lobal markets oscillated in green and red amid news that U.S. reached an Gagreement with Mexico on tariff but gains were limited as fresh U.S. trade threats against China gave nervousness. In the U.S., more than 500 companies and 140 groups have signed a letter to the President urging to strike deal with China as they are concerned about the negative and long term impact on businesses that the additional tariffs will have. Market participants are awaiting a possible meeting between Trump and Xi Jinping at the G20 summit in Japan this month. Equity markets are expecting support from policy makers as the trade tensions are threatening to weaken the fragile economic growth. U.S. 10 ten yields have plummeted to the lowest levels since 2017 on expectations that the Federal Reserve would cut interest rates. Japanese stock markets too witnessed profit taking amid wary about the prospects for the Japanese economy. Recently, the Bank of Japan Governor indicated that in case momentum towards 2 percent inflation target is lost, then the bank would resort to more easing. The statement came after European Central Bank President Mario Draghi said to support growth and People’s Bank of China Governor said that he has "tremendous" policy options to stoke demand.
Back at home, domestic market extended decline for the second consecutive week, clocking their worst week on the back of weak global sentiments along with apprehension on the NBFC’s liquidity. Selling pressure was witnessed in healthcare, banking, finance telecom and auto sector shares. On the economic data front, industrial growth for the month of April came at 3.4 percent from 0.4% growth recorded in the previous month. Consumer Price Index (CPI) inflation rose to 3.05% in May 2019 (new base 2012=100), compared with 2.99% in April 2019. Another data shows India slipped a rank to 10th place in the latest ranking of top foreign direct investment receiving countries for 2018. Even deal making through the private equity/venture capital routes saw a sharp 54% dip in May at a low $2.8 billion due to fewer large deals. There is an expectation that the Federal Reserve will ease monetary policy soon to counter a slowing global economy due to the escalating trade war with China. Fed is scheduled to meet next week.
On the commodity market front, Commodities saw minor upside and CRB traded near 182 as sharp fall in crude capped the upside. Dollar index saw some bounce back after a sharp fall of previous week. German ZEW Survey Expectations, Euro-Zone ZEW Survey, CPI of UK, CPI of Canada, FOMC Rate Decision and Fed Chair Powell Holds Press Conference After FOMC Meeting, GDP of Newzeland, BOJ Rate Decision, RBA Governor Lowe Gives Speech in Adelaide, Bank of England Bank Rate, BOE Asset Purchase Target, CPI of Japan etc are few important data to be released this week which may give significant direction to the commodities.
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• India's industrial production grew more-than-expected in April. Industrial production grew 3.4 percent year-on-year in April, following a revised 0.4 percent rise in March. Output was forecast to grow moderately by 1.2 percent.
• India's consumer price inflation accelerated further in May, in line with economists' expectations. The consumer price index rose 3.05 percent year-on-year in May after a 2.99 percent increase in April, which was revised from 2.92 percent.
• Hexaware has acquired US-based Mobiquity Inc for a total consideration of about USD 182 million (approximately Rs 1,266 crore). Mobiquity creates digital products for brands like Amazon Web Services, Rabobank, Philips, Wawa, Backbase and Otsuka.
• Gujarat State Fertilizers & Chemicals announced that post annual shutdown for repairs of Isothermal Shift Reactor top hemispherical head, Ammonia-IV plant at Baroda unit is under startup and anhydrous Ammonia production is expected to start from 13 June 2019 onwards.
• Bharat Dynamics has signed a contract worth Rs.1187.82 crore for supply of heavy weight torpedoes. The contract has to be executed in next 42 months.
• Havells is planning to expand its rural footprint in India, including Uttar Pradesh. The company plans to add nearly 2,000 new retailers to its existing network of more than 15,000 retail points in UP.
• Bharat Heavy Electricals has secured a prestigious order for the erection work of the upcoming 2x1000 MWe Turbine Generator (TG) island Units 3&4 at Kudankulam Nuclear Power Project in Tamil Nadu being set up with foreign cooperation (Russia). Valued at over Rs.440 crore, the order has been placed on BHEL by Nuclear Power Corporation of India (NPCIL).
Mining & Minerals
• NMDC is bearing a loss of Rs 12 crore a day as operations at its Chhattisgarh projects have been stalled following a strike by tribals protesting against a mine allotted to the company.
• Music Broadcast announced that the company has entered into definitive binding agreement for the acquisition of Reliance Broadcast Network. The company will acquire 24% of the equity share capital of RBNL on or before 31 July 2019 and (subject to receipt of the regulatory approval from the Ministry of Information and Broadcasting) the acquisition of the entire equity stake of promoters in RBNL (by MBL) will happen after 31 March 2020, i.e. post the expiry of the lock-in period as prescribed under the applicable law.
