Morning Notes. Domestic Market View. LKP Advisory. 13-Jan-2016

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1 Morning Notes 13-Jan-2016 Indices 12-Jan 11-Jan % Chg. Major Indices 12-Jan 11-Jan % Chg. FII's & DII's in equity Rs.Crs S&P BSE SENSEX 24,682 24, % CAC 40 Index 4,379 4, % 12-Jan Buy Sell Net S&P CNX NIFTY 7,510 7, % DAX Index 9,985 9, % FII / FPI Investments NIFTY MIDCAP ,088 13, % Dow Jones Industrial A 16,516 16, % DII's Investments NIFTY SMALL 100 5,453 5, % FTSE 100 Index 5,929 5, % FII's contribution to the total turnover 36% Nasdaq Composite Ind 4,686 4, % DII's contribution to the total turnover 19% BSE Sectoral Indices NIFTY PHARMA 11,342 11, % Major Asian Indices 12-Jan 11-Jan % Chg. FII's in Derivatives Rs.Crs NIFTY FMCG 19,341 19, % Hong Kong 19,712 19, % 12-Jan Index Fut Index Opt Stock Fut Stock Opt NIFTY CONSUMPTIO 3,413 3, % Nikkei ,219 17, % Net NIFTY INFRA 2,609 2, % Korea 1,891 1, % OI NIFTY IT 10,790 10, % Shanghai 3,023 3, % Chg.OI 1.3% 3.1% 0.0% 5.9% NIFTY AUTO 7,721 7, % Taiwan 7,768 7, % FIIs' contribution to the total Derivatives turnover 29% NIFTY ENERGY 8,616 8, % NIFTY MEDIA 2,496 2, % Commodities (MCX) 12-Jan 11-Jan % Chg. Curr. Derivatives (NSE) 12-Jan 11-Jan % Chg. NIFTY METAL 1,725 1, % Aluminium (29JAN % USDINR 27-JAN % NIFTY FIN SERVICE 6,580 6, % Copper(29FEB2016) % EURINR 27-JAN % NIFTY BANK 15,735 16, % Crude (19JAN2016) 2,030 2, % JPYINR 27-JAN % NIFTY REALTY % Gold (05FEB2016) 25,674 25, % DJIA ( ) % NIFTY PSU BANK 2,521 2, % Silver (4MAR2016) 33,389 33, % S&P500 ( ) % Top Gainers Top Gainers Top Gainers Top Gainers BSE Smallcap BSE Midcap BSE 100 CNX Nifty Company LTP Chg % Chg Company LTP Chg % Chg NTPC IDEA Top Losers WIPRO PNB M&M BANKBARODA ADANIPORTS INDUSINDBK HINDUNILVR HINDALCO Company LTP Chg % Chg Company LTP Chg % Chg GODREJCP FEDERALBNK Top Losers UNITDSPR RCOM NTPC JINDALSTEL WIPRO CANBK NMDC IDBI Company LTP Chg % Chg Company LTP Chg % Chg SHRIRAMCIT INDIANB Top Losers WOCKPHARMA ORIENTBANK ABB RCOM CADILAHC JINDALSTEL SJVN JPASSOCIAT Company LTP Chg % Chg Company LTP Chg % Chg VIVIDHA ASHAPURMIN Top Losers ESSDEE KMILES INFINITE FEDERALBNK RPPINFRA CASTEXTECH SHRENUJ INDTERRAIN CNX Nifty BSE 100 BSE Midcap BSE Smallcap Domestic Market View Markets to make a positive start, initial trade to remain cautious on weak macro data The Indian markets continued their bearish trend and ended the last session with cut of over half a percent, amid global turmoil. Today, the start is likely to be in green on positive global cues. However there will be some cautiousness from the domestic front, as in a double whammy, the industrial production plunged to an over four-year low, contracting 3.2 percent in November, while retail inflation increased marginally to 5.61 percent in December, mainly on costlier vegetables and cereals. Meanwhile, Finance Ministry has attributed the decline in November industrial production to a four-year low to statistical reasons, particularly due to lesser number of working days due to Diwali and the impact of Chennai floods. Markets are likely to get some support with Paris-based think tank OECD stating that India is witnessing firming economic growth while most of the developed economies are seeing mixed trends. The assessment based on Composite Leading Indicators (CLIs) stated that India's CLI inched up to in November from in October. The IT pack is likely to come under pressure, as India's largest IT services company, Tata Consultancy Services (TCS), has put in a lacklustre performance in December quarter. The dollar revenue of the company dropped 0.3% to $4.15 billion, while net profit was flat sequentially at $926 million, impacted by deluge in Chennai.

