n the week gone by, global markets rallied on expectation of further interest rate I cuts by central banks worldwide. Markets also welcomed Christine Lagarde, the head of the International Monetary Fund, to replace Mario Draghi as the president of ECB as this has reinforced expectations of more monetary policy easing. Recently, the Chinese commerce ministry has cleared that US tariffs against China must be lifted for the two sides to reach a deal to end the trade war.
Back at home, domestic markets witnessed volatile movement ahead of the Union Budget. The Indian rupee looked strong tracking firmer emerging market currencies and lower crude oil prices. As expected, in the budget, Finance minister has allocated Rs. 70,000 crore to PSBs inorder to boost credit. Government has set a target of Rs. 1, 05,000 crore of disinvestment receipts for the FY 2019-20. Also, the announcement of corporate tax to 25% for the companies having turnover upto 400 crores, will certainly bring ease of doing business in the economy. In the budget, it could be seen that the government wants to strengthen the debt as well as the equity market, by providing much needed relief to the market participants. It seems that the government is taking each measure to push growth in the economy. Meanwhile, Revenue collection from GST for June stood at Rs 99,939 crore; it slipped below Rs 1 lakh crore for the first time since February. The eight core sector industries recorded a growth of 5.1 percent in May on the back of healthy output in steel and electricity. Business activity growth in India’s service sector contracted in June; the Nikkei/IHS Markit Services Purchasing Managers’ Index fell to 49.6 last month from 50.2 in May. Going forward, market will witness a stock specific movement as we are going into the earning season. Besides, rupee movement, crude oil prices, inflow and outflow of foreign funds will dictate the trend of the markets.
In the commodity market front, some correction was witnessed in CRB after a continuous upside of three weeks. The week was full of event risk. Positive outcome from China and US in G 20 couldn’t lift up the market as per expectation and market took a dip on growth concern. Domestic market was conscious ahead of the Union Budget. In the OPEC meet, which was scheduled on 1st and 2nd July, they reached on the consensus that they will continue the production cut till March, 2020. Despite production cut decision of crude oil, market reacted in a negative way and hit the downside of around 5%. Gold made new high of 35100 in the Indian market owing to a rise of 2.5% import duty. This week, bullion counter should trade in a range. Base metal counter can trade on weaker path. Going forward some of the market triggers are New Yuan Loans, CPI of China, Bank of Canada Rate Decision, FOMC Meeting Minutes¸ CPI of US, etc.
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Highlights of Union Budget 2019-20
• PAN and Aadhaar will become interchangeable. Now you can also use your Aadhaar number to file I-T Returns soon.
• In view of rising income levels, those in the Rs.2-5 crore and Rs.5 croreand-above brackets will see increase in effective tax rate by 3% and 7%, respectively
• GST rate on electric vehicles proposed to be lowered to 5%. Additional income tax deduction of Rs.1.5 lakh on interest on loans taken to purchase electric vehicles.
• Additional deduction of Rs.1.5 lakh on loans up to March 31 2020 for buying affordable houses, giving Rs. 7 lakh benefit to home buyers.
• Proposal to provide Aadhaar cards for NRIs with Indian passports, after their arrival in India, with no waiting period.
• Increase in Special Additional Excise Duty and Road and Infrastructure Cess each by Rs. 1 per litre on petrol and diesel
• To resolve the angel tax issue, startups will not be subject to any scrutiny in respect to valuation. Funds raised by startups will not require any scrutiny by the I-T department.
• TDS of 2% on cash withdrawals exceeding Rs.1 crore in a year from bank accounts, to discourage business payments in cash.
• Period of exemption for capital gains arising from sale of house for investment in startups to be extended to March 31, 2021.
• Rs.70,000 crore in recapitalisation for public sector banks and Rs.1.05 lakh crore disinvestment target for the year has been set.
• New national educational policy hopes to transform Indian education into one of the best in the world, with focus on bringing in foreign students.
• Rs.50 lakh crores proposed for Railway infrastructure.
• By 2022, the 75th year of Independence, every single rural family, except those who are unwilling to take the connection, will have electricity and clean cooking facility.
• Stress on zero-budget farming, which is a form of gardening as a selfsustainable practice, with minimum external intervention.
• The pension benefit will be extended to 3 crore retail traders under PM Karam Yogi Maan Dhan Scheme. It requires only Aadhaar numbers and bank accounts.
• Rs.1 crore worth of loans proposed to MSMEs. The Government will extend pension benefits to 3 crore retail traders and shopkeepers who have a revenue of less than Rs.1.5 crore.
• Investment by FIIs and FDIs in debt securities in infrastructure debt funds to be allowed. Minimum public shareholding in listed companies can be increased from 25% to 35%.
