RULE THE MARKET - Karvy Onlinecontent.karvyonline.com/contents/kstreetissue013.pdf · 2018. 12. 1. · declined by (2.4%). Manufacturing improved by 7.4% in Q2FY19 vs. 13.5% in Q1FY19

ISSUE: 013

01ST DECEMBER, 2018

RULE THE MARKET

From The Desk Of Research HeadCONTENTSEquity 1-6

Derivatives 7-8

Commodity 9-12

Currency 13-14

TeamDr. Ravi Singh

Syed Hasan Jafar

Viplav Dhandhukia

Amrita Preetam

Amit Samar

Chirag M Solanki

Chetan K Waghray

Vaishali Paruthi

Pankaj Wadhwani

Benjamin Francis

Sourabh Gilda

Sarath Jutur

Jayasree Ram

Munindra Upadhyaya

Yash Bhotika

Vivek Ranjan Misra

Veeresh Hiremath

Arpit Chandna

Ravi Pandey

Anup. B.P

Ramesh Chenchala

Rahul Chander

Amit Kumar

Vinod Jayakumar

Siddhesh Ghare

Bharath Sunnam

Karvy Head Office

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GDP recorded 7.1% growth in Q2FY19.

The Indian economy grew at 7.1% YoY during Q2FY19 vs. the consensus estimate of 7.4%. During

Q1FY19 GDP grew at 8.2% YoY. This indicates growth is on track to roughly meet RBI estimate of 7.4%

growth for the entire fiscal year.

The Gross Fixed Capital Formation (GFCF) increased by 12.5% YoY during Q2FY19 as compared to

6.1% during Q2FY18. We expect the capex spending to lead growth on the back of higher capacity

utilization which recorded 73.8% in Q1FY19 vs. 71.2% in Q1FY18. The rolling 4-quarter average indeed

indicates an upward trend. Private Final Consumption Expenditure grew by 7%.

Manufacturing improved by 7.4% in Q2FY19 as compared to 7.1% in Q2FY18, while lower than 13.5% YoY

growth of last quarter it indicates good momentum.

Bank credit growth accelerated in September 2018 where private sector banks recorded more than

20% growth. The credit-deposit (C-D) ratio at the all-India level improved to 76.4%in September 2018

as compared to 75.6% in the previous quarter. Also, the PMI index remained well above the 50-mark in

the last nine months, indicating better economic activity.

High-frequency indicators such as automobile sales’ volume grew by 11% YoY during Q2FY19, whereas,

commercial vehicles grew by 38%. This is indicative of higher Private Final Consumption Expenditure

(PFCE) which grew at 7.0% YoY during Q2FY19 as compared to 6.8% in Q2FY18. Construction recorded

growth of 7.8% in Q2FY19 which is indicative of the growth in production of cement and finished steel

consumption at 12.5% and 7.2%, respectively.

Therefore, we expect the GDP growth momentum to keep pace on the back of higher personal

consumption indicated by increasing bank credit. Risks to the outlook are largely on account of the

external sector, the lagged impact of currency depreciation and uncertain political outlook.

GDP Fine Print

Agriculture improved by 3.8% YoY in Q2FY19 as compared to 5.3% in Q1FY19. Mining and Quarrying

declined by (2.4%). Manufacturing improved by 7.4% in Q2FY19 vs. 13.5% in Q1FY19. Construction

growth is stable at 7.8% this quarter vs. 8.7% in Q1FY19. Public services improved by 10.9% in Q2FY19

vs. 9.9% in Q1FY19. Indicators of Railways sector, namely, Net Tonne Km and Passenger Km have grown

by 6.9% and 2.2%, respectively, during Q2FY19. Electricity, Gas, Water Supply and Other Utility Services

sector grew by 9.2% as compared to 7.7% in Q2FY18. This is indicative of IIP Electricity which improved

by 7.5% as compared to 6.1% in Q2FY18.

- VIVEK RANJAN MISRA Head - Fundamental Research

EQUITY

Economy

• The Reserve Bank of India said that the minimum holding period requirement for NBFC originating loans will now be set at six monthly or two quarterly installments. Earlier, the holding period was 12 months. The revised rules were applicable for loans of original maturity of over five years. This will help housing finance companies, especially those who have longer maturity loans.

• The Government is confident of meeting direct tax collections target for the current financial year ending March.

• India will have to undertake more reforms and try harder to grow at over 8%, Niti Aayog Vice-Chairman Rajiv Kumar said Thursday.

• Farmers across the country marched into the national capital on Thursday for a two-day agitation, demanding better prices for their produce and a complete loan waiver.

Automobile:

• Tata Motors-owned Jaguar Land Rover temporarily halted operations at its engine factory for a two-week production freeze in English Midlands. It said that the shutdown concerns EMC’s machine and assembly halls. Affected staff will continue to receive full pay during the freeze and maintenance and salaried staff will continue as normal.

BFSI:

• The Reserve Bank of India has notified that the net stable funding ratio requirement for banks under the Basel-III framework would come into effect from 1st April 2020.

• IL&FS Financial Services has defaulted on payments towards a term loan, including interest of Rs. 2.52 bn, due on Thursday.

• The government-appointed board at IL&FS Group is shortly going to put up a fleet of 72 luxury cars for auction, most of which are Jaguar and Audi models.

Metals:

• The National Company Law Tribunal’s Kolkata bench has admitted the insolvency plea against power transmission company EMC, which defaulted on payments to the tune of Rs. 65 bn to the banks and other creditors.

• ArcelorMittal emerged as the sole-bidder for Essar Group firm, EPC Constructions India, with a bid of Rs. 5 bn, against outstanding loans of Rs. 72.68 bn.

Pharma:

• GlaxoSmithKline PLC confirmed that consideration was being given to a potential transaction that included a merger of its Indian consumer health care unit.

• Sun Pharmaceutical Industries clarified that there was no material impact of news on governance issues.

Aviation:

• The government has formed a special purpose vehicle to absorb Rs. 290 bn of Air India’s debt, Civil Aviation Secretary R.N. Choubey confirmed.

Railway

• Railway Minister Piyush Goyal would soon be able to monitor the entire rail network, including movement of trains and earnings of the national transporter, live in his office through a software.

Oil and gas

• The Indian government’s Vedanta Resources wants US oilfield services companies to set up consortia to help develop the 41 blocks in India acquired this year by its Cairn Oil & Gas unit.

• The price of petrol has been cut by Rs. 10 per liter and diesel by Rs. 8 in the last six weeks.

NEWS

INTERNATIONAL NEWS

• According to ECB vice-president, Italy is clearly underperforming Euro-zone in growth.

• The European Union has unveiled a strategy to become the world’s first climate neutral economy by 2050.

• Oil prices firmed on Friday on expectations that OPEC and Russia will agree on some form of production cuts next week, although swelling US supplies kept markets in check.

• The benchmark 10-year Treasury yield temporarily fell below 3 percent overnight, for the first time since 18th September 2018.

TREND SHEETSymbol CMP S2 S1 R1 R2 TREND

SENSEX 36194.3 34333 35264 36757 37320 Up

NIFTY 10876.75 10330 10604 11036 11196 Up

NIFTYBANK 26862.95 25646 26254 27242 27621 Up

YESBANK 169.80 123 146 193 217 Down

RELIANCE 1,167.55 1062 1115 1203 1239 Up

HDFCBANK 2,128.45 1967 2048 2173 2218 up

INFY 667.45 572 620 695 722 Up

TCS 1,968.25 1704 1836 2049 2129 Up

ICICIBANK 355.15 342 348 364 373 Down

AXISBANK 625.75 605 615 637 649 Up

SUNPHARMA 492.60 445 469 522 552 Down

TATASTEEL 529.50 497 513 545 560 Down

HDFC 1,989.00 1823 1906 2036 2082 Up

FORTHCOMING EVENTS

• 5th December 2:30 PM RBI POLICY.

• 6th December OPEC Meeting.

• 7th December after 6:00 PM 5 States Exit Polls.

• 11th December 5 States Chhattisgarh, Mizoram, Rajasthan, Telangana, Madhya Pradesh Results.

• 14th December RBI Board Meet.

• 19th December FOMC Meeting.