2 Domestic Market Overview Indian equities declines for second straight session; Nifty ends below 7550 level The carnage in Indian stock markets prolonged for yet another session as the benchmarks continued to sway to the tune of depressing global developments and deposed another over half percent on Tuesday. Worries about the Beijing's ability to manage financial markets coupled with deepening fears about a protracted slowdown in the world's No. 2 economy continue to keep investors on edge after sharp losses over the past week. On the domestic front, sentiments got undermined on report that foreign investors sold shares worth Rs. 1, crore on January 11, Market participants also remained cautious ahead of Index of Industrial Production (IIP) for November and CPI Inflation data to be released later in the day. Besides, depreciation in Indian rupee too weighed down sentiments. The rupee surrendered its initial gains and was trading lower by 12 paise at per dollar on fresh bouts of demand for the American currency from importers and banks amid volatile domestic equities. The benchmarks got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. However, the bourses failed to capitalize on the early momentum and slipped to lower levels in late morning session on expectation that consumer inflation probably edged up for the fifth straight month in December, driven by higher food prices, complicating the central bank s task of steering monetary policy at a time of international deflation. The selling pressure accentuated in the mid afternoon trades as investors took to across the board risk aversion. Though the bourses recovered from the lows of the day but could not succeed in minimizing the huge losses by the end of trading session. Eventually the NSE s 50-share broadly followed index Nifty, plunged by over half a percent to settle above the crucial 7,500 support level while, Bombay Stock Exchange s Sensitive Index Sense deposed over hundred points and closed below the psychological 24,700 mark. Moreover, the broader markets too succumbed to the selling pressure evident in their larger peers and plunged by around a percent. Global Market Overview Asian markets end mostly in red on Tuesday Asian equity markets ended mostly in red on Tuesday in cautious trading, as oil took another tumble and Chinese stocks seesawed before the release of trade data on Wednesday, which is expected to show further declines in both exports and imports. Worries about the Beijing's ability to manage financial markets coupled with deepening fears about a protracted slowdown in the world's second largest economy, fueling volatility in Asian markets. After oscillating between gains and losses, Chinese shares closed higher as the central bank stepped up efforts to stabilize yuan and China's State Council reportedly established a new working group to coordinate between financial and economic regulators. Japanese shares fell sharply to wipe out all of their 2015 gains on speculation the government may raise sales tax next year unless a serious situation prevails. US markets close higher; Nasdaq snaps 8-day losing streak The US markets closed higher on Tuesday with Nasdaq snapping its 8-day losing streak. The main indexes started the day higher but dipped into negative territory by the afternoon, when oil prices plunged to multiyear lows. On the economy front, job openings rose in November, and more people were hired. Labor s Job Openings and Labor Turnover Survey showed 5.43 million job openings, up from 5.34 million in October. That s still shy of the all-time high notched earlier in the year, but moving in the right direction. Even better, hires rose to 5.2 million from 5.17 million, and more people million - quit. That s a sign of worker confidence in their job prospects. A measure of smallbusiness optimism showed an unusual split in December, as owners became more confident about sales at the same time they become more pessimistic about business conditions. The National Federation of Independent Business reported that its small-business optimism index edged up 0.4 points to a reading of The readings have ranged between 94.1 and 98 in 2015.