• Buyback tax of 20% extended to listed companies.
• According to the rating agency Icra, Indian pharmaceutical industry is likely to grow by 11-13 per cent in the current fiscal. This along with moderation in pricing pressure for US market, new launches and market share gains for existing products and consolidation benefits will drive growth in Fy2020.
• According to the survey results from IHS Markit, India's manufacturing sector growth slowed in June reflecting softer increases in new works, output and employment. The headline IHS Markit manufacturing Purchasing Managers' Index fell to 52.1 in June from a 3-month high of 52.7 in May. A score above 50 indicates expansion in the sector.
• According to the survey results from IHS Markit, India's services activity contracted in June for the first time since May 2018, driven by decline in new business and employment. The services Purchasing Managers' Index, or PMI, fell to 49.6 in June from 50.2 in May. Any reading below 50 indicates contraction in the sector.
|Stocks||*Closing Price||Trend||Date Trend Changed||Rate Trend Changed||SUPPORT||RESISTANCE||Closing S/l|
|S&P BSE SENSEX||39513||UP||08.02.19||36546||36300||35300|
*BPCL has broken the support of 370
Closing as on 30-08-2019
1) These levels should not be confused with the daily trend sheet, which is sent every morning by e-mail in the name of "Morning Mantra ".
2) Sometimes you will find the stop loss to be too far but if we change the stop loss once, we will find more strength coming into the stock. At the moment, the stop loss will be far as we are seeing the graphs on weekly basis and taking a long-term view and not a short-term view.
|9/7/2019||TCS||Quarterly Results,Interim Dividend|
|16/07/2019||Multi Comm. Exc.||Quarterly Results|
|19/07/2019||Dabur India||Quarterly Results|
|19/07/2019||RBL Bank||Quarterly Results|
|20/07/2019||Amara Raja Batt.||Quarterly Results|
|20/07/2019||HDFC Bank||Quarterly Results|
|22/07/2019||TVS Motor Co.||Quarterly Results|
|23/07/2019||M & M Fin. Serv.||Quarterly Results|
|23/07/2019||NIIT Tech.||Quarterly Results|
|24/07/2019||ICICI Pru Life||Quarterly Results|
|25/07/2019||Bajaj Fin.||Quarterly Results|
|25/07/2019||Bajaj Finserv||Quarterly Results|
|8/7/2019||Mindtree||200% Special Dividend+ 40% Final Dividend|
|9/7/2019||Can Fin Homes||100% Dividend|
|9/7/2019||South Ind.Bank||25% Dividend|
|9/7/2019||ICICI Pru Life||15.5% Final Dividend|
|11/7/2019||Escorts||25% Final Dividend|
|11/7/2019||Amara Raja Batt.||508% Final Dividend|
|11/7/2019||Bajaj Fin.||300% Dividend|
|11/7/2019||Bajaj Auto||600% Dividend|
|11/7/2019||Bajaj Finserv||50% Dividend|
|12/7/2019||KotakMah. Bank||16% Dividend|
|15/07/2019||Dr Reddy's Labs||400% Dividend|
|15/07/2019||Zee Entertainmen||350% Final Dividend|
ICICI Lombard GIC Limited
|Face Value (Rs.)||10.00|
|52 Week High/Low||1264.50/690.00|
|M.Cap (Rs. in Cr.)||50198.91|
|P/E Ratio (times)||50.82|
|P/B Ratio (times)||9.38|
• ICICI Lombard GIC is one of the leading private sector general insurance companies in India with a gross written premium (GWP) of Rs 14789 crore for the year ended 31 March 2019.
• The Gross Direct Premium (GDPI) of the Company increased 19% to Rs 3485 crore in Q4FY2019 compared to Rs 2926 crore in Q4FY2018, as against industry growth rate of 12.6%. Excluding crop segment, GDPI growth for Q4 FY2019 was 29.4% over Q4FY2018. The GDPI increased 17% to Rs 14488 crore in FY2019 from Rs 12357 crore in FY2018 against the industry growth of 12.9%.
• The net premium income of the company has increased 21% to Rs 2197.47 crore in Q4FY2019. The combined ratio improved to 98% in Q4FY2019 from 99.5% in Q4 FY2018. However, the company has consistently improved combined ratio to below 100% mark to 98.5% in FY2019 from 100.2% in FY2018 and 103.9% in FY2017.
• Investment assets increased 22% to Rs 22231 crore end March 2019, as compared to Rs 18193 crore end March 2018. Investment leverage (net of borrowings) was 4.09x end March 2019 as compared to 3.9x end September 2018. Investment income increased to Rs 423.64 crore in Q4FY2019 as compared to Rs 323.42 crore in Q4FY2018.
