Wise Money – A weekly research newsletter from SMC Global Securities Ltd. Issue no. 743


  • Equity 4-7
  • Derivatives 8-9
  • Commodity 10-13
  • Currency 14
  • IPO 15
  • FD Monitor 16
  • Mutual Fund 17-18

From The Desk Of Editor

In the week gone by, global markets moved higher and the Nasdaq reached an all- I time closing high as investors headed into their long holiday weekend buoyed by a record surge in payrolls, which provided assurance that the U.S. economic recovery was well under way. US employers added a substantial 4.8 million jobs in June, and the unemployment rate fell to 11.1 percent, as the job market improved for a second straight month yet still remained far short of regaining the colossal losses it suffered this spring. China’s services sector expanded at the fastest pace in over a decade in June as the easing of coronavirus-related lockdown measures revised consumer demand. Japan's services sector extended activity declines for a fifth straight month in June, although the pace of contraction slowed significantly after a nationwide state of emergency was lifted, easing disruptions to businesses.

Back at home, the Indian stock market moved higher tracking positive global cues as increasing optimism for a safe and effective COVID-19 vaccine eased concerns. Progress of a vaccine trial also added to the optimism. The Indian economy gathered pace in June with goods movement rebounding close to prelockdown levels and GST collections rising sharply from May. Auto and two-wheeler companies clocked sharp month-on-month sales increase in June as pent-up demand and revival in economic activity drove purchases of sedans, SUVs and motorbikes across the country. The rupee appreciated against the US dollar tracking weakness in the greenback and gains in the domestic equity market amid optimism over potential COVID-19 vaccine. There is an expectation that RBI may unveil more relief measures for some of the stressed sectors of the economy, especially in the services segment such as hospitality, tourism and others, as efforts are stepped up to help them emerge from the bruising impact of the lockdown. Investors would continue to track global cues and development around coronavirus cases along with the geo-political tensions for any directional move. Besides, movement of Currency, inflow and out flow of foreign fund, macroeconomic data and crude oil prices will continue to dictate the trend of the market going forward.

On the commodity market front, Finally CRB gave closing above 140 last week on some value buying. Commodities provided opportunities for both buyers and sellers past week. The OPEC producer group slashed oil production to the lowest level since the Gulf War in 1991, with Saudi Arabia faithfully delivering the extra curbs promised in June. It is giving support to the crude prices nevertheless some profit booking from higher levels cannot be denied. It should trade in a wide range of 2750-3200 levels. In June, global food commodity prices rose for the first time since the beginning of the year driven by a rebound in vegetable oils, sugar and dairy quotations. However, the cereals and meat markets were mostly under pressure amid market uncertainties posed by the COVID-19 pandemic. Prime Minister Narendra Modi, in his address to the nation on Tuesday evening, announced that 80 crore people will be given free grains for the next five months. It may give some support to the agri prices. Inflation Rate OF China and Mexico, Euro group Meeting, Unemployment Rate of Mexico, etc are few high importance data scheduled for this week.

(Saurabh Jain)

SMC Global Securities Ltd. (hereinafter referred to as “SMC”) is a registered Member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited and its associate is member of MCX stock Exchange Limited. It is also registered as a Depository Participant with CDSL and NSDL. Its associates merchant banker and Portfolio Manager are registered with SEBI and NBFC registered with RBI. It also has registration with AMFI as a Mutual Fund Distributor.

SMC is a SEBIregistered Research Analyst having registration number INH100001849. SMC or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in securities market.

SMC or its associates including its relatives/analyst do not hold any financial interest/beneficial ownership of more than 1% in the company covered by Analyst. SMC or its associates and relatives does not have any material conflict of interest. SMC or its associates/analyst has not received any compensation from the company covered by Analyst during the past twelve months. The subject company has not been a client of SMC during the past twelve months. SMC or its associates has not received any compensation or other benefits from the company covered by analyst or third party in connection with the research report. The Analyst has not served as an officer, director or employee of company covered by Analyst and SMC has not been engaged in market making activity of the company covered by Analyst.

The views expressed are based solely on information available publicly available/internal data/ other reliable sources believed to be true.

SMC does not represent/ provide any warranty express or implied to the accuracy, contents or views expressed herein and investors are advised to independently evaluate the market conditions/risks involved before making any investment decision.

DISCLAIMER: This report is for informational purpose only and contains information, opinion, material obtained from reliable sources and every effort has been made to avoid errors and omissions and is not to be construed as an advice or an offer to act on views expressed therein or an offer to buy and/or sell any securities or related financial instruments, SMC, its employees and its group companies shall not be responsible and/or liable to anyone for any direct or consequential use of the contents thereof. Reproduction of the contents of this report in any form or by any means without prior written permission of the SMC is prohibited. Please note that we and our affiliates, officers, directors and employees, including person involved in the preparation or issuance of this material may; (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of company (ies) mentioned herein or (b) may trade in this securities in ways different from those discussed in this report or (c) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instrument of the company (ies) discussed herein or may perform or seek to perform investment banking services for such Company (ies) or act as advisor or lender / borrower to such company (ies) or have other potential conflict of interest with respect of any recommendation and related information and opinions, All disputes shall be subject to the exclusive jurisdiction or Delhi High Court.

SAFE HARBOR STATEMENT: Some forward statements on projections, estimates, expectations, outlook etc are included in this update to help investors / analysts get a better comprehension of the Company's prospects and make informed investment decisions. Actual results may, however, differ materially form those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, Impact of competing products and their pricing, product demand and supply constraints. Investors are advised to consult their certified financial advisors before making any investments to meet their financial goals.



