rule the market - karvy onlinecontent.karvyonline.com/contents/kstreetissue031.pdf · research...

ISSUE: 031

06TH APRIL, 2019

RULE THE MARKET

From The Desk Of Research Head

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It is confirmed that KSBL and Research Analysts, primarily responsible for this report and whose name(s) is/ are mentioned therein of this report have not received any compensation from the subject company mentioned in the report in the preceding twelve months. It is confirmed that Research Analyst did not serve as an officer, director or employee of the companies mentioned in the report. KSBL may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Neither the Research Analysts nor KSBL have been engaged in market making activity for the companies mentioned in the report. We submit that no material disciplinary action has been taken on KSBL by any Regulatory Authority impacting Equity Research Analyst activities.

FY 19-20 has already seen investors getting rewarded by the markets as the markets have clocked

fresh lifetime highs during the week gone by. The markets have already shrugged off its range-bound

movement since January 2019; thereafter it shot up sharply after clocking a low in mid-February. This

bump up has been clearly fuelled by strong FPI flows, reduced political risk and an easing of tensions

between China and the US over the trade war which has been haunting the markets for a while now.

Moreover, the overall global liquidity environment has also bettered in the recent past. The overall

sentiment is bullish, but the big question in everyone’s mind is whether this rally will sustain or not.

Well, the answer to this is yes. Though we have seen market participants taking some profits off the

table from lifetime highs, we feel such minor declines only strengthen the markets in the medium to

long run.

If one looks at the election years, markets have, on most occasions, obliged the investors in some

way or the other. In most instances, the markets have favored the bulls and have given them thumbs

up each time there was clarity in which government is likely to assume power. Even this time, the FII’s

seem to be convinced that the NDA government will come back to power and the main reason why

they are pumping in loads and loads of money is that they expect the current image of the reformist

government to prevail for the development of the country. Their sentiment seems to have gotten

reasonably stronger after the government’s “non-military pre-emptive action” against Pakistan-based

terrorists. This has not only turned the tables for the BJP led NDA Government, but also changed the

complete political narrative in the county and has substantially reinforced Modi’s image as a leader

who will not keep quiet, if provoked.

As we enter into the election mode later this week, we expect volatility in the markets to spike as

the overall picture is still not pretty clear as to which party will come out with winning colors. Traders

who trade as per their whims and fancies may have to bear the brunt of their undisciplined manner of

trading, while traders who follow smaller stop losses will also get stopped out of the markets as the

whiplashes will be wilder. Hence, we recommend traders to maintain a disciplined trading approach

with wider ranges between their entries and stop losses so that they can get the better of the market

swings. While such wild moves will entice a lot of smart investors who are waiting by the sidelines to

pump in their share into the market and make the most of the volatile moves. Volatility is not bad for

the markets; in fact, it is good for investors who have missed out the previous up move. Thus, we wish

all investors make the most of this volatility, we also hope traders make good money by buying on

declines and exiting on occasions when they do not see further buying coming through. The wait for

the election fever to begin is finally over, now let’s brace up for a roller coaster ride!

CONTENTSEquity 1-6

Derivatives 7-8

Commodity 9-12

Currency 13-15

TeamDr. Ravi Singh

Syed Hasan Jafar

Amit Samar

Viplav Dhandhukia

Vaishali Paruthi

Chetan K Waghray

Konpal Pali

Thomas V Abraham

Vivek Lohumi

Jayasree Ram

Vivek Ranjan Misra

Veeresh Hiremath

Siddhesh Ghare

Ramesh Chenchala

Ravi Pandey

Ravikanth Pedapati

Bharath Sunnam

Arpit Chandna

Anup.B.P

Vinod Jaya Kumar

Karvy Head Office

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Analyst CertificationThe following Karvy Research Desk, who is (are) primarily responsible for this report and whose name(s) is/ are mentioned therein, certify (ies) that the views expressed herein accurately reflect his (their) personal view(s) about the subject security (ies) and issuer(s) and that no part of his (their) compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report.

- VIVEK RANJAN MISRAHead-Fundamental Research

EQUITY

Economy• The Reserve Bank on Thursday cut the retail inflation forecast to 2.9-3% for the

first half of current fiscal, mainly due to lower food and fuel prices as well as the expectation of a normal rainy season.

• The RBI also lowered the GDP growth forecast for the current fiscal to 7.2% from the earlier estimate of 7.4% amid probability of El Nino effects on monsoon rains and uncertain global economic outlook.

• Fitch Ratings kept India’s sovereign rating unchanged at the lowest investment grade of ‘BBB-’ with a stable outlook.

• India’s exports are expected to reach $32.38 billion in March, the highest in any month so far, on account of healthy growth in sectors such as pharmaceuticals, Commerce and Industry Minister Suresh Prabhu said on Wednesday. He said exports will cross the $331-billion mark in the year 2018-19.

Automobiles• The country’s largest car maker Maruti Suzuki (MSI) cut vehicle production by

around 21% across its factories in March due to subdued demand. The auto major produced a total of 1,36,201 units in March, including Super Carry LCV, down 20.9% from 1,72,195 units in the year-ago period, it said in a regulatory filing.

• German auto major Volkswagen on Wednesday said it intends to merge all passenger car entities in India, which will now be led by group firm Skoda Auto as part of its new strategy for the country. The boards of the three Indian subsidiaries -- Volkswagen India Private Ltd (VWIPL), Volkswagen Group Sales India Pvt Ltd and Skoda Auto India Pvt Ltd (SAIPL) -- have approved the proposal for their merger, the Volkswagen (VW) Group said in a statement.

Technology• Digital solutions and technology firm Zensar announced that it has started

operations in Mexico City, marking its expansion into the Latin America market. The Latin America operations will support the company’s customers in North America and the local region.

• The committee of independent directors of Mindtree has appointed Khaitan & Co as legal counsel and ICICI Securities as financial advisor to help the company board take a decision on the open offer made by Larsen and Toubro (L&T).

Banking• Bandhan Bank has received approval from the BSE and the NSE for the proposed

scheme of amalgamation of Gruh Finance with the bank.Power• Infrastructure firm Tata Projects Wednesday said it has bagged order worth

around USD 321 Mn from Nuclear Power Corporation of India (NPCIL). “This 2X700 MW power plant order valued around USD 321 Mn is the company’s third contract in the nuclear power sector,” Tata Projects said in a statement.

• Cancellation of auctions for renewable energy projects because of high bids have saved central and state governments Rs. 3,405 crore, a top official said, although companies have sharply criticized the practice as anti-investor. “It is important to go for a rebid if the prices are higher than expected,” Ministry of New and Renewable Energy (MNRE) secretary Anand Kumar said.

Steel• Neelachal Ispat Nigam Limited (NINL) achieved net sales turnover of Rs. 2,100

crore in the 2018-19, registering a growth of 126% over the 2017-18. • Steel Authority of India Limited produced 16.3 Mn ton (mt) crude steel in FY19,

registering a growth of 8% over the previous year and clocking the best ever saleable steel production during the year.

Railway• Tech giant Microsoft Thursday said Indian Railways will use its ‘Kaizala’ solution

to connect employees across the country with quality healthcare facilities. Microsoft had launched Kaizala - a productivity app - designed for the Indian market to enable large group communications and work management.

• The Bangalore Metro Rail Corporation (BMRCL) appears to have learned from its past mistakes, as it prepares to build Metro lines along the 19-km outer ring road (ORR) and to the airport. The transport utility has started acquiring land for the two projects and hopes to take at least 90% of the land required in custody before awarding civil work contracts.

NEWS

INTERNATIONAL NEWS

• South Korea said on Thursday that it is considering dispatching a special envoy to North Korea as part of its efforts to get stalled nuclear talks back on track.

• China has deployed its latest guided missile destroyer and frigate in the fleet of naval ships participating in anti-piracy operations in the Gulf of Aden and Somalian coast in the Arabian Sea and the Indian Ocean.

• US President Donald Trump said on Thursday the United States and China were close to a trade deal that could be announced within four weeks while warning Beijing that it would be difficult to allow trade to continue without a pact. The two countries are engaged in intense negotiations to end a month-long trade war that has rattled global markets, but hopes of a resolution soared after both sides expressed optimism following talks in Beijing last week.