• Solvency ratio was 2.24x end March 2019 as against 2.02x end March 2018 and higher than the minimum regulatory requirement of 1.50x.
• It has posted 7% increase in the net profit to Rs 227.73 crore in the quarter ended March 2019 (Q4FY2019). PBT increased 20% to Rs 345.49 crore in Q4FY2019. PBT for Q4 FY2019 includes upfront
expensing of acquisition cost related to the growth of 29.4% in GDPI (excluding crop segment) whereas the full benefit of earned premium will be realized over the policy period.
• Risk of reinsurance inward
• Changes in regulations and polices
The company has maintained a leadership position and expanding its distribution network to increase penetration in tier 3 and tier 4 cities. The company is continuously performing well and the management of the company intends to continue to focus on improving its operating and financial performance. Its key focus is to reduce its combined ratio, while maintaining robust reserves. It plans to reduce its net expense ratio by continuing to eliminate, standardise and automate internal processes. We expect the stock to see a price target of Rs.1302 in 8-10 month time frame on a current P/BV of 9.38x and FY20 (BVPS) Book Value Per Share of Rs.138.77.
Engineers India Limited
|Face Value (Rs.)||5.00|
|52 Week High/Low||139.45/100.45|
|M.Cap (Rs. in Cr.)||7551.02|
|P/E Ratio (times)||19.40|
|P/B Ratio (times)||3.07|
|P/BDividend Yield (%)||3.08|
• EIL is an engineering consultancy, and engineering, procurement and construction (EPC) company in the hydrocarbons and petrochemicals industry.
• Order inflows for FY19 were at Rs. 5890 crore (consultancy Rs. 1585 crore, turnkey Rs. 4305 crore), taking the order backlog to Rs. 11,188 crore. The company is also upbeat about order inflows in FY20 as well. It has guided for an order intake of close to Rs 1800 crore.
• Next year the company expects finalization of orders such as Numaligarh Refinery expansion [this year it got pipeline order from Numaligarh] order; Strategic reserves project at 2 locations one each in Odisha and Karnataka. End of next year or beginning of a year next to that, the company expects awarding of Chennai Refinery order, followed by Cavery Basisn Refinery project at Nagapattinam, Bina Refinery expansion, Mangalore Refinery Expansion projects.
• EIL reported strong Q4FY19 numbers. This was due to higher-than-expected contribution from the turnkey business coupled with strong margins. Revenues grew 20.2% YoY to Rs 612.6 crore. Consultancy and turnkey segment contributed 57.5% and 42.5%, respectively.
• Consultancy revenues grew 4.4% YoY and turnkey revenues jumped 51% YoY. Absolute EBITDA increased 62.3% YoY to Rs 93.3 core. This was due to healthy EBIT margins in the turnkey segment.
• Its strategy of expanding into international markets is paying off and it has started getting new overseas orders. The company recently won an order worth Rs
550 crore from Mongolia. It expects more orders to come from Bangladesh and Dangote (Africa).
• Cash diversion towards other government sick companies.
• Lower capex in the Oil & Gas sector
Sizeable growth potential of the sector, forthcoming capex in hydrocarbon sector, asset-light business model, foray into newer segments/sectors, debt-free balance-sheet, healthy revenue and earnings growth and robust return ratios continue to augur well for the company. Going ahead, it is expected that the company will post accelerated revenue and EBITDA growth due to increasing contribution from turnkey segment, coupled with higher margins. Thus it is expected that the stock will see a price target of Rs. 141 in 8-10 months time frame on the current PE multiple of 20.87 times and FY20E EPS of Rs. 6.77.
Source: Company Website Reuters Capitaline
Above calls are recommended with a time horizon of 8 to 10 months.
The stock closed at Rs 1178.20 on 05th July, 2019. It made a 52-week low of Rs 1018.30 on 09th October 2018 and a 52-week high of Rs. 1354.80 on 31st December 2018. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 1189.60
The Stock has been consistently maintaining its uptrend and seen traded in a rising channel with formation of higher high and higher bottom pattern on weekly charts. At current juncture, once again stock has taken support at its rising trend line of channel and given a break above falling wedge pattern on daily charts. The positive divergence on secondary oscillators suggest that stock may continue its upside momentum in coming sessions as well. Therefore, one can buy in the range of 1170-1175 levels for the upside target of 1245-1250 levels with SL below 1120.
The stock closed at Rs 398.45 on 05th July, 2019. It made a 52-week low at Rs 277.35 on 04th February 2019 and a 52-week high of Rs. 428 on 07th August 2018. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 356.48
In recent past, the stock took V shape recovery from its 52 week low and once again it managed to surpass its 200 days exponential moving average on weekly charts. This week fresh breakout was witnessed into the prices above the falling trend line of long term channel. Additionally, stock is also maintaining its bullish trend on daily charts as well as prices are trading above its short and long term moving averages. Therefore, one can buy in the range of 395-400 levels for the upside target of 435-440 levels with SL below 370.