  • The Centre’s fiscal deficit for the first two months of financial year 2020-21 (FY21) came in at Rs4.66 trillion, or 58.6 percent of the full year target of Rs7.96 trillion. This was primarily because of a crunch in tax and non-tax revenues and capital receipts.It was 52 percent for the corresponding period last year.
  • American multinational company Intel will invest Rs 1,894.50 crore in Reliance Industries' technology arm Jio Platforms, making it the twelfth high-profile investment in the firm in less than three months. The deal will translate into a 0.39 percent stake for Intel in RIL's digital arm.
  • Zydus announced that its plasmid DNA vaccine candidate for COVID-19 (ZyCoV-D) developed indigenously at its Vaccine Technology Centre in Ahmedabad, India has successfully completed the preclinical phase and has now received permission from the Drug Controller General of India - Central Drugs Standard Control Organisation (CDSCO) to initiate Phase I/II human clinical trials in India.
  • Metropolis Healthcare announced that the proposed acquisition of 51% stake in Shraddha Diagnostic Centre stands closed after promoters of SDCIPL communicate to the Company their intent to terminate the said SPA. The acquisition of SDCIPL, was a part of inorganic growth plan of the Company and the termination of the aforesaid agreement will not have any impact on the business of the Company.
  • Maruti Suzuki India announced the launch of its Vehicle Lease Subscription Services for individual customers – Maruti Suzuki Subscribe. Through this, the Company would offer cars for subscription as a pilot project in Gurugram and Bengaluru. The subscription will be initially available on Swift, Dzire, VitaraBrezza and Ertiga from Maruti Suzuki ARENA Channel and Baleno, Ciaz and XL6 from NEXA Channel. Maruti Suzuki has tied up with ORIX Auto Infrastructure Services, a subsidiary of ORIX Corporation, Japan, to launch Maruti Suzuki Subscribe for the Indian market.
  • Axis Bank has decided to wind down its UK subsidiary and the move will not have any material impact on its financial position. The lender has been reviewing its international strategy and as part of this, has adopted a clear objective to focus on the Indian banking market and harness the potential there.
  • Global investment firm KKR & Co. Inc. will pick up a controlling stake in Mumbai-based branded formulation player JB Chemicals and Pharmaceuticals (JB Chemicals). As part of the deal, KKR will acquire stake from the founding Mody family at Rs 745 per share.
  • US factory orders spiked by 8.0 percent in May after plunging by a revised 13.5 percent in April. Economists had expected factory orders to surge up by 8.9 percent compared to the 13.0 percent plunge originally reported for the previous month.
  • US trade deficit widened to $54.6 billion in May from a revised $49.8 billion in April. Economists had expected the trade deficit to widen to $53.0 billion from the $49.4 billion originally reported for the previous month.
  • US non-farm payroll employment skyrocketed by 4.8 million jobs in June after soaring by an upwardly revised 2.7 million jobs in May. Economists had expected employment to surge up by about 3.0 million jobs compared to the spike of 2.5 million jobs originally reported for the previous month.
  • US initial jobless claims dropped to 1.427 million, a decrease of 55,000 from the previous week's revised level of 1.482 million. Economists had expected jobless claims to tumble to 1.355 million from the 1.480 million originally reported for the previous week.
  • US construction spending tumbled by 2.1 percent to an annual rate of $1.356 trillion in May after plunging by 3.5 percent to a revised rate of $1.386 trillion in April. The continued decrease came as a surprise to economists, who had expected construction spending to climb by 1.0 percent compared to the 2.9 percent slump originally reported for the previous month.
  • Euro zone Producer prices decreased 5.0 percent on a yearly basis in May,following a 4.5 percent decline in April. Economists had expected a fall of 4.8 percent.













Beat the street - Fundamental Analysis

CMP: 569.00
Target Price: 657
Upside: 15%
  • Face Value (Rs.) 2.00
  • 52 Week High/Low 624.00/375.50
  • M.Cap (Rs. in Cr.) 154638.20
  • EPS (Rs.) 40.75
  • P/E Ratio (times) 13.98
  • P/B Ratio (times) 3.02
  • Dividend Yield (%) 0.88
  • Stock Exchange BSE

Investment Rationale

  • The management stated that the company has seen decent bookings in March quarter in spite of the slowdown towards the lastfew days ofthe quarter and the pipeline looks promising. During the quarter Q4FY20, HCL had very strong renewal booking momentum, made possible due to its flawless execution and customer satisfaction. This includes some of the largest clients of HCL across the globe across industry verticals.
  • HCL signed 53 transformative deals this year and $100+ Mn clients increased by 5, from 10 to 15 (on YoY basis). HCL surpassed 150,000 employees in FY’20 and now proudly stands at 150,423 at the end of FY’20 and operates out of 46 countries across the globe.
  • It has shown strong growth at 16.7% YoY in constant currency led by industry leading organic growth and acceleration of its Mode 2 and Mode 3 revenue. The company has delivered strong double-digit growth across all segments, geographies and verticals.
  • HCL activated its COVID-19 Business Continuity Plan at the end of January and now has 96% of its employees working from home and another 2.5% of its employees working from HCLor client locations.
  • For the fourth consecutive year, it has delivered an industry leading growth; the growth of 16.7% LTM in constant currency in FY’20. The revenue growth is within the guided range of 16.5% to 17% YoY in constant currency. – Sequential revenue growth of 0.8% in constant currency forQ4 FY’20 is also industry leading.
  • According to the management, FY’20 has been a landmark year, where it has witnessed its highest growth in recent years and an industry leading performance for the fourth consecutive year. Its focus on Mode 1-2-3 strategy has helped deliver an allround growth across service lines, verticals and geographies and enabled the company to deliver at the top end of its revenue guidance and exceed the top-end ofits margin guidance forthe year.”