KSTREET - 01ST DECEMBER 2018 1

INDIAN INDICES (% CHANGE)

GLOBAL INDICES (% CHANGE)

NIFTY MIDCAP100TOP GAINERS & LOSERS (1W)

SECTORAL INDICES (% CHANGE)

FII/FPI & DII TRADING (IN RS. CRORES)

NSE NIFTY TOP GAINERS & LOSERS (1W)

EQUITY

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11/26/2018 11/27/2018 11/28/2018 11/29/2018

FII/FPI DII


BEAT THE STREET - FUNDAMENTAL ANALYSIS

Sunteck Realty Ltd CMP Rs.337Target Price Rs.497Upside 47%

Investment Rationale

• The company has carved a niche for itself in the ultra-luxury and luxury segment by differentiating itself in each micro-market through brand positioning with a different product offering. While the projects in BKC are residential projects catering to ultimate luxury and premium customers, ODC project is a mixed-use development project with residential, commercial and retail space. A significant amount of operating cash flow of Rs. 31 bn is expected to be realized from these two projects in 3-4 years.

• The company has launched its affordable housing project on 100 acres of land parcel at Naigaon. The pricing is quite affordable considering the fact that Mumbai has always been a premium residential market.

• The company has already sold ~2000 units worth more than Rs. 600 cr (out of 2476 units) units during the launch of the project in September.

• Since last few quarters, the company has experienced healthy growth in pre-sales and it delivered ~100% YoY growth in pre-sales in H1FY19 (Rs. 6027 mn pre-sales in H1FY19 as compared to Rs. 2976 mn in H1FY18) due to the overwhelming response to the first phase of Naigaon project.

VALUE PARAMETERSFace Value (Rs.) 1.0

52 Week High/Low (Rs.) 527/296

M.Cap (Rs. Bn/US $mn) 49.3/709

EPS (Rs.) 15.3

P/E Ratio (times) (FY20E) 20.14

Dividend Yield (%) 0.45

Stock Exchange NSE

% OF SHARE HOLDING

in Rs.Mn ACTUAL ESTIMATE

YE Mar FY 18 FY 19 FY 20

REVENUE 8883 9418 14825

EBITDA 3720 3876 5655

EBITDA(%) 41.9% 41.1% 38.1%

PAT 2233 2450 3777

EPS (Rs.) 15.3 16.7 25.8

RoE (%) 8.5% 8.6% 11.8%

PE (x) 25.4 21.3 13.8

P/E CHARTValuation

The company’s business performance has been robust on the back of strong pre-sales and periodic launch of fresh inventory. We expect revenue and EPS to grow at 29% and 30% CAGR, respectively, over the next two years. We have valued SRL using the NAV method, wherein, we have calculated the value of ongoing projects and unsold inventories from completed projects. We estimate a target price of Rs. 497/share (post-tax) on the FY20 basis..

EQUITY


BEAT THE STREET - FUNDAMENTAL ANALYSIS

Tata ElxsiCMP Rs.1029Target Price Rs.1208Upside 17.4%

Company Background

Tata Elxsi was formed in 1989 as an Indian arm to US-based Elxsi to manufacture multi processor-based computers locally. Today it is amongst the leading global providers of design and technology services for product engineering and solutions across industries, including Broadcast, Communications and Automotive.

Investment Rationale

• We believe Tata Elxsi is well positioned to benefit from the technological shift in the auto industry. While its auto division will benefit from opportunities created by the emergence of autonomous car and electric vehicle, its communication and broadcasting division will benefit from 5G and software-defined networks (SDN).

• We are positive about the potential of its IP-based offerings, including Autonomai and FalconEye for auto and broadcasting segments, respectively. Its design services division is also gaining traction as visible from the latest deal announced with Panasonic.

• Our positive stance on the company also comes from management’s objective to internally target 10% sequential QoQ growth and its objective to maintain 24%-25% margins at EBITDA level.

VALUE PARAMETERSFace Value (Rs.) 10.0

52 Week High/Low (Rs.) 1491/882

M.Cap (Rs. Bn/US $mn) 60.6/0.8

EPS (Rs.) 39

P/E Ratio (times) (FY20E) 18.3

Dividend Yield (%) 1.0

Stock Exchange BSE

ValuationWe believe that TELX with its focus on IP-based solutions and other offerings in the areas of auto infotainment, autonomous vehicle and with IPs like FalconEye is in the right direction to achieving higher growth rates. This coupled with management’s focus on achieving 10% sequential quarterly revenue growth rate and maintaining margins of 24-25% at EBITDA level would augur well for the investors. We value TELX at a 5-year historical average (ex-standard deviation of 7.4) FY20E PE of 21.8 with a “BUY” and a target price of Rs. 1208.

EQUITY

P/E CHART

% OF SHARE HOLDING

in Rs.Mn ACTUAL ESTIMATE

YE Mar FY 17 FY 18 FY 19 FY 20

REVENUE 12.37 13.86 16.18 19.30

EBITDA 3.0 3.5 4.1 5.0

EBITDA(%) 24.0 25.0 25.2 25.7

PAT 1.7 2.4 2.8 3.5

EPS (Rs.) 28 39 46 55

RoE (%) 34.6 37.1 33.9 32.3

P/E 26.4 26.6 22.5 18.6


EQUITY

BEAT THE STREET - TECHNICAL ANALYSIS

Allahabad Bank

ALBK is in a short-term uptrend. The stock has formed good support around 38-40 levels which is acting as a good base for this counter for the past few weeks. On the other hand, the stock has hurdle around 51-53 levels, crossing and sustaining above which it may see a rally towards 60-64 levels over medium to long-term. The stock has been making a cycle of higher highs and higher lows on the daily chart after registering a low around 33.15 levels last month. The stock has surged more than 40% since and is trading above all the major moving averages on the daily chart. The stock is trading above the parabolic SAR on the daily as well as the weekly charts, indicating positive bias in the counter. On the daily chart, the stock has seen a good accumulation near 40-42 levels and has attracted buying by the market participants every time it has dipped towards its 21-period moving average on the weekly chart, which is currently placed near 42 levels. From the technical perspective, the stock has given a consolidation breakout from the said range with supportive volume formation. On the momentum oscillator front, the 14-period RSI is placed at 69, 60 levels on the daily and weekly charts, respectively, and is placed above the 9-period signal line on the daily and weekly chart, indicating underlying strength and bullish bias in the counter. Investors who want to build a position in this counter for 6-8 months can buy the stock on dips towards 47 levels, add more on dips towards its 21-period moving average on the weekly chart placed near 41-42 levels for the upside target of 61-64 levels, with a stop loss placed below its support placed at 36 levels.

Tata Consultancy Services Limited

TCS has underperformed its key large-cap benchmark of Nifty 50, while it has outperformed its sectoral index NIFTY IT for November. The stock has closed with gains of more than 1.50%, while during the same period NIFTY 50 has gained more than 4.50% to shut shop at 10,876, while NIFTY IT has lost around 2.00% during the same period to shut shop at 14,638. The stock after correcting more than 10% from its all-time highs towards the 200 days moving average has seen strong traction in price and volume, indicating some value buying has emerged after the recent price correction. Even the October and November lows zone of 1780-1800 also coincide with the 50% retracement of the major rally of 1400 to 2250 zone, signifying the support zone or the recent lows. The stock currently has given break out from a double bottom pattern and is trading above it, indicating possible reversal of the previous major correction from all-time highs to the lows of 1780 levels and is likely to move towards all-time highs in the coming months. Even the volumes on the current weekly candle are huge, indicating strong hands have accumulated it. On daily charts, though MACD is trading below its neutral line, there is a bullish crossover, indicating a probable bottom is in place for near term, even the RSI on weekly charts after cooling off from the overbought zone and is currently pegged at 56 indicating upside is of more probable from here on. Even the ADX on weekly charts has also cooled off from sub-50s to the current levels of 30, indicating the strong uptrend is still intact and the +DI lines sustaining above –DI lines is also suggesting a bullish view for near term. On the derivative activity front, the stock is has seen good rollover and the same is seen over the last few months, supporting our bullish view. Investors who want to build a position in this counter for 6-8 months can buy the stock on dips towards 1945 levels, add more on dips towards swing support near 1800 levels for the upside target of 2200-2400 levels, with a stop loss placed below its 50 period moving average on the weekly chart placed near 1720 levels.