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.
SOURCE: CAPITAL LINE
Charts by Spider Software India Ltd
Above calls are recommended with a time horizon of 1-2 months
Nifty dragged down due to liquidation of long positions. Recent data has turned cautious and is indicating probability of further profit booking. Call writing and put unwinding were seen on the day of budget. Call writers were active in 12000, 11900, 11800 strike calls indicating limited upside. This clearly indicates lack of buying interest and discomfort in the market. The levels of 11700 will remain crucial for this week as indicated by option open interest concentration. If Nifty falls below the 11700 mark, it could correct to 11500 levels on the back of further selling. On bounce, the index will face strong resistance at 11900-11950 levels. The options open interest concentration is at the 12000-strike calls with the highest open interest of above 30 lakh shares; among put options, the 11700-strike taking the total open interest to 12 lakh shares, with the highest open interest among put options. The Implied Volatility (IV) of calls closed at 12.91% while that for put options closed at 12.22%. The Nifty VIX for the week closed at 13.53% and is expected to remain down trending. The PCR OI for the week closed at 1.16 which indicates put writing. Next support is placed around 11750-11700 levels.
**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 (Aug) may continue to remain trapped in the bearish zone of 6600-6800 levels as the sentiments are mixed amid ongoing sowing season. Good rains have been reported in Telangana & Maharashtra, due to which the pace of sowing has been seen well there. The demand side is muted due to lack of quality arrivals in the spot markets. Traders were buying limited stock for their turmeric Grinding units. They are waiting for upcountry demand. At the Erode Turmeric Merchants Association Sales yard the finger turmeric sold at Rs.5,655-7,016 a quintal, Root variety sold at Rs.5,199-6,489 a quintal, finger turmeric sold at Rs.5,888-7,089 a quintal, root variety at Rs.8,769-6,510 a quintal. A bullish trend can be seen in jeera futures (Aug), hence lower level buying is recommended eyeing 17600 levels, taking support near 17190-17070 levels. Steady domestic as well as overseas demand amid lower arrivals, are keeping the spot prices steady. Lower arrivals in the spot market are further expected to push up the prices. Arrivals in Unjha are being pegged at 6,000-7,000 bags (1 bag = 55 kg). The rally in cardamom futures (Aug) may get stalled & we might see profit booking from higher levels towards 2500-2400. Forecast of well-distributed monsoon rainfall in key growing areas of Kerala further is likely to dampen the bullish sentiment as it would support fruit formation. The average price of small cardamom was 3,259.72 rupees per kg at the auction held at Puttady in Kerala, according to the Spices Board India data. Dhaniya futures (Aug) is likely to gain towards 7300-7350 levels taking positive cues from higher export demand and low crop in the key growing areas of Rajasthan and Gujarat.
Bullion counter may continue to remain on sideways path as on the one side uncertainty regarding the US China trade war; Middle East tensions and expectation of interest rate cut by Fed in upcoming meeting can support the prices but bounce back in the greenback can cap the upside. Gold can witness profit booking at higher levels as it can test 34200 by facing resistance near 35200 while silver can test 37500 while taking resistance near 39400. Last week Indian gold made lifetime high of 35100 after the increase of import duty in gold by 2.5% whereas Comex gold couldn’t give much reaction on this news. Silver was also few points shy away from 39000 marks. The U.S. Federal Reserve holds its two-day policy meeting on July 30-31 and futures are fully pricing in a 25-basis-point cut. Meanwhile the yields on U.S. benchmark 10- year Treasury notes hitting their lowest in over 2-1/2 years as euro zone yields tumbled on record lows on bets the European Central Bank’s next chief would stay a dovish course to help the euro zone economy. India's gold imports rose 12.6% in June from a year earlier to $2.69 billion amid a jump in global prices to six-year highs. The gold market saw its best price performance in three years last month, but there Interest in physical gold bullion has been lackluster for the last two months, according to the latest sales data from the U.S. Mint In June. In June, the mint sold 5,000 ounces of gold in various denominations of America Eagle gold coins; in May the mint sold only 4,000 ounces of gold.