• US initial jobless claims inched up to 222,000, an increase of 3,000 from the previous week's revised level of 219,000.
• US consumer price index inched up by 0.1 percent in May after rising by 0.3 percent in April. The uptick in prices matched economist estimates.
• US producer price index for final demand inched up by 0.2 percent in May after rising by 0.2 percent in April. The uptick in prices matched economist estimates.
• US trade deficit narrowed to $50.8 billion in April from a revised $51.9 billion in March. Economists had expected the deficit to widen to $50.7 billion from the $50.0 billion originally reported for the previous month.
• Eurozone Industrial production declined 0.5 percent month-on-month in April, following a 0.4 percent fall in March. This was in line with economists' expectation.
• Japan's tertiary activity index rose 0.8 percent month-over-month in April, after a 0.2 percent decline in March. Economists had expected a 0.4 rise.
• China's bank lending increased in May, figures from the People's Bank of China showed. Banks extended CNY 1.18 trillion new loans in May compared to CNY 1.02 trillion in April. However, this was below the forecast of CNY 1.3 trillion.
|Stocks||*Closing Price||Trend||Date Trend Changed||Rate Trend Changed||SUPPORT||RESISTANCE||Closing S/l|
|S&P BSE SENSEX||39452||UP||08.02.19||36546||36300||35300|
*TATASTEEL has breached the resistance of 500
Closing as on 14-06-2019
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.
|18-Jun-19||Canara Bank||Fund Raising|
|19-Jun-19||The Federal Bank||Fund Raising|
|20-Jun-19||The Federal Bank||Fund Raising|
|28-Jun-19||Reliance Home Finance||Financial Results|
|28-Jun-19||Reliance Capital||Financial Results|
|18-Jun-19||MAS Financial Services||Dividend Rs -3.60 Per Share|
|18-Jun-19||Triveni Engg & Industries||Buyback|
|19-Jun-19||Rallis India||Dividend - Rs 2.50 Per Share|
|19-Jun-19||Shriram Transport Fin Com||Dividend - Rs 7 Per Share|
|19-Jun-19||ICICI Lombard GIC||Dividend - Rs 3.50 Per Share|
|20-Jun-19||Hindustan Unilever||Dividend - Rs 13 Per Share|
|20-Jun-19||HDFC Bank||Dividend Rs 15 Per Sh|
|20-Jun-19||Graphite India||Dividend Rs 35 Per Share|
|20-Jun-19||Adani Ports and SEZ||Buyback|
|20-Jun-19||Bandhan Bank||Dividend - Rs 3 Per Share|
|27-Jun-19||Neuland Laboratories||Dividend - Rs 1.20 Per Share|
|27-Jun-19||BSE||Dividend - Rs 25 Per Share|
|28-Jun-19||Tata Chemicals||Dividend - Rs 12.50 Per Share|
KALPATARU POWER TRANSMISSION LIMITED
Target Price: 638
|Face Value (Rs.)||2.00|
|52 Week High/Low||546.00/268.50|
|M.Cap (Rs. in Cr.)||7539.52|
|P/E Ratio (times)||16.15|
|P/B Ratio (times)||2.42|
|Dividend Yield (%)||0.61|
• KPTL is amongst the largest players firmly entrenched in the global power transmission and infrastructure EPC space.
• For FY 20, the management of the company expects net sales growth of 15-20% with operating margin of around 11%. T&D should grow in the range of around 12% and Non T&D business (Rail and oil and gas pipeline) should grow atleast 30% with better margins.
• Net Debt as on Mar 19 stood at around Rs 510 crore vs 698 crore same period last year. Better collection and advance from international orders helped in reduction of debt. In international order book, focus remains in Africa and Saarc regions.
• Order book of the company stood at Rs 14068 crore as on Mar 19. Of the total order book, around 40% is from T&D international, 16% is from T&D domestic, 17% is from pipeline business and 27% is from Railways. Going forward, the company expects domestic order inflows to increase in T&D space from green corridor projects and from SEBs (State Electricity Board). Financial organizations like REC, PFC and international institutions are providing funds to SEBs.
• Devlopment related to Transmission assets such as Jhajjar Transmission line in Haryana and Satpura Transmission in MP are fully operational. Alipurdurar transmission line in West Bengal has received COD and project execution is in full swing. Kohima Mariani project construction work is also on full swing. Process to monetize transmission assets portfolio in final stages. Monetization of assets will be used for debt reduction and for investments in subsidiaries.