TRENDSHEETSymbol CMP S2 S1 R1 R2 TREND

SENSEX 38862.23 38215 38539 39228 39594 Up

NIFTY 11665.95 11460 11563 11765 11864 Up

NIFTYBANK 30,084.65 29343 29714 30552 31019 Up

IBULHSGFIN 903.05 796 850 938 973 Up

TATAMOTORS 205.15 164 185 218 230 Up

RELIANCE 1,353.90 1304 1329 1393 1432 Up

SBIN 317.05 304 311 328 339 Up

YESBANK 266.85 251 259 280 294 Up

MARUTI 7,107.70 6523 6815 7285 7463 Up

HDFC 2,059.20 1903 1981 2101 2143 Up

TCS 2,048.30 1966 2007 2089 2131 Up

ICICIBANK 390.55 371 381 405 419 Up

HDFCBANK 2,305.60 2254 2280 2332 2358 Up

FORTHCOMING EVENTSCOMPANY NAME DATE/ EX-DATE EVENT

INFOSYS LTD 12/04/2019 QUARTERLY RESULT

WIPRO LTD 16/04/2019 QUARTERLY RESULT

HDFCBANK LTD 20/04/2019 QUARTERLY RESULT

HEXAWARE TECHNOLOGIES LTD 24/04/2019 QUARTERLY RESULT

BAJAJ HEALTHCARE LTD 09/04/2016 BONUS ISSUE 1:1

COLGATE-PALMOLIVE(INDIA) LTD 05/04/2019 INTERIM DIVIDEND- RS. 7

METROGLOBAL LTD 11/04/2019 BUYBACK OF SHARES

KSTREET - 06TH APRIL 2019 1

INDIAN INDICES (% CHANGE)

GLOBAL INDICES (% CHANGE)

NIFTY MIDCAP100TOP GAINERS & LOSERS (1W)

SECTORAL INDICES (% CHANGE)

FII/FPI & DII TRADING (IN RS. CRORES)

NSE NIFTY TOP GAINERS & LOSERS (1W)

EQUITY

Source: Bloomberg

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

NIFTY IN

DEX

SENSEX

IND

EX

SPBSMIP IN

DEX

SPBSSIP IND

EX

NIFTYJR IN

DEX

NSEM

CA

P IND

EX

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

NSEA

UTO

IND

EX

NSEBA

NK

IND

EX

NSESRV

IND

EX

NSEPH

RM IN

DEX

NSEIT IN

DEX

NSEM

ET IND

EX

NSEN

RG IN

DEX

NSEC

ON

IND

EX

NSEREA

L IND

EX

NSEFM

CG

IND

EX

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

CC

MP IN

DEX

IND

U IN

DEX

SPX IN

DEX

NK

Y IND

EX

HSI IN

DEX

SHC

OM

P IND

EX

UK

X IN

DEX

CA

C IN

DEX

-15.0

-10.0

-5.0

0.0

5.0

10.0

DEW

AN

HO

USIN

G FIN

AN

CE

CO

RP

PNB H

OU

SING

FINA

NC

E LTD

IND

IABU

LLS VEN

TURES LTD

JUBILA

NT LIFE SC

IENC

ES LTD

HEX

AW

ARE

TECH

NO

LOG

IES LTD

GU

JARA

T STATE PETRO

NET

LTD

NBC

C IN

DIA

LTD

RELIAN

CE PO

WER LTD

RELIAN

CE C

APITA

L LTD

CO

ROM

AN

DEL

INTERN

ATIO

NA

L LTD

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

TATA

MO

TORS LTD

BHA

RTI AIRTEL LTD

MA

RUTI SU

ZUK

I IND

IA LTD

TATA

STEEL LTD

IND

IABU

LLS HO

USIN

G

FINA

NC

E L

BHA

RAT PETRO

LEUM

CO

RP LTD

ZEE ENTERTA

INM

ENT

ENTERPRISE

SUN

PHA

RMA

CEU

TICA

L IN

DU

S

TITAN

CO

LTD

YES BAN

K LTD

-1500.0

-1000.0

-500.0

0.0

500.0

1000.0

1500.0

2000.0

02-04-19 03-04-19 04-04-19 05-04-19

FII DII


BEAT THE STREET - FUNDAMENTAL ANALYSIS

Mahindra & Mahindra Ltd CMP Rs.658Target Price Rs.813Upside 24%

Investment Rationale

• M&M sold 330,436 tractors recording 3% growth YoY during FY19.

• Registered 13.1% sales growth at Rs. 46.3bn in Q3FY19 backed by a 1.6% increase in average realizations.

• M&M new brand Trakstar is witnessing higher traction and is expected to gain 2-3% market share over the next 2-3 years.

• Amidst all this, we expect uncertainty in the tractor segment in FY20E due to unpredictable monsoon.

• At the same time, in the UV segment, M&M’s core product portfolio is showing signs of maturity with incremental growth expected from new launches.

• Robust volume from new product Marazoo with a waiting period of 3-4 weeks will contribute significantly to volume growth.

• M&M expects cumulative volume from its three new launches (Marazzo, Alturas G4 & XUV300) to be ~9000 per month.

• We expect M&M’s overall volume, sales and PAT to grow at a CAGR of 10%, 11.6% and 11% over FY18-20E respectively.

VALUE PARAMETERSFace Value (Rs.) 5

52 Week High/Low (Rs.) 992/616

M.Cap (Rs. Bn/US $mn) 818/12029

EPS (Rs.) 42.1

P/E Ratio (times) (FY20E) 12

Dividend Yield (%) 0.13

Stock Exchange NSE/BSE

P/E CHARTValuation

Based on its core earnings, M&M stock is currently trading at 8.1xFY20E earnings. The stock remains one of the most inexpensive stocks amongst large-cap Auto Companies in India.

We rate BUY on the stock for a target price of Rs. 813 valuing at PER of 12xFY20E core EPS + Rs. 307 Subsidiary Valuations.

Risks

• High competitive intensity

• Higher tax rate on large UV

• Government new emission norms

• Uncertainty of normal monsoon

EQUITY

% OF SHARE HOLDING

in Rs.Mn ACTUAL ESTIMATE

YE Mar FY 18 FY 19 FY 20

REVENUE 475774 538559 592088

EBITDA 70434 76811 87406

EBITDA(%) 14.8% 14.3% 14.8%

PAT 41896 54557 51609

EPS (Rs.) 34.1 39.7 42.1

RoE (%) 14.5 16.7 14.0

PE (x) 10.0 8.6 8.1

21.6

33.0 21.9

23.6 Promoter

FIIs

DIIs

Others

80

102

124

146

Apr

-18

May

-18

Jun-

18

Jul-

18

Aug

-18

Sep-

18

Oct

-18

Nov

-18

Dec

-18

Jan-

19

Feb-

19

Mar

-19

MAHINDRA & MAHINDRA LTD. Sensex

70.2 3.5

14.4

11.9

Promoter

FIIs

DIIs

Others

80

102

124

146

Apr

-18

May

-18

Jun-

18

Jul-

18

Aug

-18

Sep-

18

Oct

-18

Nov

-18

Dec

-18

Jan-

19

Feb-

19

Mar

-19

Sandhar Technologies Ltd Sensex

21.6

33.0 21.9

23.6 Promoter

FIIs

DIIs

Others

80

102

124

146

Apr

-18

May

-18

Jun-

18

Jul-

18

Aug

-18

Sep-

18

Oct

-18

Nov

-18

Dec

-18

Jan-

19

Feb-

19

Mar

-19


70.2 3.5

14.4

11.9

Promoter

FIIs

DIIs

Others

80

102

124

146

Apr

-18

May

-18

Jun-

18

Jul-

18

Aug

-18

Sep-

18

Oct

-18

Nov

-18

Dec

-18

Jan-

19

Feb-

19

Mar

-19



BEAT THE STREET - FUNDAMENTAL ANALYSIS

Sandhar TechnologiesCMP Rs.261Target Price Rs.351Upside 34%

Investment Rationale

• Sandhar technology is a dominant global manufacturer of automotive component and system suppliers. It is one of the largest manufacturers of operator cabin in India.

• Sandhar technologies have maintained pace with sales growth of 19.8% during 9MFY19 which is much faster than its peers.

• This growth is primarily on the back of entry in the scooter segment for TVS and Hero Motocorp and strong growth in its off-highway operator cabins business.

• We expect its current business to scale up towards double-digit growth in FY20 on the ground of foraying into the scooter segment and an upward move to its existing business with new clients.

• We believe that its six joint ventures will operate in the next 3-4 quarters and will have the capability to generate~ Rs.7bn of sales by FY22E.

• During 9MFY19, Sandhar has secured ~Rs.4.1bn of new businesses, the full impact of these orders is expected to be seen in FY20.

• On the basis of the current product portfolio, Sandhar is expected to report sales and PAT CAGR of 16.6% and 46.4% over FY18-20E respectively.

VALUE PARAMETERSFace Value (Rs.) 10

52 Week High/Low (Rs.) 451/226

M.Cap (Rs. Bn/US $mn) 15/231

EPS (Rs.) 23.4

P/E Ratio (times) (FY20E) 15

Dividend Yield (%) 1.5

Stock Exchange NSE/BSE

Valuation

The stock has run up nearly 8x in the last 5 years. While we await Q4FY19 results for further clarity on the performance from the newly commenced plant, we value the stock at 11x (near the 5 year avg. 1 year fwd P/E) on FY21E EPS of Rs. 61.4.

Risks

The high competition and delay in entering the domestic innerwear segment could result in difficulty in penetration into the US market.

