LKP Securities

Published on 23/10/2020 1:31:18 PM

Midday Review

Markets continue to trade in positive terrain

Indian stock markets continued to trade in positive terrain in afternoon session with Sensex and Nifty trading above 40,600 and 11,900 levels respectively. Buying in frontline stocks such as Tata Steel, Maruti Suzuki and Power Grid were aiding sentiment, while selling in Ultratech Cement, Hindustan Unilever and Axis Bank kept the gains in the markets in check. Besides, broader indices were also trading in green, supporting their larger peers. Sentiments remained positive as Niti Aayog Vice Chairman Rajiv Kumar expressed confidence that money and resources will be in place for a viable and effective vaccination system to fight COVID-19, even as he said it is quite premature to talk about the cost for getting the vaccination. Meanwhile, the Reserve Bank of India in its latest data has showed that bank credit grew by 5.66 per cent to Rs 103.44 lakh crore, while deposits increased by 10.55 per cent to Rs 143.02 lakh crore in the fortnight ended October 9. In the fortnight ended October 11, 2019, bank credit had stood at Rs 97.89 lakh crore and deposits at Rs 129.38 lakh crore.

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LKP Securities

Published on 23/10/2020 9:32:26 AM

Market Opening Bell

Markets likely to get flat-to-positive start on Friday

Indian markets snapped the four-day gaining streak and ended lower on Thursday due to the slip in pharma, IT and banking stocks. Today, the markets are likely to get flat-to-positive start amid gains in global peers coupled with hopes of economic revival. Investors will be taking some encouragement with NITI Aayog Vice Chairman Rajiv Kumar’s statement that the Indian economy might end up with a lower contraction in the current fiscal than projected by various organisations and also stressed that the next stimulus should focus on short-gestation infrastructure projects. However, there may be some cautiousness as a private report stated that with no signs of reprieve from the pandemic in near future and economy yet to show major indications of a revival, India's consumer confidence has declined by 0.3 percentage points in October 2020. Traders may be concerned as India on Thursday recorded 54,482 cases, taking its tally to 7,759,640. Death toll rose to 117,336. Meanwhile, capital markets regulator Sebi COVID-19 pandemic, the watchdog, in March, came out with various measures, including revision of market wide position limit, to ensure orderly trading and settlement to contain high market volatility. Housing finance companies stocks will be in focus with a private report that housing sales in the December quarter likely to rise by 35 percent over the previous quarter boosted by festive demand amid reduced cost of acquisition. Besides, the Reserve Bank of India (RBI) has fixed the minimum Net Owned Fund (NOF) size for housing finance companies at Rs 25 crore. The housing finance companies (HFCs) holding a Certificate of Registration (CoR) and having an NOF of less than Rs 25 crore will be required to achieve NOF of Rs 15 crore by March 31, 2022 and Rs 25 crore by March 31, 2023. Pharma stocks will be in limelight with a private report that US regulators have approved the first drug to treat COVID-19: remdesivir, an antiviral medicine given through an IV for patients needing hospitalization. There will be some buzz in the e-commerce stocks with report that a buying spree among consumers during the current festive season has ushered in green shoots of recovery in the retail sector, which was severely affected due to the COVID-19 crisis, while e-commerce companies enjoy a higher pie of sales as people prefer online shopping now. There will be lots of earnings reaction based on the performance of the companies.

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LKP Securities

Published on 22/10/2020 2:14:48 PM

Midday Review

Markets under pressure in afternoon deals

Indian equity benchmarks continued their lackluster trade in afternoon session, with Sensex and Nifty trading below at 40,600 and 11,950 levels, respectively. Sentiments were dented with private report that the Indian economy will suffer its deepest contraction on record this fiscal year and recent government stimulus does not go far enough to significantly boost activity depressed by the coronavirus pandemic. With over 7.6 million coronavirus infections, India is the second worst hit country in the world after the United States and the spread shows no signs of abating. Adding pessimism, a private report stated that the government expects the fiscal deficit to be close to 7 percent of GDP or thereabouts in the current financial year. The general deficit is unlikely to be lower than 11 percent, with the state government borrowings estimated at 4 percent levels. Stocks from healthcare, energy and banking counters were trading lower, while telecom, metal and capital goods counters were supporting the markets.

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LKP Securities

Published on 22/10/2020 9:23:49 AM

Lkp advisory:
Index closed day at 11938 with gains of 41 points and formed a doji candle for fourth consecutive session hinting volatility is on the verge. Now index has strong hurdle near 12030 zone any break above said level can push index to 12200 zone on immediate basis, support for nifty is coming near 11875-11780 zone. Nifty bank closed a day at 24635 with gains of more than one percent, immediate support for nifty bank is coming near 24400-24200 zone and resistance is coming near 24800-25000 zone.