  • High competitive intensity
  • Currency fluctuation


The Company’s management has adopted a prudent approach and has focused on keeping its dependence on external borrowings to a minimum. As a result, despite the acquisitions undertaken over the past few years, it continues to maintain a strong financial. The company reported strong cash and liquid investment balances, thereby maintaining a robust business financial. Thus, it is expected that the stock will see a price target of Rs.657 in 8 to 10 months time frame on a current P/BVx of 3.02x and FY21 BVPS of Rs.217.52.

P/E Chart

CMP: 481.90
Target Price: 593
Upside: 23%
  • Face Value (Rs.) 2.00
  • 52 Week High/Low 570.00/256.95
  • M.Cap (Rs. in Cr.) 6572.78
  • EPS (Rs.) 44.80
  • P/E Ratio (times) 10.76
  • P/B Ratio (times) 4.18
  • Dividend Yield (%) 0.93
  • Stock Exchange BSE

Investment Rationale

  • Deepak Nitrite continues to benefit from the favorable developments taking place in the global chemical industry with China de-emphasizing its chemical manufacturing and global market players are looking to establish supply arrangements in alternate markets including India. With global spread of the novel Corona virus, the management of the company expects that there may be some acceleration in the shift to diversify and derisk supply chains. On Standalone basis, revenue growth was impacted due to 10 days of lockdown in March 20 and Still revenue sreported higher by 8% Y-o-Yat Rs.526 crore in Q4Fy20.
  • During the March quarter, operating margins increased 560 bpsto24.8% leading to 35% increase in operating profits to Rs 262.08 crore. Robust operating performance was a result of operating leverage from higher volumes, realisation gains across most products and management efforts to optimise production schedules as well as focus on high-value highmargin products. Moreover, balanced growth across basic chemicals, fine & speciality chemicals and performance products segment resulted in robust topline performance which was supported by encouraging demand scenario of company's products in the export markets.
  • In recent quarters, it has recalibrated the mix of geographies and end-user industries for performance product segment which has resulted in better product acceptance and enhanced realisations. Leveraging its backward integrated operations, it has also capitalised on favourable demand supply situation for DASDA caused by disruptions in China.
  • Deepak Phenolics (DPL), a wholly-owned subsidiary of Deepak Nitrite has reported revenue of Rs 530.96 crore compared to Rs 522.43 core in Mar 19 quarter andaccounted for 50% of sales. PBIT margins stood at 12% for Mar 20 quarter compared to 14.7% in Mar 19 quarter. Despite the challenges in the Phenol and Acetone market globally and slowing economic growth in the domestic market.
  • According to the management of the company, the immediate focus is to conserve cash, restore operational efficiency and productivity while further de-risking the business by rebalancing product mix across a more diversified base of end user industries.


  • Volatility in Raw Material Prices
  • Currency Fluctuations


The company has strong track record on quarterly as well as yearly basis. It has a positive outlook towards the opportunities emerging across the chemicals industry landscape on the back of its diversified product portfolio across key product categories. Global customers are also seeking to establish operations in alternate markets other than China for which India is better placed. The Company is cautiously optimistic about its immediate term prospects even as it gears up for the multiplier effects of international restrictions and the nationwide lockdown on economic growth in the months and quarters ahead. Thus, it is expected that the stock will see a price target of Rs.593 in 8 to 10 months time frame on one year expected P/Bvx of 4.08x and FY21 BVPS of Rs.145.32.

P/E Chart

Above calls are recommended with a time horizon of 8 to 10 months



Beat the street - Technical Analysis

Ambuja Cements Limited (AMBUJACEM)

The stock closed at Rs 195.80 on 03rd July 2020. It made a 52-week low at Rs 136.55 on 26th March 2020 and a 52-week high of Rs. 255 on 23rd September, 2019. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 191.64

As we can see on chart that stock is forming a “Bull Flag” pattern on weekly charts and is likely to trade on verge of breakout of same. Apart from this, it is comfortably trading above its 200 DEMA on daily charts, which give positive outlook for coming days. Moreover, technical indicators such as RSI and MACD are suggesting buying for the stock. Therefore, one can buy in the range of 191- 193 levels for the upside target of 215-220 levels with SL below 180.

Bharti Infratel Limited (INFRATEL)

The stock closed at Rs 226.70 on 03rd July 2020. It made a 52-week low of Rs 120.05 on 19th March 2019 and a 52-week high of Rs. 296.50 on 02nd December, 2019. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 221.60

Short term and medium term bias are looking positive for stock and it is trading in higher highs and higher lows on charts which is bullish in nature. Apart from this, it is also forming an “Inverted Head and Shoulder” pattern on weekly charts, which is considered to be bullish. Therefore, one can buy in the range of 221-223 levels for the upside target of 240-245 levels with SL below 208.

Disclaimer : The analyst and its affiliates companies make no representation or warranty in relation to the accuracy, completeness or reliability of the information contained in its research. The analysis contained in the analyst research is based on numerous assumptions. Different assumptions could result in materially different results.

The analyst not any of its affiliated companies not any of their, members, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of the analysis research.


