Market Outlook, 6th April, 2015

Dear Customer,

 

Markets always tend to be interesting with something or the other happening all the time. Our Morning Mantra is released before the opening bell and it includes the market commentary along with Corporate & Global news for the day.

 

• U.S. stock-index futures retreated after data Friday that showed the weakest American hiring in more than a year. Emerging-market currencies rallied with gold, while oil traded near $50 a barrel in New York.

Dow Jones	17763.2	+65.06	0.37%
Dow Futures	17676.0	+0.0	0.0%
Hangseng	25275.6	+192.9	+0.77%
Nikkie	19398.7	-36.4	-0.19%
SGX Nifty	8672	+37.0	+0.43%

 

• Asian shares rose and the dollar dropped on Monday, after a dismal U.S. jobs report pushed down U.S. Treasury yields as investors pared bets the U.S. Federal Reserve would hike interest rates anytime soon.
• The United States added 126,000 jobs in March, the weakest since 2013 and below Reuters expectations of 245,000 payrolls. The unemployment rate held steady at 5.5%, as expected. Wages increased slightly more than expected at 0.3%.
• Market is expected to open on positive note and likely to remain strong during the day.
• Sathavahana Ispat Ltd has informed BSE that the Company has commenced commercial operations of Ductile Iron Pipe making plant, Sinter plant and captive Thermal Power plant forming part of Integrated Project at Andhra Pradesh.
• Kesoram Ind has transferred its Haidrabad Tyre unit to subsidiary.
• Indoco Remedies Ltd has acquired  Clinical/Contract Research Organisation (CRO) division of Piramal Enterprises Ltd. Indoco Remedies Limited will acquire the assets of the division along with its employees in an all cash-deal and the same would be funded via internal accruals. Facility is Equipped with a 98-bed facility, the CRO  is located in Hyderabad and spread across 30,000 square feet.
• Snowman Logistics Ltd has informed BSE that the Company has commenced operations of its new Chennai warehouse of 6,000 pallets situated at Survey No.199/9 and 200/2, Mevalurkuppam Village, Sriperumbudur Taluk, Kancheepuram District, Tamil Nadu taking the total warehousing capacity of the Company to 85,500 palle.
• Dr Reddy's Laboratories Ltd, said it is entering into a definitive agreement to acquire a select portfolio of Belgium-based pharmaceutical firm UCB in India for Rs 800 crore. 
• Tata Steel Ltd, said its joint venture Tata Steel Minerals Canada has acquired the remaining 49% stake in the Howse iron ore deposit in Canada for close to Rs 25 crore. 
• Hit by sluggish demand, Bosch has decided to suspend production of various equipment, including diesel products, its Bangalore facility in order to minimise operating cost.
• Cairn India Ltd plans to treble natural gas production from its predominantly oil-rich Rajasthan block to 3 million standard cubic meters per day by mid-2018. 
• Zydus Hospitals plans to set up a hospital chain in Gujarat by investing about Rs 1000 crore over a period of next 5-6 years. It will soon open 550-bed super-specialty hospital in Ahmedabad with an investment of Rs 550 crore.
• BEL reported provisional sales of Rs.6671 vs exp 7050cr for FY15 and  order book reported at Rs.22100cr vs yoy 23200cr
• Bosch Ltd has informed BSE regarding "Go-Slow strike by Labour Union and Workmen of Jaipur Plant - Bosch Limited (‘The Company’) declares lockout"
• Around 100 overseas funds have been slapped with tax notices estimated at $5-6 bn for 'untaxed gains' made by them in the Indian markets over the past years, prompting them to approach government functionaries citing fresh concerns over the Indian tax regime. (ToI)
• Caplin Point Laboratories Ltd has entered into license and distribution agreement with Fresenius Kabi USA, LLC, a Delaware Limited Liability Company. Under this agreement, Caplin Point shall be responsible for developing and manufacturing identified parenteral products whereas Fresenius Kabi USA shall be holding these ANDAs and commercialize the same in USA. This is a product specific agreement for USA. Currently two products are featuring in the contract. Caplin Point has already received milestone payments for two products and the product development cum dossier preparation have just commenced.
• Aurobindo Pharma Receives US FDA Nod For Sildenafil Injection. Sildenafil Injection Is Used For Treatment Of Hypertension.
• GMR Infra gets LoA for dedicated freight corridor project consortium gets 407 km long corridor Proj at cost Of Rs. 5,080 Cr On EPC Basis Eastern Corridor Project to be completed In 45 Months.
• Auto Monthly Sales: Institution Desk: Most of the original equipment manufacturers (OEMs) reported YoY growth in sales in March 2015, thereby ending FY15 on a positive note. Two-wheeler sales, after displaying weakness for the past four-five months, registered improvement in demand with most OEMs reporting YoY growth in sales. In the passenger car space too, domestic sales grew on YoY basis in case of most OEMs. MHCV (medium and heavy commercial vehicle) sales continued their growth momentum with a strong double-digit YoY growth, while tractor sales weakened further as M&M (Mahindra & Mahindra) and Escorts reported steep 31% and 32% YoY fall in sales, respectively.

