to set up a manufacturing unit in Anantapur district of Andhra Pradesh with an investment of Rs4bn. (BL) Claris Lifesciences has received approval by the UK health regulator, Medicines and Healthcare products Regulatory Agency for its newly commissioned plant in Ahmedabad. (BL) Cyient Ltd will buy 51% stake in the Atlanta-based data analytics start-up Invati Insights Private Ltd. (ET) Economy snippets The Finance Ministry expressed hope that domestic diesel prices will soon become market linked in the backdrop of softening global crude oil rates. (BL) Seeking to revive interest in oil and gas exploration by simplifying rules, the Oil Ministry is looking at replacing the controversial Production Sharing Contracts with simpler revenue-sharing regime. (BS) Foreign direct investment flows to India surged by about 34% to US$1.92bn in June, the data by Department of Industrial Policy and Promotion showed. (BS) Indias economy is on course to grow by around 5.8% in the fiscal year to March 2015, finance ministry said, expressing confidence that green shoots of recovery were taking hold. (ET) The Reserve Bank of India plans to articulate a comprehensive debt management strategy. According to the annual report 2013-14, the key ingredients of this will be sound international practice and extending maturities to cater to the requirements of diverse investors. (BS) The Reserve Bank said its surplus for FY14 declined 14.75% to Rs526.79bn as its interest income from investments in foreign sovereign bonds declined during the year even as its investments increased. (BL)
Posted on: Fri, 22 Aug 2014 04:56:47 +0000
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