• Revenue growth 29% in Mar 19 quarter and 24% in
FY 19 is due to better execution in T&D, Oil & Gas and Railways business. For FY 19, revenues from T&D business stood at around Rs 5050 crore and grew by around 9-10%, rail business was roughly around Rs 900 crore and grew by 70% YoY and Oil and gas pipeline business grew by more than 100% and stood at Rs 1200 crore.
• Increase in escalation cost due to delay in projects
• Political uncertainties and changes in regulations
The company continues to focus on improving profitability, order visibility and return ratios as a result of improved margins and unlocking of capital from noncore assets. Its diversification focus has led to success in securing significant orders in the non-T&D business, with healthy margins. Thus, it is expected that the stock will see a price target of Rs.638 in 8 to 10 months time frame on a one year average P/E of 20.45x and FY20 (E) earnings of Rs.31.21.
INOX LEISURE LIMITED
Target Price: 450
|Face Value (Rs.)||10.00|
|52 Week High/Low||382.60/189.65|
|M.Cap (Rs. in Cr.)||3345.96|
|P/E Ratio (times)||24.45|
|P/B Ratio (times)||3.47|
|P/BDividend Yield (%)||0.00|
• INOX Leisure Limited (INOX) is amongst India’s largest multiplex chains with 141 multiplexes and 583 screens in 67 cities. INOX has redefined movie experiences in India making it truly a 7-star experience. Each INOX property is unique with its own distinct architecture and aesthetics.
• The management has indicated that the pace of screen addition would continue in FY2020E, expect addition of 80 screens (85 screens added in FY2019) with a capex of Rs. 300-330 crore.
• It had posted strong Q4 number earlier this month with revenues from operations jumping 48% from Rs. 324 crore to Rs. 479 crore. EBITDA margin in Q4 FY2019 improved to 20% while adjusted PAT rising from Rs. 4 crores to Rs. 44 crore. For the quarter, Inox Leisure’s net box office figures went up from Rs.190 crores to Rs.284 crores, a growth of 50%.
• Revenues from other segments also showed a good growth. In Q4, Inox Leisure opened five properties with 28 screens. The overall footfalls for the quarter improved from 126 lakh to 180 lakh, driven by box office success of movies like “Gully Boy", “Simmba", “Total Dhamaal" and “Kesari". The content slate, going forward, is also encouraging with movies such as Bharat, Super 30, Kick 2, Mission Mangal, Brahmastra, etc.
• Recently, it has partnered with popular American professions basketball league, the National Basketball Association (NBA), to integrate the NBA into select cinemas across Delhi, Hyderabad,
Kolkata, Mumbai and Pune.
• According to the management, all expansion is taking place at a fast pace and it has no issues as far as capital is concerned to execute projects.
• Obtaining Business Licenses
• Quality Film Content Flow
With the consistency in performance and a healthy pipeline signal strong growth, the company is expected to see good growth going forward. It continues to impress with industry leading growth across all parameters. In addition, strong market position reflected in ability to consistently raise ticket prices and strong screen pipeline, will help in increasing average footfalls and consumer spending. Thus, it is expected that the stock will see a price target of Rs.450 in 8 to 10 months time frame on a target P/E of 31x and FY20 (E) earnings of Rs.14.5.
Source: Company Website Reuters Capitaline
Above calls are recommended with a time horizon of 8 to 10 months.
The stock closed at Rs 132.60 on 14th June, 2019. It made a 52-week low of Rs 67.50 on 17th July 2018 and a 52-week high of Rs. 136.20 on 06th June 2019. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 107.52
As we can see on chart that stock is trading in higher highs and higher lows, which is bullish in nature. Apart from this, it has formed an “Inverted Head and Shoulder” pattern, and also has given the breakout of same and thereafter the stock is continuously trading above. So, it is expected that follow up buying can continue for coming days. Therefore, one can buy in the range of 128-129 levels for the upsides target 145-150 levels with SL below 118.
The stock closed at Rs 2254.50 on 14th June, 2019. It made a 52-week low at Rs 1784 on 14th June 2018 and a 52-week high of Rs. 2285 on 13th June 2019. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 1997.74
Stock is continuously trading in uptrend and has formed a “Cup and Handle” pattern on weekly charts, which is considered to be bullish. Last week, market showed some selling pressure but stock has managed to close with 3% gains and has registered yearly high along with high volumes so buying momentum can continue for coming days. Therefore, one can buy in the range of 2240-2245 levels for the upside target of 2360-2400 levels with SL below 2180.
