Daily Market Strategy - Jan 21 2016

“Emerson once said, “The difference between a hero and a regular man is that a hero was braver five minutes longer.” ― Jenni Pulos, Grin and Bear It
 
Investors and traders may have had some sleepless nights given the way the market has been accelerating on a downhill. But the brakes seem to be applied, albeit temporarily as global cues seem to have picked up their pieces and are looking to put up a smile. There are a host of outside the market developments to keep watch besides the ECB meet later today. US jobless claims and data on petroleum stocks will be keenly watched by global investors. In India, the rainfall data for week ended Jan 20 is expected besides water level in major reservoirs.
 
The outlook is a better start as indices will look at jumping into the green in the initial minutes of trade. The falling rupee could see some pull back later in the day even though importers dollar buying may cap upside. Stocks that have got beaten on account of global weakness could stage a comeback. Reliance could well lead from the front initially and cherry picking among large caps could keep the indices in a better range. For the next couple of weeks, the range for the Nifty is likely to be between 7240 on the downside and 7550 on the upside. The prominent earnings for the day include Idea Cellular, Biocon, Exide Industries and Hindustan Zinc.
 
On Wednesday, led by a free fall in Reliance Industries, the Sensex firms’ combined market cap eroded by 69,908.86 crore in a single day. Among the 30 Sensex firms, shares of 27 companies declined on Wednesday, which saw a combined market cap erosion of Rs. 70,388.72 crore. While Bajaj Auto, Hero MotoCorp and Wipro saw their combined market cap surged by 479.86 crore.
 
Watch out for the Oil PSUs as the Oil Minister to addresses the Fourth India Africa Hydrocarbon Conference in Delhi later today.
 
The Reserve Bank of India (RBI) Governor Raghuram Rajan said that governments worldwide need to create an underlying framework for growth in the long term for the global economy. "My sense is that at this point if you are an emerging market, you focus on fundamentals, try and get inflation down, try and get your current account deficit down," Rajan was quoted as saying.
 
In a year end update of office market, global real estate consultants Cushman & Wakefield, recorded a marginal 1% decline in net absorption at 33.5 msf across top eight cities. 
 
The Dow Jones Industrial Average and the S&P 500 index lost 1% each on Wednesday but ended off session lows while the Nasdaq Composite got away with only a minor loss. The Dow Jones Industrial Average and the S&P 500 index lost 1% each on Wednesday but ended off session lows while the Nasdaq Composite got away with only a minor loss.

Sebi panel has recommended favourable tax regime and steps to bring in long-term funds from domestic and overseas investors, according to reports.
 
Among other stocks to watch: 
 
Idea Cellular: Idea Cellular will announce its Q3 results. The top telco’s Net Revenue is likely to touch Rs. 9,097 crore as per IIFL estimates recording a 13.5% growth Y-o-Y and a 4.7% rise Q-o-Q.
 
Axis Bank: The bank recorded a rise of 15% in its net profit at Rs.2,175 crore for the quarter ended December 31, 2015 as compared to Rs.1,889.7 crore for the quarter ended December 31, 2014.
 
TVS Motor: TVS Motor is confident of gaining market share in the motorcycles segment with the launch of two new models targeting commuters and the youth, reports a financial newspaper. The company on Wednesday unveiled a new TVS Victor in the commuter segment and a TVS Apache RTR 200.
 
NCC,Gayatri Projects:  NCC Ltd, along with Gayatri Projects Ltd and its unit Gayatri Infra Ventures Ltd, has signed an agreement to sell 100% of their shareholding in Western UP Tollway Ltd to Cube Highways and Infrastructure Pte Ltd for Rs.575 crore.
 
Vedanta: Vedanta Resources has cut the value of its bond repurchase programme to US$227.4 million from the US$500-million figure it had announced last week, reports a business daily.
 
Titan Company: Titan Company, which on Wednesday forayed into the smartwatch segment, plans to launch a payment facility similar to Apple Pay, reports a business daily.
 
Chambal Fertilizers: The company will announce its Q3 results. According to IIFL, the fertilizer major’s net revenue is expected to rise 16.8% to Rs. 3,298 crore yoy; Q3 net revenue is expected to surge 19.8% qoq.
 
Exide Ind: The company will announce its Q3 results. IIFL estimates that the company’s PAT is likely to surge 44.80% to Rs. 140.70 crore yoy; however, Q3 PAT is expected to decline 9.8% qoq.
 
GSFC: The company will announce its Q3 results. IIFL expects net revenue to soar 9% to Rs. 1,426 crore yoy; however, Q3 net revenue is expected to plunge 19.1% qoq.
 
Rcom: Reliance Communications (RCom) paid an aggregate amount of Rs. 5383.84 crore as liberalization fee to Department of Telecommunications (DoT).
 
DHFL: The company reported a 16.3% increase in net profit at Rs. 186 crore for the quarter ended December 31, 2015 as compared to Rs. 160 crore for the quarter ended December 31, 2014. 
 
JSW Energy: The net profit for the quarter was at Rs. 321 crore. The total income for the quarter stands at Rs. 2649 crore.
 
Hindustan Zinc:The company will announce its Q3 results. IIFL expects net revenue to fall 10.8% to Rs. 3,435 crore yoy; Q3 net revenue is expected to plunge 14.8% qoq.
 