Charts by Reliable software

Above calls are recommended with a time horizon of 1-2 months




Nifty indices rallied for the third consecutive week and ended last week with gains of nearly 2% backed by strong global cues. From derivative front, put writers were once again seen shifting to higher bands while call writers also are feeling discomfort at current juncture which suggest that bullish momentum will likely to continue in coming sessions as well. The Implied Volatility (IV) of calls closed at 24.12% while that for put options closed at 27.89%. The Nifty VIX for the week closed at 26.51% and is expected to remain sideways. PCR OI for the week closed at 1.53 indicates more put writing as compared to call. From technical front, now Bank nifty is facing hurdle at 22450 levels above and follow through buying may witness in the index which could take Bank Nifty towards 23000 levels as well. As far nifty is concerned, index has made strong base around 10350-10400 zone. However, as far nifty is holding above that, bias is likely to remain bullish and any dip onto the prices should be used to create fresh longs.












Top 10 Long Buildup

Top 10 Short Buildup

Note: All equity derivative data as on 2nd July 2020

**The highest call open interest acts as resistance and highest put open interest acts as support.

# Price rise with rise in open interest suggests long buildup | Price fall with rise in open interest suggests short buildup

# Price fall with fall in open interest suggests long unwinding | Price rise with fall in open interest suggests short covering





Turmeric futures (July) facing resistance near 6000, may witness correction towards 5200-5300 levels. Despite the fact that arrivals of turmeric to the markets in Erode are on the decline, but the demand side is also weak as the traders are purchasing only fifty per cent of it quoting lesser price. The main reason for the decrease in arrival is non-operation of bus services in the district.At the Erode Turmeric Merchants Association, finger turmeric was sold at Rs.4,789-6,077 a quintal, while root variety fetched Rs.4,511-5,518. At the Erode Cooperative Marketing Society, finger turmeric fetched Rs.5,099-5,989 a quintal and root variety went for Rs.4,229-5,660.Jeera futures (July) is likely to get stuck in the range of 13400-14300 levels. Firstly, the IndiaChinastandoff at the LAC border has disrupted the export business to China. Amid increased vigilance at ports there is delay in clearance of shipments at customs. It is reported that Indian customs officials have started physical inspection of all consignments coming from the neighbouring country. Another important factor that will probably lend bearish sentiments is the Indian rupee on hitting a three-month high against the US dollar making Indian parity more expensive than its competitors.The upside move seen in dhaniya futures (July) during the previous weeks may remain restricted from hereon, as it shall face resistance near 6370. Moreover, taking advantage of the higher prices, the arrivals have started increasing in the spot markets. The Ramganmandi in Rajasthan is witnessing arrivals of more than 6,000 bags (1 bag = 45 kg). Cardamom futures (July)is likely to plunge towards 1250-1200 levels as the export demand scenario has been bleak &the worsening situation of Covid-19 is playing spoilsport.


Bullion counter edged lower last week as strong U.S. jobs data lifted investors' risk appetite; although losses were limited by surging global cases of the novel coronavirus and lingering trade tensions between the United States and China. Investors are betting on stock markets rather than on gold. The shortterm scenario is a risk-on mood. However, investment demand in gold as a hedge will remain elevated, offsetting a dip in jewelry and industrial consumption of the physical metal. Also lifting the positive market sentiment was news of the COVID-19 vaccine that has shown potential and was found to be well tolerated in early-stage human trials. Encouraging economic data worldwide and hopes for a coronavirus vaccine pushed European stocks to a near one-week high. Gold’s overall trajectory remained positive with large monetary stimulus packages to cushion economies from the fallout of pandemic-induced lockdowns, among other factors, has helped gold prices rise 16.7% so far this year. The central banks are providing liquidity to the market and this is changing the relative yield structure in asset markets. Gold is often used as a safe store of value during times of political and financial uncertainty. Meanwhile, more than 75 members of the U.S. Congress sent a letter to President Donald Trump urging him to take make a formal determination on whether China's treatment of Muslim Uighurs and other groups constitutes an atrocity. For the this week, gold may trade in the range of 46400-48900 and Silver may trade in the range of 45900-50800. Whereas on COMEX gold may trade in the range of $1750-$1810 and Silver may trade in the range of $17.40-$18.80.


Soybean futures (July) is likely to trade with a positive bias in the range of 3650-3850 levels taking positive cues from the international market. The sentiments are optimistic owing to prospects for U.S. trade with China. Recently, China booked first deals to purchase U.S. soybeans, since it asked suppliers to guarantee their cargoes are not contaminated with the novel coronavirus. Traders have been increasingly enthusiastic about U.S. soybean exports to China as purchases have been relatively strong this month. However, one factor that may cap any large upside is the increasing sowing area this Kharif season, thanks to more than normal rainfall in the major growing states. This year, Madhya Pradesh has received 162.3 mm of rainfall between 1 and 24 June, more than double the normal 77.3 mm, while Maharashtra received 220.4 mm compared to the usual 147.3 mm over the corresponding period. This has resulted in MP’s acreage for soybean increasing to 40.28 lha from nil last year, while in Maharashtra, it has shot up to 18.7 lha from last year’s 0.001 lha. Mustard futures (July) is expected to trade sideways to up in the range of 4600-4800 levels. Firm demand for mustard oil in the domestic market, lower imports, and a smaller crop are seen pushing the prices of this oilseed higher on the spot markets. Soy oil futures (July) may trade sideways in the range of 795-820, while CPO futures (July) may attract lower level buying near 645 and an upside till 680 can be seen in days to come. On CBOT, soy oil is trading near three month high and Malaysia palm oil is following the bullish pursuit of edible oils amid higher crude prices.