3 Index Futures (OI in '000 Shares) Future Chg Spot Chg Prem / Total Open Interest 12-Jan (%) 12-Jan (%) Disc 12-Jan Chg (%) NIFTY 7, , , CNXIT 10, , BANKNIFTY 15, , , Increasing OI, Increasing Delivery Qty & Increasing Price in Stock Futures (Open Interest in '000 Shares) Symbol Total OI Del Qty Cash Market Prev Increase Spot Fut Spot Fut Prem / 12-Jan % Chg. 12-Jan % Del. % Del. Del Qty (Rs.) (Rs.) Chg (%.) Chg (%.) Disc BPCL 5,611 3% 871,687 62% 40% 487, % 0.1% 3.1 BOSCHLTD 141 2% 195,596 20% 18% 18, % 0.1% 58.9 DIVISLAB 2,355 1% 165,787 59% 57% 68, % 0.3% 3.5 WOCKPHARMA 4,161 1% 293,808 21% 14% 199, % 4.0% 9.0 BATAINDIA 3, % 79,061 35% 20% 28, % -0.2% BEL 2, % 280,732 52% 30% 186, % 0.4% -1.4 Increasing OI, Increasing Delivery Qty & Decreasing Price, (Open Interest in '000 Shares) Symbol Total OI Del Qty Cash Market Prev Increase in Spot Fut Spot Fut Prem / 12-Jan % Chg. 12-Jan % Del. % Del. Del Qty (Rs.) (Rs.) Chg (%.) Chg (%.) Disc DABUR 3,632 19% 902,830 58% 68% 39, % -3.2% 1.2 UNITECH 305,998 16% 13,760,951 27% 22% 8,482, % -6.0% 0.0 FEDERALBNK 23,896 15% 11,305,926 39% 56% 9,670, % -8.0% 0.1 ULTRACEMCO 1,289 12% 402,565 44% 32% 130, % -2.1% -5.9 BANKINDIA 28,893 11% 696,625 21% 24% 37, % -4.7% -3.5 IOB 16,450 9% 564,115 27% 15% 178, % -2.3% -0.9 CANBK 17,090 9% 578,522 28% 25% 127, % -4.4% -1.7 VOLTAS 5,528 8% 1,463,989 47% 29% 881, % -4.0% -1.0 YESBANK 15,709 6% 1,169,033 34% 27% 274, % -3.1% 3.0 ASIANPAINT 4,709 6% 607,375 60% 48% 211, % -0.1% 4.1 Open Interest Break-up (Rs. in Cr.) 12-Jan 11-Jan Change in OI % Chg INDEX FUTURES 22,381 21, INDEX OPTIONS 132, ,121 4, TOTAL INDEX 154, ,060 4, STOCK FUTURES 64,839 64, STOCK OPTIONS 18,479 17,029 1, TOTAL STOCKS 83,318 81,813 1, GRAND TOTAL 238, ,872 6, FII's 138, , Others 99,366 95,

4 Corporate News Tata Motors subsidiary Jaguar Land Rover (JLR) is planning to launch an all-new version of its luxury sedan Jaguar XE in India on February 3, 2016 with two petrol engine options. Jaguar retailers have now formally started accepting bookings of this new addition to the Jaguar product portfolio in India. Bank of Maharashtra is proposing to raise Basel III Compliant Tier-ll Bonds amounting to Rs 1,000 crore by way of Private/Public Placement.Bank of Maharashtra offers several products and services in personal banking such as deposits, savings, personal loans, educational loans, demat services, credit cards, etc. The bank also offers services to agricultural and SME sectors. Reliance Industries subsidiary Reliance Jio Infocomm (RJIL) has reportedly received approval from the government's green panel to build the Indian part of the Asia-Africa-Europe One (AAE-1) submarine cable under the Coastal Regulation Zone (CRZ). AAE-1, the largest next generation subsea cable system spanning around 25,000 km and linking South Asia to Africa and Europe via the Middle East, is being constructed by a consortium of 17 global service providers. The Indian part of the project will be implemented by Reliance Jio. The cable will terminate in Mumbai at a Beach Man Hole (BMH) proposed to be located at a beach road connecting JP road to Versova Beach, in front of Harshvardhan Society. Omkar Speciality Chemicals has received Environment Clearance for its Manufacturing Unit - V located at Plot No D- 27/5, M.I.D.C., Lote Parshuram Industrial Area, Chiplun, Taluka Khed, District - Ratnagiri, Maharashtra. The production at this unit shall commence in phased manner. In Phase I the Company plans to produce Vitamin C & Folic Acid. Adani Power is set to expand the capacity of Udupi Power Corporation (UPCL) to 2,800 MW from the present 1,200 MW at an estimated investment of Rs 11,500 crore. The company has acquired UPCL from Lanco Infratech early last year at an enterprise valuation of Rs 6,300 crore. The company is also planning to set up two more units of 800 MW each near Udupi to raise capacity. Rashtriya Ispat Nigam (RINL) has signed a Memorandum of Understanding (MoU) with the Andhra Pradesh government for expanding its capacity with an investment outlay of Rs 38,500 crore. The MoU envisages an investment of around Rs 