{LONGTERMINVESTORS} Market Mantra: The Money Daily – January 19, 2016

 

Market Mantra

 

Slow and unsteady China, Big results and collateral damage!

 

The world economies and markets will be afraid after China's economy slowed down to a 25-year low clocking growth of 6.9% in the fourth quarter of 2015. The markets which are already on tenterhooks have one more reason now to stay subdued. During the day, the World Economic Outlook from the IMF is expected. The usual noise from Davos will also be heard. Among the big numbers, RIL, HCL Tech and Reliance Power will be in focus.

 

The outlook is a weak start. Asian markets are flat for now. The short term outlook for market remains negative till Nifty trades below 7540 levels. The current downfall could extend up to 7250-7200 levels. The mid-cap and small-cap stocks which were out performing till the previous week are also showing signs of fatigue. We see further pain here. The main indices could always twist around after a weak start as has been the case.

 

Results Preview: Reliance Industries Revenue Rs58,673cr (-26.7% yoy), PAT Rs7,072cr (39.1% yoy)

 

 

Trading ideas (Time period: 1-3 days)

 

Britannia Jan Futs (SELL, below Rs2,760, Target Rs2,680, SL Rs2,800): Britannia has recently signaled trend reversal below Rs2,900 with broader pattern indicating near breakdown from support from rising trendline, stock could be heading below Rs2,600 in the near term. Inability of stock to sustain above the support of its 200-DMA has reinforces negative trend in the counter. It presents great opportunity for the traders to jump in on the downtrend. An occurrence of this event indicates further selling and continuation of the downtrend. (Duration 5 days)

 

Derivative strategies (Time period: Till expiry)

 

² SELL FUT TATAGLOBAL Jan below 123 with SL of 128 for target of 118/113   

Lot size: 4000 Remarks: Net maximum profit of Rs40,000 and net maximum loss of Rs20,000

 

Corporate Snippets

 

²  Maruti Suzuki India said it will open 250 Nexa outlets by 2016-17 from 100 right now and double its employees (relationship managers) in the Nexa outlets to 5,000. (BL)

²  BHEL has commissioned the second 660 MW supercritical unit of Lalitpur Super Thermal Power Project (STPP) in Uttar Pradesh. (ET)

²  Suzlon Group has bagged two 50.4 megawatt (MW) order from Hindustan Petroleum Corporation Ltd (HPCL) and state-run NALCO for installation additional wind power capacity. (ET)

²  The finance ministry wants state-run NALCO to buy back 25% of its shares from the government worth $481mn, a senior government official told Reuters, as the government's plans to raise about $10bn from asset sales fall way short of targets. (BS)

²  Ahead of the commercial launch of Reliance Jio (RJio) in April, the Ambani brothers inked the spectrum trading and sharing agreements for 800 Mhz spectrum, which will bolster RJIo's spectrum holdings. (BS)

²  Sundaram Fasteners, through a filing infomed BSE that its board on Monday approved funds not exceeding Rs 3bn on private placement basis, proposed to be listed on one or more stock exchanges. (BL)

²  Reliance Infrastructure announced takeover of the management and control of Pipavav Defence & Offshore Engineering Co Ltd (PDOC). It would hold 36.5% of the equity capital of PDOC. (ET)

²  Maruti Suzuki India has cut the price of its premium crossover S-Cross by over Rs 200k after failing to gain traction in the market. (BL)

 

Economy snippets

 

²  As many as 15 more coal mines that were auctioned last year would begin production by March 31, taking the number of total producing mines to 23, government said. (ET)

²  India's merchandise exports fell to $22.3bn against $26.2bn a year ago in December 2014, according to data released by the commerce ministry. (BS)

²  Drug prices may come down sharply in the coming days as the government is likely to cap the trading margin on medicines at 35%. (BL)

 

Result table

Rs m	Revenues	YoY %	PAT	YoY%
Asian Paints	41,600	13.9	4,633	25.8
Rallis	3,062	(20.4)	204	(20.0)
Kotak Bank	41,747	19.1	9,452	31.9
Wipro	1,29,650	7.0	22,341	1.9
MindTree	11,209	22.9	1,435	1.9
TTK Prestige	4,478	16.7	372	42.5

 

 

Warm Regards,

 

Amar Ambani

Head of Research,

IIFL

 

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