Crude Oil after surging 17% stuck in the wider range of 2800-3150 on MCX. Encouraging global economic data also supported the prices, but a resurgence in U.S. coronavirus infections fanned concerns that economic activity will weaken in the coming weeks. New COVID-19 cases in the United States rose by nearly 50,000, the biggest one-day increase since the start of the pandemic. Numerous states are advising citizens to restrict movements and closing businesses and restaurants again, which is expected to hamper job growth. At this time, the economic data seems to be outpacing the COVID-19 infections and it seems the growth is happening despite this uptick in cases. U.S. energy firms cut the number of operating oil and natural gas rigs to a record low for a ninth straight week, according to Baker Hughes. U.S. crude inventories fell 7.2 million barrels from a record high last to last week, more than expected, the U.S. Energy Information Administration said. Gasoline stockpiles were higher, however, and the spike in cases in heavily populated U.S. Sun Belt states, among the country’s biggest consumers of gasoline, could hit fuel demand headed into the July 4 holiday weekend, often a busy period for travel. For the next week, the crude price may post some correction where we can expect downside of 2720-2780, from there we again create long positions whereas if prices bounced from there we again witness 3150-3200. U.S. oil and gas rig count, an early indicator of future output, fell by two to an all-time low of 263 in the week to July 2, according to data from energy services firm Baker Hughes. U.S. oil rigs fell by three to 185, their lowest since June 2009, while gas rigs rose one to 76. Natural gas may continue to trade in a wider range of 118-145.


Cotton futures (July) may witness a consolidation in the range of 15450-16365 levels. The bearish fundamental which is that, this season sowing has surpassed last year, and has also the five-year average. Good climatic conditions coupled with government initiatives have led to a significant rise in cotton area from last year. Despite this, the cues from the international market is bullish, the reason being ICE cotton futures has scaled to 4 months high & this elevation is likely to stay due to lower U.S. planting estimate and dry weather concerns in the top growing-state Texas. Guargum futures (July) may witness sell on rise facing resistance near 5600 and the correction may go down till 5200-5100 levels. This commodity being used in oil drilling activity, now is facing dearth of demand in this ongoing global pandemic scenario. Guar gum exports are decreasing due to weak demand from the US and a decrease in active oil rigs numbers in the country. Also, the average U.S. rig count for June 2020 was 274, down 74 from the 348 counted in May 2020, and down 695 from the 969 counted in June 2019.Castor seed futures (July) is likely to maintain its upside momentum & witness 4050, taking support near 3800 levels. The anticipation of lower acreage this season is lifting the sentiments of the market participants. It is being estimated that the area under castor may shrink over 25% in 2020-21 (Jul-Jun) as farmers are likely to shift to other remunerative crops such as groundnut and cotton, prompted by a good monsoon. Secondly, higher carryover stocks due to tepid demand and a bumper crop in 2019-20 would also discourage farmers to grow more castor this year.


Base metal may trade in range with positive bias. Copper can move towards 472 by taking support at 445. The copper prices may lend support from dwindling stockpiles at exchange warehouses and growing worries over supply disruption from top producer Chile along with signs of robust demand from China. Chile, the world's largest exporter of metal essential in electronic products and manufacturing, faces drastic drop in production due to COVID19. Improvement in macro-economic data from economies like US, China and Euro Zone including rebound in factory activity has fanned hopes that the worse may be over. In China, the official manufacturing PMI for June rose to three months high of 50.9, its fourth straight month of expansion. Meanwhile in China, Yangshang's import premiums jumped to $102.50 last week from prior week’s $80, indicating recovery in demand from the region. Zinc may move towards 170 and taking support near 155. Lead can move towards 148 while taking support near 138. Many drivers have got back into their cars after weeks of lockdown which likely bounce in replacement demand of lead acid battery. Nickel may test to 1000 by taking support near 965. Nickel prices are currently under a recovery mode over the supply woes coming from Brazil with the behemoth Brazilian miner- Vale downgrading its nickel production forecasts for the year. Aluminum may move towards 140 while taking support near 132. Aluminum Corp of China Ltd, known as Chalco, with an annual capacity of 18.86 million tonnes, said today it would implement “flexible production”, a phrase used to refer to output cuts, at three alumina production lines accounting for about 10% of its total capacity.





NATURAL GAS MCX (JUL) contract closed at Rs. 129.20 on 02nd Jul’2020. The contract made its high of Rs. 184.50 on 05th May’2020 and a low of Rs. 115.50 on 21st Jun’2020. The 18-day Exponential Moving Average of the commodity is currently at Rs. 132.28. On the daily chart, the commodity has Relative Strength Index (14-day) value of 42.045.

One can buy near Rs. 126 for a target of Rs. 145 with the stop loss of Rs. 117.

COPPER MCX (JUL) contract closed at Rs. 464.60 on 02nd Jul’2020. The contract made its high of Rs. 469.40 on 02nd Jul’2020 and a low of Rs. 412.90 on 27th May’2020. The 18- day Exponential Moving Average of the commodity is currently at Rs. 453.08. On the daily chart, the commodity has Relative Strength Index (14-day) value of 68.161.

One can sell near Rs. 463 for a target of Rs. 448 with the stop loss of Rs. 470

GUARGUM NCDEX (JUL) contract was closed at Rs. 5354.00 on 02nd Jul’2020. The contract made its high of Rs. 5758.00 on 08th Jun’2020 and a low of Rs. 4852.00 on 24th Apr’2020. The 18-day Exponential Moving Average of the commodity is currently at Rs. 5449.00. On the daily chart, the commodity has Relative Strength Index (14-day) value of 46.295.

