Market Mantra
Flat open as indices track F&O expiry, Railway Budget
After days of weakness volatility is set to amplify on account of F&O expiry and the railway budget. Stocks like Siemens, BEML, Texmaco, Titagarh Wagons and Timken are expected to be on investors' radar as expectations are high that a major chunk of the incremental budget could be spent towards construction of new lines, doubling of lines and towards raising rolling stock (including engines, coaches, wagons). Should a freight hike happen, logistic companies may have a temporary run at the expense of few sectors. Also, what remains interesting to watch is what decision the Railway minister would take to improve the strained finances.
The outlook is a flat start. Asian markets are directionless for now with the bias weak. Choppiness could set in as traders adjust their positions on account of F&O expiry. US stock indices recovered from steep losses to close modestly higher.
Trading ideas (Time period: 1-3 days)
Hexaware Mar Futs (SELL, below Rs239, Target Rs225, SL Rs246): With an appearance of Evening Doji star pattern in yesterday's trade, it has given short term trend reversal after an extended upmove from the low of Rs197. The daily RSI has given a negative crossover which could provide immediate trigger for the down fall. It has also reversed from the resistance of its 200-DMA, suggesting the resumption of the downtrend. (Duration 5 days)
Derivative strategies (Time period: Till expiry)
² Buy DLF Put March 80 above rs 4 with SL of 2 for target of 8/10
Lot size: 5000 Remarks: Net maximum profit of Rs30,000 and net maximum loss of Rs10,000
Corporate Snippets
² Iron ore mine allotted to Tata Steel by Chhattisgarh government in Dantewada district stands cancelled as the company failed to complete prospecting work within the stipulated period. (BS)
² IDBI Bank received Sebi's approval to raise Rs37.7bn through issuance of shares to qualified institutional players. (BL)
² Loans worth Rs117bn given by State Bank of India have been locked up as non-performing assets as nearly 1,160 defaulters have willfully decided not to repay. (BL)
² Venezuela's state oil company PDVSA is about to clinch a deal for ONGC to invest some US$500mn in their San Cristobal joint venture, the South American company's president said. (BS)
² Piramal Enterprises said it is looking to raise up to Rs10bn through issuance of non-convertible debentures on private placement basis. (ET)
² Eicher Motors' Royal Enfield announced launch of its first retail operations in Thailand. (BS)
² Videocon said it is targeting 15% market share in the air conditioner segment by selling 600,000 units in 2016. (BS)
² Infosys has extended the tenure of its chief Vishal Sikka by nearly two years till March 2021, saying his initiatives have helped the company move towards reclaiming its industry leadership position. (BL)
² The Joint Lenders Forum (JLF) approved the Strategic Debt Restructuring (SDR) conversion package for the debt-laden IVRCL Limited. Under this package, the lenders will convert a part of the debt of the company into equity, in one or more tranches, at a price of Rs 8.765 per equity share of face value of Rs 2 each. (ET)
Economy snippets
² The National Highways Authority of India will raise Rs33bn by selling tax-free bonds. (BS)
² In a bid to evacuate minesites to comply with the directive of the Supreme Court, the government of Goa has put nearly eight mn tonnes of low-grade iron ore for immediate auction at the price rejected by most buyers in previous auctions. (ET)
² Four industrial cities, including Ahmedabad Dholera special investment region in Gujarat, are being implemented under the Delhi-Mumbai Industrial Corridor project, Parliament was informed. (BL)
² A total of Rs 12.3bn has been transferred to the coal bearing states including Jharkhand and Odisha on account of upfront payment for coal blocks that were auctioned and allotted. (BS)
Warm Regards,
Amar Ambani
IIFL
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