Soybean futures is giving a lower closing since past three months on account of various factors ranging from lower meal exports amid a stronger rupee rising from 70.64 to 68.46 against U.S Dollar. This bearish trend is likely to continue & the August contract may face resistance near 3690, while the downside may get extended towards 3550-3500 levels. In days to come, the area under sowing may catch a rapid pace as the monsoon is progressing well in the major growing regions & also the farmers may get interested to grow more of this oilseed after the announcement of raising the minimum support price by Rs.311 per 100 kg to Rs.3,710 per quintal. U.S soybean futures (Aug) is expected to take support near $8.70 per bushel & trade on a steadier path as compared to previous weeks. After the Presidents Donald Trump and Xi Jinping struck a truce at the Group of 20 summit in Osaka, China is considering buying some U.S. agricultural products as a gesture of goodwill amid the resumption of trade talks. Mustard futures (Aug) is not being able to breach the resistance near 4000 & going ahead, we may see weakness towards 3890-3875. This softness is attributed to the slowdown of the demand for the oilseed by the millers, which is getting reflecting in the fact that mills in India crushed 13% lower in June from a month ago. The downtrend may again emerge in CPO futures (July) towards 500-495 levels, while soy oil futures (Aug) may come down to test 730-727, facing resistance near 744 levels. In the Union Budget, the Finance Minister mentioned that the country is aiming oilseed self sufficiency, to help cut import bill.
Crude oil prices may continue to witness further selling pressure pressured by concerns over the outlook for global economic growth despite the extension of production cut by OPEC and non OPEC members and Middle East tensions. Crude oil may dip further towards 3700 levels while taking resistance near 4150 levels in near term. Weakness in the oil market came despite ongoing tensions in the Middle East, threatening supply routes. British Royal Marines seized a giant Iranian oil tanker in Gibraltar last week for trying to take oil to Syria in violation of EU sanctions, a dramatic step that drew Tehran's fury and could escalate its confrontation with the West. The Organization of the Petroleum Exporting Countries and other producers such as Russia, a group known as OPEC+, agreed to extend oil supply cuts until March 2020 as members overcame differences to try to prop up prices. Natural gas may witness lower level buying as it can test 170 while taking support near 152. Elsewhere, recovery in oil exports from Venezuela in June and growth in Argentinian output in May kept a lid on prices. Forecasts for higher demand this week and record liquefied natural gas (LNG) exports over the next two weeks can support the prices. Natural gas consumption increased in 2018, reaching a new record consumption level of 82.1 billion cubic feet per day, according to the EIA. Natural gas consumption has increased in 8 of the past 10 years. Growth in natural gas consumption has largely been driven by increased consumption in the electric power sector.
Cotton futures (July) may trade sideways in the range of 21000-21700 levels. The market participants are cautious & closely watching the sowing progress at home as well as in U.S. The USDA estimates that in India’s marketing year (MY) 2019/20 cotton production at 29.3 million 480 lb. bales with a planted area of 12.5 million hectares. The rapid pace of advance of the monsoon towards the rest of the country is expected to lead to favorable rains. The nationwide average yields for MY 2019/20 around 510 kilograms per hectare, above average historical yield levels. Castor seed futures (Aug) is expected to maintain its upside course & may head to test 5800, taking support near 5600 levels. Prices of castor seed in the key markets of Gujarat are trading higher on account of elevated demand from domestic stockists amid a decline in arrivals. The market participants are closely watching the fall in the acreage of the oilseed. The latest statistics show that acreage of Kharif castor crop was at 2,039 ha, down 72% on year, according to the latest data from farm ministry. Mentha futures (July) is expected to witness a U-turn recovery from lower levels towards 1275-1295, taking support near 1220 levels. The arrivals on the spot markets will probably slow down as farmers have stopped harvesting the new crop due to heavy rainfall in the key growing areas of the state. Additionally, lower inventory and good export demand for the newlyharvested oil will also act as a catalyst to fuel the upcoming uptrend. There are talks in the market that farmers are holding back stocks right now as they feel prices will rise to 1,800 rupees a kg by Aug-Sep..
Base metal counter can trade on weaker path. Top U.S. and Chinese representatives are arranging to talk again this week, U.S. administration officials stated, in a move to try to resolve a year-long trade war that has been weighing on global growth and metals demand. Copper may further dip towards 430 levels while taking resistance near 450 levels. Red metal witnessed first weekly fall in four, due to tepid demand outlook and rising supplies. Inventories in warehouses tracked by ShFE have been falling in recent months but were still up 23% so far this year. Meanwhile, Lead may trade sideways as it can face resistance near 159 while taking support near 146 levels. Zinc may trade with weak bias as it can test 188 levels while taking resistance near 202 levels. Zinc prices fell recently as rising Chinese production and a collapse in the premium for cash metal on the LME pointed to a better supplied market. Rising Chinese output, rumours that zinc is moving from Chinese bonded storehouses into the LME warehouse system and a big fall in the premium for LME cash zinc were pushing prices lower. Higher output by Chinese smelters is expected to end a deficit that according to the International Lead and Zinc Study Group (ILZSG) amounted to 97,000 tonnes during the first four months of this year. Nickel can also witness profit booking towards 850 levels. Aluminium can test 135 levels while taking resistance near 147 levels.