One can buy above Rs. 5450 for a target of Rs. 5750 with the stop loss of Rs 5300.




  • PM Narendra Modi said will extend the PM GaribKalyan Yojana till November. About 80 cr poor families will continue to get 5 kg of free wheat/ rice and 1 kg of dal till Nov.
  • India’s gold imports plunged 86% year-on-year in June due to record high prices and as international air travel were banned and many jewellery shops were closed amid a nationwide lockdown to curb the spread of coronavirus.
  • BSE has executed maiden delivery of gold mini on 'options in goods' contract.It has registered the highest turnover of Rs 2,442 crore in 'options in goods' contracts.
  • MCX announced that it has received permission from SEBI for launch of Futures contracts on MCX iCOMDEX Bullion and Base Metal indices.
  • The month of June has generated 18 per cent above normal rainfall for the country — up to 13 per cent lower than the figure midway due to an intervening lean patch over Central as well as North-West India.
  • The U.S. Agriculture Department said that private exporters reported the sale of 126,000 tonnes of soybeans for delivery during the 2020/21 marketing year that begins on Sept. 1.
  • China's official PMI picked up to a three-month high of 50.9 in June, comfortably above the 50-level that separates growth from contraction.
  • The Food and Agriculture Organization (FAO) food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 93.2 points last month, up 2.4% on May.
  • CME Group said it would expand delivery options for its new gold contract to include vaults in London as well as in New York after disruption to supply routes caused havoc in gold markets earlier this year.


CRB was trying to trade above 140 mark from last to last week and finally it gave closing above 140 last week on some value buying. Commodities provided opportunities for both buyers and sellers past week. Oil prices rose after an outsize drawdown in U.S. crude stockpiles but the market’s upside was limited by the surge in new coronavirus cases and the impact that could have on business reopening in the world’s largest economy. Energy Information Administration reported a 7.2 million-barrel drawdown in U.S. crude stockpiles for the week ended June 26 — about 10 times more than forecast. Additionally OPEC producers are sticking to a deal to trim output. The producer group slashed oil production to the lowest level since the Gulf War in 1991, with Saudi Arabia faithfully delivering the extra curbs promised in June. Natural gas prices rebounded from the lower levels as hedge funds increased long position. Both gold and silver moved up and saw some profitbooking from the higher side in later part of the week. Gold broke beyond the $1,800 per ounce target long eyed by bulls in the precious metal as concerns about a second wave of coronavirus infections colluded with stimulus measures aimed at helping economic recovery from the pandemic. IMF slashed its already gloomy growth projections for 2020, saying it expected the global economy to now contract 4.9% this year. That was much lower than the 3% drop it forecast in April.Base metals saw limited upside for the same bearish news. Copper was up by 20% in the second quarter and continued its bull run as Chinese economy is rebounding strongly and the Caixin Manufacturing PMI data beat expectations in June. New orders surged above 50 for the first time since Jan. Still, concerns about the coronavirus and its impact on global growth lingered in the background. Prices also advanced after positive vaccine news from Pfizer and BioNech.LME inventories of copper fell for an eleventh straight day, down 3,275 tons to 213,325. It is the lowest since March 16.

World cereal production is poised to reach a new record level of 2 790 million tonnes in 2020 – up 9.3 million tonnes from the May forecast – surpassing the record-high registered in 2019 by as much as 3.0 percent, according to FAO’s Cereal Supply and Demand Brief. Jeera futures settled in range as the spot trading activities at the mandies are coming back on track, however, orders from domestic and overseas markets have slowed since last week. Demand generally remains subdued during monsoon due to higher moisture content. Prime Minister Narendra Modi, in his address to the nation on Tuesday evening, announced that 80 crore people will be given free grains for the next five months.







Spot Prices (% Change)



Aluminium......the metal ignited the world

Aluminium is the second most important metal after steel due to widely use in automotive, construction, aerospace industries and household appliances and utensils. It is traded the most on the exchange across the world. China is the world’s largest aluminium producer

The aluminium market has bought into the V-shaped recovery, with Shanghai futures reaching as high as 14200 yuan a tonne on June 30, 2020, just shy of the peak so far this year of 14,240 yuan on Jan. 17. London three-month aluminium is also recovering, reaching as much as $1,602 a tonne on June 30, 2020, up 12.7% since the low so far this year on April 8, but still some 12.6% below the peak of $1,835 a tonne on Jan. 6. The aluminium price has climbed 5.7% in June month in LME and 6.4% in SHFE. In Shanghai the prices have rebounded from their March slump, easing some of the previous financial stress on the country’s operators. The prices got supported on hopes for stronger demand in top consumer China buoyed sentiment, but a rapid rise in second wave of COVID-19 cases have feared an economic recovery amid an oversupplied global market and large surpluses.