38,500 crore to take up various projects at Visakhapatnam with an employment opportunity to around 3000 people. Omax Autos has sold its remaining 51% stake in its subsidiary company Gmax Auto. The shares transfers in this regard have been registered on January 11, 2016 by the board of directors of Gmax Auto. Consequently, the company has no stake in Gmax Auto and it is no more a subsidiary of the company. Larsen & Toubro s (L&T) construction arm -- L&T Constructions has won orders worth Rs 1247 crore across various businesses. Under Buildings & Factories Business, the company has secured a prestigious turnkey order worth Rs 989 crore from a global Information Technology major for the construction of its world class IT Park in Bengaluru. The scope of work includes civil, structural, mechanical, electrical, plumbing, high-end finishes, data centre and other associated works. The project is scheduled to be completed in 30 months. Tata Motors Group global wholesales in December 2015, including Jaguar Land Rover, were at 91,762 units, higher by 7%, over December Cumulative wholesales for this fiscal were at 754,307 units, higher by 6% over the last fiscal. Global wholesales of all Tata Motors commercial vehicles and Tata Daewoo range in December 2015 were 32,475 units, higher by 6%, compared to December Cumulative commercial vehicles wholesales for this fiscal declined by 1% over the last fiscal at 273,485 units. Jasch Industries has received in principal approval to demerger of automation division of the company in a wholly owned subsidiary (WOS) of the company. The board of directors at their meeting held on January 11, 2016 has approved for the same. Indian Bank is planning to raise about Rs 1,100 crore to raise Basel III complaint Tier II Bonds. In this regard, the bank is proposing to seek approval of its board in ensuing board meeting. GMO-controlled funds -- GMO Emerging Markets and GMO Emerging Domestic Funds -- have bought 3.01 lakh and lakh shares respectively in cable manufacturer CMI. These shares were bought at an average price of Rs 304 a share.

5 Tata Teleservices (Maharashtra) (TTML) has reported the subscriber figures as on December 31, The company s total subscribers stood at 10,512,363 of which Wireline contributed 809,266, FWT 699,617 and Mobile 9,003,480 subscribers. NIIT Technologies, a leading global IT solutions organization, has been selected as a strategic partner by Ofcom, the UK s communications regulator. NIIT Technologies will help Ofcom manage its infrastructure and application systems and offer a customer focused service to improve the users experience of ICT services. The value of the contract is 23 million pound over a six year period which includes an initial term of 4 years and extensions. Emami has entered into the packaged honey category under its Zandu brand. The homegrown consumer goods firm has positioned Zandu honey on quality and claims its product has zero sugar. The Emami s Zandu honey has been priced at a 35% premium over Dabur. Supreme Petrochem has commissioned the main plant and it is expected to attain full capacity with commissioning of all connected systems by January 16, The operations of Chennai plant were disrupted due to floods. IDFC Bank has reportedly acquired a 9.99% stake in ASA International India Microfinance for about Rs 8.5 crore. This is the first investment by the lender in a microfinance institution. ASA International India is a division of Dhaka-headquartered ASA, which operates in over 12 countries and plans to disburse $2.5 billion in loans among 6.6 million clients in PI Industries has commenced the commercial production at its 3rd unit located at Sterling SEZ facility, Jambusar in state of Gujarat with effect from January 11, Fiem Industries has started commercial production and supply from its newly set-up unit at Mandal taluka, Ahmedabad district in state of Gujarat. This unit has been set-up to manufacture and supply Automotive Parts i.e. Automotive Lighting & Signaling Equipments, Rear View Mirrors and Plastic Molded Parts to new factory of the company s esteemed customer