Opening Bell
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Opening Bell
Opening Bell October 14, 2014 Market Outlook • Indian markets are expected to open in the positive territory despite weak global cues as upbeat CPI data and better-than-expected Q2 numbers from Reliance are likely catalysts for today’s session. Today’s Highlights Results: Bajaj Auto, Blue Dart, Symphony Ltd; India WPI YoY, Japan PPI YoY, UK CPI YoY, Eurozone industrial production Index Movement (past one month) Key Developments BSE (RHS) • Reliance Industries reported its Q2FY15 results with revenues declining 4.3% YoY to | 1,13,396 crore and net profits increasing 1.7% YoY to | 5,972 crore. The GRM for the quarter was at $8.3/barrel vs. expectation of $7.7-8/barrel • IndusInd bank reported an NII of | 833 crore (up 19% YoY) and PAT of | 430 crore in line with estimates and surged 30% YoY led by strong business growth and other income • Future Group has tied up with Amazon India to sell online its fashion brands initially and all other brands subsequently • About 150 striking union members of Bosch's Bangalore plant were arrested before being released on bail when they tried to stage a protest against the government's directive prohibiting the strike. • Essar Group plans to delist Essar Shipping and Essar Ports from the stock exchanges • Bajaj Auto's numbers are likely to be better both YoY and QoQ owing to strong exports (~30% YoY) while margins are likely to improve ~250 bps QoQ on better product mix • IL&FS Engineering and Construction Company has bagged a | 1232 crore road project (Patna Gaya Section of NH-83) contract from NHAI Sensex Nifty 13-Oct 9-Oct 7-Oct 23000 30-Sep 24000 7400 26-Sep 25000 7600 24-Sep 26000 7800 22-Sep 27000 8000 18-Sep 28000 8200 16-Sep 8400 12-Sep Markets Yesterday • After a negative start, domestic markets closed positive on the back of appreciation of the rupee against the dollar and the go-ahead from the Finance Minister for a major overhaul of the current monetary policy framework • US markets closed negative reflecting lingering concerns about global economic growth and monetary policy divergence NSE (LHS) Close Previous Chg (%) MTD(%) YTD(%) P/E (1yr fwd) 26,384 26,297 0.3 -0.9 24.6 16.7 7,884 7,884 0.0 -1.0 25.1 16.6 Institutional Activity FII (| cr) DII (| cr) CY12 127,034 -55,612 CY13 112,221 -74,125 YTD CY14 83,260 -31,045 Yesterday Last 5 Days -671 -2,537 567 2,739 World Indices – Monthly performance Shanghai 2,372 1.5% BSE 26,384 -2.5% NSE 7,884 -2.7% Dow Jones 16,321 -3.1% Nikkei 15,079 -3.1% Kospi 1,938 -5.6% U.K. 6,366 -6.5% Nasdaq 4,214 -7.7% France 4,079 -8.2% Germany 8,812 -8.7% Nifty Heat Map Tata power Axis Bank 85.2 2.8% 386.9 2.0% Cairn India 289.9 Hero Moto 2,874.9 Tata Motors 496.3 BPCL GAIL Bajaj Auto L&T Dr Reddy 1.4% 1.2% 0.7% 671.8 0.2% 444.0 0.0% 2,348.8 -0.2% 1,445.8 -1.1% 2,943.2 -1.9% United Spirits JSPL SBI HDFC Ltd Hindalco IDFC Wipro RIL 2,412.1 2.6% 159.1 2.0% 2,485.5 1.4% 1,017.8 1.1% 151.1 0.6% 140.2 0.1% 584.6 0.0% 957.9 -0.3% Asian Paints 655.7 Sun Pharma 803.9 -1.1% -2.1% NMDC Indusind Bank Infosys HDFC Bank ONGC Sesa Sterlite Lupin NTPC ACC Cipla 155.6 2.4% 635.0 1.9% 3,942.6 1.4% 876.8 1.1% 406.8 0.6% 249.9 0.0% 1,327.3 -0.1% 140.3 -0.7% 1,387.0 -1.2% 576.0 -2.8% ICICI Securities Ltd. | Retail Equity Research PNB Coal India ICICI Bank HCL Tech Kotak Bank Ultratech Grasim Ind ITC Ambuja Cement