EQUITY

P/E CHART

% OF SHAREHOLDING

in Rs.Mn ACTUAL ESTIMATE

YE Mar FY18 FY19 FY20

REVENUE 19464 23303 26452

EBITDA 2083 2441 3044

EBITDA(%) 10.7 10.5 11.5

PAT 656 971 1407

EPS (Rs.) 10.9 16.1 23.4

RoE (%) 14.0 14.5 18.5

PE (x) 24.3 16.1 11.3

21.6

33.0 21.9

23.6 Promoter

FIIs

DIIs

Others

80

102

124

146

Apr

-18

May

-18

Jun-

18

Jul-

18

Aug

-18

Sep-

18

Oct

-18

Nov

-18

Dec

-18

Jan-

19

Feb-

19

Mar

-19


70.2 3.5

14.4

11.9

Promoter

FIIs

DIIs

Others

80

102

124

146

Apr

-18

May

-18

Jun-

18

Jul-

18

Aug

-18

Sep-

18

Oct

-18

Nov

-18

Dec

-18

Jan-

19

Feb-

19

Mar

-19


21.6

33.0 21.9

23.6 Promoter

FIIs

DIIs

Others

80

102

124

146

Apr

-18

May

-18

Jun-

18

Jul-

18

Aug

-18

Sep-

18

Oct

-18

Nov

-18

Dec

-18

Jan-

19

Feb-

19

Mar

-19


70.2 3.5

14.4

11.9

Promoter

FIIs

DIIs

Others

80

102

124

146

Apr

-18

May

-18

Jun-

18

Jul-

18

Aug

-18

Sep-

18

Oct

-18

Nov

-18

Dec

-18

Jan-

19

Feb-

19

Mar

-19



EQUITY

BEAT THE STREET - TECHNICAL ANALYSIS

HDFC

The stock is in an uptrend and making higher highs and higher lows on the weekly charts. The historical price action in the stock reflects that any meaningful dip in the stock attracts market participants, which helps the stock to resume its up move. Currently, the stock is trading near its all-time high of 2065 levels. Prior to that, the stock has seen profit taking from high of 2053 which has dragged the stock to the low of 1644 levels. Thereafter, the stock has bounced from the said lower levels with supportive volume formation on daily charts and given V shape recovery on daily and weekly charts. The bounce from the 200 DEMA has seen supportive volume formation and the stock is trading above all its major moving averages on daily charts. The stock has seen supportive volume formation on daily charts and an increase in delivery quantity to trade quantity. Which again reflects up trend in the stock will remain intact. On technical setup, the 14 period RSI is pointing northwards indicates strength in the stock. The Parabolic SAR is trading below the price on weekly charts which indicates up trend in the stock will remain intact. The recent development in the stock suggests that the stock is well placed to take it up. Hence, we are suggesting a buy in the stock around 2040 levels for the upside target of 2450- 2475 levels with stop loss of placed at 1730 levels and any minor dip around 1890 levels can be used for averaging the stock for the time frame of 6- 8 months.

HCL Technologies Limited

HCLTECH is one of the constant performers from its sector. The stock is in the cycle of making higher highs and higher lows in all time frames suggesting inherent strength in the counter.

Also, the stock is heading strongly from the past three months towards its all-time high suggesting aggressive buying in the counter. On the weekly chart, according to the formation which

the counter has made it is indicating bulls to take control near the support zone of 1000 levels which is the Fibonacci retracement of 38.20% drawn from its all-time highs of 1125 to its

recent swing low of 920 levels. On the technical front, the 14 period RSI has seen a stellar rally from the lows of 38-40 levels and is currently placed near 54-60 indicating further strength in

the counter. Also on the daily chart, the Parabolic SAR (Stop & Reverse) is placed below the current price supporting bullishness intact in the counter. On the daily chart, the stock is placed

above all its major moving averages (21, 50, 100 & 200 DEMA) and has witnessed huge rally with positive momentum which is expected to carry the stock price higher. On indicator front,

the 14 days RSI is placed near 54-60 levels indicating inherent strength in the counter. On the other hand, the stock witnessed volatility burst on the Bollinger Band (20,2) on the daily charts

coupled by notable trading volumes and is now placed near its higher band affirming the bullishness intact in the counter and this to continue in the coming future. On the derivative front,

the stock has witnessed an aggressive rollover indicating the market perception for the counter is bullish and the momentum is likely to continue in coming trading sessions from short to

medium term perspective, which might help the counter to surge higher.

STOCK HDFC

CMP 2059.20

ACTION BUY

ENTRY 2040

AVERAGE 1890

STOP LOSS 1730

TARGET 1 2450

TARGET 2 2475

TIME FRAME 6-8 MONTHS

STOCK HCLTECH

CMP 1092.80

ACTION BUY

ENTRY 1090

AVERAGE 1007

STOP LOSS 925

TARGET 1 1300

TARGET 2 1320

TIME FRAME 7-8 MONTHS


EQUITY

Sentiment

Stop Loss 1275

Target 1160

Lot Size 700

Margin 152802

21-DEMA 1261

Open Interest Shares 1701700

Change in OI 40600

Cost of Carry (%) 14.35

SECTORAL SNIPPETS

NIFTY METAL (3132.35) ended the first week of New Financial Year on a positive note with a gain of more than 3.00% and has outperformed the broader market. After three weeks of consolidation, the index has moved out of the range of 2920-3070 and closed at the highest point of trade, confirming the breakout and also depicts that bulls are having upper hand on the index. On the last trading day, most of the major stocks have seen a strong rally to cover up the underperformance which space has witnessed over the last few days. The index has gained around 19% from recent major swing lows of 2649 in the month of February, indicating strength is coming back into the index. For now, the index is trading well above its all major short and medium-term moving averages suggesting the short and medium term trends are up. RSI on the index is placed above 60 levels and the cross over is still in the positive zone, indicating ongoing bullishness is likely to continue. Going into the internals, the breadth of the index for the week is very strong with 13 stocks gaining and closing in green while the rest of the 2 stocks ending slightly below flat line. Leading the leader board are SAIL (10%) and WELCORP (7.00%) and even VEDL, TATASTEEL, JINDALSTEL, HINDZINC and HINDALCO have gained in the range of 4.00% to 5.00% for the week, out of which most of the gains came on Friday. The index has gapped up and sustained well above the this month’s first-day gap up, indicating the strength in the index persists and the more up move is possible unless the month’s lows are broken. Going forward, the index may stay in its upward trajectory until the recent lows of 3050 is taken off. For now, immediate supports for the NIFTY METAL index may be assumed at 3050-3070 levels followed by 2950-2920. Whereas on the upside, immediate resistances may be assumed at 3200-3230 levels followed by the 3300 zone. Going forward, we expect the index to trade with positive bias in the range of 3080 to 3200/3250 levels.

NIFTY AUTO (8564.60) outperformed Nifty 50 index on a weekly basis and ended the week on a positive note with gains of over 2.50% which was majorly due to the surge in the heavyweight counters among which MARUTI, TATAMOTORS, HEROMOTOCO, EICHERMOT and MRF which surged around 6.50%, 18.20%, 2.70%, 2.02% and 3.80%, respectively. While on contrary, the counters which witnessed downward movement were M&M, BAJAJ-AUTO and ASHOKLEY which plunged nearly 1.50% to 3.80% on a weekly basis. Technically, the index has recovered sharply with a gap up opening on the weekly chart, indicating a reversal in its near term downtrend and is looking positive. Even the index has witnessed robust volumes throughout the week setting up a bullish view in the counter. The next support for the counter is pegged around 8380-8400 levels which is the unfilled gap followed by 8200 levels. While on the contrary, the resistance is pegged around 8670-8700 levels followed by 8800 levels. On oscillator front, the index has witnessed some recovery from the lower band towards the mean of the Bollinger band (20, 2) and has settled above the mean affirming bulls to take control from now onwards. Even the 14 period RSI is placed around 50-55 levels and has given a positive crossover on daily chart suggesting further upside room in the counter. Going forward for the coming week, it is advisable to trade cautiously in the index as quarterly results will be in the pipeline post the sales data and stock specific movement can be seen in the near future.

NIFTY FMCG (29,869.15) closed in the marginal negative territory last week, underperforming the benchmark index Nifty which closed in green with a gain of around 0.70% on a weekly basis. Technically, the index is holding above its 21/50/100/200 day EMA levels on the daily chart. The index is currently trading near the weekly support zone of 29,800-29,900 levels on the daily charts and any close below the same may drag the index towards the lower levels of 29,500 in the short term period. On the other hand, the stock is oscillating the cluster of major moving averages from past few sessions, indicating range bound trade is likely to continue. The Bollinger band (20,2) on the weekly charts suggest the formation of support around the lower levels as the lower band is currently facing the northward direction. Among the index stocks EMAMILTD, GODREJIND, JUBLFOOD, MARICO & PGHH looks bullish while HINDUNILVR, COLPAL and DABUR may remain laggards. Going forward, the supports for the index are placed around 29,800 levels and below it at 29,600 zone, any breach below the level could aggravate selling pressure in the index. While resistance is placed around 30,100 levels and above that around 30,300 levels may act as huge supply zones.

NIFTY BANK (30,084.65) underperformed Nifty with a loss of 1.25% during the week passed by, while the broader index Nifty gained by 0.36%. It traded volatile as the index witnessed a correction from its all-time high. Four sessions out of five witnessed selling, while on the last trading day, the index witnessed support at 29,850 levels. Technically, the index may resume its upward move once 30,250 levels are crossed and sustained, else it may continue to trade with a sell on the rising bias. Markets were disappointed despite the much-anticipated rate cut because of RBIs negative prognosis in respect of the economy. RBI cut the growth forecast for FY19 from 7.4% to 7.2% citing global headwinds and a slowdown in private and public consumption. RBI also reduced the inflation forecast for the first half of FY20 to 2.9-3% from 3.3% earlier. On the stock front, BANKBARODA and FEDERALBNK gained by 2.06% and 1.56% during the week. On the other side, YESBANK, IDFCFIRSTB and ICICIBANK lost by 3.13%, 2.34% and 2.18%, respectively. BankNifty may face a minor resistance at 30,250 levels followed by 30,650 levels. For the week ahead, support for the index can be pegged at 29,850 levels followed by 29,670 levels.