	Mar-15	Mar-14	YoY	Feb-15	MoM
Maruti Suzuki	1,11,555	1,13,350	-1.6%	1,18,551	-5.9%
M&M - Tractors	12,254	17,593	-30.3%	11,437	7.1%
M&M (Auto)	45212	51636	-12.4%	38033	18.9%
Hero MotoCorp	5,31,750	5,24,028	1.5%	4,84,769	9.7%
TVS Motors	2,11,122	1,96,826	7.3%	2,04,565	3.2%
Tata Motors	52478	51,184	2.5%	44209	18.7%
Atul Auto	3,222	3,214	0.2%	3,402	-5.3%
Ashok Leyland	12,754	10,286	24.0%	10,762	18.5%
Bajaj Auto	243319	3,04,330	-20.0%	243319	0.0%
Escorts	4,223	6,187	-31.7%	3,444	22.6%
Royal Enfield	32,854	23,693	38.7%	30,240	8.6%
VECV	4,401	4,366	0.8%	3,100	42.0%
SML Isuzu	1,772	1,337	32.5%	981	80.6%

Morning Mantra- Nifty Market Outlook on 6th April, 2015

Nifty (8530.80, +95.25, +1.12%)
On the last Friday, the market moved up quite strongly-the index tested the critical resistance zone between 8550 and 8630. This is the most important zone for the bulls for it has the potential to nip any fledgling rally in the bud. This is such an important supply zone that an intraday spike or even a one-day close above this range would not mean much for the supply pressure here could be a sustained selling campaign that could happen after a bull trap laid by a close above this zone. Thus, we need to be very vigilant about any short term speculative long position that has been created with a hope of a potential bullish reversal.

The most critical range for the day is located between 8598 and 8628-if the Nifty were to take out this range and stay above that on good buying support then only retain old short term long positions else it would be more prudent to take at least some profits in them. Our anticipation is that, on the back of high positive expectation of a favorable outcome from the bimonthly monetary policy announcement scheduled for tomorrow, we could see a short term pullback rally top on this eventful day. We need to see the index fulfilling the conditions stated in the foregoing paragraph.

• Most critical levels for the day: 8598 – 8628


• Strong support: 8551 – 8508


• Strong resistance: 8598 – 8628


• Major support: 8488 – 8454


• Major resistance: 8670 – 8704

Bank Nifty (18617.85, +411.20, +2.26%)

The rally in the bank index is predicated upon a favorable outcome from the impending monetary policy announcement scheduled for tomorrow; however, one of the pink dailies says that opinion poll conducted by it shows that the central bank may not alter interest rates for now though the Statutory Liquidity Ratio (SLR) might be reduced, and the banks on their part might initiate lowering the base rates for loans. If this were to be true then there could be at least some tempering of the exuberance this index has shown on last Friday. We need to see this index decisively getting past its 50-day EMA at 18817, which is exactly 200 points above the last closing price to really consider a bullish reversal is in process else it could just be a pullback rally. The reversal would be confirmed only when this index successfully takes out 19010 through 19060, and stays above that on closing price basis for at least two days; till such time that happens it would still be a pullback corrective rally.

• Most critical levels for the day: 18535 – 18447, its strong support zone as well


• Strong resistance: 18792 – 18817


• Major support: 18415 – 18364


• Major resistance: 19010 - 19060