Gati Ltd: The company has posted a net profit of Rs. 7.7 crore for the quarter ended December 31, 2015 as compared to Rs. 11.4 crore for the quarter ended December 31, 2014. 
 
KPIT Technologies: KPIT Technologies reported a 13% increase in consolidated net profit at Rs.73.5 crore for the third quarter that ended on December 31, 2015.
 
Triveni Engineering: Triveni Engineering & Industries reported net profit at Rs.14.1 crore for the third quarter that ended on December 31, 2015.
 
Edelweiss Financial Services : The company has posted a net profit after at Rs. 106 crore for the quarter ended December 31, 2015 as compared to Rs. 82.9 crore for the quarter ended December 31, 2014. 
 
Tata Elxsi: Tata Elxsi reported a 39.5% increase in standalone net profit at Rs. 39.9 crore for the third quarter that ended on December 31, 2015.
 
South Indian Bank: The bank recorded a rise of 16% in its net profit at Rs. 102 crore for the quarter ended December 31, 2015 as compared to Rs. 87.9 crore for the quarter ended December 31, 2014.
 
Results: Biocon,Idea Cellular, Hindustan Zinc, Interglobe Aviation, Alembic Pharmaceuticals, Exide Industries,Reliance Capital, Chambal Fertilisers & Chemicals,Indiabulls Real Estate, Chemo Pharma Laboratories,Deepak Fertilisers & Petrochemicals Corporation,Essel Propack, Binani Industries,Gujarat State Fertilizers & Chemicals,Siti Cable Network,Zee Media Corporation, Hatsun Agro Product,Uttam Value Steels, Heritage Foods, Himachal Futuristic Communications, International Paper Appm, Jindal Drilling & Industries,Mahindra & Mahindra Financial Services,Omax Autos,Pincon Spirit,Raymond, Rolcon Engineering, Syngene International, Tci Finance, Tcpl Packaging, Dinath Exim Resources, Agro Tech Foods,Baid Leasing And Finance,Eimco Elecon (india), Foseco India, Gujarat Lease Financing,Haryana Capfin, Orient Tradelink, Orient Tradelink, Pil Italica Lifestyle, Virat Crane Industries, Vst Industries, Worldwide Leather Exports
 
Global Data: World Economic Forum - Davos CHF, HIA New Home Sales (MoM) (Nov)AUD, Consumer Inflation Expectation (Jan) AUD, RICS Housing Price Balance (Dec) GBP, All Industry Activity Index (MoM) (Nov) JPY, Business Climate (Jan) EUR, Trade Balance (Dec) EUR, 3-y Bond Auction EUR, Current Account Balance (Nov)EUR, ECB Interest Rate Decision (Jan 21) EUR, Initial Jobless Claims (Jan 15) USD, Continuing Jobless Claims (Jan 8) USD, Philadelphia Fed Manufacturing Survey (Jan) USD, ECB Monetary policy statement and press conference  EUR, Consumer Confidence (Jan)Preliminar EUR, EIA Natural Gas Storage change (Jan 15)USD, EIA Crude Oil Stocks change (Jan 15) USD
 
Trends in FII flows: The FIIs were net sellers of Rs.13.24 bn in the cash segment on Wednesday. The domestic institutional investors (DIIs) were net buyers of Rs.13.83 bn as per the provisional figures released by the NSE.
 
Other news in the media:
 
CCEA will take call on the Rs 17bn investment proposal related to transfer of HDFC Ltd shares to the UK-based joint venture partner Standard Life in HDFC Standard Life Insurance Company. (ET)
 
Larsen & Toubro, in a joint venture with Daewoo E&C of South Korea, has bagged an order worth Rs 31bn from Bihar State Road Development Corporation for construction of a six-lane cable bridge over river Ganga near Kachchi Dargah in Patna district on NH-30, the engineering major said. (BL)
 
Reliance Communications said it has paid Rs 54bn as a liberalization fee to the telecom department. (ET)
 
Cipla and three other drug makers - Emcure, Hetero and Natco - will sell generic version of Bristol-Myer Squibb's anti-hepatitis drug, Daclatasvir. (BS)
 
MRF has said that it is exploring possibilities of setting up a new plant outside South India, and a possible location could be Gujarat. (BS)
 
TVS Motor launched the new TVS Apache RTR 200 4V and a new Victor. It has invested around Rs 3bn to develop the product. (BS)
 
Tata Steel has suspended operations at its Canadian iron ore-mining and processing project this month. (BL)
 
JSW Energy said it expected to announce a deal by February to buy a thermal power plant as discussions continue for two such plants. (ET)
 
Reliance Industries will start production of natural gas from coal seams, called coal-bed methane (CBM), in Madhya Pradesh shortly. (ET)
 
Telecom regulator Trai will firm up its view on spectrum price for the next round of auction and differential pricing of data, which is central to the Net neutrality issue, by the end of this month. (ET)
 
The government today approved a 'viability gap funding' (VGF) of Rs 51bn for setting up over 5,000 MW of grid linked solar power projects under the Jawaharlal Nehru National Solar Mission. (BS)
 
The long-awaited new textile policy that aims to create 35mn jobs and boost exports to over $300bn over the next decade is likely to be announced within the next few months, the Minister of State for Textiles (independent charge) has said. (BL)