MENTHA OIL MCX (JUL) contract closed at Rs. 1232.00 on 04th Jul’19. The contract made its high of Rs. 1372.50 on 18th Jun’19 and a low of Rs. 1170.00 on 04th Feb’19. The 18-day Exponential Moving Average of the commodity is currently at Rs. 1342.80. On the daily chart, the commodity has Relative Strength Index (14-day) value of 37.393.
One can buy above Rs. 1235 for a target of Rs. 1290 with the stop loss of Rs. 1211.
NATURAL GAS MCX (JUL) contract closed at Rs. 156.00 on 04th Jul’19. The contract made its high of Rs. 193.90 on 26th Apr’19 and a low of Rs. 150.40 on 20th Jun’19. The 18-day Exponential Moving Average of the commodity is currently at Rs. 169.40. On the daily chart, the commodity has Relative Strength Index (14-day) value of 41.900.
One can buy above Rs. 152 for a target of Rs. 165 with the stop loss of Rs. 146.
JEERA NCDEX (AUG) contract was closed at Rs. 17,270.00 on 04th Jul’19. The contract made its high of Rs. 18,100.00 on 4th Jun’19 and a low of Rs. 17,070.00 on 2nd Jul’19. The 18-day Exponential Moving Average of the commodity is currently at Rs. 17375. On the daily chart, the commodity has Relative Strength Index (14-day) value of 45.939.
One can buy near Rs. 17100 for a target of Rs. 17700 with the stop loss of Rs 16800.
• The Economic Survey for 2018-19 (Apr-Mar) highlighted India’s FY20 GDP growth at 7.0%.
• The Union Cabinet approved an increase in the MSP of most Kharif crops.
• India's commodity derivatives turnover from five exchanges rose 11% on year to 19.36 trillion rupees in Apr-Jun.
• NCDEX will launch unprocessed whole raw moong futures on 8th July, 2019.
• NAFED has offered 252,300 tn chana for sale in Madhya Pradesh via electronic auctions. Of the total quantity, 143,300 tn chana will be auctioned via NCDEX e-Markets Ltd every day between 1200 IST and 1245 IST.
• Since Jun 1, the country has received 145.4 mm rainfall, 27% below the normal weighted average of 199.7 mm for the period.
• European Union leaders nominated IMF chief Christine Lagarde as Mario Draghi’s replacement at the helm of the European Central Bank after marathon talks that have exposed deep divisions in the bloc.
• Chile’s Codelco, the world’s top copper miner Chuquicamata mine was fully operational after a twoweek long strike that had docked output from the sprawling deposit came to an end.
• During its 175th meeting, the OPEC gave its nod for extension of production cut till March 2020
In the week gone by, some correction was witnessed in CRB after a continuous upside of three weeks. The week was full of event risk. Domestic market was conscious ahead of the Union Budget, which was scheduled on Friday; participants were waiting for further cues in terms of policy measures. Appreciation in INR locked the price movement though rising crude oil prices and foreign fund outflows weighed on the domestic currency and restricted its rise. Positive outcome from China and US in G 20 couldn’t lift up the market as per expectation and market took a dip on growth concern. OPEC meet was scheduled on 1st and 2nd July and they came on consensus that they will continue the production cut till March, 2020. Despite production cut decision market reacted in negative way and hit the downside of around 5%. Growth concern thwarted the news of production cut here. The EIA showed crude stockpiles fell 1.1 million barrels in the week ending June 28, below expectations of a draw of about 2.96 million barrels. Natural gas prices saw further decline on weaker demand. Natural gas is still down nearly 20% YTD as record supply will keep prices depressed. Some safe haven buying noticed in gold though the upside was limited owning to appreciation in dollar index. Silver was weak as global growth to weigh on silver’s industrial uses, which accounts for roughly 50% of the metals demand. Almost all base metals nosedived on growth concern; aluminum and zinc traded weak for nonstop seven week. While global consumption growth of aluminium and copper during the first quarter of 2019 was muted at 1.4 per cent and 0.8 per cent, respectively, as against 4 per cent and 2.3 per cent, respectively, in 2018, consumption of zinc registered a de-growth of 1.3 per cent as against 0.3 per cent de-growth in the last year. Despite muted consumption levels, markets of the three key non-ferrous metals continued to remain in deficit in this period, with shortages in fact expanding on a Y-o-Y basis, as production growth was even lower than the growth in demand. MSP declaration by the Government couldn’t give much positive impact on the prices. Oil seeds and edible oil counter was in a bearish grip. As of now, no sowing has been reported in Madhya Pradesh and Maharashtra while sowing in Rajasthan jumped over six folds to 186,000 ha. There is lack of buying for the oilseed on the spot markets, due to negative crush margin. Castor seed witnessed gains in key spot markets of Gujarat and futures owing to decline in acreage.