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 ended the week on negative note and sectors such as FMCG, Banking, Auto and pharma witnessed selling pressure. Since the start of the week, call writers were seen active in 12000 & 11900 strikes while marginal put unwinding was witnessed in 11700 put strikes. In coming sessions, it is expected that market undertone is likely to remain bearish as far nifty is trading below 11950 levels. On downside, immediate support is placed at 11700 levels. However, any slide below 11700 can add further selling pressure, which could take Nifty towards 11580 levels as well. Among Nifty Call options, the 12000 strike call has the highest open interest of more than 46 lakh shares, while in put options 11500 strike hold the maximum open interest of more than 23 lakh shares. The Implied Volatility (IV) of calls closed at 14.98% while that for put options closed at 15.32%. The Nifty VIX for the week closed at 13.66% and is expected to remain volatile. The PCR OI for the week closed down at 1.35 from week high of 1.42, which indicates more call writing. On the technical front, 11750-11700 spot levels is strong support zone and current trend is likely to remain under pressure as far we are trading below 11950.
**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
This week, the probabilities are higher that turmeric futures (July) might break the major support near 6500 & decline further to test 6400-6200 levels. In the current season (2019-20) turmeric sowing turmeric sowing is likely to start in the month of June. However, in the initial stage it is being estimated that acreage is expected to rise by 25% on year in 2019-20 (Jul-Jun). Forecast of a good monsoon indicates the likelihood of higher output in the upcoming kharif season. While on the spot markets, in Erode, a key market in Tamil Nadu, the finger variety was sold at 6,300-6,400 rupees per 100 kg, and the bulb variety at 5,900-6,000 rupees per 100 kg. Jeera futures (July) is likely to witness steep correction towards 17050-16800 levels. On the spot markets, prices have already started declining because supply is seen rising. On the demand side, the exports have fallen due to sluggish demand from China and Bangladesh. The conviction is high that cardamom futures may continue to make new life time highs due to acute shortage in the supply side. In days to come, the July contract is expected to rally towards 2600 levels. The fundamentals highlight that forecast of weak rainfall in the key growing areas of Kerala, may affect plantations. The growers were expecting a fresh harvest in June, but there would be a 60-day delay, which in all probability would be in August only. Moreover, as there is no carry-over stock either with farmers or traders due to last year’s production loss and anticipation of a delayed production this year have boosted the sentiment in the cardamom auction market.
Bullion counter may continue its upside momentum as safe haven buying amid Middle East tensions and uncertainty regarding resolution of trade war tensions can assist the prices higher but profit booking at higher levels can be seen. Also supporting gold price is dovish tilt of major central banks and increasing economic uncertainty amid growth slowdown and trade conflict. Expectations that the US and China leaders will be able to reach a deal at the G20 summit on June 28-29 is still uncertain. President Donald Trump admitted to being the current obstacle to a trade deal with China as he mentioned that “It’s him right now that’s holding up the deal, as he needed Beijing to agree to four or five “major points”, without specifying what they were. Gold can take support near 32200 and recover towards 33700 levels while silver can test 38500 levels while taking support near 36500 levels. Expectation of a rate cut by the U.S. Federal Reserve considering global scenario weighed on the dollar and in turn supported gold prices. Markets will have a keen watch on the next meeting of the US Fed policymakers which is to be held on June 18-19 in this week. Markets are pricing in a 20% chance of a 25-basis-point cut at the June meeting, according to CME fed funds futures, with those odds jumping to 66% at the July meeting. The number of Americans filing applications for unemployment benefits unexpectedly rose in penultimate week, adding to concerns about U.S. labour market after job growth slowed sharply in May.
Soybean futures (July) is expected to take support near 3620 levels & expected to rise towards 3765 levels on fear over delay in sowing. In recent update, the Skymet advised farmers in Maharashtra and Rajasthan, the leading soybean growers, to delay sowing of Kharif crops due to a weak monsoon current. Moreover, firmness in U.S soybean futures on Chicago Board of Trade is also trading near its two months high as the near-term weather forecasts turned wetter, a bad prognosis for a crop. Further, the acres that have been planted may not reach the high yields of recent years because of significantly delayed development, adding more risk to production. Soy oil futures (July) will possibly take support near 730 levels & witness a rise towards 750 levels. The strength to the domestic edible oils is being lent by the rally in the U.S soybean oil taking support near 27 cents per pound. On the spot markets, the majority of oils traded higher on improved demand, with soy refined quoting at Rs.760-62 for 10 kg, while soy solvent ruled at Rs.720- 25. The bearish trend of CPO futures (June) may take a pause near 492 levels & the downside may remain capped. The palm oil prices in the international markets have started to reverse from multi month lows on the news that Indonesia began testing biodiesel with a bio-content of 30% in cars to boost local markets for its vast palm oil crop. Mustard futures (July) is looking bullish & if trades above 3960, then we may see rising towards 3980-4020 levels. The sentiments are optimistic due to paucity of stocks in wholesale markets as peak arrival season has drawn to a close.