Stock ALBK

CMP 48.55

Action BUY

Entry 47

Average 41

Stop loss 36

Target 60

Target 2 64

Time Frame 6-8 Months

Stock TCS

CMP 1974.80

Action BUY

Entry 1945

Average 1800

Stop loss 1720

Target 2200

Target 2 2400

Time Frame 6-8 Months


EQUITY

Sentiment

Stop Loss 163

Target 141

Lot Size 2800

Margin 75000

21-DEMA 151

Open Interest Shares 6713800

Change in OI -2649200

Cost of Carry (%) 6.71

SECTORAL SNIPPETS

NIFTY IT (14,638.05) traded with a positive bias, gained more than 6% on the weekly closing basis, exhibiting outperformance of the index. On the stock specific front, all major stocks gained, whilst only two stocks lost. TCS 8.95%, INFY 7.93%, Mindtree 6.17%, WIPRO 5.76%, HCLTECH 3.88%, TATAELXSI 3.68%, KPIT 3.29% & TECHM 2.63% managed to close in green, whereas OFSS lost -0.43% & INFIBEAM lost -5.02% and closed in red in the last week. NIFTYIT index, after placing a swing low near 13,581 levels witnessed sharp recovery and managed to surpass and sustain above its major 200-DEMA which is currently placed near 14,016 levels, and lastly ended the week with significant gains, outperforming the broader market exhibiting sheer outperformance of the index. Technically, index is consolidating above its 21-DEMA (14404) and holding marginally below its 50-DEMA (14693). On the momentum setup, 14-period RSI post finding support near 36-levels, moved higher above equilibrium levels in last few sessions, reaffirming buying strength in the counter. On the downside, index has immediate support near 14,250 levels followed by 14,000 levels, while on the higher side 14,700-14,730 will work as an immediate resistance followed by 15,000. Going forward, index on sustaining above 14,250 is likely to trade with mixed to positive bias towards 14,900-15,000 levels.

NIFTY BANK (26,862.95) gained in par with Nifty with gains of 3.32% during the week. The index surpassed its crucial resistance at 26,400 levels and sustained above the same during the week and is poised to move towards 27,500 levels which may act as immediate resistance. Considering the positive bias in the index, market participants may stay long with a bullish bias. On the stock specific front, most of the index stocks closed in green. INDUSIND BANK, HDFCBANK, FEDERALBNK and KOTAKBANK gained by 7.33% to 5.50% during the week. On the other hand, YESBANK and BANKBARODA lost 12.84% and 4.46%, respectively, with respect to the weekly closing basis. Yes Bank’s shares continued its southward journey after a global rating agency downgraded the lender’s foreign currency issuer rating to Ba1 from Baa3, citing concerns over the transition in leadership as well as the governance issues. Technically, BankNifty may face crucial resistance at 27,000 and 27,500 levels. For the week ahead, support for the index can be pegged at 26,500 levels followed by 26,000 levels. On the momentum setup, 60-period weekly CCI is plotting above its zero line, indicating an underlying bullishness in the index. However, we may expect a subdued movement in the index if it falls below the 26,600 levels.

NIFTY AUTO (9270.20) underperformed Nifty 50 index on the weekly basis, however, ended the week on a positive note with over 2.20% of gains. This was majorly due to the bounce in the heavyweight counters like MARUTI, M&M, HEROMOTOCO, BAJAJ-AUTO and ASHOKLEY which surged around 3.20%, 6%, 4.70%, 5.80% and 2.50%, respectively, while TATAMOTORS, EICHERMOT and BHARATFORG were the major losers from the same universe which plunger around 5.50%, 3% and 3.10%, respectively, on a weekly basis. Technically, the index has seen a relief rally after two consecutive weeks of the bear run. The support zone of 9000 levels played a crucial role and reversed the trend for the index. On the daily chart, the stock is still placed below all its major moving average and the upside may be expected near to the unfilled gap placed around 9350-9400 levels, which would play a crucial role for resisting the index. On the weekly chart, 14 periods RSI is on the verge to witness short-term rally as it has been placed near the oversold zone, suggesting trend reversal in the counter. The immediate support for the index is placed around 9000 levels followed by 8850 levels, while on the contrary the resistance is pegged around 9350-9400 levels followed by 9600 levels. For the coming week, stock specific action can be seen as sales figure will be out from 1st December. Hence, it is advisable to trade cautiously in the counter and to look for stock specific action.

NIFTY METAL (3163.75) index ended the week on a negative note by more than 1.5% and also made lower low and lower high for the week. The index has also broken its previous major swing lows and closed below it, indicating a probable start of the fresh leg of down move into the index. However, over last three days, the index moved into a range, suggesting a halt of decline in the index from a very short-term perspective. The index is also sustaining well below its all major short-term moving averages, depicting the ongoing downtrend is likely to persist. On the indicator front, the index is oversold and is likely to trade in a range for near term. Ongoing into the internals, the breadth of the index is weak, with more than 50% stocks ending in negative, which also adds to the likely weakness into the index. Major stocks which lost most during the week are ferrous metals like Jindalstel, Sail, Tatasteel, and others like Coalindia, Hindcopper, Jslhisar, Jswsteel, and Vedl also witnessed cracks during the week. On the flip side, stocks like HINDALCO, HINDZINC, NATIONALUM, APLAPOLLO and NMDC have ended in positive zone. Even on the derivative front also, most of the stocks have not seen any major rollovers also suggesting participants expect muted action for near term. Technically, immediate supports for the NIFTY METAL index are pegged around 3080-3100 followed by 3030-3050. Whereas on the upside, immediate resistances are pegged around 3225-3250 followed by 3300-3325. Going forward, we expect the index to trade sideways in the range of 3100 to 3250 with a negative bias.

JUBILANT FOODWORKS LTD: BUY JUBLFOOD (DEC FUTURE) | CMP: 1256.70 SECTOR: FMCG

JUBLFOOD’s weekly chart structure clearly indicates the formation of higher tops and higher bottoms for the past few weeks. The stock gained around 4% during the previous week, in line with the broader markets with reasonable price volume activity, thereby suggesting build up of long positions in the counter during the first week of the December 2018 series. As far as technical parameters on weekly time frame are concerned, the RSI (50.78) is currently placed above the RSI Avg (46.44), hinting at a possible upside towards Rs.1320-1325 is very likely as there is enough room for the stock to perform on the upside. The ADX (34.30) on the other hand is also comfortably placed for the bullish setup seen on the weekly charts of JUBLFOOD as the DMI+ (20.50) is pointing upwards. The stock has an immediate hurdle around Rs.1270-1275 crossing which a sharp rally towards the target may be seen. On the other hand, the supports are pegged around Rs.1220-1200, breaking which the bullish setup could get negated. Hence, we recommend smart traders to go long as per the levels mentioned above.

Sentiment

Stop Loss 1190

Target 1325

Lot Size 500

Margin 110100

21-DEMA 1193

Open Interest Shares 2295000

Change in OI -466500

Cost of Carry (%) -1.45

CASTROL INDIA LIMITED: SELL CASTROLIND (DEC FUTURE) | CMP: 151.75 SECTOR: AUTO-ANCL

CASTROLIND managed to close with gains of 1.44% on a weekly closing basis, underperforming the broader markets. The stock price, after witnessing technical pullback towards 160 levels, failed to sustain at higher levels and succumbed to pressure in the last two sessions of the week, while in the last session, the stock lost over 3%. Technically, the stock price is holding below its major 200-DEMA which is currently placed near 165 levels, while holding marginally above its 21 & 50-DEMA. On the momentum setup, 14-pd RSI consolidated near 60-levels in the last couple of sessions, while in the last sessions indicator witnessed bearish crossover of its signal line exhibiting underlying weakness in the counter, since bulls failed to utilize recent pullback and bears took over the control. Hence, we recommend Smart Trader to initiate a short position on the bounce towards 154 levels for the target of 141, keeping a stop loss above 163 levels.