To ease the suffering of farmers due to deficient start of monsoon and its less coverage & to fulfill the promise of doubling the farmers’ income till 2022, the Union Cabinet on July 3, 2019 has hiked the Minimum Support Prices (MSPs) for major Kharif crops for 2019-20. The Central government has taken farmer friendly initiative on the line of policy of increasing MSP of notified crops to at least 50 per cent return over cost of production which is a major step towards increasing the income of farmers.
The MSPs for all kharif crops of 2019-20 season have been increased from 1 per cent to 9 per cent as follows :
• The MSP of soyabean has been increased by Rs 311 per quintal to Rs.3,710 per quintal from last year’s Rs.3,399 while MSPs of sunflower has been increased by Rs 262 to Rs.5,650 per quintal and sesamum by Rs 236 to Rs.6,485 per quintal.
• Government has increased the MSPs of tur dal by Rs 125 per quintal and urad dal by Rs 100 per quintal. This will help address the issues related to requirement of pulses in view of the need to meet the nutritional security and protein requirements of a large section of population.
• The MSP of cotton too has gone up marginally. The highest percentage return to farmers over their cost of production is for Bajra (85%) followed by urad (64%) and tur (60%)
The Minimum Support Prices for all kharif crops of 2019-20 season is as follows:
MSP has an important role
The move will lead to increased investment and production through assured remunerative prices to the farmers. The revised MSPs will provide much relief to farmers as it will bear the burden of increased input cost such as increasing fuel prices, rental cost of agricultural equipment and spike in fertliser prices. Promoting cultivation of pulses & oilseeds can help India overcome nutrition insecurity, improve soil fertility by nitrogen fixation, reduce the dependency on import by boosting production and provide income support to farmers. Thus, increased MSPs for pulses & oilseeds will give a price signal to farmers to increase acreage. Increase in MSPs of nutri-cereals will improve nutritional security and allow farmers to get higher prices.
However, the MSP hikes are expected to widen the fiscal deficit. The move may stoke inflation; prompt the Reserve Bank of India (RBI) to hike interest rate. It may also hit exports of Rice, Kapas and soymeal badly as the domestic prices of these crops may go beyond international prices.
|1st JUL||US and China hold off new tariffs at the G20 summit in Japan|
|2nd JUL||IMF Director Christine nominated to be new ECB chief.|
|3rd JUL||US Non-Manufacturing growth slowed to 2-year lows.|
|4th JUL||India’s 2019-20 GDP growth projected at 7% in Economic Survey|
Indian Rupee jumped to 11 months high after Indian Chief Economic Advisor Mr. Krishnamurthy’s remarks for fiscal target ahead of union of budget cheered by Bonds and Rupee traders. He mentioned that the fiscal deficit will stay at 3.4% this FY and FY20 at 3.0%. Eventually overnight index swap - 1Y is above 5Y which suggest that there could me more rate cuts in the coming months. Admittedly, official comment by Hon FM in her maiden budget will cement the rate trend. Although lower GST collections and ripple effect of global slowdown may hit the revenue collections. Any substantial deviation of fiscal deficit may lead outflows in debt markets which in-turns hit Rupee sharply. Globally, Sterling’s slide against the dollar since last week has deepened – after odds of no-deal exit rises. The outgoing leaders Prime Minister May and European Commission President Juncker failed to produce a breakthrough in Brexit negotiations raises the question of how the new leaders will influence the exchange rate in the coming quarters. Next week, growth number of UK likely to decline steeply as recent survey indicators posted a gloomy outlook amid Brexit uncertainties. In US, this week modest 102,000 rises in the ADP measure of private payroll employment in June is still concern as it mirrors the recent deterioration in some of the survey-based employment indices. FOMC members will closely monitors the upcoming labor data and economic releases to gauge Fed’s dot plot.
USDINR is likely to take support around 68.40 and move higher towards 69.10.
USD/INR (JUL) contract closed at 68.70 on 4th Jul’19. The contract made its high of 69.3175 on 1st Jul’19 and a low of 68.6650 on 4th Jul’19 (Weekly Basis). The 14- day Exponential Moving Average of the USD/INR is currently at 69.43
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 25.55. One can buy above 68.70 for the target of 69.30 with the stop loss of 68.40.
EUR/INR (JUL) contract closed at 77.73 on 4th Jul’19. The contract made its high of 79.01 on 1st Jul’19 and a low of 77.70 on 4th Jul’19 (Weekly Basis). The 14-day Exponential Moving Average of the EUR/INR is currently at 78.74
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 30.25. One can buy above 78 for a target of 78.60 with the stop loss of 77.70.