JINDAL STEEL & POWER LIMITED: BUY JINDALSTEL (APR FUTURE) | CMP: 188.60 SECTOR: METALS

JINDALSTEL managed to close with gains of 4.28%, whereas NIFTY METAL Index closed with a gain of 3.09% on a weekly closing basis, exhibiting outperformance of the stock in comparison to the benchmark. After making a swing low of 123 in the earlier month, stock price gradually recovered in the last few weeks. In the last session of the week, the stock price gained momentum with splurge in volume exhibiting buying interest in the counter. Technically, the stock price is holding above its major 200-DEMA (174) and also above its 21 & 50-DEMA which is currently placed near 172 & 163 levels respectively. On the momentum setup, 14-period RSI moved above equilibrium level reaffirming that momentum may accelerate further in sessions to come. Prices after piercing middle Bollinger Band (20,2) witnessed turnaround and moved and sustained above the band. Hence, we recommend Smart Trader to initiate Long position near 186 levels for the higher target of 204, keeping a stop loss below 174 levels.

Sentiment

Stop Loss 174

Target 204

Lot Size 2250

Margin 90338

21-DEMA 172

Open Interest Shares 24610500

Change in OI 1617750

Cost of Carry (%) 16.11

COLGATE-PALMOLIVE (INDIA) LIMITED: SELL COLPAL (APR FUTURE) | CMP: 1236.85 SECTOR: FMCG

COLPAL ended the previous week lower by more than 2% with reasonable volumes, indicating a build-up of short positions in the counter. The stock has also confirmed the hanging man candlestick pattern which was formed last week, by ending lower during the week gone by, thereby adding to our bearish stance on the counter. The stock also has immediate support around Rs.1220 - Rs.1215 levels, which if broken on a conclusive basis, can trigger a fresh round of selling towards the mentioned target levels. This current bearish setup gives aggressive traders an excellent opportunity to go short as per the levels mentioned above since the stock has closed on a negative note is likely to distribute around current levels if the recent highs are not taken out on a closing basis. The stock’s RSI is currently placed around 49.79, well below the RSI Avg.56.95indicating weakness. Hence we recommend traders to short the stock below Rs.1235 with a stop loss placed above Rs.1275 for the downside target of Rs.1160.


WEEKLY VIEW OF THE MARKET

Nifty (11665.95): Nifty ended the previous week near its lifetime high. Last week the Indian markets saw a lot of volatility after the markets clocked fresh record highs on the back of sustained buying activity in heavyweight stocks. Nifty clocked a fresh lifetime intraday high of 11,761, while the BSE Sensex managed to register its lifetime intraday high at 39270.14. Technically, the markets have witnessed a stellar rally in the recent past, but a profit-taking move was also seen post the announcement of the RBI’s monetary policy in which the central bank obliged the street by providing a 25Bps rate cut on the Repo front. Meanwhile, manufacturing activity dropped and slowed to a six month low of 52.6 in March as against that of 54.3 in February. Immediate weekly supports for the Nifty lie around 11,300-11,250 zone where huge amount of put writing is seen, clearly indicating that market participants are not expecting a decline below the said zone. However, in case of a breach of those levels, the index is likely to witness support around 11,200. While on the upside, the Nifty will find it difficult to surpass the immediate resistance around the lifetime high and sustain above it as a good amount of call writing has also been seen around the next resistance zone around 11,800-11,900 strikes. Later this week, the first phase of election kicks in, hence, volatility will spike up. Secondly, towards the end of this week, the IIP and Inflation data will also be released by government agencies which will set the undertone for the markets in the days to come.

DERIVATIVE STRATEGIES

DERIVATIVES

TYPE: BUY CALL IN NIFTY

FIRST LEG Buy one lot of NIFTY 25APRIL 11700 CE @ 168

MAX PROFIT Unlimited

Max Loss 12,600

BEP 11,868.0

STOP LOSS 50 ( Option Points)

RATIONALE The index is expected to trade with a bullish bias in the near term.

TYPE BUY CALL IN RECLTD

FIRST LEG Buy one lot of RECLTD 25 APR 155 CE @ 5

BEP 160

MAX PROFIT UNLIMITED ABOVE BEP

MAX LOSS 30000

STOP LOSS 148 (Spot Levels)

RATIONALE The stock has gained momentum with spurt in volume and stock is well poised with bullish bias. Also in the last session stock has witnessed addition in open interest with rise price, indicating long accumulation in the counter, reaffirming underlying strength in the counter.

TYPE: BULL CALL SPREAD IN BANK NIFTY

FIRST LEG Buy one lot of BANKNIFTY 11 APRIL 30100 CE @ 250

SECOND LEG Sell one lot of BANKNIFTY 11 APRIL 30500 CE @ 95

BEP 30255.0

Max Profit 4,900

MAX LOSS 3,100

RATIONALE The index is expected to trade with a bullish bias in the near term.

TYPE BULL CALL IN INFY

FIRST LEG Buy one lot of INFY 25 APR 760 CE @ 24

SECOND LEG Sell one lot of INFY 25 APR 770 CE @ 20

BEP 764

MAX PROFIT 7200

MAX LOSS 4800

STOP LOSS 745 (Spot Levels)

RATIONALE After minor pullback, stock price found support above its 21-DEMA and gained momentum in the last session of the week. Also on the momentum setup, the stock is well poised with a bullish bias, reaffirming underlying strength in the counter.

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7KSTREET - 06TH APRIL 2019

DERIVATIVES

FII ACTIVITY IN INDEX FUTURES FII ACTIVITY IN STOCK FUTURES

TOP 6 LONG BUILD UP

Stock Name LTP % Price Change Open Int % OI Change

CIPLA 532.1 0.61 10125000 46.76

OFSS 3557.2 5 293000 38.75

PCJEWELLER 87 5.84 13936000 28.08

BAJAJFINSV 7397.8 5.13 706000 23.2

DHFL 163.5 8.82 24089000 21.85

NMDC 105.3 0.81 18534000 19.5

BANKNIFTY OPTION OI CONCENTRATION CHANGE IN BANKNIFTY OPTION OI

TOP 6 SHORT CLOSURE


CHOLAFIN 1484.35 2.2 594000 -30.53

TORNTPOWER 263.6 2.37 2214000 -19.7

STAR 494.85 4.75 3081000 -19.47

SIEMENS 1146.9 1.6 1602000 -16.53

KAJARIACER 619.95 5.1 1875000 -15.43

INDIACEM 110.7 2.22 19562000 -15.41

TOP 6 SHORT BUILD UP


AMBUJACEM 224 -4.8 21575000 107.5

AMARAJABAT 681.65 -5.32 2091000 67.34

BPCL 358.1 -9.92 11147000 55.56

LT 1373.8 -0.83 7939000 25.29

CUMMINSIND 714.8 -4.18 1728000 22.05

JETAIRWAYS 256.1 -4.72 7014000 21.68

TOP 6 LONG CLOSURE


CGPOWER 38.65 -9.48 25596000 -25.65

BEML 990.45 -2.18 1441000 -18.97

IDBI 44.7 -4.18 27770000 -14.79

COALINDIA 234.7 -1.05 31456000 -13.89

RPOWER 10.5 -7.49 1.05E+08 -13.12

JISLJALEQS 56.85 -3.48 35874000 -10.33

NIFTY OPTION OI CONCENTRATION CHANGE IN NIFTY OPTION OI

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COMMODITIES

BULLIONIt was a roller coaster ride for the global bullion market during the week ended on 5th April 2019. During the first part of the week, the market was under pressure owing to rise in the dollar index. Besides, strength in the global equity market also weighed on the bullion prices. Disappointing economic data from the US failed to have a major impact on the yellow metal market. Major economic releases from the US were core retail sales, which dropped by 0.4% against the previous reading of 1.4%. US manufacturing PMI data showed an improvement to 55.3 from the previous number of 54.2. Core durable goods orders have improved by 0.1% against -0.2% while ADP non-farm payrolls increased by 129,000 against 197,000 recorded in the previous month. On the domestic front, MCX gold futures movement was dictated by USDINR pair.

CRUDE OILCrude oil prices have posted the biggest first-quarter price push since 2009 supported by production cut led by the producer’s cartel OPEC and Russia and the sanctions imposed by the US on Iran and Venezuela. In addition, tariff impositions by the US over China created a fear of global economic slowdown, hampering global energy demand. As per EIA, US crude oil imports averaged 6.8 Mn barrels per day last week, up by 223,000 barrels per day from the previous week. The US commercial crude oil inventories increased by 7.2 Mn barrels from the previous week. Total motor gasoline inventories decreased by 1.8 Mn barrels last week and are about 2% above the five year average for this time of year. The distillate fuel inventories decreased by 2 Mn barrels during the last week. Total crude arrivals into Asia for March closed 24.12 Mn barrels per day (bpd) down from the record inflow of 26.46 Mn bpd in February as refinery maintenance in North Asia put a lid on demand. The United States re-imposed sanctions on Iran after President Donald Trump last May withdrew the country from a 2015 nuclear deal between Iran and several world powers, accusing it of supporting terrorism and conflicts in Syria and Yemen. According to PDVSA, Venezuela’s state-run energy company, PDVSA, kept oil exports near 1 Mn barrels per day in March despite US sanctions and power outages that crippled its main export terminal. The OPEC member stabilized exports in March after shipments fell about 40% in February from the prior months. By the end of the current week, Crude oil prices fell, with Brent slipping away from the $70 mark after briefly rising above that level in the previous session, as traders fretted about progress in US-China talks to end a trade war. Saudi Arabia is threatening to sell its oil in currencies other than the dollar if Washington passes a bill exposing OPEC members to US antitrust lawsuits. According to Reuters, Venezuelan state-owned oil company PDVSA expects its crucial crude upgraders to operate well below capacity this month as US sanctions and energy blackouts hit the OPEC nation’s oil industry. In the coming months, eyes will be on OPEC nations and Russia who are expected to formulate a strategy on crude exports. The ongoing tussle between US President Donald Trump and the OPEC nations has resulted in a directional uncertainty among the traders in the global market.