WEEKLY VIEW OF THE MARKET

NIFTY (10,876.75): Nifty zoomed past the psychological 10,900 mark but managed to shut shop just shy of the said level to settle at 10,876.75, higher by 3.32%. A surge in buying activity due to revived positive sentiment pulled the markets higher significantly during the last week. Going into the next week, we expect the positive momentum to continue even as data pertaining to Monthly Auto Sales Data will be released today (1st December 2018) and outcome of RBI’s Monetary Policy will be announced on 5th December 2018. The Group of 20 Summit is on, as leaders from across the globe have gathered in Argentina to discuss the global economy and security, shadowed by increased tensions stoked by the US President Donald Trump’s trade war. Leaders from across the globe are set to meet each other and discuss key issues during this two-day G-20 summit which concludes today. Trump’s planned meetings with a half-dozen other world leaders will be keenly watched by many investors. However, most of the attention will be drawn by the important meeting between two leaders in particular: US President Donald Trump and China’s President Xi Jinping, who are most likely going to discuss de-escalating their battle over trade, which has given jitters to the entire global economy in the recent past. Coming back to the Indian markets, technically, Nifty is placed around the upper end of the resistance zone of 10,850-109,00. Though Nifty index has been trading in a positive manner for the past few sessions, chances of a throwback remain as we continue moving higher towards 11,000-11,100. This could prove to be the immediate near term hurdle for the index, crossing which Nifty can accelerate its upmove towards 11,150-11,200 in the days to come. Among important macroeconomic data which came out on Friday, India’s economy slowed to 7.1% in the July-September quarter of the year from 8.2% in the previous quarter on the back of a sharp drop in manufacturing, agriculture and mining activities, as per data released by government agencies. The GDP has clearly shown its lowest growth rate in as many as three years. Having said that, India still remains the world’s fastest-growing major economy across the globe. Considering the above mentioned macroeconomic data point, Nifty index is likely to witness immediate support around 10,800-10,750. The second level of meaningful support is pegged around 10,700-10,650 levels. This week, we expect the Nifty to move in a range of 10,600-11,200 with a possibility of moving higher or lower by 100-150 odd points in either direction depending on the overall market sentiment. Having already discussed Nifty’s presence around the upper end of the trading band, we continue with our approach of recommending traders to buy on dips in a disciplined manner and exit leveraged positions if the immediate support zone mentioned above is not held on a sustainable basis.

DERIVATIVE STRATEGIES

Type: Bull call spread in NIFTY

First leg Buy one lot of NIFTY 27 DEC 11,000 CE @ 141

Second leg Sell one lot of NIFTY 27 DEC 11,300 CE @ 38

Max Profit 14,775

Max Loss 7,725

BEP 11,103

Rationale The index is expected to trade with a bullish bias in the near term.

DERIVATIVES

First leg Buy one lot of IGL 27 Dec 265 CE @ 9.25

Second leg Sell one lot of IGL 27 Dec 280 CE @ 4.25

BEP 270

Max Profit 27,500

Max Loss 13,750

Rationale The stock is in an uptrend and has retraced lower towards its support zone around 260-265 levels and is expected to resume its uptrend.

Type: Bear put spread in RPOWER

First leg Buy one lot of RPOWER 27 DEC 30 PE @ 1.80

Second leg Sell one lot of RPOWER 27 DEC 27 PE @ 0.70

BEP 28.9

Max Profit 24,700

Max Loss 14,300

Rationale The stock is in short-term downtrend and is trading below its short to medium term moving averages.

Type: Bull call spread in Bank Nifty

First leg Buy one lot of BANK NIFTY 06 DEC 26900 CE @ 187

Second leg Sell one lot of BANK NIFTY 06 DEC 27300 CE @ 61

Max Profit 5,480

Max Loss 2,520

BEP 27,026

Rationale The index is expected to trade with a bullish bias in the near term.

7KSTREET - 01ST DECEMBER 2018

DERIVATIVES

FII ACTIVITY IN INDEX FUTURES FII ACTIVITY IN STOCK FUTURES

TOP 6 LONG BUILD UP

Stock Name LTP % Price Change Open Int % OI Change

ACC 1485.5 1.99 1433200 13.85

ESCORTS 704.7 6.50 5408700 13.69

STAR 485.65 8.05 3794800 11.12

CANFINHOME 269.85 3.93 4126800 6.82

AXISBANK 625.75 1.82 36369600 6.43

ZEEL 477.45 4.05 13076700 5.85

BANKNIFTY OPTION OI CONCENTRATION (WEEKLY) CHANGE IN BANKNIFTY OPTION OI (WEEKLY)

TOP 6 SHORT CLOSURE


INDIGO 1038.25 1.15 2778600 -40.51

KSCL 522.7 3.32 930000 -39.63

BERGEPAINT 319.8 1.90 1922800 -33.89

GODREJIND 549.45 5.37 1534500 -29.45

CASTROLIND 151 1.10 6713800 -28.29

ALBK 48.55 7.53 16060000 -26.28

TOP 6 SHORT BUILD UP


IOC 134.6 -2.64 82479500 103.47

REPCOHOME 369.75 -4.67 1417000 95.34

BRITANNIA 3169.75 -47.25 2773400 90.69

OIL 186.25 -9.21 8956365 85.17

ONGC 140.3 -7.85 74133750 68.65

NTPC 140.3 -3.90 69668000 67.21

TOP 6 LONG CLOSURE


NHPC 25.95 -0.38 16335000 -36.98

JETAIRWAYS 305.7 -0.88 4335600 -29.90

PCJEWELLER 68.85 -10.18 7066000 -28.95

EQUITAS 107.65 -0.14 10616000 -24.52

MUTHOOTFIN 452.6 -0.28 1524000 -24.46

MGL 832.3 -3.03 1077000 -21.31

NIFTY OPTION OI CONCENTRATION CHANGE IN NIFTY OPTION OI


COMMODITIES

BULLIONGold market witnessed a range bound trend in the international market during the week ended on 30th November 2018. Market participants took a cautious approach during the week ahead of G20 meeting in Argentina over the weekend. Range bound movement in the dollar index kept the price of yellow metal in a narrow range. COMEX gold futures are heading for a second straight month of gains in November. During the week, major economic releases were advanced GDP estimates for the third quarter, which came at 3.5% same as that of previous reading. Another data was goods trade balance; wherein, the trade deficit widened to USD -77.2 billion for November against the previous reading of USD -76.3 billion. Further, the release of recent FOMC meeting minutes on Thursday was watched closely for Fed’s stance on interest rate; wherein most of the officials vowed for a gradual interest rate hike. However, the market was put in the dark with varying comments from US Fed chairman and vice chairman during the week regarding interest rate decisions. In the G20 meeting, the US and Chinese leaders are scheduled to discuss trade matters. The US trade restrictions have hit a total of $369 bn of Chinese exports this year, much higher than the $278 bn of goods impacted by tariffs alone. The gold price movement in the Indian market was completely different. MCX gold and silver futures tumbled during the week, despite the steady trend in the international market. Sharp appreciation in Indian Rupee against US Dollar led to a decline in the Indian market.

ENERGY COMPLEXCrude oil prices traded sideways mostly buoyed towards downside as swelling US supplies and growing production kept the prices in check. Although the prices breathed easy in the week as the market expected OPEC & Russia to agree on production cuts. In the major developments this week, Russia has shown a positive conviction for the reduction in oil output with OPEC but is still bargaining with the producer group’s leader, Saudi Arabia, over the timing and volume of any reduction. The market is, moreover, focused on the interactions of the US President Donald Trump, Russian President Vladimir Putin and Saudi Arabia’s Crown Prince Mohammed bin Salman at this weekend’s G20 meeting for the discussion over the global oil prices. Suggesting in a slowdown of demand for refined products, Asian gasoil exports for November have been assessed around 7.0 mn metric tons (mt), down from the year-to-date (YTD) monthly average of about 8.9 mn mt, with nearly 6.5 mn mt accounted for so far. As per EIA, US crude oil inventories increased by 3.6 mn bbl for the week ended Nov. 23 and are about 7% above the 5-year average for this time of year. Total motor gasoline inventories decreased by 800,000 bbl and are about 5% above the 5-year range. Distillate fuel inventories increased by 2.6 mn bbl last week and are about 6% below the 5-year average for this time of year. In the coming week, OPEC and non-OPEC members will meet in Vienna, Austria on 6th December to discuss a new round of production cuts of 1 mn to 1.4 mn barrels per day (bpd) and possibly more. The following decrease in the global supplies will force the oil market toward the verge of balancing although the market is expected to balance by the first half of 2019; still, the prices will have short-term positivity.