M&M 920.3 2.3% 340.8 1.7% 1,477.9 1.3% 1,755.8 1.1% 1,008.5 0.6% 2,481.9 0.0% 3,418.9 -0.2% 350.6 -0.7% 208.9 -1.2% 1,269.0 -3.7% Tata Steel TCS Tech M. Bank of Baroda Maruti HUL 457.8 2.2% 2,716.6 1.4% 2,368.0 1.2% 865.4 0.7% 2,972.9 0.2% 720.4 0.0% Bharti Airtel 391.6 Power Grid 134.9 BHEL DLF -0.2% -0.9% 218.2 -1.5% 146.9 -3.8% Markets Today Commodities Gold (|/10 gm) Silver (|/kg) Crude ($/barrel) Copper ($/tonne) Currency USD/INR EUR/USD USD/YEN ADRs HDFC Bank ICICI Bank Tata Motors Infosys Dr Reddys Labs Close Previous Change (%) MTD(%) YTD(%) 26,970 38,356 88.2 6784 26,859 38,130 88.9 6703 0.4 0.6 -0.8 1.2 0.7 -1.1 -6.9 1.0 -2.1 -11.6 -20.4 -8.0 61.11 1.27 107.26 61.34 1.28 106.86 -0.4 -0.2 0.4 1.1 0.8 2.2 1.1 -7.4 -1.8 47.5 49.9 42.9 63.9 47.8 47.1 49.1 42.7 62.8 48.8 0.9 1.6 0.5 1.6 -1.9 -6.3 NA -9.0 3.9 -1.0 36.6 NA 38.7 11.0 18.9 Exchange Cash Turnover (| crore) Sectoral Index Sector 1-Oct 7-Oct 2,427 13,389 5000 3,056 15,857 10000 2,666 14,388 15000 8-Oct 9-Oct 10-Oct 13-Oct 0 BSE Cash NSE Cash NSE Derivative Turnover (| crore) 0 1-Oct 7-Oct 8-Oct 236,318 100000 193,733 200000 9-Oct 10-Oct 189,542 300000 13-Oct NSE Derivative Sectoral Performance – Monthly Returns (%) Close Previous Change % Change Volume Auto 17334.9 17348.4 -13.5 -0.1 1720000 Banks 17932.9 17694.2 238.6 1.3 3038000 BSE Small Cap 10646.5 10611.0 35.5 0.3 49672000 Capital Goods 14279.6 14352.0 -72.4 -0.5 7436000 Consumer Durables 9582.0 9590.2 -8.2 -0.1 634000 FMCG 7311.7 7351.2 -39.5 -0.5 674000 13559.2 13702.3 -143.1 -1.0 1190000 Healthcare 20000 2,797 14,552 Prior Values 3,979.29bln IN -1.2bln $ 26.96bln $ 311.43bln $ 4.60% 4.50% 37.8bln $ 0.50% -1.00% -30.7bln $ 10.84bln $ 5.20% 4.50% 3.74% 3.45% 4.00% 8.00% 7.00% 163,472 Latest Values -7.8bln $ 5.70% 4.70% 0.40% -1.40% -34.6bln $ 4.00% 8.00% 7.00% 2,941 15,375 Release Date 31-Oct 1-Sep 13~17Oct 17-Oct 29-Aug 30-May 13~17Oct 10-Oct 10-Oct 1-Sep 13~17Oct 14-Oct 14-Oct 14-Oct 14-Oct 30-Sep 30-Sep 30-Sep 146,208 Period Sep Q2 Sep w/e Q1 12M Sep Aug Aug Q2 Sep Sep Sep Sep Sep N/A N/A N/A 2,680 13,082 Key Domestic Economic Indicator Fed Fiscal Deficit Current Account Exports - USD FX Reserves, USD Final GDP Quarterly yy GDP Annual Imports - USD Industrial Output yy Manufacturing Output Trade Deficit - RBI Trade Deficit Govt - USD WPI Food yy WPI Fuel yy WPI Inflation yy WPI Manufacturing Inflation yy RBI Cash Reserve Ratio RBI Repo Rate RBI Reverse Repo Rate 109,834 Key Data Points IT 10805.2 10680.7 124.5 1.2 620000 Metals 11081.0 10931.5 149.5 1.4 3113000 Mid Cap 9489.8 9444.4 45.4 0.5 61639000 Oil & Gas 10765.0 10753.7 11.3 0.1 1306000 Power 2009.7 2006.9 2.8 0.1 9891000 PSU 7840.3 7780.1 60.2 0.8 11940000 Real Estate 1563.7 1592.1 -28.4 -1.8 15522000 IT Consumer Durables Healthcare FMCG Auto Power Banks BSE Small Cap Mid Cap Oil & Gas PSU Capital Goods Real Estate Metals-13.8 -15.0 3.4 -1.2 -1.7 -2.4 -3.3 -3.8 -4.4 -4.7 -4.9 -5.2 -5.4 -7.1 -10.1 -10.0 -5.0 (%) 0.0 5.0 Key News for Today Company/Industry News Macroeconomics CPI September 2014 at 6.45% came in much lower than market expectations (7.2%). MoM vegetable & fruit prices declined ~1.5% while fuel & transport inflation softened ~200 bps YoY leading to the softer reading View CPI inflation may further decline both on account of the seasonal effect as well as the higher base. We expect CPI January 2015 inflation to be below RBI’s target of 8%. Softening