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Market Mantra Markets start week on cautious note with profit booking on the anvil.US$ sees weakness as Trump immigration policy causes debate on the same on wider forum!!
With most Asian markets shut for holiday the cues from Australia & Japan were weak with both indices seeing cuts of nearly 1%. Globally after a superb start to the New Year profit booking seems the theme for this week as caution returns at higher levels.US$ weakened further while bond yields also softened as gold prices rallied indicating flight to safety after a heady run for equities.
Nifty will also see initial weakness after rising sharply last week as 8700 proves a resilient top. With the Union Budget to be announced on Wednesday expect range bound market movement for today & tomorrow with rumours on stock/sector driving prices. Foreign flows to stay positive with US$ weakness prompting value buying.
Technical view: Nifty faces resistance around 8700-8720 while support emerges around 8580-8600.Bank Nifty finds resistance around 19800 while support emerges around 19400.
Trading ideas (Time period: 1-3 days)
EICHERMOT (Buy above Rs 23600 for target of Rs 24300, SL at Rs 23250): Stock has given a breakout from downward sloping trendline on daily charts, which connected two previous lower highs. Also stock managed to successfully close above its 100-DMA placed at Rs 23070 levels. The breakout has been confirmed on lower time frame charts with spurt in volumes, which may augur well for the stock. We advise to Buy Eicher Motor above Rs 23600, stop loss at Rs 23250 and Target of Rs 24300.
Derivative strategies (Time period: Till expiry)
Sell BHEL February future @ 138.5-140.5, Stop loss 143.35 & Target 136.75-137.25
Corporate Snippets
Lokesh Machines Ltd is set to enter into an agreement with EMCO GmbH of Austria for the manufacture and sale of the latter's machines in India and export supplies. (BL)
Fitch Ratings has assigned NTPC’s EUR500mn, 2.75% notes due in 2027, a final rating of ‘BBB—’, which denotes investment grade. (BL)
Jain Irrigation Systems will raise USD200mn through issuance of dollar bonds — for the first time — to overseas investors, primarily to retire debt. (BL)
Aditya Birla Group plans to invest Rs70bn in the next two years in Andhra Pradesh on expanding existing businesses. (BS)
The Competition Commission has approved Schneider Electric's proposed purchase of the remaining 26% in power backup solutions provider Luminous. (BS)
Larsen & Toubro has bagged orders worth Rs12.86bn for construction jobs. (ET)
UK Steel workers' unions have given their backing to Tata Steel UK's pension plan in a bid to rescue thousands of jobs and allow a merger with ThyssenKrupp to go ahead. (ET)
Maruti Suzuki India Ltd said that it will increase prices of products ranging from Rs1,500 to Rs8,014 (ex-showroom, Delhi) across models. (BL)
Hindustan Petroleum Corp Ltd (HPCL) and GAIL India Ltd signed a pact with Andhra Government for setting up a Rs400bn petrochemical plant in the state. (ET)
Balrampur Chini Mills signed an agreement with Ganesh Explosives to sell its entire 53.96% stake in its subsidiary Indo Gulf Industries Ltd (IGLL). (BL)
Granules India Ltd has announced its move to invest USD20mn in its wholly-owned subsidiary Granules Pharmaceuticals Inc. (BL)
The Central Board of Direct Taxes (CBDT) issued the clarifications on implementation of GAAR provisions, which is to kick-in from April 1 this year. (BL)
According to the data released by the Securities and Exchange Board of India (Sebi), mutual fund managers invested a net sum of Rs47.77bn this month (till January 25). (BS)
Foreign investors have pulled out a little over Rs56bn from the Indian capital market so far this month, concerned about "lower prospects" of economic growth compared with other emerging markets. (BS)
Country's foreign exchange reserves surged for the second consecutive week by USD932.4mn to USD361bn in the week to January 20 on account of rise in foreign currency assets. (BS)
Results Table
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Warm Regards, India Infoline Research
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