Morning Notes. Domestic Market View. LKP Advisory. 18-Dec-2015

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1 Morning Notes 18-Dec-2015 Indices 17-Dec 16-Dec % Chg. Major Indices 17-Dec 16-Dec % Chg. FII's & DII's in equity Rs.Crs S&P BSE SENSEX 25,804 25, % CAC 40 Index 4,678 4, % 17-Dec Buy Sell Net S&P CNX NIFTY 7,844 7, % DAX Index 10,738 10, % FII / FPI Investments NIFTY MIDCAP ,221 12, % Dow Jones Industrial A 17,496 17, % DII's Investments NIFTY SMALL 100 5,478 5, % FTSE 100 Index 6,103 6, % FII's contribution to the total turnover 38% Nasdaq Composite Ind 5,003 5, % DII's contribution to the total turnover 21% BSE Sectoral Indices NIFTY METAL 1,796 1, % Major Asian Indices 17-Dec 16-Dec % Chg. FII's in Derivatives Rs.Crs NIFTY MEDIA 2,497 2, % Hong Kong 21,872 21, % 17-Dec Index Fut Index Opt Stock Fut Stock Opt NIFTY ENERGY 8,357 8, % Nikkei ,354 19, % Net NIFTY PSU BANK 2,936 2, % Korea 1,978 1, % OI NIFTY AUTO 8,149 8, % Shanghai 3,580 3, % Chg.OI -5.1% -3.5% 2.6% 6.0% NIFTY REALTY % Taiwan 8,320 8, % FIIs' contribution to the total Derivatives turnover 22% NIFTY CONSUMPTIO 3,538 3, % NIFTY FIN SERVICE 6,956 6, % Commodities (MCX) 17-Dec 16-Dec % Chg. Curr. Derivatives (NSE) 17-Dec 16-Dec % Chg. NIFTY INFRA 2,681 2, % Aluminium (31DEC % USDINR 29-DEC % NIFTY IT 11,275 11, % Copper(29FEB2016) % EURINR 29-DEC % NIFTY PHARMA 11,772 11, % Crude (18DEC2015) 2,315 2, % JPYINR 29-DEC % NIFTY BANK 16,742 16, % Gold (05FEB2016) 24,841 25, % DJIA (18-DEC-2015) % NIFTY FMCG 19,941 19, % Silver (4MAR2016) 33,170 34, % S&P500 (18-DEC-2015) % Top Gainers Top Gainers Top Gainers Top Gainers BSE Smallcap BSE Midcap BSE 100 CNX Nifty Company LTP Chg % Chg Company LTP Chg % Chg TATASTEEL BOSCHLTD Top Losers TATAPOWER IDEA HINDALCO CAIRN VEDL AXISBANK RELIANCE ONGC Company LTP Chg % Chg Company LTP Chg % Chg SAIL BOSCHLTD Top Losers IDBI ABB TATASTEEL GODREJCP M&MFIN IDEA PFC ONGC Company LTP Chg % Chg Company LTP Chg % Chg IDBI ABB Top Losers M&MFIN CONCOR TATAGLOBAL PGHH NATIONALUM OBEROIRLTY MPHASIS BLUEDART Company LTP Chg % Chg Company LTP Chg % Chg SOMANYCERA SUNILHITEC Top Losers 3IINFOTECH SHRENUJ RESPONIND CASTEXTECH KWALITY RAJTV ZENTEC PIPAVAVDOC CNX Nifty BSE 100 BSE Midcap BSE Smallcap Domestic Market View Markets to get a soft-to-cautious start on feeble global cues The Indian markets posted a wonderful day of trade in last session and the benchmarks surged over a percent, reclaiming their crucial levels in intraday trade and closing near the highs. Today, the start is likely to be in red tailing the weakness in the global bourses and the markets will be consolidating after four straight sessions of gains. There will be some profit taking in the high flying counters of recent rallies. Meanwhile, Finance Ministry has said that India is well prepared to deal with the impact of the US Federal Reserve interest rate hike and the end of uncertainties will actually help policy makers in emerging economies. Though, any major fall is not expected but traders will be eyeing the global developments with Bank of Japan coming up with its money policy review. On the domestic front, the banking pack is likely to be in action, as the RBI in order to improve transparency and ensure speedier monetary policy transmission has said that all banks will have to follow a new uniform methodology from the next fiscal for calculation of base rate on the basis of the marginal cost of funds. The apex bank stated that marginal cost pricing of loans will help the banks become more competitive and enhance their long run value and contribution to economic growth. The aviation stocks too are likely to see some action, as the government has deferred plan to impose two percent levy on most domestic and international air tickets from January 1.