BASE METALSWith developing concerns over the dollar index prices and happenings at G-20 meetings base metal traded on a negative for the first two days of the week and later revived during the third session after the Fed Chair said that the interest rate hike had come to a near close and if there were any hikes then the economy must increase its borrowing costs which shall divert the investments into higher return earning assets rather than commodities. Shanghai Aluminium sunk to the lowest prices in two years to 13,590 Yuan a ton as staling manufacturing growth compounded plentiful supply amid relatively lenient winter output curbs. Also, on Thursday Chile’s Codelco, the world’s largest copper producer, said that mine output fell 3% in the first nine months of the year as ore grades sharply declined. Its mines produced 1.2 mn tons of copper, with ore grades down 5% over the same period. Nickel made a low of $10,720 per ton during the week pressured by the dollar price variances. The intensifying trade war between the United States and China is largely to blame, as it has flooded the market with low-cost Aluminium, much of which found its way to India’s shores. In addition, the quarter witnessed a jump in fake semis from China and ASEAN (Association of South East Asian Nations) countries, rising by 13 times in the quarter to a total of 66 thousand metric tons. Based on numbers from July through September quarter, Hindalco Industries, Vedanta Ltd., and National Aluminium Company saw overall domestic sales improve by a scant 3.56%. During the same quarter, demand for aluminium jumped by 16% on the year, totaling 847 thousand metric tons. Consumption of Aluminium also rose in the quarter, up 14% on the year to 1.6 million metric tons.

OILS & OILSEEDSSoybean futures are expected to trade on a mixed note could keep bias on the positive side due to improved industrial demand in the physical market. Moreover, slower pace of arrivals and improved export prospects of meals is also supporting soybean prices at futures platform. Daily arrivals of soybean have been hovering in a range of 7-9 lakh bags since last 2 weeks as farmers are holding their produce in anticipation of further rise in prices. However, higher production outlook for India as well as for the world could restrict major gains. Likewise, RM seed futures are expected to trade sideways to lower due to slack demand in the physical market. Adequate supply at key trading centers and accelerating sowing progress in major growing states could weigh on prices coming days. The area under mustard seed cultivation has touched 59.15 lakh hectares as against 57.89 lakh hectares during the corresponding period in the previous rabi season, higher by 4.29% YoY. Similarly, Soy ref futures could slip further on weaker demand outlook against adequate supply levels. Apart from that prices could track strengthening the value of Indian currency against the US dollar index which is making import cheaper in India. Likewise, CPO futures are expected to trade down in anticipation of a rise in inventory levels in Malaysia and Indonesia. Malaysia’s palm oil stockpiles at the end of October.

COTTONMCX cotton futures are expected to trade sideways to down in the upcoming week in expectation of a rise in arrivals due to better price realization to farmers. Kapas prices are ruling much higher to the MSP level hovering near about Rs.5600 -5900 per quintal level at key trading centers. Apart from that, the market may track cues from strengthening the value of Indian currency against the US dollar making export more costly for Indian traders. Limited overseas demand of Indian fiber, resulting with increased price disparity could affect overall export from India and repercussion of the same could be seen on prices in near term. Indian currency appreciated further and ruling near about 69.7 levels on Friday. However, losses in cotton prices are likely to be limited due to weaker production outlook. Cotton Association of India estimated total cotton production for the year 2018-19 at 343.25 lakh bales, lower by 1.4% as compared to the prior year. Ministry of Agriculture projected cotton production for the year 2018-19 at 324.83 lakh bales in its first advance estimates against the 348.88 lakh bales of the prior year, lower by 7% YoY. Overall arrivals for the year 2018-19 has been lower by about 30% due to lower yield realization in Maharashtra and Karnataka. About 41 lakh bales of cotton arrived till mid-November, since starting of the marketing year 2018-19 commenced in October 2018; wherein about 58 lakh bales arrived during the same period in prior year. Meanwhile, prices may track cues from the outcome of G-20 meet where the US and China could try to resolve their trade dispute. Meanwhile, USDA released its weekly export sales data for the week ending on 22nd November showed net sales of 176,800 RB for 2018/2019 were down 16% from the previous week, but up noticeably from the prior 4-week average. Exports of 126,100 RB were down 16% from the previous week and 4% from the prior 4-week average.

SPICESCardamom futures continued their trade in sideways to positive trend during the week. Prices breached major resistance of Rs. 1520 levels to hit Rs. 1550/kg but failed to sustain the gains on profit booking. Decline in production in the current season due to adverse weather conditions will result in lower supplies at the spot auctions in coming days. Further, plantations in Guatemala, the largest producer has reported having been affected by the volcano. Hence, we expect cardamom futures to trade on a positive note. Turmeric futures traded in a range bound levels; however, sharp gains on the last day of the week resulted in prices pausing their 4-week fall. Prices traded lower initially dragging the loss to a multi-month low of Rs. 6250/quintal; however, recovered well to close above last week’s close. Despite higher crop estimates on the back of the higher area, drought conditions in few major states may affect yield levels. Hence, we expect turmeric futures to trade in a positive note for the week. Jeera futures noted sharp fall during the week extending loss to four weeks in a row. Expectations of the area under jeera to improve after support from government continued to weigh prices. As per the latest data, sowing in Gujarat is completed in 122,200 hectares of land that was 1914 hectares last year during the corresponding period. We expect jeera futures to trade in a negative note for the week. Dhaniya futures traded in a range with a positive bias during the week. Prices traded down initially extending loss on extended profit booking. However, the prices recovered to trade higher on expectations of the lower area under dhaniya as farmers may shift to other crops supported gains. Progress is also slow in the major growing states without required moisture for the sowing activities. As per latest data, sowing in Gujarat is completed in 7600 hectares of land which was 35700 hectares last year during the corresponding period and yet to start in full pace in other two major growing states of Rajasthan and Madhya Pradesh.


COPPER

As on 30th November 2018, LME copper 3M forwards are trading around $6200/Mt. The prices are trading above the weekly 8,13 EMA levels (6170,6190). Also, prices are trading above the 38.2% Fibonacci retracement ($6190) support levels. The momentum indicator RSI -14 is trading around 49 in a neutral zone. In the bigger scenario, the prices are trading within a confined range of $5960-6370 levels. Based on the above discussed technical study, we are anticipating the commodity to breach consolidation phase resistance levels around $6380-6400 and to resume the bull rally. Buy LME Copper 3M at $6150-6160 TP 6300 SL 6070. Buy MCX Copper Feb-19 at Rs 428-430 TP 445 SL 422

NICKEL

As on 30th November 2018, Nickel 3M forwards at the LME platform are trading around $1160/MT. In the bigger scenario, the prices have started falling after making a high of $16690/Mt. prices are trading below the weekly 8,13 EMA support levels ($11,900,12,200) also prices are falling along with trend channel support and resistances. Overall the bearish trend is intact; however, from the current levels pullbacks towards the 11,500 are due which is the channel falling trend line resistance levels. Daily RSI-14 is treading around 26 which may support for pullback in the coming week. Lower side supports are seen at 10,800 then at 10,500 levels. Buy LME Nickel 3M at $10800-10830 TP 11500 SL 10500. Buy MCX Nickel Dec at Rs 750-752 TP 810 SL 720.

MENTHA OIL

Mentha oil December contract futures settled at Rs. 1654/Kg. The prices are trading below the weekly 8,13 (1720-1740) EMA levels. Also, prices are witnessing a moving averages bearish crossover. In the mentioned price chart, it is visible that prices have broken Head and Shoulder pattern neckline supports around Rs. 1690-1700 (on increased Volumes), as per the pattern target is seen at Rs. 1400. However, before this prices were witnessing important support levels around Rs. 1560 then at 1471 which are the Fibonacci 23.6% and 38.2% of the range 1851-1091, the same tool is providing resistance around Rs. 1670(23.6%). The momentum indicator RSI -14 is treading around 40 which as a potential to move lower. Overall, we expect the commodity to move lower up to 1500-1470 and thereafter, recovery is expected. The view will be intact until current month high 1840 is not interrupted. Mentha oil Dec MCX: Sell at Rs1680-1700 TP Rs 1480 SL Rs 1850