Honda Motorcycle & Scooter India (HMSI) in Gujarat. Gayatri Projects is planning to consider the corporate restructuring of its road assets, which may mean hiving of its roads business as a separate entity. In this regard, the company s management is in the process of finalizing a few options for corporate restructuring of its road assets, which among other things may involve hiving off the entire road asset business as a separate entity..economy Govt to amend law to push mining M&As In a bid to help companies pare debt and enable banks to recover some of the funds that are locked up, the government has proposed amendments to the country's mining law, within a few months of the amended mining law being operational. It will allow transfer of captive mines allotted in the past to new owners in case of a merger or acquisition deal. This move will benefit metal companies, which have been hit by an onslaught of cheap imports from China where there is surplus capacity due to an economic slowdown. It will also help in checking the stressed and non-performing assets of banks by allowing them to liquidate assets where a firm or its captive mining lease is mortgaged. While releasing the draft amendments, the Mines Ministry has said that the transfer provisions will also allow mergers and acquisitions of companies and facilitate ease of doing business for companies to improve profitability and decrease costs of the companies dependent on supply of mineral ore from captive leases. The ministry said that the government would allow the transfer at the time of M&A but specified certain conditions. The transfer of captive leases would be subject to the consideration of enforcing performance security, Mine Development and Production Agreement (MDPA), and realization of an appropriate amount only if found feasible at the time of framing terms and conditions.

6 India Inc raises $3.16 billion from overseas markets in November 2015 India Inc has raised over $3.16 billion from overseas markets in November 2015 down 9.5 per cent from a year ago, according to RBI data. Of the total borrowings, by way of external commercial borrowings (ECBs) and foreign currency convertible bonds (FCCBs), $2.11 billion was raised through the approval process while $1.05 billion came through the automatic route. Out of the total 57 borrowers, four raised the money through approval route, while the rest by way of automatic route. Through approval route, ONGC Videsh raised $1.78 billion for refinancing of an earlier ECB, Rural Electrification Corporation raised $300 million for on lending, Perkins India Private mobilized $34 million for working capital. Among major borrowers in the automatic route, Railway Finance Corporation raised $400 million for refinancing of an earlier ECB, Power Finance Corporation raised $360 million for on-lending. Adani Hazira Port mopped up $80 million for port-related activity and Inbisco India $18.8 million for refinancing ECB and Vacmet India raised $16.36 million for import of capital goods. India s market outlook to be decided by inflation, Consumption demands, earnings: Moody s Rating agency Moody s had said that India s market outlook for this year will depend on consumption demands, corporate earnings and inflation trends. While maintaining that it expects the country to be the world s fastest growing major economy this year, it expects that the market trends will depend on whether inflation remains under control and corporate profits revive. Moody s further stated that India enters 2016 on the cusp of a cyclical growth recovery, with inflation under control and the economy benefiting from lower commodity prices. Notifying that these reasons place the country at an advantage relative to many similarly rated emerging market peers, Moody s said that it believes that these advantages will only yield sustainable growth acceleration once corporate and bank balance sheets are repaired, and if the private sector remains internationally competitive. Additionally, Moody s said that inflation and corporate profit trends will offer clues as to whether these