2 Domestic Market Overview Benchmarks end near day s high; bulls wake-up in late trade Thursday s session turned out to be a fabulous day of trade for the Indian equity markets, where frontline gauges garnered gains of over a percent. Hectic buying activity which took place during last leg of trade mainly drove the markets higher, with frontline gauges ending at intraday high levels, recapturing their crucial 25,800 (Sensex) and 7,800 (Nifty) bastions. Key domestic indices started the day firmly tailing the global rally after the US Federal Reserve raised interest rates for the first time in nearly a decade and signalled its tightening cycle would be gradual. But the early euphoria fizzled out and markets turned choppy as the government appeared reconciled to miss the April 1 deadline to roll out the ambitious tax reforms with the Congress cold shouldering parliamentary affairs minister M Venkaiah Naidu s call to meet afresh for talks on the GST bill. Sentiments took U-turn in last hour of trade as market-participants opted to take positions in beaten down but fundamentally strong stocks. Sentiments remained up-beat after Fitch Ratings said that India s less dependence on exports and improved external balances makes it better placed than many of its peers after the American central bank -- the US Federal Reserve -- raised its key interest rates. Credit rating agency also said that India is not immune to potential market jitters on account of interest rate hike by the US Fed, but favorable economic growth outlook makes it attractive for foreign investors. Some support also came with Chief Economic Adviser Arvind Subramanian s statement that the rate hike by the US Federal Reserve is in line with global expectations and its impact on India will be very minimal due to strong macroeconomic conditions. There was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at per dollar at the time of equity market closing against its previous close of on the Interbank Foreign Exchange on the back of heavy dollar-selling by custodian banks. Global Market Overview Asian markets close in green on Thursday Asian equity markets closed in green on Thursday, taking cues from a positive finish in Wall Street overnight after the Federal Reserve raised its target federal funds rate to a range of 0.25 to 0.5 percent. The rationale behind the move, the first since 2006, - Labor market has considerably improved this year and the central bank is confident of inflation rising over the medium term towards its 2 percent objective. China stocks ended higher as risk appetite improved after the Federal Reserve raised rates, as expected, removing a major source of uncertainty about the US central bank's policy. US markets closed lower as oil sinks to seven year low The US markets closed lower on Thursday, snapping a three-day winning streak as oil prices posted their lowest settlement in nearly seven years. The market s slump comes a day after the Federal Reserve lifted benchmark interest rates for the first time in nearly a decade. The day s economic reports were mixed, underlining strength in the labor markets and weakness in manufacturing. A measure of manufacturing activity in the Philadelphia area fell back into negative territory in December, another indicator of the difficult times facing the manufacturing sector. The manufacturing index in December fell to negative 5.9, the third month in the last four where the readings were below zero. Manufacturing more generally has been weighed down by the strength of the US dollar, tepid foreign demand and the collapse in oil prices. The Philadelphia Fed index for current new orders remained negative and fell 6 points, to However, firms reported higher shipments, as the current shipments index increased 6 points to a reading of 3.7.