global crude oil prices have further raised the probability of 6% January 2016 CPI target being achieved. Rate cut expectations may further get strengthened by the current reading Wipro Such exits reinforce the success of this VC strategy employed by Wipro as it has earmarked a $100 million fund to invest in start-ups, which can provide access to platforms that they cannot build on their own As per media sources, Wipro has sold its 8% stake in US-based Axeda, an M2M solutions provider, with a three-fold return on its $5 million investment in June 2013. The company was compelled to exit after Nasdaq-listed PTC bought Axeda for $170 million in July 2014 ICICI Securities Ltd. | Retail Equity Research Impact Key News for Today DLF Sebi has barred DLF and its six top executives from accessing the securities markets for three years. DLF in its IPO in 2007 failed to disclose in its final issue prospectus the name of an associate company against which an FIR was filed Consequently, DLF would be unable to raise funds from the capital markets. Hence, it would impact its debt reduction process further. Furthemore, DLF may not benefit from REITS listing over the next three years Jaiprakash Associates Concerned over their massive exposure to the debt-laden infrastructure conglomerate Jaypee Group, its lenders have met to take stock of the situation It was a regular review meeting and was to take stock as to how much of the assets have been sold by the group as well as how much more they are going to put on the block. Also, as of now the group is not a bad asset IRB Infrastructure Mhaiskar Infrastructure Pvt Ltd, a wholly owned subsidiary of IRB, has now executed a concession agreement with MSRDC for the operation & maintenance of Yashwantrao Chavan Expressway and Mumbai Pune section of NH-4 along with execution of additional works on the Mumbai Pune section of NH-4, on a DBFOT basis with toll rights in Maharashtra The company has already received the letter of intent for the same from MSRDC. In that regard, it has signed a concession agreement and is already factored in the stock Indian Agriculture Sector As per media sources, the cotton output for the The current estimates are higher than current Kharif season (FY 2015) is estimated at the previous year's production of ~ 37 ~40 million bales (1 bale = 170 kg) million bales. This is likely to put some pressure on cotton prices domestically due to robust production & subdued demand globally ICICI Securities Ltd. | Retail Equity Research Sensex Chart Technical Outlook We said, "Watch if lower levels attract support..." Down 204 points initially, the index found support near the 61.8% level we had marked. Recovering 350 points intra-day, the index settled 87 points or 0.3% higher. While metal and bank indices recovered 1.3%, realty, pharma indices lost 1-1.7%. The A/D ratio turned marginally positive. The action formed a counter attack bull (CAB) candle, indicating support we suspected at lower levels. Follow-up support sustaining and closing above the CAB candle would encourage bulls further. A faster retracement of the two-day fall is, however, required to confirm a firm bottom. Failure to sustain above the CAB candle could open up negative options. Pivot Points CNX Nifty Technical Picture Index/Stocks SENSEX NIFTY ACC ADANI ENTER. ADANI POWER ADITYA BIRLA ALLAHABAD BANK ANDHRA BANK APOLLO HOSPITALS