BASE METALSMetal prices started the fresh month on a mixed note and traded on a negative note for the next one trading session and rose towards the end of week, largely weighed by the increased manufacturing activity of China and optimism over closing the trade talks between US and China in the coming four weeks. After Russia’s Rusal had launched new production at its Boguchansk aluminium smelter in Siberia doubling its capacity to 298,000 tons a year, investor concerns about the rising supply of aluminium were heightened. This shall keep the bearish foot intact in the near term and any rise in the short term shall be mere corrections in prices. As per Antaike’s forecast, China’s output of aluminum is expected to grow 1.7% year on year to 37.2 Mn tons in 2019, and demand is to add 1% to 37.5 Mn tons, giving support to the prices but keeping the bearish term. On a monthly basis, China’s copper products production was down by 49.3% to 710,000 tons in February and 29.1% year on year, giving an overview of supply shortness in the global markets and supporting the prices in the near term. From Jan to Feb, the output of refined copper was 1.34 Mn tons, up 6.2% y/y from 2018, indicating less support for the metal. China’s zinc output during Jan – Feb 2019 was down by 8.2% on a yearly basis to 851,000 tons. From Jan to Feb, the output of refined lead production was up to 923,000 tons, 8.8% on a yearly basis compared to 2018. Chinese Ministry of Ecology and Environment (MEE) will work with other departments including the Ministry of Public Security to launch a new round of probes on the illegal collection and dismantling of lead-acid batteries and smelting lead, which shall give support to the prices in the near term. Passenger car trades in China were 1.20 Mn and 807,300 respectively in Jan – Feb 2019, up 0.79% and 1.68% on a yearly basis. Basic passenger cars accounted for 60.81%, passenger cars 9.75%, trucks 10.3%, SUV7.11% and MPV 5.73%, which was down on a monthly basis. Coming to the economic front, Chinese commitments to increase purchases of American agricultural, energy and manufactured products are expected to be part of a final deal, and China would get about six years to meet those commitments, or until 2025.

COTTONCotton futures traded higher for the most part of the week due to expanding demand-supply gap. Emerging concerns over supply deficit driven by lower production in major cotton growing states helped prices to stay firmer during the week ending on 5th April. Cotton production for the year 2018-19 is estimated to be lower by 10% on a yearly basis due to minimal yield realization amid fall in acreages in the central and southern region of India. Cotton Association of India has estimated production for the year 2018-19 at 328 lakh bales compare to 365 lakh bales of the

prior year. Moreover, improved seasonal demand of the cotton also sparked fresh buying at futures as well as a physical platform. Apart from that, prices tracked gains in global cotton prices supported by the expectation of settlement of trade tension between the US and China which could boost up the trading activities between these two countries. Likewise, slower sowing progress of cotton in the US and expected fall in acreages under cotton in the US buoyed prices. As per USDA, all cotton planted area for 2019 in the US is estimated at 13.8 Mn acres, 2% below last year. Upland area is estimated at 13.5 Mn acres, down 2% from 2018. American Pima area is estimated at 255,000 acres, up 2% from 2018. Meanwhile, USDA released its weekly export sales report on Thursday for the week ending 28th March showed net sales of 322,100 RB were up 47% from the previous week and up noticeably from the prior 4-week average. Increases were reported for Vietnam (100,800 RB), China (59,000 RB), Bangladesh (48,700 RB), India (43,800 RB), and Turkey (42,700 RB). Similarly, Exports of 410,900 RB were up 8% from the previous week and 19% from the prior 4-week average. Exports were primarily to Vietnam (86,200 RB), Turkey (80,800 RB), Pakistan (51,100 RB), China (46,500 RB), and Indonesia (28,800 RB)..

OIL & OILSEEDSSoybean futures at NCDEX platform traded on positive bias during the week ending on 5th April following a pickup in demand at key trading centers. Apart from that, gains in CBOT soybean prices driven by optimism over ease of trade dispute between the US and China also helped prices to trade on a positive bias. USDA weekly export sales data for the week ending 28Mar showed Net sales of 36,700 MT for 2018/2019 were up noticeably from the previous week and the prior 4-week average. Meanwhile, US exporters sold 828,000 tons of soybeans to China, as per the US Agriculture Department. Meanwhile, USDA released its planting prospective report for the year 2019- 20 on Friday. As per USDA planting prospects reports Soybean planted area for 2019 is estimated at 84.6 Mn acres, down 5% from last year. Compared with last year, planted acreage is down or unchanged in 26 of the 29 estimating States. Similarly, RM Seed futures traded higher on commencement of procurement of mustard seed by NAFED at MSP of Rs.4200 per quintal. Moreover, improved buying from stockiest also helped prices trade on to remain higher during the week. Refine soy oil at NCDEX platform traded higher following good buying at the physical market. Moreover, increased import cost due to weakness in Indian currency also impacted market sentiments positively during the week. Likewise, CPO futures traded higher following gains in BMD CPO prices. BMD CPO futures rose in expectation of fall in inventory levels during months of Nov. Apart from that, reports of higher export from Malaysia during the month of March added positivity to prices. Intertek Testing Services said Malaysia’s palm oil shipments in March rose 22.4% from a month earlier, while AmSpec Agri Malaysia said exports increased 22.9% last month.

SPICESEntire commodities in the spices complex witnessed positive trend during the week ended on 5th April. Cardamom futures started positively and extended 8-year high levels further tracking unfavorable weather conditions in the growing regions. Lack of rainfall amid dry and higher temperature has affected the crop growth creating expectations of a sharp decline in yield levels. A major rally in prices was limited all these days as there were no exports; however, as the export inquiries from Saudi Arabia has come for the quality certified ahead of Ramzaan and this supported sharp rally in prices. However, gains were limited as prices loss some gains on profit booking during mid-week before turning positive again on the last day of the week. Skymet Weather, private weather forecaster released their forecast for monsoon 2019; according to the forecast, monsoon in 2019 is likely to be below normal with 93% of LPA. This also kept prices supported during the week. Hence, Apr futures traded in a range of Rs.1740-1646.8/kg before closing the week at Rs.1700/quintal, up by 1.21% W/W; however, continued profit booking from higher levels in next month May futures resulted in prices closing in red with the loss of 2.09% from its last trade. Turmeric futures rallied to their 3-month higher levels during the week tracking strong buying activities at the spot market. Further, the forecast of below normal rainfall in monsoon 2019 by Skymet Weather supported gains. Spot markets opened after remaining closed on account of year ending; arrivals increased aftermarket reopened. Hence, Apr futures traded in the range of Rs.6618/quintal and Rs.6102/quintal before closing at Rs.6450/quintal; up by 6.02% W/W while May futures closed with gains of 6.20% from last trade. The lower price level at both the futures market and spot markets resulted in active buying of the commodity. Jeera futures extended gains for the 6th consecutive week as they traded sideways to positive during the week. Prices traded lower initially during the week but soon recovered to hit multi-month high. Improvement in the buying activities at the spot market supported gains. Current lower levels are good levels for the large scale buyers such as stockiest and exporters. The export demand in the coming days will drive the prices as India is the major supplier of the spice to the world. Hence, Apr futures closed the trade at Rs.15940/quintal; up by 1.30% W/W while May futures closed the trade with gains of 1.69% from last week. Apr futures made a low of Rs.15580/quintal and a high of Rs.16350/quintal during the week. Dhaniya futures noted sharp gains as they traded higher for the 5th successive week. Strong buying activities amid declined supplies at the spot market supported gains. Further, supply concerns amid lower crop estimations supported sharp gains to 2-year high levels. Hence, Apr futures made a high of Rs.7254/quintal and low of Rs.6696/quintal before closing at Rs.7190/quintal, up by 8.02% W/W while May futures closed with gains of 7.81% from last week.