3 Index Futures (OI in '000 Shares) Future Chg Spot Chg Prem / Total Open Interest 17-Dec (%) 17-Dec (%) Disc 17-Dec Chg (%) NIFTY 7, , , CNXIT 11, , BANKNIFTY 16, , , 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 / 17-Dec % Chg. 17-Dec % Del. % Del. Del Qty (Rs.) (Rs.) Chg (%.) Chg (%.) Disc BEML % 319,511 28% 46% 100, % 8.6% 4.3 TV18BRDCST 47,243 16% 5,255,757 24% 31% 4,121, % 8.1% 0.1 TATASTEEL 33,588 8% 3,624,287 30% 15% 2,778, % 4.7% -0.3 TATAGLOBAL 24,116 8% 473,803 27% 32% 78, % 4.4% 1 IDBI 45,032 8% 2,812,078 19% 16% 2,302, % 5.7% 0 WIPRO 7,537 7% 1,592,685 71% 61% 31, % 0.2% 2.4 KOTAKBANK 10,546 7% 835,750 55% 63% 47, % 1.7% 1.0 DISHTV 40,920 7% 3,711,587 62% 27% 2,553, % 0.7% 0.6 COALINDIA 15,139 6% 3,517,964 70% 52% 2,063, % -0.2% 1.2 WOCKPHARMA 3,782 6% 254,015 25% 23% 79, % 2.6% 8.2 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 / 17-Dec % Chg. 17-Dec % Del. % Del. Del Qty (Rs.) (Rs.) Chg (%.) Chg (%.) Disc AXISBANK 46,759 6% 7,232,179 60% 59% 1,877, % -0.3% 1.8 PIDILITIND 722 3% 530,505 75% 52% 277, % 0.0% 2.4 ONGC 19,682 3% 3,989,343 62% 61% 496, % -0.7% 0.2 BPCL 6,292 3% 505,416 45% 35% 166, % 0.1% 3.9 BHARATFORG 5,880 2% 723,888 59% 41% 200, % 0.3% 1.9 TITAN 9,417 2% 665,330 48% 42% 65, % -0.3% 1.4 VOLTAS 7,048 2% 3,787,363 65% 41% 2,101, % -0.8% -4.0 BOSCHLTD 118 1% 278,155 27% 22% 19, % -1.8% 57.5 GAIL 9,810 1% 605,247 28% 22% 64, % -0.2% 0.5 IDEA 54,819 1% 2,859,764 59% 51% 230, % -0.7% -0.6 Open Interest Break-up (Rs. in Cr.) 17-Dec 16-Dec Change in OI % Chg INDEX FUTURES 20,840 20, INDEX OPTIONS 134, ,221-3, TOTAL INDEX 155, ,015-3, STOCK FUTURES 66,789 64,471 2, STOCK OPTIONS 19,336 18, TOTAL STOCKS 86,125 83,081 3, GRAND TOTAL 241, , FII's 147, , Others 94,112 92,

4 Corporate News Sobha has launched its first commercial project 'Sobha City Mall' at Puzhakkal in Thrissur, Kerala. Situated at the heart of 'Sobha City'- the first and the largest integrated township In the State, Sobha City Mall will offer best-in-class retail and entertainment experience for the customers. Hindustan Unilever (HUL) has signed an agreement with Mosons Group to acquire its flagship brand Indulekha. The proposed acquisition is in line with the company s strategic intent to strengthen its leadership position in Personal Care by providing an impetus to its play in the evolving Premium Naturals segment. Asian Granito India has launched its new product SLIMGRES -- the thinnest tile ever made in India. These ultra thin glazed vitrified tiles are an epitome of innovation a perfect merge of sleekness with utility. This is the new innovation of the company which will make the difference in Tile industry. Tata Power has always been the frontrunner and a pioneer in providing reliable and uninterrupted power to the city of Mumbai. In line with this, the company has completed the uprating of existing transmission line no. 4 between MSETCL Kalwa receiving station and Tata Power Salsette receiving Ssation (8 km route length) by replacing existing conductor with high ampacity conductor (capacity increased from 900 amps to 1800 amps). The uprated 220kV line will relieve critical loading of the Kalwa-Salsette lines and will enhance firm transmission capacity for bringing power from outside to Mumbai city. Aurobindo Pharma has received final approval from the US Food & Drug Administration (USFDA) to manufacture and market Loperamide Hydrochloride Tablet, 2 mg. This product is expected to be launched in Q4 FY The approved ANDA is bioequivalent and therapeutically equivalent to the reference listed drug product (RLD) Imodium A-D Tablets, 2 mg, of Johnson & Johnson Consumer Inc., McNeil Consumer Healthcare Division. Container Corporation of India has received its board's approval to set up two new Multi Modal Logistics Parks (MMLPs) at Tehi in Madhya Pradesh and Barhi in Haryana with the project costs of around Rs 174 crore and Rs 346 crore, respectively. The company s board gave approval for the same at the meeting held on December 16, JMC Projects (India), one of the leading civil engineering and EPC Company has recently secured new orders worth over Rs 1,050 crore. The first order is for five building projects in Bangalore worth approximately Rs 794 crore. Inox Wind has secured perpetual and exclusive rights from its technology partner AMSC to manufacture 2MW Electronic Control Systems in India. In further developments, the company also signed an agreement with AMSC to collaborate on the development of a 3 MW turbine for India. Aurobindo Pharma has received final approval from the US Food & Drug Administration (USFDA) to manufacture and market Methylprednisolone Sodium Succinate Injection USP, 40 mg/vial, 125 mg/vial, 500 mg/vial, and 2 g/vial. The approved ANDA is bioequivalent and therapeutically equivalent to the reference listed drug product (RLD) Solu-Medrol, of Pharmacia & Upjohn Co. Sharon Bio-Medicine s division - Sanctuary for Research & Development (SA-FORD) which is actively practicing Clinical Research Studies has cleared National Good Laboratory Practice (GLP) Compliance Monitoring Authority (NGCMA) Surveillance Inspection. The laboratory of SA-FORD is located at MIDC, Taloja. Pritish Nandy Communications (PNC) Mastizaade, 2016 s much awaited adult comedy, has been acquired by Kumar Mangat s Panorama Studios for India theatrical distribution. The film will release on January 29, 2016 with an estimated 2,000 plus prints. The music rights for the film have already been acquired by T-Series. Deccan Gold Mines (DGML) subsidiary -- Deccan Exploration Services (DESPL) is planning to commence Core and RC Drilling at Ganajur-Karajgi PL Block located in Hayed District, Mangalagatti PL Block located in Dharwad District in the State of Karnataka by third week of December, 2015.

