Market Mantra
After a fall, flat start likely for Sensex, Nifty
The world and it's markets seem to have no major worries. So was the case on Monday but Indian indices came tumbling down charting it's own course. Metal, pharma and banking stocks were among the top losers. The weakness on Monday was accentuated by a fall in Tata Steel, SBI and ICICI Bank.
The outlook is a flat start. Crude prices have cooled. Asian markets remain directionless as they are moving in a narrow range. US indices too ended near precious closing levels. Fed policy will be in focus as global investors will eye US GDP data and a speech from Janet Yellen. Nifty resistance at 7745 is particularly strong; this level is the midpoint of the current gann channel. Technically speaking, formation of hanging man candlestick at the top of the uptrend also suggests investors should adopt a cautious approach. With F&O expiry around the corner, market is most likely to swing between 7500-7700 zone (maximum call/put OI at 7700/7500 strikes).
Trading ideas (Time period: 1-3 days)
Lupin Mar Futs (SELL, below Rs1,500, Target Rs1,440, SL Rs1,525): Lupin on the weekly chart has broken below the horizontal support line which was in place since February 2015. Following that breakdown in third week of March, the stock attempted to consolidate at the bottom. However, that consolidation was eventually broken on the downside in yesterday's trade. We expect Lupin to witness follow-up selling. As per our Gann angles placement, it is likely to hit Rs1,440 before it attempts to reverse.
Derivative strategies (Time period: Till expiry)
² Buy Fut IGL March Above Rs542 with SL of Rs532 for target of Rs562
Lot size: 1100 Remarks: Net maximum profit of Rs22,000 and net maximum loss of Rs11,000
Corporate Snippets
² GVK Power & Infrastructure Limited announced it will divest 33% stake in Bangalore International Airport Limited (BIAL) to Fairfax India Holdings Corporation and Fairfax Financial Holdings Limited, through their wholly-owned subsidiaries in Mauritius, for an aggregate investment of Rs21.5bn. (BS)
² Natco Pharma has received eight observations for its formulation plant at Kothur near Hyderabad and API facility at Manali (near Chennai), following inspections by the USFDA in the months of February and March. (BL)
² Cadila Healthcare has acquired Actibile, a gastroenterology brand from Albert David for an undisclosed sum. (ET)
² Dr Reddy's Laboratories has entered into a US licensing pact with XenoPort for the development and commercialisation of latter's clinical-stage oral new chemical entity XP23829. (BS)
² Glenmark Pharmaceuticals has received final approval from the US health regulator USFDA for oral contraceptives and leukemia treatment injection. (BS)
² BHEL has commissioned second 40 Mw hydropower generating unit at the Teesta low dam hydro electric project (HEP) stage-IV in West Bengal. (BL)
² ONGC said its board has approved a Rs340bn investment plan to bring into production a flagship hydrocarbon block in the Krishna-Godavari basin off the Andhra coast. (BL)
² Biocon has got approval from Japan's health ministry to sell its biosimilar insulin Glargine in disposable pens in the the country, the second largest market for insulin outside of the US and Europe. (BS)
² HCC has bagged two orders worth Rs6.2bn in the hydro power and tunneling sectors. (ET)
² L&T Finance Holdings' subsidiary L&T Infrastructure Finance Company plans to raise up to Rs2bn through issuance of non-convertible bonds on a private placement basis. (BS)
² Lloyd Electric and Engineering announced the acquisition of Noske-Kaeser's rail and vehicles business in select markets for 2.3 mn euros. (ET)
Economy snippets
² The Delhi government presented an annual budget of Rs466bn for 2016-17, an increase of Rs88.5bn over last year. (BS)
² The government is likely to infuse additional capital of about Rs50.5bn in some public sector banks this week. (ET)
² The newly constituted Board of Trade (BoT), a top advisory body on external commerce, is expected to meet on April 6 to discuss on the ways to boost exports. (BL)
² The Centre has notified the new Aadhaar Act which gives the numbers assigned by it a statutory backing for transfer of subsidies and benefits to people eligible for them. (ET)
Warm Regards,
Amar Ambani
IIFL
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