SILVER

COMMODITIES

TRENDSHEET

Commodities 29-Mar 5-Apr % Change 52 Week High% Change from 52

Week High52 Week Low

% Change from 52 Week Low

MCX Gold (Rs/10 gms) 31734.0 31740.0 0.0% 34031.00 -6.73% 29268.00 8.45%

MCX Silver (Rs/Kg) 37761.0 37559.0 -0.5% 41698.00 -9.93% 34981.00 7.37%

MCX Crude Oil (Rs/bbl) 4185.0 4347.0 3.9% 5669.00 -23.32% 2993.00 45.24%

MCX Natural Gas (Rs/mmBtu) 186.7 185.1 -0.9% 358.70 -48.40% 171.60 7.87%

MCX Copper (Rs/kg) 451.1 443.0 -1.8% 493.25 -10.20% 397.40 11.46%

MCX Lead (Rs/kg) 139.6 137.5 -1.5% 171.80 -19.99% 133.15 3.23%

MCX Zinc (Rs/kg) 205.1 227.0 10.7% 227.85 -0.37% 163.80 38.58%

MCX Nickel (Rs/kg) 898.6 903.8 0.6% 1095.20 -17.48% 735.00 22.97%

MCX Aluminium (Rs/kg) 150.2 147.3 -1.9% 178.85 -17.64% 124.75 18.08%

NCDEX Soybean (Rs/Quintal) 3681.0 3785.0 2.8% 3915.00 -3.32% 3149.00 20.20%

NCDEX Refined Soy Oil (Rs/10 kg) 728.8 745.5 2.3% 786.75 -5.24% 713.60 4.47%

NCDEX RM Seed (Rs/Quintal) 3754.0 3781.0 0.7% 4244.00 -10.91% 3711.00 1.89%

MCX CPO (Rs/10 kg) 516.6 548.5 6.2% 673.00 -18.50% 483.40 13.47%

NCDEX Castor Seed (Rs/Quintal) 5278.0 5620.0 6.5% 6300.00 -10.79% 3831.00 46.70%

NCDEX Turmeric (Rs/Quintal) 6084.0 6450.0 6.0% 7702.00 -16.26% 5958.00 8.26%

NCDEX Jeera (Rs/Quintal) 15735.0 15940.0 1.3% 21000.00 -24.10% 14600.00 9.18%

NCDEX Dhaniya (Rs/Quintal) 6656.0 7190.0 8.0% 7254.00 -0.88% 4186.00 71.76%

MCX Cardamom (Rs/kg) 1679.7 1700.0 1.2% 1740.00 -2.30% 818.50 107.70%

NCDEX Wheat (Rs/Quintal) 1783.0 1845.0 3.5% 2162.00 -14.66% 1640.00 12.50%

NCDEX Guar Seed (Rs/Quintal) 4370.5 4411.0 0.9% 4869.50 -9.42% 3494.50 26.23%

NCDEX Guar Gum (Rs/Quintal) 8801.0 8950.0 1.7% 10510.00 -14.84% 7200.00 24.31%

MCX Cotton (Rs/Bale) 21060.0 22280.0 5.8% 24280.00 -8.24% 19970.00 11.57%

NCDEX Cocud (Rs/Quintal) 2281.5 2443.0 7.1% 2454.00 -0.45% 1166.00 109.52%

NCDEX Kapas (Rs/20 kg) 868.0 868.0 0.0% 938.50 -7.51% 854.00 1.64%

MCX Mentha Oil (Rs/kg) 1732.0 1523.5 -12.0% 1846.10 -17.47% 1106.00 37.75%

TECHNICAL RECOMMENDATIONS

NICKEL

TURMERIC

Silver may contract futures at the MCX platform has opened at Rs 37807, made a high of 37836 low of 37000 and trading around Rs 37510 levels. Weekly 13 and 24 EMA are providing radiances around Rs 38600 then at 39130 levels. Indicators have approaching oversold territory and the prices are now at support levels. Therefore, we are expecting a long term bull rally continuation and recommend buying from lower levels

Weekly Strategy:Silver May MCX: Buy at 37000-36900 TP 38000/38600 SL 36450

Nickel April contract futures at the MCX platform has opened at Rs 915/Kg, made a high of Rs 926.70 and low of 891.10. As on 5th April 2019 at 7 Pm prices are trading around 910. Prices are trading above the weekly 8,13 EMA levels and providing supports at 705 levels. Prices have failed to sustain above the Fibonacci 61.8% retracement resistance levels at 970 levels. Overall trend positive but correction is expected thus we recommend selling for 1-2 weeks.

Nickel April MCX: Sell at Rs 920-925 TP 860 SL 970

Turmeric April futures at the NCDEX platform has opened at Rs 6108/quintal and made a low of 6102, high of Rs 6618 and finally settled higher at 6450 levels. Prices have breached the falling trend line and also the Weekly EMA levels around Rs 5300 levels. Indicators are at a natural zone, therefore, we recommend buying the commodity from lower levels.

Turmeric May NCDEX: Buy at 6400-6420 TP 6900 SL 6250


COMMODITIES

MCX CRUDE MCX NATURAL GAS

MCX CRUDE- PRICE, VOLUME & OPEN INTEREST MCX NATURAL GAS – PRICE, VOLUME & OPEN INTEREST

NEWS DIGEST

• Oil prices steadied below $70 a barrel in London, a level which has been not breached since November, as a surprise surge in the US crude stockpiles showing that markets remain adequately supplied. Brent crude futures, the international benchmark, reversed earlier losses to rise 0.4%.

• Gold is likely to hit a bump in futures trade on Friday, reflecting a weak global trend. The yellow metal slipped in global markets as the dollar rose against the yen on signs of progress in the US-China trade dispute and strong US economic data.

• Country-wise tea exports during the months of January and February this year fell to 41.60 Mn kilograms from 44.72 Mn kilograms during the same period last year, according to Tea Board data. Exports to CIS countries during the first two month period of 2019 fell to 9.20 Mn kilograms from 11.36 Mn kilograms in the same period of 2018.

• Zinc prices rose by 0.29% to Rs 226.95 per kg in futures trade on April 5 tracking a firm trend at the physical market on the back of the pickup in demand. At the Multi Commodity Exchange, zinc for April was trading higher by 65 paise, or 0.29%, to Rs 226.95 per kg with a business turnover of 8,403 lots.

• Copper futures rose by 15 paise to Rs 445.75 per kg on April 5 amid pick up in domestic demand at the spot market. At the Multi Commodity Exchange, copper for delivery in April rose by 15 paise, or 0.03%, to Rs 445.75 per kg in a business turnover of 17,338 lots. Besides increased demand from consuming industries, a firm trend in base metals in the global market influenced copper prices at futures trade.

WEEKLY COMMENTARY

• Gold prices slipped on Friday as global stocks firmed and the dollar rose against the yen, but bullion held above a 10-week low touched in the previous session ahead of US jobs data. Spot gold slipped 0.2% to $1,289.40 per ounce by 1012 GMT, after touching its lowest since 25th January at $1,280.59 on Thursday.

• The prices of cotton remained stable. The trading volume increased. Due to the increase in dollar and interest rate and the news of an increase in the prices of energy economic activity was literally stopped. In the local cotton market during the last week the increase in buying was witnessed by textile and spinning mills and due to ginners’ interest in selling the prices of cotton remained stable, while prices of low-quality cotton were increased due to which the trading volume increased.

• Crude is set for the longest weekly winning streak since November 2017 amid concerns over supply shortfalls from countries like Venezuela and optimism over US-China trade talks. Futures in New York rose as much as 0.9% Friday, leading to a 4% rally for the week. Opec’s production dropped for a fourth straight month in March, while Venezuela’s oil output has plunged by half amid power failures, according to people familiar with the matter.

• Soyabean has fallen almost 3.69% in last 2 month on the back of increase arrivals and higher stocks of soyabean. In its latest press release by SOPA, soybean arrivals for the Oct-Feb period in the current crop year pegged at 73 lakh tons (lt), up by 24.9% on year. SOPA expects availably of soybean for crushing, direct use and exports in 2018/19 to be about 102 lakh tons as against 86 lt last year.

• According to USDA monthly report in February, palm oil consumption for India is forecast at 10.6 mt, up 16.7% on year. Prices of the edible oil have been weighed by expectations of rising production in March and current highs in inventory levels in Malaysia. Malaysian palm oil inventories rose 1.3% to 3.05 mt in February from a month earlier while production declined 11.1% to 1.54 mt.

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COMMODITIES

PRICES OF METALS IN LME/ COMEX/ NYMEX (IN US $)

Commodity Exchange Contract 29-Mar 05-Apr % change

Aluminium LME 3M 1911.00 1909.00 -0.10%

Copper LME 3M 6473.50 6450.00 -0.36%

Lead LME 3M 2015.00 2000.00 -0.74%

Nickel LME 3M 12995.00 13160.00 1.27%

Zinc LME 3M 2913.00 2914.50 0.05%

Gold CME APR 1290.80 1291.10 0.02%

Silver CME MAY 15.10 15.12 0.10%

WTI Crude oil CME MAR 60.18 62.18 3.32%

Natural Gas CME MAR 2.67 2.65 -0.97% INTERNATIONAL COMMODITY PRICES

Commodity Exchange Contract 22-Mar 29-Mar % change

Soybean CBOT MAY 923.50 909.00 -1.57%

Soy oil CBOT MAY 28.61 28.65 0.14%

CPO BMD JUNE 2165.00 2103.00 -2.86%

Cotton ICE MAY 76.60 75.90 -0.91%

FUTURE PRICES (% CHANGE)

LME WAREHOUSE STOCKS (IN TONS)

Commodity Previous week This week Change % Change

Copper 175325 168525 -6800 -3.88%

Zinc 57650 52325 -5325 -9.24%

Aluminium 1160275 1129175 -31100 -2.68%

Lead 78275 78750 475 0.61%

Nickel 185358 182574 -2784 -1.50%

SHANGHAI WAREHOUSE STOCKS (IN TONS)*


Copper 261412 257320 -4092 -1.57%

Zinc 109804 108772 -1032 -0.94%

Aluminium 734990 722092 -12898 -1.75%

*Until Wednesday

WEEKLY STOCK POSITION IN LME (IN TONS)

COMEX WAREHOUSE STOCKS (IN TONS)


Copper 43562 41425 -2137 -4.91%

-12.04%

-1.90%

-1.80%

-0.86%

-1.54%

-0.53%

0.02%

0.47%

0.72%

0.93%

1.21%

0.58%

1.30%

1.69%

2.30%

2.83%

3.48%

3.87%

5.79%

6.02%

6.17%

6.48%

7.08%

8.02%

10.68%

-15.00% -10.00% -5.00% 0.00% 5.00% 10.00% 15.00%

Mentha Oil

Aluminum

Copper

Natural Gas

Lead

Silver

Gold

Barley

RM Seed

Guar Seed

Cardamom

Nickel

Jeera

Guar Gum

Soy Oil

Soybean

Wheat

Crude Oil

Cotton

Turmeric

CPO

Castor Seed

Cotton Seed Oil Cake

Dhaniya

ZincWith the peak summer on the horizon, the common man waits for good rains for some respite from the scorching heat of April and May. There is another set of people in the govt – the policymakers and farmers who wait for the forecast for the upcoming monsoon season every year. Good rainfall in the four-month-long monsoon season is crucial for the rural economy as production in Kharif season is dependent on the monsoon rainfall; India’s agricultural production of more than 60% is produced in the Kharif season, hence, any irregularities in the rainfall would hamper production thereby resulting in short supply of majority of the essential commodities. The monsoon season delivers about 70% of India’s annual rainfall and is key to the success of the farm sector in the country.