Factors impacting Aluminium
  • Global primary aluminium production is expected 5.5 million ton in May 2020.
  • Global primary aluminium demand fell sharply in the first quarter of 2020 as a result of the coronavirus outbreak
  • China’s annualised production rose by 718,000 tonnes to 36.56 million tonnes over the first five months of this year, the latest estimate from the International Aluminium Institute (IAI) found.
  • Chinese aluminium production fell last year for the first time in a decade. China’s share of global output touched 57% in May. There was a small dip in March at the peak of China’s lockdowns. But cumulative production was still up by 2% in January-May after a 1.0% contraction last year.
  • Annualised production in the rest of the world decreased by 612,000 tonnes over the January-May 2020 period. That decline reflected curtailments because of lockdowns butlowinternationalpricesarestartingtotakeatollonWesternsmelters.
  • New smelters in China continue to come online. Yunnan Aluminium announced last month the commissioning of a 500,000-tonne per year plant in the Wenshan region of the province.
  • Aluminum Corp of China Ltd, known as Chalco, with an annual capacity of 18.86 million tonnes, said that it would implement “flexible production”, a phrase used to refer to output cuts, at three alumina production lines accounting for about 10% of its total capacity.
  • Alcoa has announced the permanent closure of its Ferndale smelter in the U.S. state of Washington. The plant was already operating at reduced capacity of 230,000 tonnes.
  • In other development, President Trump has imposed a blanket tariff of 10% on all U.S. imports with exceptions for a couple of close allies.
  • Canada was exempted last year but is faces renewed tariffs after an alleged surge of metal entering the U.S. market.
  • The US Midwest premium that the buyers and end-users will have to pay on top of the aluminium prices has risen in the forward market, even though the physical market outlook has been depressed by the Covid-19 pandemic.




Currency Table

Market Stance

A green week for rupee which climbed to three months high ended on Thursday backed by Jio's flows and notably intervention from RBI was subdued which creates high volatility in rupees. Additionally better than expected economic data notably manufacturing PMIs helped to restore confidence. Now in coming days whether RBI will allow rupee to rise further or reverse the direction is a matter of attention for rupee traders. From the majors, Euro is holding its ground following upbeat economic data from Eurozone and in-fact the Euro-zone took one of the biggest hits in early March and its recovery appears to have been strong but at the same time higher infection rates and renewed restrictions in some US states have created space for dollar as safe haven currency against euro which considered to be the primary concern in euro of not rising sharply. After falling to 3 months low, British Pound recover some of its losses but again Brexit weekly round of negotiations will bring choppy move in sterling pairs. In next few days, we have another fresh round of talks that will lead to more uncertainty. Volatility in pound will continue to remain higher during on-going Brexit negotiations phases.

Technical Recommendation

USD/INR (JUL) contract closed at 74.9000 on 02-Jul-2020. The contract made its high of 75.8850 on 29-Jun-2020 and a low of 74.8225 on 02-Jul-2020 (Weekly Basis). The 21-day Exponential Moving Average of the USD/INR is currently at 75.82.

On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 28.10. One can sell at 75.20 for the target of 74.40 with the stop loss of 75.70.

GBP/INR (JUL) contract closed at 93.6950 on 02-Jul-2020. The contract made its high of 94.6000 on 02-Jul-2020 and a low of 92.8450 on 30-Jun-2020 (Weekly Basis). The 21-day Exponential MovingAverage oftheGBP/INR is currently at 94.39.

On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 41.30. One can sell at 93.75 for a target of 92.75 with the stop loss of 94.30.

News Flows of last week

30th JUN India records quarterly current account surplus for first time in 13 years
01st JUl BoE to review climate impact of corporate bond-buying after COVID crisis
01st JUl Bank of England gave banks 18 months to manage climate risks
02nd JUl U.S. job growth roared back, but COVID-19 resurgence threatens recovery
02nd Jul U.S.trade deficit widened as exports fellto lowestlevel since 2009
02nd Jul Brazilrevises 2020 fiscal outlook, sees 'lost decade'for national debt
02nd Jul June U.S. payrolls rise sets record amid virus reopenings
02nd JUl China's services sector grows at fastest pace in over a decade in June - Caixin PMI

Economic gauge for the next week

EUR/INR (JUL) contract closed at 84.5150 on 02-Jul-2020. The contract made its high of 85.4575 on29-Jun-2020 and a low of 84.4100 on 02-Jul-2020 (Weekly Basis).The 21-day Exponential Moving Average of the EUR/INR is currently at 85.08

On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 39.40. One can sell at 84.50 for a target of 83.60 with the stop loss of 85.10.

JPY/INR (JUL) contract closed at 69.7025 on 02-Jul-2020. The contract made its high of 70.8300 on 29-Jun-2020 and a low of 69.6525 on 02-Jul-2020 (Weekly Basis). The 21-day Exponential MovingAverage ofthe JPY/INR is currently at 70.06

On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 33.95. One can sell at 70.00 for a target of 69.00 with the stop loss of 70.50.




UTI AMC gets SEBI's go ahead to launch IPO

UTI Asset Management Company (AMC) has received markets regulator Sebi's go ahead to raise a little over Rs 3,000 crore through its initial public offering (IPO). The IPO of the country's largest asset management company in terms of total assets under management (AUM) comprises sale of 3,89,87,081 equity shares by existing shareholders, according to the draft red herring prospectus (DRHP). State Bank of India (SBI), Life Insurance Corporation (LIC) and Bank of Baroda are offering to sell 1,04,59,949 shares each, while Punjab National Bank (PNB) and T Rowe Price International are planning to offload 38,03,617 shares each. UTI AMC, which had filed draft papers with Sebi in December 2019, obtained its observations on June 16, latest update with the markets watchdog showed. SBI, LIC, Punjab National Bank and Bank of Baroda hold 18.5 per cent stake each in UTI AMC. The US-based T Rowe Price holds 26 per cent stake in the company. Kotak Mahindra Capital, Axis Capital, CitiBank, DSP Merrill Lynch, ICICI Securities, JM Financial and SBI Capital Markets are the book running lead managers to the offer. The shares of the company are proposed to be listed on BSE and NSE. As of September 30, 2019, the company had the largest share of monthly average AUM. In December 2019, Sebi had asked SBI, LIC and PNB to dilute their stakes to below 10 per cent in UTI AMC by December next year.