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LKP Securities

Published on 22/10/2020 9:08:10 AM

Markets to get pessimistic start amid weak global cues

Indian markets ended Wednesday's volatile session on a higher note led by gains in metals, realty and financial stocks amid positive global cues. Today, the start of session is likely to be pessimistic on weakness in global markets. Traders will be concerned as the International Monetary Fund slashed this year's economic forecast for Asia, reflecting a sharper-than-expected contraction in countries like India, a sign the coronavirus pandemic continues to take a heavy toll on the region. There will be some cautiousness with a private report that the government expects the fiscal deficit to be close to 7 percent of GDP or thereabouts in the current financial year. The general deficit is unlikely to be lower than 11 percent, with the state government borrowings estimated at 4 percent levels. Meanwhile, India on Wednesday recorded over 56,000 cases, taking the tally to 7,705,158. Death toll rose to 116,653. However, some respite may come later in the day as Reserve Bank Governor Shaktikanta Das said the country is at the doorstep of economic revival on the back of accommodative monetary and fiscal policies being pursued by the central bank and the government. Some support may come as the Reserve Bank announced an on tap Targeted Long-Term Repo Operations (TLTRO) scheme of up to Rs 1 lakh crore to enable banks to provide liquidity support to a host of sectors, including agriculture, retail, drugs and pharmaceuticals and MSMEs. Market participants may take note of Economic Affairs Secretary Tarun Bajaj’s statement that the government is open to further stimulus measures to boost the coronavirus-hit economy. Agriculture industry stocks will be in focus as Government-owned FCI and state procurement agencies have bought 106.88 lakh tonnes of paddy so far in the kharif marketing season for Rs 20,180 crore. There will be some reaction in Rubber industry stocks as the commerce ministry recommended for continuation of anti-dumping duty on a Chinese synthetic rubber for five more years with a view to guard domestic players from cheap imports.

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LKP Securities

Published on 21/10/2020 5:37:16 PM

Closing Bell

Indian equities end in green for fourth consecutive day

Indian equity benchmarks managed to close higher after witnessing wild swings during the session on Wednesday, owing to buying interest in Realty, Telecom and Metal shares. The benchmarks staged a gap up opening, as traders took encouragement with the Commerce and Industry Ministry’s statement that foreign direct investment (FDI) in India has increased by 16 per cent year-on-year to $27.1 billion during April-August this year. During April-August last year, India had received FDI worth $23.35 billion. Additional support came with Ratings agency ICRA’s report that India's economic recovery has ‘broadened and strengthened’ in September 2020 from the pandemic-induced lows seen in April 2020. It said that as many as nine of the tracked 15 non-financial high frequency indicators recorded growth in September 2020, while five posted a narrower year-on-year (YoY) contraction in that month.

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LKP Securities

Published on 21/10/2020 9:22:29 AM

Sensex, Nifty likely to make positive start on firm global cues

Indian markets ended higher after a volatile session on Tuesday mainly led by IT stocks and some financials after the banking index turned positive. Today, the start of session is likely to be positive on the back of firm global cues. Traders will be getting some encouragement with the Commerce and Industry Ministry’s statement that foreign direct investment (FDI) in India has increased by 16 per cent year-on-year to $27.1 billion during April-August this year. During April-August last year, India had received FDI worth $23.35 billion. Some support will come with ratings agency ICRA’s statement that India's economic recovery has broadened and strengthened in September from the pandemic-induced lows seen in April 2020. ICRA said that as many as nine of the tracked 15 non-financial high frequency indicators recorded growth in September 2020, while five posted a narrower year-on-year contraction in that month. However, there may be some cautiousness with an RBI analysis showing that aggregate sales of private sector manufacturing companies recorded a sharp contraction of 41.1 per cent year-on-year in the first quarter of 2020-21, reflecting the impact of the pandemic induced lockdown. Traders also may be concerned with report that a day after witnessing a significant drop in new Covid-19 cases, India on Tuesday recorded 54,422 cases, taking the tally to 7,649,158. Death toll rose to 115,888. Meanwhile, SEBI has amended norms pertaining to alternative investment funds (AIFs), including defining relevant professional qualifications. Under the new norms, qualification and experience criteria of the investment team may be fulfilled individually or collectively by personnel of key investment team of the manager. Agriculture industry stocks will be in focus as Ministry of Consumer Affairs, Food and Public Distribution claimed that the Paddy procurement in current season has exceeded by 22.43 per cent as compared to the previous season and the Government continues to procure Kharif 2020-21 crops on MSP from the farmers. There will be lots of important earnings announcements too, to keep the markets in action.

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LKP Securities

Published on 20/10/2020 1:45:00 PM

Midday Review

Benchmarks continue to trade in positive terrain

Indian stock markets continued to trade in positive terrain in the afternoon session due to buying in telecom, realty and TECK stocks. Healthy buying was observed in blue-chip stocks like HCL Tech, Bharti Airtel and Larsen & Toubro. Sentiments were upbeat as Finance Minister Nirmala Sitharaman exhorted large central public sector enterprises (CPSEs) to achieve by December 75 per cent of their planned capital expenditure (capex) target for 2020-21, to support economic growth hit by the COVID-19 crisis. Some support also came as markets regulator SEBI allowed exchanges dealing with agri-commodity derivatives to utilise the fund created for farmers and FPOs for reimbursement of mandi tax and charges incurred by them on storage and transportation of goods. The decision was taken based on the recommendations of the Commodity Derivatives Advisory Committee (CDAC).

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LKP Securities

Published on 20/10/2020 9:03:50 AM

Lkp market outlook

Index closed a day at 11873 with gains of nearly one percent and formed doji candle pattern on daily chart. Now index has good support is near 11800-11720 zone if managed to hold above said levels then we may see a consolidation move going forward in the range of 11600-12000 zone, immediate resistance is placed at 11900-12000 zone. Nifty bank closed a day at 24267 with gains of more than 3 percent along with that index has given a bullish flag breakout on daily chart which suggest current bullish momentum can extend further, support for index is coming near 24000-23800 zone and resistance is coming near 24600-24800 zone.

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