COMMODITIES

TREND SHEET

Commodities 23-Nov 30-Nov % Change 52 Week High% Change from 52

Week High52 Week Low

% Change from 52 Week Low

MCX Gold (Rs/10 gms) 30,495.00 30,211.00 -0.9% 32,311.00 -6.50% 28,055.00 7.68%

MCX Silver (Rs/Kg) 36,061.00 35,497.00 -1.6% 41,698.00 -14.87% 35,445.00 0.15%

MCX Crude Oil (Rs/bbl) 3623.00 3551.00 -2.0% 5669.00 -37.36% 3464.00 2.51%

MCX Natural Gas (Rs/mmBtu) 312.20 319.60 2.4% 358.70 -10.90% 162.50 96.68%

MCX Copper (Rs/kg) 429.85 426.05 -0.9% 493.25 -13.62% 402.55 5.84%

MCX Lead (Rs/kg) 137.10 136.55 -0.4% 172.50 -20.84% 133.15 2.55%

MCX Zinc (Rs/kg) 181.95 182.30 0.2% 232.70 -21.66% 163.80 11.29%

MCX Nickel (Rs/kg) 764.40 768.20 0.5% 1095.20 -29.86% 692.80 10.88%

MCX Aluminium (Rs/kg) 136.65 134.85 -1.3% 178.85 -24.60% 128.30 5.11%

NCDEX Soybean (Rs/Quintal) 3423.00 3355.00 -2.0% 3895.00 -13.86% 2967.00 13.08%

NCDEX Refined Soy Oil (Rs/10 kg) 733.15 722.70 -1.4% 796.35 -9.25% 711.15 1.62%

NCDEX RM Seed (Rs/Quintal) 4095.00 3967.00 -3.1% 4262.00 -6.92% 3727.00 6.44%

MCX CPO (Rs/10 kg) 508.30 500.30 -1.6% 673.00 -25.66% 493.10 1.46%

NCDEX Castor Seed (Rs/Quintal) 5642.00 5364.00 -4.9% 6300.00 -14.86% 3831.00 40.02%

NCDEX Turmeric (Rs/Quintal) 6482.00 6512.00 0.5% 8066.00 -19.27% 6250.00 4.19%

NCDEX Jeera (Rs/Quintal) 19,405.00 18,670.00 -3.8% 22,360.00 -16.50% 14,010.00 33.26%

NCDEX Dhaniya (Rs/Quintal) 6239.00 6468.00 3.7% 6664.00 -2.94% 4186.00 54.52%

MCX Cardamom (Rs/kg) 1485.60 1490.00 0.3% 1550.00 -3.87% 818.50 82.04%

NCDEX Wheat (Rs/Quintal) 2099.00 2100.00 0.0% 2114.00 -0.66% 1575.00 33.33%

NCDEX Guar Seed (Rs/Quintal) 4461.00 4309.50 -3.4% 4869.50 -11.50% 3494.50 23.32%

NCDEX Guar Gum (Rs/Quintal) 9136.00 8717.00 -4.6% 10,510.00 -17.06% 7200.00 21.07%

MCX Cotton (Rs/Bale) 21,750.00 21,200.00 -2.5% 24,280.00 -12.69% 18,410.00 15.15%

NCDEX Cocud (Rs/Quintal) 1954.50 1897.50 -2.9% 2043.00 -7.12% 1166.00 62.74%

NCDEX Kapas (Rs/20 kg) 868.00 868.00 0.0% 1010.00 -14.06% 854.00 1.64%

MCX Mentha Oil (Rs/kg) 1668.40 1669.00 0.0% 1991.90 -16.21% 1106.00 50.90%

TECHNICAL RECOMMENDATIONS


COMMODITIES

NEWS DIGEST

• China’s official Purchasing Managers’ Index fell to 50 in November, missing market expectations and down from 50.2 in October. The 50-point mark is considered neutral territory, indicating no growth in activity or contraction on a monthly basis.

• One of the world’s major oil contracts, New York’s WTI, slumped under $50 per barrel on Thursday, reaching the lowest level in nearly 14 months. WTI and Brent North Sea crude, another benchmark contract, have been tumbling for weeks on fears of a supply glut, despite oil kingpin, Saudi Arabia planning an output cut and urging other producers to follow suit.

• Gold prices firmed up on Thursday as the dollar faltered following dovish comments from US Federal Reserve Chair Jerome Powell, calming investor concerns over the pace of rate hikes.

• Australian miner Fortescue Metals this week said the latest developments in satellite imagery are helping it scour vast swathes of its backyard for new deposits, seeking an edge as it jostles with global peers for the next big strike. The world’s fourth-largest iron ore miner raised its exploration rights in South Australia by a third this year, data compiled from the state government by McMahon Mining Title Services Pty Ltd. and reviewed by Reuters show.

• Rabi sowing in 2018-19 is almost half-way done and 46% of the normal sown area (five-year average) has been covered by last week. Due to the late start to the harvesting of Kharif crop and thereby, delay in sowing of the Rabi crops, total Rabi sown area is reported 7.31% (by November 23, 2018) lower in 2018-19 compared to the corresponding period last year.

• The U.S. administration is moving to moderate its steel trade tariffs, but countries in Europe and beyond are loath to lower protections for their steelmakers as long as the US-China trade tensions prevail. Since slapping 25% tariffs on all the US steel imports in March, Washington has struck deals with countries including South Korea, Argentina, Brazil and South Africa to end the tariffs in exchange for import quotas.

WEEKLY COMMENTARY

• Oil prices slipped further on Friday as swelling inventories depressed sentiment despite widespread expectations that OPEC and Russia would agree on some form of production cut next week. Both international oil benchmarks, North Sea Brent and the US light crude, have had their weakest month for more than 10 years in November, losing more than 20% as global supply has outstripped demand.

• China’s soybean tariffs, which have virtually halted purchases of the US soybeans that last year totaled $12 billion, came in retaliation for Trump’s duties on Chinese steel and aluminum. That left US farmers and grains merchants with huge inventories of soybeans because China typically buys 60% of US soy exports. Grains companies have had to adapt quickly to keep massive volumes of perishable goods moving at the lowest possible cost.

• China’s 2018 cotton output is estimated to come in at 6.07 million tons, down 0.9% from the previous year, according to a report issued by China National Cotton Information Center Ltd Co. Xinjiang, China’s top cotton-producing region, was expected to produce 5.13 million tons of the fibre this year, according to data from China Cotton Association.

• Meanwhile, USDA released its weekly export sales data for the week ending 22nd Nov showed net sales of 176,800 RB of cotton for 2018/2019 were down 16% from the previous week, but up noticeably from the prior 4-week average. Exports of 126,100 RB were down 16% from the previous week and 4% from the prior 4-week average.

MCX CRUDE MCX NATURAL GAS

CALENDAR SPREAD NYMEX - CRUDE OIL CALENDAR SPREAD NYMEX - NATURAL GAS

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

0.5

16-Nov 18-Nov 20-Nov 22-Nov 24-Nov 26-Nov 28-Nov 30-Nov

$/B

BL

-0.2

-0.15

-0.1

-0.05

0

0.05

0.1

16-No

v

17-No

v

18-No

v

19-No

v

20-N

ov

21-No

v

22-No

v

23-No

v

24-N

ov

25-No

v

26-No

v

27-No

v

28-No

v

29-No

v

30-N

ov

$/M

MB

tu

250

270

290

310

330

350

370

0

50000

100000

150000

200000

250000

300000

12-Nov 14-Nov 16-Nov 20-Nov 22-Nov 26-Nov 28-Nov

Open Interest Volume Price (INR/MMBTU)

3500

3600

3700

3800

3900

4000

4100

4200

0

50000

100000

150000

200000

250000

13-No

v

14-N

ov

15-No

v

16-No

v

19-No

v

20-N

ov

21-No

v

22-No

v

23-No

v

26-No

v

27-No

v

28-No

v

29-No

v

Volume Open Interest Price (INR/Bbl)


COMMODITIES

PRICES OF METALS IN LME/ COMEX/ NYMEX (IN US $)

Commodity Exchange Contract 16-Nov 23-Nov % change

Aluminium LME 3M 1942.00 1933.50 -0.44%

Copper LME 3M 6168.00 6205.50 0.61%

Lead LME 3M 1964.00 1931.00 -1.68%

Nickel LME 3M 10875.00 11010.00 1.24%

Zinc LME 3M 2509.50 2460.50 -1.95%

Gold CME DEC 1223.40 1224.10 0.06%

Silver CME DEC 14.26 14.25 -0.11%

WTI Crude oil CME OCT 50.39 51.26 1.73%

Natural Gas CME OCT 4.31 4.60 6.68%

INTERNATIONAL COMMODITY PRICES

Commodity Exchange Contract 16-Nov 23-Nov % change

Soybean CBOT NOV 907.25 914.75 0.83%

Soy oil CBOT DEC 27.60 27.68 0.29%

CPO BMD DEC 2045.00 2039.00 -0.29%

Cotton ICE DEC 74.90 76.66 2.35%

SPOT PRICES (% CHANGE)

LME WAREHOUSE STOCKS (IN TONS)

Commodity Previous week This week Change % Change

Copper 137100 136175 -925 -0.67%

Zinc 121600 117550 -4050 -3.33%

Aluminium 1064975 1052450 -12525 -1.18%

Lead 107675 105200 -2475 -2.30%

Nickel 213984 213570 -414 -0.19%

SHANGHAI WAREHOUSE STOCKS (IN TONS)*


Copper 133163 131042 -2121 -1.59%

Zinc 35452 26779 -8673 -24.46%

Aluminium 750229 731130 -19099 -2.55%

*Until Wednesday

WEEKLY STOCK POSITION IN LME (IN TONS)

Cotton Balance Sheet for 2018-19 by Cotton Advisory Board

Cotton Year: October to September

2017-18 (P) * 2018-19 (P) *

Particulars(In lakh bales

of 170 kg. Each)

(in Thousand Tons)

(In lakh bales of 170 kg.