Skymet Weather, a private weather forecaster in its report released on 3rd April forecasts a below normal rainfall of 93% (with an error of -/+5%) of the Long Period Average (LPA) of 887 mm. The below-normal rainfall is attributed mainly to the El Nino phenomenon that affects rainfall in the country. The Skymet Weather model suggests that there is 80% chance of active El Nino during Mar-May and 60% chance during June-August. Earlier in February, Skymet had said monsoon rainfall in India is expected to be normal this year; but the later development in the El Nino has resulted in the downward revision of the view. But as per the IMD, the monsoon is likely to be robust and healthy in 2019 provided there is not a surprise El Nino phenomenon. So with the country’s prominent weather forecasters with a slightly contrary view on the monsoon, it has to be seen who will get their forecast right.

Below is the probability of monsoon,

• 0% chance of excess (seasonal rainfall that is more than 110% of LPA)

• 0% chance of above normal (seasonal rainfall that is between 105 to 110% of LPA)

• 30% chance of normal (seasonal rainfall that is between 96 to 104% of LPA)

• 55% chance of below normal (seasonal rainfall that is between 90 to 95% of LPA)

• 15% chance of drought (seasonal rainfall that is less than 90% of LPA)

• On a monthly basis, rainfall probability is as follows,

• June – 77% of LPA (LPA for June = 164 mm)

• June – 77% of LPA (LPA for June = 164 mm)

• August – 102% of LPA (LPA for August = 261 mm)

• September – 99% of LPA (LPA for September = 173 mm)

Rainfall is expected to be weak in the first two months; this is likely to have an impact on the sowing activities of Kharif crop. However, the only silver lining is that rainfall is close to normal in the last two months. Indian Meteorological Department is expected to release their first forecast on monsoon anytime in April and later will be followed up with a second forecast in May with the forecast of onset date as well.

WEEKLY COMMENTARY


USD/INR

USDINR is currency trading at 69.22. During the week, it made a high of 69.36 and low of 68.38. The RSI is at 40.91. The moving average of 32 is at 70.20 and 55 is at 69.22. The trend is looking sideways for the week. Hence, we recommend buying at 69.00-68.90 TP 70.00 SL 68.50.

EUR/INR

EURINR is currency trading at 79.94. During the week, it made a high of 77.85 and low of 76.79. The RSI is trading at 36.08. The moving average of 32 is at 80.17 and 55 is at 79.94. The trend is looking positive for the week. Hence, we recommend buying at 77.50-77.60 TP 78.50 SL 77.00.

GBP/INR

GBPINR is currency trading at 90.42. During the week, it made a high of 91.11 and low of 89.53. The RSI is trading at 45.45. The moving average of 32 is at 91.47 and 55 is at 90.99. The trend is looking side for the week. Hence, we expect a trading range of 89.50-91.50.

JPY/INR

JPYINR is currency trading at 61.96. During the week, it made a high of 62.28 and low of 61.96. The RSI is at 40.51. The moving average of 32 is at 63.24 and 55 is at 62.67. The trend is looking sideways for the week. Hence, we recommend selling at 62.50-62.80 TP 61.00 SL 63.00.

TECHNICAL RECOMMENDATIONMARKET STANCE

In a largely anticipated move, RBI has cut the interest rates by 25 bps but surprised the markets with no change in policy stance at Neutral while markets expected an accommodative. There might be another rate cut during the year but may not be expected in June as the RBI pointed out the risks of EL-Nino, election results and uncertain crude prices. RBI said the output gap remains negative, domestic economy facing headwinds on the global front. Indian government bonds slumped and Rupee extended losses after the announcement as the central bank has sounded dovish on the economy although it mentioned that the risks are evenly balanced. Stocks across the globe advanced largely pulled by the optimism over a potential trade deal between the US and China. The wall street journal has reported that Trump expects to announce the date of trade summit with Xi Jinping in a day. President Trump announced that a trade deal could happen within four weeks while warning China that it would be difficult to allow trade to continue without a pact. Sterling is seen holding to its support at 1.3000 although witnessed see-saw movements during the week. The uncertainty about the Britain withdrawal agreement has substantially increased as the 12th April deadline approaches. EU has already warned Britain it would not accept for a fresh deal or a short term extension of the deadline.

NEWS FLOWS OF LAST WEEK

• US manufacturing activity expanded last month, rebounding from its lowest level since late 2016. On the other hand, the Caixin Manufacturing PMI surprisingly jumped to 50.8 in March to its highest level in eight months in contrast with the analyst expectation of a 49.9, which performed as the main catalyst to push global equities higher.

• After a successful implementation of first Dollar Buy/Sell swap agreement by RBI, it has decided to come up with another auction of a similar kind on 23 April for an amount of $5 Bn.

• US President Trump took a step back from his threat to close the US southern border to fight illegal immigration, as pressure mounted from companies worried that a shutdown would cause chaos to supply chains.

• Activity in China’s services sector picked up to a 14-month high in March as demand improved at home and abroad, a private business survey showed today, adding to signs that government stimulus policies are gradually kicking in.

• PM May hunted for a compromise with opposition leader Jeremy Corbyn in an attempt to prevent a potentially disorderly departure on 12th April. The lower house of the British Parliament approved legislation which would force May to seek a Brexit delay.

• India FX reserves increased to 411.91 Bn from 406.67 Bn during the week ended on 29 March 2019.

CURRENCY

CURRENCY TABLE

Currency Pair Open High Low Close

USDINR 69.27 69.36 68.38 69.22

EURINR 77.61 77.85 76.79 77.72

GBPINR 90.55 91.11 89.53 90.42

JPYINR 62.19 62.28 61.30 61.96


ECONOMIC GAUGE FOR THE NEXT WEEK

GMT Start Date Local Time Country Relevance Indicator Name Period Reuters Poll Prefix Unit Prior