SEBI seeks clarification on CAMS IPO

Markets regulator Sebi has sought clarifications from merchant bankers of the proposed initial public offering of Computer Age Management Services, which filed draft papers in January to raise an estimated Rs 1,500-1,600 crore. The CAMS' IPO will sell 1.22 crore equity shares through offer-for-sale by Great Terrain Investment, NSE Investments, Acsys Investments, HDFC and HDB Employees Welfare Trust, as per the draft papers. While Great Terrain is an affiliate of Warburg Pincus, NSE Investments is a group firm of the National Stock Exchange. In an an update on June 29, the regulator said it is awaiting response to the clarification sought on June 26 from the lead manager of the public issue. The issue is being managed by Kotak Mahindra Capital Co, HDFC Bank, ICICI Securities and Nomura Financial Advisory and Securities (India). Computer Age Management Services (CAMS) claims to be India's largest registrar and transfer agent with a market share of 69.4 per cent, based on mutual fund average assets under management, as of November 2019. During the period, it served Rs 18.7 lakh crore of AAUM (average assets under management ) of 16 mutual fund clients. It offers integrated services for receipt, verification and processing of financial and non-financial transactions for the BFSI sector, largely to the mutual fund industry. It also provides services of transaction, payment, settlement and reconciliation; dividend processing, record keeping, report generation, intermediary empanelment and brokerage computation and compliance. According to the draft IPO papers, CAMS's total income and profit after tax for 2018-19 stood at Rs 711.49 crore and Rs 130.89 crore, respectively.

Mindspace Business Parks REIT inches closer to IPO, revises draft prospectus

Mindspace Business Parks REIT, an entity jointly backed by realty developer K Raheja Corp and private equity major Blackstone Group, has revised its draft prospectus to raise Rs 1,000 crore through fresh issue of shares via an initial public offering (IPO). Both the entities are expected to offer a part of their existing shareholding through the offer for sale. The company has updated the filing to reflect the new business environment in the backdrop of the Covid-19 induced lockdown. It has leased additional 7 lakh sq ft to tenants across various properties since April 1. As per the revised filing with Sebi, it has completed additional 3.3 million sq. ft. of new office space since its previous filing last year. Its portfolio includes a total leasable area of 29.5 million sq ft with five integrated business parks and five independent offices across the Mumbai Metropolitan Region, Pune, Hyderabad, and Chennai. As on March end, the total market value of its portfolio is Rs 23,675 crore, including the facility management division. The company’s clients include the likes of Accenture, Qualcomm, UBS, JP Morgan, Amazon, Barclays, Facebook and Capgemini. As of May end, committed occupancy of its portfolio stood at 92.4% and average rent was Rs 52.5 per sq ft.








All equity, debt schemes deliver positive returns in June

All equity and debt scheme categories gave positive returns in the month of June. Within the equity category, schemes investing in bank stocks led the returns chart across all the categories of funds last month. Banking funds delivered 12.06 percent returns, outperforming the benchmark S&P BSE Bankex that gained 10.98 percent during the review period, according to a mutual fund research firm, Value Research. The second best-performing category was small-cap funds with 11.15 percent average returns. In comparison, the S&P BSE Small Cap Index rose 14 percent in June. Midcap funds gave 8.81 percent average returns in June as against 10.21 percent gains in S&P BSE Midcap Index.

HSBC Mutual Fund launches HSBC Focused Equity Fund

HSBC Asset Management has announced the launch of HSBC Focused Equity Fund (HFEF) - an open-ended equity scheme investing in maximum 30 stocks across market caps. The NFO will open on July 1 and close for subscription on July 15. According to the press release shared by the fund house, the fund aims to seek long term capital growth by building a concentrated portfolio of equity & equity related instruments of 30 companies across large-cap, mid-cap and small-cap categories with a sector agnostic approach. HSBC Focused Equity Fund will follow BSE 200 Index TRI Benchmark and will be co-managed by Neelotpal Sahai, Head of Equities, HSBC AMC and Gautum Bhupal, Fund Manager, HSBC AMC. The scheme will have a concentrated portfolio up to 30 companies across market capitalization. The scheme will be sector and market-cap agnostic.

Liquidity window for mutual funds induced confidence in system: SEBI

A joint move by SEBI and RBI for liquidity window to the mutual funds has helped induce confidence in the system, though not much demand for the scheme was seen, the capital market regulator said. In view of the possible redemption pressure that the mutual fund industry may face after the abrupt winding up of six debt schemes of Franklin Templeton Mutual Fund, the central bank announced a special liquidity window of Rs 50,000 crore for mutual funds in April end. Under the special liquidity scheme, the RBI will conduct repo (repurchase agreement) operations of 90-day tenor at a fixed repo rate of 4.40 percent for banks. According to the RBI, banks can avail funds under this facility exclusively for meeting the liquidity requirements of "mutual fund" houses by extending loans and undertaking outright purchase of and/or repos against the collateral of investment grade corporate bonds, commercial papers (CPs), debentures and certificates of deposit (CDs) held by the fund houses.




Performance Charts

EQUITY (Diversified)





Due to their inherent short term nature, Short term funds have been sorted on the basis of 6month returns
Note:Indicative corpus are including Growth & Dividend option . The above mentioned data is on the basis of 02/07/2020 Beta, Sharpe and Standard Deviation are calculated on the basis of period: 1 year, frequency: Weekly Friday, RF: 6%
*Mutual Fund investments are subject to market risks, read all scheme related documents carefully.