Each)

(in Thousand Tons)

SUPPLY

Opening Stock 43.76 743.92 47.12 801.04

Crop 370.00 6290.00 361.00 6137.00

Import 15.80 268.60 15.00 255.00

TOTAL SUPPLY 429.56 7302.52 423.12 7193.04

DEMAND

Mill Consumption 275.91 4690.47 278.00 4726.00

S.S.I Consumption 27.20 462.40 27.00 459.00

Non Textile Consumption 11.50 195.50 12.00 204.00

Export 67.83 1153.11 65.00 1105.00

TOTAL DEMAND 382.44 6501.48 382.00 6494.00

Closing Stock. 47.12 801.04 41.12 699.04

P - Provisional * - As estimated by CAB in its last meeting held on 22.11.2018

-4.93%

-4.59%

-3.79%

-3.40%

-3.13%

-2.92%

-2.53%

-2.07%

-1.96%

-1.99%

-1.57%

-1.56%

-1.43%

-1.32%

-0.91%

-0.87%

-0.40%

0.04%

0.05%

0.16%

0.30%

0.46%

0.51%

2.63%

3.67%

-6.00% -5.00% -4.00% -3.00% -2.00% -1.00% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00%

Castor Seed

Guar Gum

Jeera

Guar Seed

RM Seed

Cotton Seed Oil Cake

Cotton

Barley

Crude Oil

Soybean

CPO

Silver

Soy Oil

Aluminum

Gold

Copper

Lead

Mentha Oil

Wheat

Zinc

Cardamom

Turmeric

Nickel

Natural Gas

Dhaniya

COMEX WAREHOUSE STOCKS (IN TONS)


Copper 141521 138404 -3117 -2.20%


USD/INR

USDINR opened the past week above 70.17, a major support level and breached it in the middle of the week ending at week lows of 69.59. 69.50-69.80 acts as a support zone in the pair, which if breached will take the pair further down till 68.80, the 50% Fibonacci retracement support. With the current downward momentum that the pair has gained, it seems that the pair is heading towards its major supports of 68.80 which was earlier multiple resistance levels. This coming week, if USDINR manages to rally above 70.20, we could see further upside in the pair, else it shall witness a free fall to test 68.80 in the next few sessions. This week shall be important with a lot of events globally and the 5-state elections domestically. This week, USDINR would be more a fundamentally driven pair and other INR pairs shall follow USDINR blindly. Technically, the pair appears oversold, but still would be sent under pressure even if we see a minor bounce. 70.30 could be used to initiate shorts for this week with stops above 70.70.

EUR/INR

EURINR has been depreciating continuously since mid-October and there are no signs of any halt in the pair, where it could breathe for a while. Weak fundamentals of the Eurozone are hitting the Euro hard. EURINR this past Friday tested the 38.2% Fibo support, but the chances for the pair to find support are close to nil. The RSI-Bollinger combination indicates that the pair is oversold and is not sufficient and efficient enough to provide support to the pair as the 8-13-20 EMAs, the bearish Parabolic SAR, are gradually developing thick bearish Ichimoku cloud. The formations are strong enough to negate any upward move in the pair. This week one can initiate shorts in the pair at levels close to 80 for targets close to 78.80.

GBP/INR

The Apr 2017 to Oct 2018 rally in GBPINR has already faded and the prices have retraced up to 50% as shown by the Fibonacci retracements. Next major support in the pair lies at 86.85 which is 61.8% Fibo retracement support level. GBPINR, after making a high of 98.51, has continuously been under pressure due to the never-ending Brexit scenario. The bearish 8-13-20 Exponential Moving Average crossover along with Ichimoku- Parabolic SAR combination clearly indicate that the pair is no sooner gaining upward momentum and will continue to take hits southward. Though this huge downfall demands minor corrective moves, it isn’t necessarily essential for the currency to behave likewise. This week, one can expect the pair to drop down up to 87.80 but is advised to initiate shorts on corrections from prevailing rates.

JPY/INR

JPYINR Spot has managed to hold above 60.50 throughout the year 2018 when it had breached the same in mid-February. After trading between 60.50-62.50 for almost 4 months from mid-February to mid-July, JPYINR breached 62.50 in the upside to rise higher up to 66.50 and last week is the first time it has again penetrated 62.50 in the downside and is now approaching its long-term support of 60.50, which also happens to be the bullish Ichimoku cloud support in the weekly charts. The daily charts, however, indicate that the pair would most probably test 60.50 soon and would then consolidate for a while. The RSI-Bollinger band combination suggests the pair is oversold and might witness a little of recovery if at all it sustains 60.50. An emerging bearish Ichimoku cloud, however, indicates that the pair will continue to be under pressure this coming week. The Parabolic SAR supports the said view. 61.15, which is the 50% Fibonacci support level might act as interim support this week. It is advised to initiate longs between 60.50 & 61.15 with a stop below 60.20 for a target of 62.00 & 62.50.

TECHNICAL RECOMMENDATIONMARKET STANCE

Global markets are trading cautiously as Trump is set to meet Chinese President Xi on the sidelines of the G20 summit in Argentina over the weekend, but he denied to meet Putin due to tensions over Russia forces opening fire on Ukrainian navy boats and seizing them. Trump and XI are expected to discuss trade tensions. Dollar index treaded steadily after a sharp fall followed by the comments of Fed chair Jerome Powell, who hinted that the rates are nearing the neutral stance. Powell in a speech before the Economic Club of New York on Wednesday said that interest rates are “Just Below” the neutral range. Although almost all the FOMC members pointed for a rate hike in December, the latest comments from Jerome Powell added uncertainty over further rate hikes in 2019. Oil prices are back again above $50 as OPEC and Russian might agree on production cuts when they meet next week, but swelling US inventories would keep the pressure on prices. RBI intervention with large pockets when Rupee was trading above 73, US 10-year Treasury yields drop to 3% from seven-year highs combined with softer crude prices helped the Indian rupee in adding gains. USDINR is likely to find its base at 69.20 – 69.50 and resume its upside momentum once the market mood shift towards OPEC meet on 6th December and five state election results.

NEWS FLOWS OF LAST WEEK

• The dollar sagged against its peers on Powell’s comments, which suggested the Fed’s interest rate hike cycle may come to an end faster than initially anticipated.

• Dovish comments from Federal Reserve Chair Jerome Powell boosted investor sentiment towards riskier assets.

• Senior UK lawmaker Fallon says it may be possible to delay the date they leave EU to negotiate a better deal.

• UK PM reiterated that there are MPs that do not want UK to leave EU, but she will stick to March 2019 deadline for UK to leave EU.

• Michael Cohen, Trump’s former personal attorney, expected to enter a guilty plea for false statements to Congress coupled with dozens of hours of testimony potentially damaging to President Trump Special Counsel Values testimony.

• Preliminary data suggest that US GDP is expected to widen by only 3.5 %( QoQ) in Q3 compared with an expectation of 3.6%.

• China November Manufacturing PMI numbers worsen to 50 from 50.2 earlier as trade tensions dent the manufacturing activity.