APOLLO TYRES ARVIND ASHOK LEYLAND ASIAN PAINTS AUROBINDO PHARMA BAJAJ AUTO BOB BOI BATA INDIA Close 26384.07 7884.25 1386.95 461.10 43.35 1613.50 101.85 67.85 1069.10 221.60 282.45 44.70 655.65 941.35 2348.80 865.35 247.65 1299.95 S1 26345.35 7872.35 1373.85 460.00 43.20 1600.75 101.40 67.45 1066.90 220.35 274.85 44.50 648.10 924.35 2339.65 863.85 245.75 1272.15 S2 26257.75 7846.05 1364.10 457.90 42.90 1589.15 100.40 66.75 1060.65 219.20 271.15 43.95 640.65 917.20 2330.95 858.50 242.35 1260.95 R1 26520.60 7924.95 1386.55 464.20 43.90 1614.15 103.45 68.95 1079.40 222.65 280.95 45.55 656.10 940.60 2357.05 874.50 252.60 1297.00 R2 26614.50 7952.95 1392.90 467.05 44.30 1620.85 104.65 70.10 1087.90 223.75 284.00 46.05 660.10 948.70 2365.75 879.95 255.25 1309.45 Nifty Call – Put Strike (No. of shares in lakh) – October 2014 7500 7600 7700 7800 7900 8000 8100 8200 8300 80.0 40 43 55 13 27 27 50 53 10 8 8 60.0 40.0 20.0 60 51 0.0 Call 20.0 Put Intraday Up 7870 7870-7840 7935-7975 0 0 Short Term Range bound 0 7700 8200 7951 7236 Advances / Declines Advances 1417 797 BSE NSE Declines 1509 724 Daily Technical Calls 1. Buy TCS in the range of 2715.00-2720.00 2. Buy Voltas in range of 237.50-238.50 *All recommendations are of October Future See Momentum Pick for more details Buy YESBAN Oct Fut in rng of 573.00-574.00 View: Bullish Strategy: Buy Future Target 1: 576.90 Target 2: 583.90 Stop Loss: 569.90 Market Lot: 1000 CMP : 578 8 45 Nifty Trend Trend Reversal Support Resistance 20 Days EMA 200 days EMA Intraday Derivative Strategy 3 4 67 Trend +ve +ve -ve +ve +ve -ve +ve +ve +ve Neutral -ve +ve -ve -ve Neutral +ve +ve -ve 40.0 60.0 80.0 Sell CROGRE Oct Fut in rng of 204.50-205.00 View: Bearish Strategy: Sell Future Target 1: 203.10 Target 2: 200.50 Stop Loss: 206.50 Market Lot: 2000 CMP : 205 See Daily Derivatives for more details ICICI Securities Ltd. | Retail Equity Research Unchanged 109 64 Results/Events Calendar 22 September Monday US Existing Home Sales 0 0 0 0 29 September Monday Germany CPI YoY 0 0 0 0 06 October Monday 0 0 0 0 0 23 24 September Tuesday HSBC China Manf. PMI Markit Eurozone Manf. PMI Markit US Manf. PMI 0 0 30 Wednesday New Home Sales MoM Markit JN Manu. PMI 0 0 0 01 September Tuesday RBI Cash Reserve Ratio RBI Reverse Repo Rate RBI Repurchase Rate Fiscal Deficit INR Crore UK GDP YoY 07 25 September 02 October 08 October Tuesday 09 October Wednesday October Monday Indusind Bank, Sintex Ind. Reliance Industries TTK Prestige, India CPI YoY India Import/Export YoY China Trade Balance 20 October Monday Exide Industries, JustDial Idea Cellular Wabco India 0 0 14 15 October Tuesday 21 22 October Tuesday 17 October Thursday 23 October Wednesday Major Economic Events this week 10 October TCS, InfoEdge, DB Corp Rallis India, Somany, CMC Bajaj Corp Initial Jobless Claims (US) US Manufacturing Prod Saturday 0 0 0 0 0 04 October Friday 24 October 11 October Friday October Saturday 18 Friday October Saturday Persistent Systems Unichem labs Oberoi Realty 0 0 25 October Friday 0 0 0 0 0 October Saturday TV18 0 0 0 0 October Axis bank, NIIT, HCL Tech Mahindra Lifespace HT Media, Zee Ent. 0 0 Thursday 0 0 0 0 0 September Markit Eurozone Services PMI 0 Markit Eurozone Composite PM0 US Trade Balance 0 US Unemployment Rate 0 Markit US Services PMI 0 Thursday 16 October HDFC, Kotak bank, Wipro Asian Paints 0 0 0 Biocon, HDFC Bank, KPIT Cairn India, JSW