efforts have created conditions for growth that are sustainable over the next three to four years. While quoting a projection of a boost in consumption following the pay revision for Central government employees and pensioners and a potential upturn in farm, which is expected to boost rural demand, it said that a broad based pick up in investment will only unfold with a lag. Budget to focus on rural economy, infrastructure, banks In order to fire up growth and tackle the growing unease in the farm economy, the government is making a strategy to focus on infrastructure, agriculture and restoring the health of the banking system areas as well as specific measures to ease stress in the rural economy as part of the Budget. There is a need to take effective measures to revive vital sectors and overall growth and the focus of the government is mainly on irrigation and agriculture as this is a very crucial Budget for the government. Further, the infrastructure sector will see greater attention as the government is keen to step up investment despite a challenging fiscal situation. The government has already allocated Rs 5,300 crore to support micro-irrigation, watershed development and the Pradhan Mantri Krishi Sinchai Yojana and has urged states to chip in substantially in this vital sector. In the absence of private investment, indications are that the sector will receive special attention, including unveiling of some innovative financing schemes. For banking sector, the government has taken several measures, including pumping in Rs 70,000 crore to recapitalise state-run banks. There is a view within the government that more needs to be done to secure the health of the crucial sector. The rural economy, a key driver of demand and a support for the broader economy, has taken a knock from the two back-to-back seasons of patchy monsoon rains. The segment drives demand for everything from motorcycles to tractors, televisions and refrigerators. For agricultural sector, Finance minister Arun Jaitley already signaled the government's support by backing calls for raising investment in the crucial farm sector and leveraging technology to fire up growth. Source: Reuters, Ace Equity & LKP Research

7 Tech View CNX Nifty Technical View Nifty continued to show resilience in breaching 7500 level decisively and managed to hold the crucial level albeit closed below 7540 levels. As long as Nifty trades above 7500 the possibility of temporary bounce till 7650 levels will remain high. The index is expected to open on strong note and is likely to test levels which if held can lead to further rise till 7620 levels in coming days. If Nifty breaches 7540 today then it can witness a small dip till 7500 levels IMPORTANT LEVELS FOR THE DAY Support BSE NSE BANKNIFTY S1 24, S2 24, Resistance R1 24, R2 25, Pivot 24,720 7,529 15,838

8 Tech View PIVOT POINTS Scrip Name CMP RB2 RB1 PP SB1 SB2 Scrip Name CMP RB2 RB1 PP SB1 SB2 ACC GAIL ADANIENT GLENMARK ADANIPORTS GMRINFRA ADANIPOWER GODREJIND ALBK GRASIM AMBUJACEM HAVELLS ANDHRABANK HCLTECH APOLLOHOSP HDFC APOLLOTYRE HDFCBANK ARVIND HDIL ASHOKLEY HEROMOTOCO ASIANPAINT HEXAWARE AUROPHARMA HINDALCO AXISBANK HINDPETRO BAJAJ-AUTO HINDUNILVR BANKBARODA HINDZINC BANKINDIA IBREALEST BATAINDIA ICICIBANK BHARATFORG IDBI BHARTIARTL IDEA BHEL IDFC BIOCON IFCI BPCL IGL CAIRN INDIACEM CANBK INDUSINDBK CENTURYTEX INFY CESC IOB CIPLA IOC COALINDIA IRB COLPAL ITC CROMPGREAV JINDALSTEL DABUR JISLJALEQS DISHTV JPASSOCIAT DIVISLAB JPPOWER DLF JSWENERGY DRREDDY JSWSTEEL EXIDEIND JUBLFOOD FEDERALBNK JUSTDIAL

9 Tech View Scrip Name CMP RB2 RB1 PP SB1 SB2 Scrip Name CMP RB2 RB1 PP SB1 SB2 KOTAKBANK TATACHEM KTKBANK TATACOMM L&TFH TATAGLOBAL LICHSGFIN TATAMOTORS LT TATAMTRDVR LUPIN TATAPOWER M&M TATASTEEL M&MFIN TCS MARUTI TECHM MCDOWELL-N TITAN MCLEODRUSS UBL MRF UCOBANK NHPC ULTRACEMCO NMDC UNIONBANK NTPC UNITECH OFSS UPL ONGC VOLTAS ORIENTBANK WIPRO PETRONET YESBANK PFC ZEEL PNB POWERGRID PTC RCOM RECLTD RELCAPITAL RELIANCE RELINFRA RPOWER SAIL SBIN SIEMENS SRTRANSFIN SUNPHARMA SUNTV SYNDIBANK

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