Crude oil prices may witness some lower level buying amid supply disruptions in Strait of Hormuz and Middle East tensions. Last week attacks on two oil tankers in the Gulf of Oman stoked concerns of reduced crude trade flows through one of the world’s key shipping routes. Fresh worries rising from the Middle East stoked tension between Iran and U.S. further hampering the prospects for Crude. Crude oil may take support near 3500 levels and can recover towards 3850 levels in near term. OPEC monthly report showed that OPEC brought its oil production down to 29.876 Mbpd in May, a five-year low for the oil cartel as it struggles to control member production to keep oil prices out of the doldrums. OPEC cut its forecast for growth in global oil demand due to trade disputes and pointed to risk of a further reduction, building a case for prolonged supply restraint in the rest of 2019. Natural gas may remain under selling pressure on unfavorable weather as it can test 150 levels by facing resistance near 175 levels. U.S. natural gas futures hit threeyear low hit last week after a federal report showed a bigger-than-usual storage build even though the increase was less than expected. The U.S. Energy Information Administration (EIA) said utilities added 102 bcf of gas to inventories during the week ended June 7. That was the fifth week in a row utilities injected over 100 bcf of gas into storage, the most since June 2014 when they added gas in the triple digits for seven consecutive weeks.
Cotton futures (July) is expected to trade in the downward trajectory within the range of 20900-21700 levels. The sentiments related to this soft commodity in the international market is bearish as the market participants are cautious because of two major triggering factors in the current scenario. Firstly, in the ongoing planting season, the weather this spring has been rough across the U.S. agriculture belt. Secondly, all eyes would be on the outcome of any solution to the trade war when U.S. President Donald Trump and Chinese President Xi Jinping will likely meet on the sidelines of the Group of 20 summit later this month in Japan. Back at home, huge quantities of cotton are being imported from West Africa and the US. So far, India has signed import deals for around 2.6 mln bales in the current year. Of this, 900,000 bales have already arrived, and the remaining quantum is likely to get delivered between JunSep. The bullish trend is likely to prevail in mentha oil futures (June) & rally may extend towards1360-1390 levels. The reason being new arrivals are only half of what is expected at this time because the farmers are stocking what they are harvesting as the pipeline had emptied last season. Cocud futures (July) is breaking all the resistances on the way & is seen heading towards 3000 levels. The sentiments are bullish on the back of an expected demand for cattle feed in Jul-Aug, as supply of green fodder doesn’t fulfill the protein requirement of cattle. This year, low stocks of cottonseed may lead to shortage of good-quality oilcake during the high-demand season and push
In base metal counter, nickel and copper may witness lower levels buying but aluminum may trade sideways. Expectation of an interest rate cut by Fed weighed on the U.S. dollar index and in turn supported the Industrial metal prices. Data from China showed that the world’s largest vehicle market in May had its worst-ever monthly automobile sales drop and factory inflation slowed during the same period as faltering manufacturing hit demand. Copper may recover lower towards 420 levels while taking support near 400 levels. Copper prices rose and witnessed their first weekly gain in nine weeks, on concerns that supply would tighten further as unionised workers at a Codelco mine decided to strike after a labour deal fell through. Latest data showed that copper inventories at warehouses tracked by the LME jumped to 248,550 tonnes, the highest since September 2018. Meanwhile Lead may recover towards 157 while taking support near 150 levels. Nickel can recover towards 900 levels while taking support near 840 levels amid worries that floods in Indonesia could disrupt supplies of nickel. Aluminium may test 148 levels while taking support near 140 levels. Zinc may trade with sideways to upside bias as it can test 214 levels while taking support near 200 levels. China's iron ore were under pressure after surging to record highs, but expectations of tight supply and brisk demand were seen intact, limiting the downside in Zinc prices. Providing additional support to prices was the demand outlook for steelmaking ingredients as China may roll out more infrastructure projects to support its slowing economy.
LEAD MCX (JUN) contract closed at Rs. 154.40 on 13th Jun’19. The contract made its high of Rs. 156.25 on 11th Jun’19 and a low of Rs. 146.00 on 02nd May’19. The 18- day Exponential Moving Average of the commodity is currently at Rs. 152.35.On the daily chart, the commodity has Relative Strength Index (14-day) value of 55.403
One can buy near Rs. 151 for a target of Rs. 159 with the stop loss of Rs. 147.
NATURAL GAS MCX (JUN) contract closed at Rs. 163.20 on 13th Jun’19. The contract made its high of Rs. 198.90 on 28th Mar’19 and a low of Rs. 160.30 on 06th Jun’19. The 18-day Exponential Moving Average of the commodity is currently at Rs. 170.53. On the daily chart, the commodity has Relative Strength Index (14-day) value of 32.778.