5 Dalmia Group firm Golden Tobacco has been issued Rs crore demand notice by the central excise department, which the company is contesting. In this regard, the company is taking appropriate legal action. Muthoot Finance has launched money remittance services between India and Nepal. In this regard, the company has collaborated with the Indian arm of Nepal based Prabhu Bank. Nepali migrants can now transfer money from a minimum of Rs 200 from any of the 4,200 branches of Muthoot Finance to their families without opening a bank account in India. Nitin Spinners has been conferred first prize by the Department of Energy, Government of Rajasthan under Rajasthan Energy Conservation Award Scheme in recognition of efforts made for Energy Conservation for the year The award has been given in the Category of Textile Spinning & Weaving. Chennai Petroleum Corporation s Manali Refinery has resumed the operations on December 16, 2015 (except Fluidized Catalytic Cracking Unit and Crude Distillation Unit - II) and the operations in Cauvery Basin Refinery at Nagapattinam resumed effective December 14, Hubtown has delayed the redemption in full, the principal amount of the Rated Secured Redeemable Non-convertible Debentures (NCDs) aggregating Rs 100 crore. The due date for redemption was December 14, 2015 and the delay was owing to the liquidity crunch. Indo Borax & Chemicals has completed the production capacity expansion and the production has been commenced from December 15, 2015.Indo Borax & Chemicals operates a most modern Boric Acid and Borax plant at Pithampur, Madhya Pradesh. The plant also enjoys the approval of Food and Drug Administration for manufacturing pharmaceutical grade of Boric Acid. Thomas Cook (India), India s leading integrated travel and travel related financial Services Company, along with Travel Corporation (India), its wholly owned subsidiary, formally completed the process of acquisition of 100% shareholding of Kuoni Travel (India) from the Kuoni Group, on December 16, Anuh Pharma has received World Health Organization (WHO) prequalification for the product Sulfadoxine. The company had last week received Good Manufacturing Practice (GMP) certificate from COFEPRIS (Health Authority of Mexico) for two products. These products are Chloramphenicol and Chloramphenicol Palmitate..Economy India better placed than peers, not immune to Fed rate hike jitters: Fitch Credit rating agency Fitch Ratings has said that India s less dependence on exports and improved external balances makes it better placed than many of its peers after the American central bank -- the US Federal Reserve -- raised its key interest rates. Fitch Ratings said that India is not immune to potential market jitters on account of interest rate hike by the US Fed, but favorable economic growth outlook makes it attractive for foreign investors. India is also less dependent than several of its peers on commodity exports and has thus not been negatively affected by the global rout in commodity prices, and also only a small part of India's sovereign debt is held by foreigners or denominated in foreign currency. According to Fitch, India's external balances have significantly improved since mid-2013, with foreign exchange reserves rising by USD 65 billion to USD 353 billion as of November 2015, and the narrowing of the current account deficit. Govt approves allocation of coal mines to PSUs for sale of coal Considering the high demand of coal in the country than the current level of production and supply, the Cabinet Committee on Economic Affairs (CCEA) has given its approval for allotment of coal blocks to central and state public sector undertakings (PSUs) for the sale of the fossil fuel mainly to medium, small and cottage, under the provisions of the Coal Mines (Special Provisions) Act, This has ended the 41-year-old monopoly of the central government over mining and sale of coal.

