Crash at start! RBI in focus
The October series has started on a cautious note. Mixed economic data from the US, slowing economic growth in China and a selloff in biotech stocks has sent ripples across world markets. Indian market too will succumb to the pressure at least at start. On the eve of RBI policy announcement, buying was seen in select real estate and NBFC stocks. The RBI governor’s action and commentary will decide the course of market movement later in the day. After a status quo on the interest rates during August, the consensus now calls for at least 25 basis points cut by RBI today.
The outlook is a weak start. The US indices – Dow, Nasdaq and S&P have produced what is technically called a death cross pattern at the same time. This pattern was last seen on Aug 24, 2011 and in the last 35 years; such a pattern has been witnessed only 13 times. The Nasdaq was down 3%, S&P 500 fell over 2% and Dow Jones fell 1.92%. Asian markets are also bleeding.
Trading ideas (Time period: 1-3 days)
Voltas Oct Futs (SELL, below Rs248, Target Rs234, SL Rs254): The stock is on the verge of giving a breakdown from a descending triangle pattern. The lower trendline placed around Rs250 has been acting as strong support since start of the month. However, repeated attempts to breach the same, has created doubt over the stock’s ability to sustain above the same. Moreover, the stock is making lower top from second week of August. We expect selling pressure to intensify once the stock breaks below Rs245. (Duration 5 days)
Derivative strategies (Time period: Till expiry)
² Long October BHEL 180 Put between 5 – 6 Rs for the target price of Rs 10 – 14 with a stop loss placed at Rs 2.8
Lot size: 1000
Remarks: Net maximum profit of Rs8,000 and net maximum loss of Rs 3,200.
² Oil and Natural Gas Corporation (ONGC), with its consortium partners Bharat Petroleum Corporation Limited(BPCL) and Japanese conglomerate Mitsui, signed a memorandum of understanding to set up a re-gasification LNG terminal at New Mangalore Port, the project is again on the back burner. The consortium had in March 2013 signed the MoU to carry out a feasibility study for a 2-3 million metric tonnes per annum (mmtpa) terminal, which could be expanded to 5 mmtpa. (BS)
² Larsen & Toubro (L&T) said its arm L&T Construction has bagged orders worth Rs15.09bn so far this month. (BL)
² Dr Reddy’s Laboratories (DRL) has launched the generic version of Astrazeneca’s Nexium, used to treat acid reflux, in the US market. (BS)
² Gammon India has received a huge order from the NHAI. The company has secured an engineering, procurement and construction order for four laning of Udhampur to Ramban Section of NH-1A in the State of Jammu & Kashmir under NHDP Phase-II, the company said in a release. The project is valued at Rs17.09bn. (BS)
² Indian Hume Pipe has secured orders worth of Rs12.31bn for Telangana Water Grid project in respect of Telangana Drinking Water Supply Projects (TDWSP) of Mahabubnagar and Nizamabad districts from Rural Water Supply and Sanitation Department, Government of Telangana. (BS)
² Real estate developers body CREDAI’s NCR chapter has decided against buying cement from Ultratech and Lafarge, alleging that the firms are indulged in cartelisation and malpractices. (BS)
² Neyveli Lignite Corporation Limited (NLC), which comes under Ministry of Coal, to set up solar power plants to produce 4000 mega watt (MW) of power. Going by the current value the whole project will attract investment to the tune of Rs280-300bn. (BL)
² Jaiprakash Power Ventures Ltd said its shareholders have approved Rs10bn investment in its subsidiary PPGCL for setting up a 1,980 Mw thermal power plant. (BS)
² Lenders of Amtek Auto have agreed to give additional funds to the troubled auto component-maker but have asked the promoters to bring in some equity first. (BL)
² ABB, has energised the first pole of the North-East Agra 800 kilovolt (kV) ultra-high voltage direct current (UHVDC) transmission link, which will supply clean hydropower from northeastern India to a nodal substation in Agra and from there, feed it across north India. (BL)
² Crompton Greaves said it has bagged a EUR17mn order from Spanish utility Gas Natural Fenosa (GNF) for supplying ZIV single and three phased smart meters. (ET)
² Nitin Gadkari in letter written to the State Government has expressed the Centre’s willingness to State’s request to convert roads connecting Anantapur with the new capital city of Amaravati via Kurnool on the National Highway 65, spanning a stretch of 452 km at an investment of Rs10bn. (BL)
² Nearly 300,000 plantation workers, employed in different estates in Kerala, began an indefinite strike to demand a wage hike and 20% bonus. “Workers from all plantations including tea, rubber, coffee and cardamom are participating in the strike,” CPI-M state secretary and AITUC leader Kanam Rajendran said. (ET)
² The Odisha government will spend over Rs40bn on the IT and IT-enabled services sector in next 5 years to create more than 100,000 jobs, Chief Minister Naveen Patnaik said. (ET)
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