One can buy around Rs. 158 for a target of Rs. 170 with the stop loss of Rs. 154.
JEERA NCDEX (JUL) contract was closed at Rs. 17415.00 on 13th Jun’19. The contract made its high of Rs. 18195.00 on 16th May’19 and a low of Rs. 17135.00 on 03rd May’19. The 18-day Exponential Moving Average of the commodity is currently at Rs. 17572.30. On the daily chart, the commodity has Relative Strength Index (14-day) value of 43.688.
One can sell below Rs. 17100 for a target of Rs. 16300 with the stop loss of Rs 17500.
• The Multi Commodity Exchange of India will launch 2.5 tons copper futures contracts on Tuesday with compulsory delivery in Thane, Maharashtra, the exchange said in a circular.
• Since Jun 1, the country has received 29.9 mm rainfall, 42% below the normal weighted average of 52.0 mm for the period, according to the weather department.
• Food grain stocks in the Central government pool were at 74.1 million tons as of Jun 1, up 9% from a year ago, according to Food Corporation of India.
• National Commodity Clearing Ltd has revised the concentration margin and threshold level for commodities with effect from Jul 1, 2019.
• The US Department of Agriculture has scaled up its estimate for India's cotton exports in 2019-20 (Aug-Jul) to 4.8 million bales (1 US bale = 218 kg) from 4.5 million bales.
• US initial claims for state unemployment benefits rose 3,000 to a seasonally adjusted 222,000 for the week ended June 8.
• Chinese banks doled out more loans in May to support the slowing economy hurt by a trade war, with further policy easing likely even amid accelerating consumer inflation.
• China's crude imports dropped to 40.23 million tonnes in May from 43.73 million tonnes in April, General Administration of Customs data showed recently.
• According to OPEC “World oil demand will rise by 1.14 million barrels per day (bpd) this year, 70,000 bpd less than previously expected”.
Commodities saw minor upside and CRB traded near 182 levels as sharp fall in crude capped the upside. Dollar index saw some bounce back after a sharp fall of the previous week. Crude prices were highly volatile whereas natural gas saw further decline on weak technical amid mild demand. Oil prices fell sharply on Wednesday, hitting the lowest settlement level since January following the U.S. Energy Department's latest inventory release. That put WTI down 23% from its Apr 23 high of $66.30, reversing a strong rally in the earlier part of the year that saw prices jump more than 50% to a nearly six-month high. The federal government’s EIA report revealed that crude inventories rose by 2.2 million barrels for the week ending Jun 7 to a nearly 2-year high. On MCX it made a low of 3536. On Thursday, it recovered some of its losses after attacks on two oil tankers in the Gulf of Oman stoked concerns of reduced crude trade flows through one of the world's key shipping routes. Gold prices continued its upward journey from past few weeks as trade and political turmoil’s, along with U.S. rate cut expectations propped up the precious metal. In MCX, gold crossed the crucial level of 33000 whereas in COMEX it made a high of. Silver couldn’t take the benefit of solid upside in gold and struggled in a range on some weakness in base metals. However, it managed to give closing above 37000 owing to some fresh buying in second half. In base metals, copper, aluminum and nickel recovered from the low; especially which saw positive price movements after a fall of 7 weeks. On the other hand, lead and zinc remained weak.
Agri commodities saw a bounce back from crucial support levels. We saw this trend especially in oil seeds and edible oil counter along with guar, cotton etc. rebound in the international market also propped up edible oil and oilseeds futures. On CBOT, the most active soybean futures was up nearly by 4% for the week, rebounding after losses of 2.5% last week. Chana after trading above 4400, saw profit booking from higher levels. In recent update, the government has doubled the limit on import of tur to 400,000 tone and said it will issue licences within 10 days. It is also reported that the Centre will sell 200,000 tone tur from its buffer stock. Guar counter turned bearish owing to the bearish trend of oil prices in the international market & onset of southwest monsoon.
Since the evolvement of the Trade War between U.S & China, it’s been almost 342 days recording series of events & still counting with lots to happen more in days to come.
• June 28, 2016 - Donald Trump lays out plans to counter unfair trade practices from China & threatens to apply tariffs under sections 201 and 301 of U.S. trade legislation.
• March 31, 2017 – Trump signs two executive orders. One calls for tighter tariff enforcement in anti-subsidy and anti-dumping trade cases.
• April 7, 2017 - At their first meeting at Trump’s Mar-a-Lago estate in Florida, Trump and Chinese Premier Xi Jinping agree to a 100-day plan for trade talks.
• July 19, 2017 - The two sides fail to agree on new steps to reduce the U.S. deficit with China after the 100 days of talks.