Steel Mahindra CIE Indoco Remedies 0 Friday India Local Car Sales Infosys Germany Trade Balance India Industrial Production YoY Germany Current Account Bala India Exports YoY Initial Jobless Claims (US) India Imports YoY Continuing claims (US) UK Trade Balance Wednesday Cyient, Mindtree, NIIT Tech Japan Ind. Prod. YoY China CPI YoY UK Jobless Claims 0 Bajaj Auto, Bluedart Symphony Ltd India WPI YoY Japan PPI YoY UK CPI YoY 03 October 27 September US GDP Annulaized QoQ US GDP Price Index Japan CPI YoY 0 0 Thursday China Manufacturing PMI EC PPI YoY Markit US Manufacturing PMI ECB Marginal Lending Facility Markit Eurozone ManufacturingUS Initial Jobless Claims 0 US Continuing Claims 0 0 Cera Sanityware HSBC China Services PMI HSBC India Services PMI HSBC China Composite PMI HSBC India Composite PMI Japan Trade Balance UK Industrial Production YoY 0 UK Manufacturing Production Y0 13 Thursday India Eight Infra Industries Initial Jobless Claims (US) Markit US Services PMI Markit US Composite PMI US Continuing Claims Wednesday 26 September October Saturday 0 0 0 0 0 Result Preview Date 13-Oct 13-Oct 13-Oct Event Local Car Sales CPI YoY Trade Balance Country IN IN CH Period Sep Sep Sep Actual Expected 154882 -6.46% 7.80% $30.94B $41.10B Date 13-Oct 13-Oct 14-Oct 14-Oct 14-Oct 14-Oct 15-Oct 15-Oct 15-Oct 16-Oct 16-Oct 16-Oct 16-Oct Event Country Exports YoY IN Imports YoY IN Wholesale Prices YoY IN PPI YoY JN CPI YoY UK Industrial Production SA MEC CPI YoY CH Industrial Production YoY JN Jobless Claims Change UK Trade Balance SA EC CPI YoY EC Initial Jobless Claims US Continuing Claims US Period Sep Sep Sep Sep Sep Aug Sep Aug F Sep Aug Sep F 11-Oct 4-Oct Expected --3.24% 3.60% 1.40% -1.70% 1.70% --35.0K -0.30% --- Previous 2.40% 2.10% 3.74% 3.90% 1.50% 1.00% 2.00% -2.90% -37.2K 12.2B -287K 2381K 16-Oct Industrial Production MoMUS Sep 0.40% -0.10% ICICI Securities Ltd. | Retail Equity Research Company Bajaj Auto Bluedart Symphony Revenue Q2FY15E 5,467.2 554.1 95.8 EBITDA Chg(%) YoY QoQ Q2FY15E 5.6 6.4 1,062.6 17.5 5.1 52.6 32.9 -36.4 18.4 PAT Chg(%) YoY QoQ Q2FY15E -6.1 8.7 818.5 25.9 -8.2 35.3 32.7 -58.1 17.6 Revenue = NII; EBITDA = PPP for Banks and NBFC Recent Releases Date Report 13 October 14 Result Update- IndusInd bank 13 October 14 Result Update- TV 18 10 October 14 Result Update- Infosys 9 October 14 Quick Comment – Maharashtra Seamless 9 October 14 Quick Comment – SKF India Chg(%) YoY QoQ -2.2 2.2 17.2 2.3 39.0 -46.3 Research Product Basket Research Perspective Product Pre-market view & Recommendation Opening Bell Daily Calls Daily Derivative Daily comprehensive snapshot containing information & in-depth analysis of Indian & US markets, major headlines, technical view, derivatives statistics, economic indicators, commodities, market indicators, domestic & global events. Features four stocks & Nifty view with a trading outlook for the day based on shortterm technical trends considering key technical indicators & statistical information. Trading strategy for a day in the futures & options segment based on news events, market trends, technical & other factors governing movements in stocks. Frequency Time frame Avg. Returns objective Location on ICICIdirect.com Pre-market open – Daily 1 Day - Market Page, Trading PageScroller & iCLICK-2-GAIN Pre-market open – Daily 1 Day 2-3 % Research page-We Recommend, Trading Page Pre-market open – Daily 1 