EUR/INR (JUL) contract closed at 77.73 on 4th Jul’19. The contract made its high of 79.01 on 1st Jul’19 and a low of 77.70 on 4th Jul’19 (Weekly Basis). The 14-day Exponential Moving Average of the EUR/INR is currently at 78.74
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 30.25. One can buy above 78 for a target of 78.60 with the stop loss of 77.70.
JPY/INR (JUL) contract closed at 63.86 on 4th Jul’19. The contract made its high of 64.35 on 3rd Jul’19 and a low of 63.8250 on 4th Jul’19 (Weekly Basis). The 14- day Exponential Moving Average of the JPY/INR is currently at 64.44
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 38.07. One can buy abovet 63.80 for a target of 64.40 with the stop loss of 63.50.
Strong Listing: IndiaMART InterMESH debuts at 21% premium at Rs 1,180
IndiaMART InterMESH, an online marketplace for business products and services, saw a strong listing on July 4. Hefty subscription and positive market mood supported the stock price. The stock opened at Rs 1,180 on the National Stock Exchange, rising 21.2 percent over the final issue price of Rs 973. The Rs 475-crore issue was subscribed 36.16 times during the IPO period June 24-26. The IPO was for 48,87,862 equity shares, including anchor portion of 21,95,038 equity shares. It was offered at a price band of Rs 970-973 per share.
* Interest Rate may be revised by company from time to time. Please confirm Interest rates before submitting the application.
* For Application of Rs.50 Lac & above, Contact to Head Office.
* Email us at email@example.com
Economic Survey 2019: Mutual funds witnessed 60% fall in net inflows in Fy19
During 2018-19, the 44-player mutual fund industry witnessed net inflows of Rs 1,09,701 crore compared to a net inflow of Rs 2,71,797 crore in 2017- 18, a fall of 60 percent year-on-year, according to the Economic Survey. Lower net inflows were largely on the back of rise in the redemptions in the last financial year. In FY19, mutual fund industry witnessed total redemption worth Rs 242 lakh crore as against Rs 207 lakh crore in FY18, data from Economic Survey revealed.
Reliance MF extends repayment date on Reliance Home Finance NCDs
Reliance Home Finance has missed a payment towards maturing non-convertible debentures (NCDs) worth Rs 400 crore to Reliance Mutal Fund on June 28, and on June 29, the NCD was extended by four months till October 31. On June 28, a few schemes of Reliance Mutual Fund had maturities out of the investments in the NCD of Reliance Home Finance (RHF) to the tune of Rs 400 crore. “RHF has paid interest that was due, and the maturity of the said instrument has been extended to October 31, 2019, with additional cover and coupon,” the press release from Reliance Mutual Fund said. Four schemes of Reliance Mutual Fund--Reliance Ultra Short Duration Fund, Reliance Credit Risk Fund Reliance Strategic Debt Fund--had investment in NCDs of Reliance Home Finance.
Mahindra MF launches equity hybrid fund
Mahindra Mutual Fund June 28 said it has launched an open-ended hybrid equity fund. The scheme would allocate 65-80 per cent in equity and equity related securities and 20-35 per cent in debt and money market securities, the company said. The new fund offering- Mahindra Hybrid Equity Nivesh Yojana, which opened for subscription from Friday will close on July 12, it said.
Note:Indicative corpus are including Growth & Dividend option . The above mentioned data is on the basis of 08/08/2019 Beta, Sharpe and Standard Deviation are calculated on the basis of period: 1 year, frequency: Weekly Friday, RF: 7%
*Mutual Fund investments are subject to market risks, read all scheme related documents carefully
SMC Group has won two prestigious awards viz. 'Business Excellence' and 'Person of the Year' at the 58th Skoch Summit & Corporate Excellence Awards 2019 held on 29th June at the Constitutions Club Of India, New Delhi. Mr. S C Aggarwal (CMD, SMC Group) receiving the 'Business Excellence’ award conferred upon SMC Global Securities Ltd. and Mr. D K Aggarwal (CMD, SMC Investments and Snr VP, PHD Chamber of Commerce) receiving the 'Person of the Year' award.
Mr. S C Aggarwal (CMD, SMC Group) addressing the audience during National Summit on Investors Protection, Education And Awareness organised by ASSOCHAM held on Wednesday, 26th June, 2019 at Hotel Le-Meridien, New
Mr. S C Aggarwal (CMD, SMC Group) and Mr. Mahesh C Gupta (Vice CMD, SMC Group) addressing the new joinees during Abhinandan - Employee Induction Program held on 27th June – 29th June, 2019 at SMC Head office, New Delhi.
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