6 This move is expected to improve domestic production of coal in order to meet growing demand of the economy, potentially cutting down imports. The move is likely to benefit the mineral-rich states to earn surplus revenue, which were until now earning royalty from private companies mining coal for captive use. Currently, states are allotted coal blocks but with specified end-use such as power production, steel and iron production etc. The coal bearing States shall be getting additional revenue from such coal mines equal to the amount of royalty on the quantity of coal produced on a monthly basis during the lease period/life of the mine as well as one time upfront payment which is 10 percent of the intrinsic value of coal in the mine in three installments in the first year of allotment. It is expected that the incremental coal produced from such coal mines would cater to the unmet demand of the coal in the country, especially of medium, small and micro industries and bridge the gap between demand and supply considerably. Govt hikes excise duty on petrol and diesel Amid fall in global crude prices, the government has raised excise duty on petrol and diesel, to shore up its revenues without stoking inflation. The duty on petrol has been raised by 30 paise a litre while that on diesel is up a steeper Rs 1.17 per litre. This move can add an extra Rs 2,500 crore to the exchequer for the rest of the fiscal, helping it bridge the expected deficit in the direct taxes in the current fiscal. After including additional and special excise duty, the total levy on unbranded petrol will be Rs per litre as against the earlier Rs On unbranded or normal diesel, total excise duty after including special excise duty will be Rs per litre compared to Rs earlier. Basic excise duty on branded petrol has been raised from Rs 8.24 per litre to Rs 8.54 a litre and the same on branded diesel from Rs 7.02 to Rs 8.19 per litre. This is the second increase in excise duty in less than six weeks. Earlier on November 7, the government had raised excise duty on petrol by Rs 1.60 per litre and on diesel by 30 paise a litre. Govt clears revised model text for Bilateral Investment Treaty Government has approved the revised Model Text for the Indian Bilateral Investment Treaty (BIT), which can provide appropriate protection to foreign investors in India and Indian investors in the foreign country, in the light of relevant international precedents and practices, while maintaining a balance between the investor's rights and the Government obligations. The Bill seeks to cover the limitation in earlier agreements ensuring that India does not get dragged into international arbitration on any issue settled by a judicial authority. The revised text provides for a refined Investor State Dispute Settlement (ISDS) that requires that foreign investor exhaust local remedies before commencing international arbitration. The revised model BIT will be used for re-negotiation of existing BIT and negotiation of future BITs and investment chapters in Comprehensive Economic Cooperation Agreements (CECAs)/ Comprehensive Economic Partnership Agreements (CEPAs) / Free Trade Agreements (FTAs). The essential features of the model BIT include an 'enterprise' based definition of investment, nondiscriminatory treatment through due process, national treatment, protections against expropriation, a refined Investor State Dispute Settlement (ISDS) provision requiring investors to exhaust local remedies before commencing international arbitration, and limiting the power of the tribunal to awarding monetary compensation alone. MF chief pitches for an early take-off of the GST Amid the ongoing protest of the opposition and dashing hopes of passage of the Goods and Services Tax (GST) Bill in the ongoing winter session of the parliament, IMF managing director Christine Lagarde has pitched for an early take-off of the Goods and Services Tax, saying that it will help India create more jobs, increase revenue as well as promote domestic manufacturing. She termed GST as a trade agreement and said, a harmonised and unified GST will broaden tax base and added that The implementation of GST will help India create jobs and help in raising revenue to finance health, education etc. Lagarde also assured support and technical assistance for implementation of the comprehensive indirect tax reform, which will subsume excise and sales taxes. Simple to administer will make GST an efficient taxation too, she added. Source: Reuters, Ace Equity & LKP Research

7 Tech View CNX Nifty Technical View Nifty witnessed a strong upside yesterday and closed near high point of the day reflecting the momentum it has picked above 7720 levels. The index has closed above the short term averages with strong market breadth implying that if Nifty holds 7720 levels then the index can test levels in coming days. Nifty is expected to open on negative note and may test levels which if held can lead to an intraday jump till levels. IMPORTANT LEVELS FOR THE DAY Support BSE NSE BANKNIFTY S1 25, S2 25, Resistance R1 25, R2 26, Pivot 25,694 7,812 16,686

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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