• Aug. 14, 2017 - Trump orders “Section 301” probe into alleged Chinese intellectual property theft, described as his first direct trade measure against Beijing.
• Jan. 17, 2018 - Trump, in a Reuters interview, threatens a big “fine” on China over alleged IP theft, without providing details.
• Jan. 22, 2018 - Trump imposes tariffs on all imported washing machines and solar panels - not just those from China.
• March 8, 2018 - Trump orders 25% tariffs on steel imports and 10% on aluminum from all suppliers - not just China.
• April 2, 2018 - China imposes tariffs of up to 25% on 128 U.S. products.
• April 3, 2018 - Trump unveils plans for 25% tariffs on about $50 billion of Chinese imports.
• April 4, 2018 - China responds with plans for retaliatory tariffs on about $50 billion of U.S. imports.
• June 15, 2018 - United States sets effective date of July 6 for 25% levies on $34 billion of Chinese imports. China responds in kind with tariffs on $34 billion of U.S. goods.
• July 10, 2018 - US unveils plans for 10% tariffs on $200 billion of Chinese imports.
• Aug. 1, 2018 - Trump orders USTR to increase the tariffs on $200 billion of Chinese imports to 25% from the originally proposed 10%.
• Aug. 7, 2018 - United States releases the list of $16 billion of Chinese goods to be subject to 25% tariffs. China retaliates with 25% duties on $16 billion of U.S. goods.
• Aug. 23, 2018 - Tariffs on goods appearing on the Aug. 7 lists from both United States and China take effect.
• Sept. 7, 2018 - Trump threatens tariffs on $267 billion more of Chinese imports.
• Sept. 24, 2018 - United States implements 10% tariffs on $200 billion of Chinese imports. The administration says the rate will increase to 25% on Jan. 1, 2019. China answers with duties of its own on $60 billion of U.S. goods.
• Dec. 1, 2018 - United States and China agree on a 90-day halt to new tariffs. Trump agrees to put off the Jan. 1 scheduled increase on tariffs on $200 billion of Chinese goods until early March while talks between the two countries take place. China agrees to buy a “very substantial” amount of U.S. products.
• Feb. 24, 2019 - Trump extends the March 1 deadline, leaving the tariffs on $200 billion of Chinese goods at 10% on an open-ended basis.
• May 5, 2019 - Trump tweets that he intends to raise the tariffs rate on $200 billion of Chinese goods to 25% on May 10.
• May 8, 2019 - The Trump administration gives formal notice of its intent to raise tariffs on $200 billion of Chinese imports to 25% from 10%, effective May 10.
• May 13, 2019 – China announces that it will increase tariffs on US$60 billion worth of US goods from June 1, 2019, in response to the tariff increases imposed by the US on May 10.
• May 16, 2019 – US places Huawei on its ‘entity list’.
• May 31, 2019 – China announces that it will establish its very own unreliable entities list in retaliation to the US’ entity list.
• June 1, 2019 – China increases tariffs on US$60 billion worth of products.
• June 2, 2019 – China issues white paper on US-China economic relations.
• All the eyes are now next on the G20 meeting.
|12th JUN||India’s retail inflation inches up to 3.05% in May|
|12th JUN||Industrial production (IIP) expanded at 3.4% in April from 0.3% a month ago.|
|13th JUN||Middle East Torpedo attacks send oil prices soaring.|
|13th JUN||Boris Johnson leads Tory leadership race with 114 votes.|
Indian Rupee pared gain this week after reports confirmed on Thursday that Oil tankers were blown in the Persian Gulf - passage accounted for 30% World's Oil supply. Anti-Iranian Trump's diplomats - John Bolton and Mike Pompeo claimed Iran involvement in such attacks. Meanwhile data released on Wednesday showed headline inflation at 3.05% in May, well below the RBI's medium-term target of 4.00% for the price gauge. The data also showed that core inflation, which strips out the volatile components of food and fuel, eased to 4.2% in May from 4.6% a month ago. It was the fifth consecutive month of a decline in core inflation. On global front, the soft 75,000 gain in non-farm payrolls in May wasn’t quite as bad as the dismal ADP employment reading last week, but it is another sign that economic growth is slowing. On balance, Fed officials are likely to see evidence of more sustained weakness before taking action of easing, however, fed fund futures are pricing aggressive interest rates cut this year. In the UK, Boris Johnson overcomes the first hurdles of becoming next UK PM and the most likely favored candidate. He received 117 votes from his Tory colleagues in the first round - hurdle level was 17. Next round will take place on June 18th where only two candidates will be left. Post that more than 1500 Conservatives party members will vote to place new PM. Going forward FOMC Monetary Policy and Economic Projections will be highly important as Fed Officials will direct the rate path amid global slowdown.