CURRENCY

CURRENCY TABLE

Currency Pair Open High Low Close

USDINR 70.45 71.02 69.57 69.59

EURINR 79.86 80.58 79.14 79.15

GBPINR 90.22 91.12 88.69 88.76

JPYINR 62.22 62.63 61.29 61.31

DXY 96.93 97.53 96.63 96.91


ECONOMIC GAUGE FOR THE NEXT WEEK

GMT Date Local Time Country Indicator Name Period Poll Prior Unit Prior

3 Dec 2:00 United States Total Vehicle Sales Nov 2018 17.3 17.57 No. of 218.5

3 Dec 20:30 United States Construction Spending MM Oct 2018 0.4 0 Percent 1.668

3 Dec 20:30 United States ISM Manufacturing PMI Nov 2018 57.8 57.7 Index -134

3 Dec 20:30 United States ISM Mfg Prices Paid Nov 2018 68.3 71.6 Index -134

3 Dec 20:15 United States Markit Mfg PMI Final Nov 2018 55.4 Diff.Idx 0.2

3 Dec 14:30 Euro Zone Markit Mfg Final PMI Nov 2018 51.5 51.5 Diff.Idx 6.2

3 Dec 7:15 China (Mainland) Caixin Mfg PMI Final Nov 2018 50 50.1 Diff.Idx -0.1

4 Dec 15:30 Euro Zone Producer Prices MM Oct 2018 0.4 0.5 Percent 316.4

4 Dec 15:30 Euro Zone Producer Prices YY Oct 2018 4.5 4.5 Percent 227.7

5 Dec 20:30 United States ISM N-Mfg PMI Nov 2018 59.7 60.3 Index 783.7

5 Dec 19:00 United States Labor Costs Revised Q3 2018 1.2 1.2 Percent 5.16

5 Dec 19:00 United States Productivity Revised Q3 2018 2.3 2.2 Percent 4.851

5 Dec 18:45 United States ADP National Employment Nov 2018 197 227 Person -0.077

5 Dec 15:30 Euro Zone Retail Sales MM Oct 2018 0.2 0 Percent -1.295

5 Dec 15:30 Euro Zone Retail Sales YY Oct 2018 1.8 0.8 Percent 0.183

5 Dec 14:30 Euro Zone Markit Serv Final PMI Nov 2018 53.1 53.1 Diff.Idx 0.008

5 Dec 14:30 Euro Zone Markit Comp Final PMI Nov 2018 52.4 52.4 Diff.Idx 1.162

5 Dec 21:00 United States EIA Weekly Crude Stocks W 30 Nov 3.577 Barrel 0.191

5 Dec 21:00 United States EIA Weekly Dist. Stocks W 30 Nov 2.61 Barrel 0.208

5 Dec 21:00 United States EIA Weekly Gasoline Stk W 30 Nov -0.764 Barrel 0.423

5 Dec 21:00 United States EIA Weekly Crude Imports W 30 Nov 0.135 Barrel 2.6

5 Dec 21:00 United States EIA Weekly Rfg Stocks W 30 Nov -0.011 Barrel -0.116

5 Dec 21:00 United States EIA Weekly Refining Util W 30 Nov 2.9 Percent -0.02

6 Dec 20:30 United States Factory Orders MM Oct 2018 -2 0.7 Percent 22791

6 Dec 19:00 United States International Trade $ Oct 2018 -54.9 -54 USD 1042

6 Dec 19:00 United States Goods Trade Balance (R) Oct 2018 -77.25 USD 0.17

6 Dec 19:00 United States Initial Jobless Claims W 01 Dec 220 234 Person 29.4

6 Dec 19:00 United States Continued Jobless Claims W 24 Nov 1.71 Person 0.3

7 Dec 1:30 United States Consumer Credit Oct 2018 14.5 10.92 USD 6.1

7 Dec 20:30 United States U Mich Sentiment Prelim Dec 2018 97 97.5 Index 266

7 Dec 20:30 United States Wholesale Invt(y), R MM Oct 2018 0.3 0.7 Percent 0.1

7 Dec 19:00 United States Non-Farm Payrolls Nov 2018 200 250 Person 0

7 Dec 19:00 United States Private Payrolls Nov 2018 200 246 Person 5.5

7 Dec 19:00 United States Unemployment Rate Nov 2018 3.7 3.7 Percent 137.9

7 Dec 19:00 United States Average Earnings MM Nov 2018 0.3 0.2 Percent 14.1

7 Dec 19:00 United States Average Earnings YY Nov 2018 3.1 3.1 Percent 19.4

7 Dec 19:00 United States Average Workweek Hrs Nov 2018 34.5 34.5 Hour

7 Dec 15:30 Euro Zone Employment Overall Final Q3 2018 158285.6 Person

7 Dec 15:30 Euro Zone GDP Revised QQ Q3 2018 0.2 0.2 Percent

7 Dec 15:30 Euro Zone GDP Revised YY Q3 2018 1.7 1.7 Percent

CURRENCY


DEMATERIALISATIONIS MANDATORY

As per the notification issued by Ministry of Corporate Affairs, unlisted companies cannot issue physical shares from 2nd October, 2018. They have to issue shares in demat form only.

• Buyback, bonus issue and rights issue cannot be issued by these companies unless securities of company’s promoters, directors, etc. are in dematerialised form.

• Any investor who holds shares in unlisted companies has to get it dematerialised if he wants to transfer shares

• Any investor who wants to buy shares through private placement or avail bonus shares and rights issue has to hold shares in dematerialised form.

All unlisted companies are required to secure ISIN from CDSL or NSDL for each type of security.

Karvy being a pioneer in the financial realm since 3 decades and providing depository and RTA services as well can facilitate the process of dematerialisation of existing shares and also offer demat account opening facility.

Q. What is the main objective of a Demat account?

The main objective of a demat account is to facilitate easy trade and transfer of the shares and also enable an investor to get the benefits of corporate actions like bonus shares, dividend, rights issue, etc.

Q. How many accounts can I have?

• You can open more than one Demat Account.

• You can hold shares, debentures, bonds, NSC, KVP in a single Demat Account.

• You can save charges on multiple accounts by consolidating your holdings into one account, if there are no other compelling reasons to keep separate accounts.

Q. Can I take a loan on my demat holding?

1. Yes, you can pledge the securities in your account in favor of a lender to avail a loan.

Q. Is there nomination facility in Demat Account?

• Nomination can be made only by individuals holding beneficiary accounts either singly or jointly.

• The Nominee needs to complete a few formalities with DP and get the securities transferred into his/her account.

STEPS TO TRANSFER SHARESFROM ONE DEMAT ACCOUNT TO ANOTHER

Fill the DIS form & submit to your current broker

Your broker will send request to

depository (NSDL/CDSL)

Depository shall transfer the shares to your new Demat

Account

Shares shall reflect in your new Demat

Account

Investor surrenders the physical certificates to the DP

DP informs the

Depository about the request

DP submits the certificates to the Registrar of the issuer company

Registrar communicates

with the depository to confirm the

request

Dematerialization of the certificates

is done by the Registrar

Registrar informs the

depository about completion of

dematerialization

1 2 3 654

STEPS TO CONVERT PHYSICAL SHARES TO DEMAT

Q. Do I have to contact all companies for any updation in my personal details?

For your demat shares, your one point contact for all the changes/updation is DP.

Q. What precautions should I take to prevent misuse of securities lying in my account?

• Keep DIS book in safe custody.

• When writing an instruction on the DI Slip, strike-out the empty spaces.

• Change your password frequently if you are using internet facility for your Demat Account.

• Before giving Power of Attorney (POA) to any person operating your Demat Account, understand the contents and implication of such POA.

Q. How much do I pay for my Demat Account?

1. You can pay Rs. 650 as an account opening fee and enjoy many exclusive offers*.

Q. Whom should I contact in case of any queries?

1. You can call on our toll free no 18004198283 or write a mail at [email protected].

Q. What all documents are required to Open Demat Account?

1. To open a demat account, you need a mobile number linked to Aadhaar, active mobile number, PAN card, digital signature, cancelled personalized cheque.

Q. What if I already have a Demat account with another Depository Participant?

You can open a trading account with us and link it to your existing demat account. Alternately, you can open a new trading and demat account with us, transfer your securities and funds to the new account and close the older account.

Q. Things to check before Opening Demat Account

Before opening a demat account, one should always check the brokerage charges, annual maintenance charges, any other charges if applicable, technology and trading platforms and other supporting value-added features and customer services.

Q. Various Types of Demat Account

At Karvy, we offer customized solutions to meet every investor’s unique requirements. You can opt for only demat or only trading account, demat and trading account with access to trading equity, commodity, currencies, mutual funds and other exchange-traded securities.

Documents

RULE THE MARKET - Karvy Onlinecontent.karvyonline.com/contents/kstreetissue013.pdf · 2018. 12. 1. · declined by (2.4%). Manufacturing improved by 7.4% in Q2FY19 vs. 13.5% in Q1FY19