Day 2-3 % Research page-We Recommend, Trading Page Daily 1 – 2 Days 1 - 2% Daily 1 Days 1 - 2% Daily 1 – 2 Days 1 - 2% Intraday Recommendation BTST Calls Margin Calls Derivative Calls Based on short-term technical trends and stock specific news/news expectations. Based on short-term technical trends and stock specific news/news expectations. Based on short-term technical trends and stock specific news/news expectations. Provides simplified derivative strategies such as spreads and covered calls Derivative Strategies Weekly & Monthly recommendations Weekly Calls Weekly Technicals Weekly Derivatives Market Trends Global Derivatives Monthly Technical’s Technical trends for a week considering key technical indicators & statistical information Features stocks with a trading outlook for a week based on short-term technical trends considering key technical indicators & statistical information. Trading opportunities in futures & options segment based on data analysis, overall market trend, volatility & open interest positions of securities. Nifty outlook for the month based on F&O data, FII activity, Heavyweights OI analysis along with statistical inputs. Derivatives outlook on global equity indices, currencies and commodities. Also, elaborating the likely impact on the Indian bourses. Trading outlook for a month based on medium-term technical trends considering key technical indicators & statistical information. Medium & Long term recommendations Tecno Funda On basis of Technical and Fundamental whenever opportunity occurs we give these Pick/Technical calls Deliver Call Positional Derivatives Stocks on the move Identifying Out-performers/Under-performers vis a vis index along with positional recommendation on Stocks/Nifty. Covers stocks, which are likely to show significant upward movement in the next 15 days due to change in trader sentiment. Detailed Company Report Fundamental report understanding the business model and future prospects of the company & valuations. Equity Model Portfolio High Dividend Yield Stocks A portfolio based on your risk appetite: large cap, midcap and diversified Features high dividend yielding stocks for assured returns on investment Trading Page iCLICK-2-GAIN Trading Page iCLICK-2-GAIN Trading Page iCLICK-2-GAIN iClick-2-Gain Weekly 1-7 days 5% Research page-We Recommend, Trading Page, iCLICK-2-GAIN & iClick-2-Invest Weekly 1-7 days 4 – 5% Research page-We Recommend, Trading Page Weekly 1-7 days 4 – 5% Research page-We Recommend, Trading Page Monthly 30 days - Trading Page Monthly 30 days - Trading Page Monthly 30 days 10% Research page-We Recommend, Trading Page, iClick-2-Invest Not regularly recommended 3 months 20% Trading Page, iCLICK-2-GAIN & iClick-2-Invest Trading Page, iCLICK-2-GAIN Fortnightly Fortnightly – every alternate Wednesday > 7-15 days 5 – 7% When published > 1 year > 20% & above Quarterly Research page-We Recommend, Trading Page, Scroller, iCLICK-2-GAIN Research page-We Recommend, Trading Page, iCLICK-2-GAIN & iClick-2-Invest Research page-We Recommend, iClick-2-Gain Research page-We Recommend, iClick-2-Gain Pankaj Pandey Head – Research [email protected] ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC Andheri (East) Mumbai – 400 093 [email protected] Disclaimer The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Securities Ltd (I-Sec). 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