USDINR is likely to stay within the range of 69.25 and 69.95.
USD/INR (JUN) contract closed at 69.61 on 13th Jun’19. The contract made its high of 69.79 on 10th Jun’19 and a low of 69.3850 on 12th Jun’19 (Weekly Basis). The 14-day Exponential Moving Average of the USD/INR is currently at 69.71
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 44.90. One can buy at 69.55 for the target of 70.15 with the stop loss of 69.25.
EUR/INR (JUN) contract closed at 78.67 on 13th Jun’19. The contract made its high of 79.01 on 10th Jun’19 and a low of 78.48 on 13th Jun’19 (Weekly Basis). The 14-day Exponential Moving Average of the EUR/INR is currently at 78.56
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 50.57. One can sell at 78.80 for a target of 78.20 with the stop loss of 79.10.
GBP/INR (JUN) contract closed at 88.2825 on 13th Jun’19. The contract made its high of 88.6975 on 10th Jun’19 and a low of 88.1225 on 13th Jun’19 (Weekly Basis). The 14-day Exponential Moving Average of the GBP/INR is currently at 88.67
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 33.51. One can sell at 88.55 for a target of 87.95 with the stop loss of 88.85.
JPY/INR (JUN) contract closed at 64.2050 on 13th Jun’19. The contract made its high of 64.29 on 10th Jun’19 and a low of 64.01 on 11th Jun’19 (Weekly Basis). The 14-day Exponential Moving Average of the JPY/INR is currently at 64.13
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 53.72. One can buy at 64.10 for a target of 64.70 with the stop loss of 63.80.
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Equity MF inflows improve slightly in May, SIP flows remain stable
Assets under management (AUM) of the mutual fund industry stood at Rs 25.43 lakh crore at May-end, up 5 percent month-on-month (MoM), data from Association of Mutual Funds in India (AMFI) showed. Equity SIPs stood steady, just short of their all-time high. MFs received net fresh flows of Rs 76,989 crore in April, mainly driven by stable inflows into liquid funds and modest equity figures. Liquid and money market funds saw inflows of Rs 72,478 crore in May compared to Rs 96,000 crore in April. While flow in liquid funds were stable, outflows in credit risk funds increased significantly to Rs 4,156 crore as against Rs 1,253 crore in April. Credit-risk funds are debt funds that have at least 65 percent investments in less than AA-rated paper. Balance funds, too, remained out of favour as outflows in May stood at Rs 2,481 crore, in continuation of net selling of Rs 2,121 crore in April.
Moderate inflows into equity funds
Inflows into equity funds, including ELSS, improved slightly to Rs 4,969 crore in May, from Rs 4,229 crore in April. Open-ended equity schemes saw inflows of Rs 5,408 crore, which were slightly offset by outflows of Rs 439 crore in close-ended equity plans. Equity flows have been subdued in April and May, with investors preferring to stay on the sidelines till election outcome on May 23. However, the clear political mandate seems to have led to spike in flows in the last week of May.
Edelweiss Asset Management launches retirement plan in its schemes
Edelweiss Asset Management announced the launch of a unique feature for retirement planning under its mutual fund schemes. The Retirement Plan is a SIP feature built on life stage based asset allocation model for retirement planning. This is how it works: the plan gradually shifts the investment portfolio towards lower-risk investments based on age and life stage as one approaches retirement. It enables auto rebalancing of the retirement portfolio at a set frequency to reduce risk as the Investor moves closer to retirement. According to the fund house, the Retirement Plan gives investors enough flexibility to plan their retirement. "This plan enables investors to plan their retirement by allocating their investments in select open-ended debt and equity schemes of Edelweiss Mutual Fund by investing through Systematic Investment Plan (SIP)," the fund house said. The plan provides two asset allocation options – ‘Auto Option’ and ‘My Custom Option’. ‘Auto Option’ has a pre-defined asset allocation at every age while the ‘My Custom Option’ provides flexibility to customise equity and debt allocation as per risk appetite and the tenure of investment.
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
Mr. S C Aggarwal (CMD, SMC Group), Mr. Mahesh C Gupta (Vice CMD, SMC Group) & other Key Directors along with SMC Employees celebrating the milestone of achieving 5000 SIPs in BSE Star MF.
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 between 30th May to 1st June, 2019 at SMC Head office, New Delhi.
Mr. D K Aggarwal (CMD, SMC Investments & Senior VP – PHD Chamber of Commerce) along with Mr. Sanjiv Bhasin (EVP, Market & Corporate Affairs, India Infoline) during Open House Discussion on Post Election Market Outlook of Various Asset Classes held on Friday, 7th June, 2019 at PHD House, New Delhi.
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