8 Apr 14:00 Euro Zone Medium Sentix Index Apr 2019 -2.1 Diff.Idx -2.2

8 Apr 19:30 United States High Factory Orders MM Feb 2019 -0.6 Percent 0.1

8 Apr 21:30 United States Not Rated Export Wheat Inspected W 04 Apr Thou Ton 418.4

8 Apr 21:30 United States Not Rated Export Corn Inspected W 04 Apr Thou Ton 1259

8 Apr 21:30 United States Not Rated Exp Soybean Inspected W 04 Apr Thou Ton 730.8

9 Apr 19:30 United States Medium JOLTS Job Openings Feb 2019 7.565 Mln Person 7.581

9 Apr 21:30 United States Not Rated Fla Orange Output 18/19 Apr 2019 Mln No. of 77

9 Apr 21:30 United States Not Rated WSD-Wheat Output 18/19 Apr 2019 Bln Bushel 1.884

9 Apr 21:30 United States Not Rated WSD-Wheat Endstocks18/19 Apr 2019 Bln Bushel 1.055

9 Apr 21:30 United States Not Rated WSD-Corn Output 18/19 Apr 2019 Bln Bushel 14.42

9 Apr 21:30 United States Not Rated WSD-Corn Endstocks 18/19 Apr 2019 Bln Bushel 1.835

9 Apr 21:30 United States Not Rated WSD-Soybean Output 18/19 Apr 2019 Bln Bushel 4.544

9 Apr 21:30 United States Not Rated WSD-Soybn Endstocks18/19 Apr 2019 Mln Bushel 900

9 Apr 21:30 United States Not Rated WSD-Cotton Output 18/19 Apr 2019 Mln Bale 18.39

9 Apr 21:30 United States Not Rated WSD-Cottn Endstocks18/19 Apr 2019 Mln Bale 4.3

9 Apr 21:30 United States Not Rated WSD-Beef Output 2019 Apr 2019 Bln Pound 27.36

9 Apr 21:30 United States Not Rated WSD-Pork Output 2019 Apr 2019 Bln Pound 27.44

9 Apr 21:30 United States Not Rated WSD-Poultry Output 2019 Apr 2019 Bln Pound 49.04

9 Apr 21:30 United States Not Rated WSD-Corn Yield 18/19 Apr 2019 Bushel 176.4

9 Apr 21:30 United States Not Rated WSD-Corn Exports 18/19 Apr 2019 Bln Bushel 2.38

9 Apr 21:30 United States Not Rated World Corn E/S 18/19 Apr 2019 Mln Ton 308.5

9 Apr 21:30 United States Not Rated WSD-Corn Endstock 17/18 Apr 2019 Bln Bushel 2.14

9 Apr 21:30 United States Not Rated WSD-Soybean Yield 18/19 Apr 2019 Bushel 51.6

9 Apr 21:30 United States Not Rated WSD-Soybean Exp 18/19 Apr 2019 Bln Bushel 1.88

9 Apr 21:30 United States Not Rated World Soy E/S 18/19 Apr 2019 Mln Ton 107.2

9 Apr 21:30 United States Not Rated WSD-Soybean E/S 17/18 Apr 2019 Mln Bushel 438

9 Apr 21:30 United States Not Rated World Wheat E/S 18/19 Apr 2019 Mln Ton 270.5

9 Apr 21:30 United States Not Rated WSD-Wheat Endstocks17/18 Apr 2019 Bln Bushel 1.099

10 Apr 14:00 United Kingdom High GDP Est 3M/3M Feb 2019 0.2 Percent 0.2

10 Apr 14:00 United Kingdom High GDP Estimate MM Feb 2019 0 Percent 0.5

10 Apr 14:00 United Kingdom High GDP Estimate YY Feb 2019 1.7 Percent 1.4

10 Apr 14:00 United Kingdom Not Rated Services MM Feb 2019 Percent 0.3

10 Apr 14:00 United Kingdom Not Rated Services YY Feb 2019 Percent 1.7

10 Apr 14:00 United Kingdom Medium Industrial Output MM Feb 2019 0.1 Percent 0.6

10 Apr 14:00 United Kingdom Medium Industrial Output YY Feb 2019 -0.8 Percent -0.9

10 Apr 14:00 United Kingdom High Manufacturing Output MM Feb 2019 0.2 Percent 0.8

10 Apr 14:00 United Kingdom Medium Manufacturing Output YY Feb 2019 -0.6 Percent -1.1

10 Apr 14:00 United Kingdom Medium Goods Trade Balance GBP Feb 2019 -12.8 Bln GBP -13.08

10 Apr 17:15 Euro Zone High ECB Refinancing Rate Apr 2019 0 Percent 0

10 Apr 17:15 Euro Zone High ECB Deposit Rate Apr 2019 -0.4 Percent -0.4

10 Apr 18:00 United States Medium Core CPI YY, NSA Mar 2019 2.1 Percent 2.1

10 Apr 18:00 United States High CPI MM, SA Mar 2019 0.3 Percent 0.2

10 Apr 18:00 United States Medium CPI YY, NSA Mar 2019 1.8 Percent 1.5

10 Apr 18:00 United States Not Rated CPI MM NSA Mar 2019 Percent 0.42

10 Apr 18:00 United States Not Rated CPI Index SA Mar 2019 Index 253.1

10 Apr 20:00 United States Not Rated EIA Weekly Crude Stocks W 05 Apr Mln Barrel 7.238

10 Apr 20:00 United States Not Rated EIA Weekly Dist. Stocks W 05 Apr Mln Barrel -1.998

10 Apr 20:00 United States Not Rated EIA Weekly Gasoline Stk W 05 Apr Mln Barrel -1.781

10 Apr 20:00 United States Not Rated EIA Weekly Crude Imports W 05 Apr Mln Barrel 0.386

CURRENCY


CURRENCY

10 Apr 20:00 United States Not Rated EIA Weekly Rfg Stocks W 05 Apr Mln Barrel 0

10 Apr 20:00 United States Not Rated EIA Weekly Heatoil Stock W 05 Apr Mln Barrel -0.036

10 Apr 20:00 United States Not Rated EIA Weekly Prods Imports W 05 Apr Mln Brl/Day -0.114

10 Apr 20:00 United States Not Rated EIA Weekly Dist Output W 05 Apr Mln Brl/Day -0.055

10 Apr 20:00 United States Not Rated EIA Weekly Crude Runs W 05 Apr Mln Brl/Day 0.018

10 Apr 20:00 United States Not Rated EIA Weekly Refining Util W 05 Apr Percent -0.2

10 Apr 20:00 United States Not Rated EIA Wkly Crude Cushing W 05 Apr Mln Barrel 0.201

10 Apr 20:00 United States Not Rated EIA Weekly Gasoline O/P W 05 Apr Mln Brl/Day 0.156

10 Apr 23:00 United States Not Rated EIA Ethanol Ref Stk W 05 Apr Thou Barrel 23992

10 Apr 23:00 United States Not Rated EIA Ethanol Fuel Total W 05 Apr Thou Brl/Day 999

10 Apr : China (Mainland) High M2 Money Supply YY Mar 2019 8.2 Percent 8

10 Apr : China (Mainland) High New Yuan Loans Mar 2019 1200 Bln CNY 885.8

10 Apr : China (Mainland) Medium Outstanding Loan Growth Mar 2019 13.4 Percent 13.4

10 Apr 04:31 United Kingdom Medium RICS Housing Survey Mar 2019 -30 Balance -28

11 Apr 07:00 China (Mainland) High PPI YY Mar 2019 0.5 Percent 0.1

11 Apr 07:00 China (Mainland) High CPI YY Mar 2019 2.3 Percent 1.5

11 Apr 07:00 China (Mainland) Medium CPI MM Mar 2019 -0.2 Percent 1

11 Apr 07:30 China (Mainland) High Total Social Financing Mar 2019 1744 Bln CNY 703

11 Apr 18:00 United States Not Rated Corn Export Sales New W 04 Apr Thou Ton 811.3

11 Apr 18:00 United States Not Rated Corn Export Sales Net W 04 Apr Thou Ton 537.2

11 Apr 18:00 United States Not Rated Corn Exp Sale Next Yr Net W 04 Apr Thou Ton 93

11 Apr 18:00 United States Not Rated Corn Exp Sales Net Total W 04 Apr Thou Ton 630.2

11 Apr 18:00 United States Not Rated Soybean Export Sales New W 04 Apr Thou Ton 2038

11 Apr 18:00 United States Not Rated Soybean Export Sales Net W 04 Apr Thou Ton 1972

11 Apr 18:00 United States Not Rated Soybean Exp Sale Next Yr Net W 04 Apr Thou Ton 20.5

11 Apr 18:00 United States Not Rated Soybean Exp Sale Net Total W 04 Apr Thou Ton 1992

11 Apr 18:00 United States Not Rated Soybeanmeal Exp Sale Net W 04 Apr Thou Ton 190.3

11 Apr 18:00 United States Not Rated Soymeal Exp Sls Next Yr Net W 04 Apr Thou Ton 0.1

11 Apr 18:00 United States Not Rated Soybn Meal Exp Sls Net Total W 04 Apr Thou Ton 190.4

11 Apr 18:00 United States Not Rated Soybeanoil Exp Sales Net W 04 Apr Thou Ton 36.8

11 Apr 18:00 United States Not Rated Soybn Oil Exp Sls Nxt Yr Net W 04 Apr Thou Ton 2.3

11 Apr 18:00 United States Not Rated Soybn Oil Exp Sls Net Total W 04 Apr Thou Ton 39.1

11 Apr 18:00 United States Not Rated Wheat Export Sales New W 04 Apr Thou Ton 731

11 Apr 18:00 United States Not Rated Wheat Export Sales Net W 04 Apr Thou Ton 704.8

11 Apr 18:00 United States Not Rated Wheat Exp Sale Next Yr Net W 04 Apr Thou Ton 312.8

11 Apr 18:00 United States Not Rated Wheat Exp Sale Net Total W 04 Apr Thou Ton 1018

11 Apr 18:00 United States Not Rated Beef Export Sales New W 04 Apr Thou Ton 21.4

11 Apr 18:00 United States Not Rated Beef Export Sales Net W 04 Apr Thou Ton 20.4

11 Apr 18:00 United States Not Rated Up Cotton Exp Sales New W 04 Apr Thou No. of 351.5

11 Apr 18:00 United States Not Rated Up Cotton Exp Sales Net W 04 Apr Thou No. of 322.1

11 Apr 18:00 United States Not Rated US Pork Export Sales New W 04 Apr Thou Ton 13.4

11 Apr 18:00 United States Not Rated US Pork Export Sales Net W 04 Apr Thou Ton 10.8

11 Apr 18:00 United States High Initial Jobless Claims W 06 Apr 210 Thou Person 202

11 Apr 18:00 United States Medium Continued Jobless Claims W 30 Mar Mln Person 1.717

11 Apr 18:00 United States Medium PPI Final Demand YY Mar 2019 1.9 Percent 1.9

11 Apr 18:00 United States Medium PPI Final Demand MM Mar 2019 0.3 Percent 0.1

11 Apr 18:00 United States Medium PPI exFood/Energy YY Mar 2019 2.5 Percent 2.5

11 Apr 18:00 United States Medium PPI exFood/Energy MM Mar 2019 0.2 Percent 0.1

11 Apr 20:00 United States Not Rated EIA- Nat Gas, Change Bcf W 05 Apr Bln Cft 23

11 Apr 20:00 United States Not Rated Nat Gas-EIA Implied Flow W 05 Apr Bln Cft 23


rule the market - karvy onlinecontent.karvyonline.com/contents/kstreetissue031.pdf · research...

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