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ISSUE: 056

28TH SEPTEMBER, 2019

RULE THE MARKET

From The Desk Of Research Head

Disclaimer: Karvy Stock Broking Limited [KSBL] is registered as a research analyst with SEBI (Registration No INZ000172733). KSBL is also a SEBI registered Stock Broker, Depository Participant, Portfolio Manager and also distributes financial products. The subsidiaries and group companies including associates of KSBL provide services as Registrars and Share Transfer Agents, Commodity Broker, Currency and forex broker, merchant banker and underwriter, Investment Advisory services, insurance repository services, financial consultancy and advisory services, realty services, data management, data analytics, market research, solar power, film distribution and production, profiling and related services. Therefore associates of KSBL are likely to have business relations with most of the companies whose securities are traded on the exchange platform. The information and views presented in this report are prepared by Karvy Stock Broking Limited and are subject to change without any notice. 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Compensation of KSBL’s Research Analyst(s) is not based on any specific merchant banking, investment banking or brokerage service transactions. KSBL generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover.KSBL or its associates collectively or Research Analysts do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research report. KSBL or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report and have no financial interest in the subject company mentioned in this report. Accordingly, neither KSBL nor Research Analysts have any material conflict of interest at the time of publication of this report. 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.

MSME segment needs reforms to increase the number of listings

IPO market after being active in the last few years seems to be losing its shine in India. If we look into the data for the recent years, companies raised funds close to Rs. 99000 crore in FY18 while it was just Rs. 36400 crore in FY19. FY20 seems to have a further sharp fall with only a collection of Rs. 13708 crore so far. Compared to the public-offers in FY18 which were 81, they drastically declined to 20 in FY20. Also over 25 companies which filed prospectuses with SEBI have postponed their offer plans. As history shows, only bull markets are a suitable flavour for primary markets in India, keeping the same view in mind, the recent decline in listing participation isn’t a surprise. However, it is a key factor which we need to focus on. With India’s listed entities market cap triggering Rs.145 lakh crore, a strong primary market is crucial enough to accommodate the new generation entrepreneurs suitably into the current economic stream. However, a roadblock to these public offers may dent the entrepreneur ecosystem where the private equity and venture capital investors have invested in around 7,000 start-ups. It is a financial fact that all these investors would be hoping and waiting to unlock the value through IPOs.

If we dig into the reasons for this slowdown in public offers, we may relate it to the policymaking which might be acting as a hurdle for the micro-enterprises to transit as a listed company. At a point of time, SEBI’s stringent eligibility criteria to go for a public listing has made it difficult for even good companies from the start-up crowd to go for a listing. SEBI’s high bar criteria focused at three-year profit record, issue size limits based on net worth and minimum promoter holdings are acting as major roadblocks to the listing. Even though the book-building route offers an alternative, it requires a mandatory quota for the QIB. The above-stated norms are harder than those of other markets and may require the regulator’s review. However, an important reason for the most start-up firms to remain under-scaled are stringent labour, taxation laws and the not so focused and directed incentives offered by our industrial policy. The stringent Small Scale Industries reservation policy, defining MSMEs based on turnover and the high difference tax arbitrage between the large and MSMEs are limiting or placing most firms to remain status quo or subdued. Following the same, in spite of contributing 85% to India’s manufacturing sector, most MSMEs which are having workers below 100 hadn’t made any significant contribution to value addition and jobs.

Even though MSMEs are a part of banks priority sector lending targets, these companies struggle in scaling due to difficulty in availing working capital resulting in high failure rate. What regulators need to do is to redefine these industries keeping the current existing size aside. They also need to ensure a free flow of working capital availability for the start-ups to grow which may ensure a break less financial growth to most start-ups.

CONTENTSEquity 1-6

Derivatives 7-8

Commodity 9-12

Currency 13-15

TeamDr. Ravi Singh

Arun Kumar Mantri

Osho Krishan

Amit Samar

M V Narasinga Rao

Deepak Balkrushna Sakure

R Rajashekar

Fenil Brahmbhatt

Konpal Pali

Vivek Lohumi

Vivek Ranjan Misra

Veeresh Hiremath

Siddhesh Ghare

Bharat Sunnam

Ramesh Chenchala

Ravi Pandey

Kushal Asthana

Amit Kumar

Arpit Chandna

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 UN trade agency has projected India’s growth rate for the current year to slowdown at 6% from last year’s 7.4% but the country will be the world’s second fastest growing economy, lagging by just a tiny fraction behind China.

• Prime Minister Narendra Modi announced a $14 Mn grant for community development projects in a grouping of Caribbean nations and another $150 Mn Line of Credit for solar, renewable energy and climate-change related works as he hosted the first ever India-Caricom leaders’ summit here.

Agriculture

• The government, on Tuesday, launched multilingual app based service - CHC Farm Machinery for Custom Hiring Centers (CHCs). This service will facilitate local farmers the use of shared resources including tractors and other farm machineries at affordable prices.

• With Tea Board to discuss on the policy of minimum price of green leaf, small tea growers have sought Rs. 30 per kilogram of green tea leaf as the minimum price.

• The country’s food grains production during the rain fed Kharif season is estimated at 140.57 million tonnes – 0.8% down from the total output estimated in 2018-19. However, it is 6.38% more than average foodgrain production of previous five years’ (2013-14 to 2017-18).

Banking & Finance

• Bank credit and deposits grew at 10.26% and 10.02% to Rs. 97.01 lakh crore and Rs. 127.22 lakh crore respectively in the fortnight ended September 13, according to the recent RBI data.

• In a relief to the crisis-hit Punjab & Maharashtra Cooperative (PMC) Bank customers, the Reserve Bank of India on Friday increased the withdrawal limit from Rs. 1,000 to Rs. 10,000.

Auto

• Tata Motors owned Jaguar Land Rover will bring in half a dozen electrified vehicles in India starting 2020, as the government of India pushes towards cleaner mobility solutions in the country with pollution on the rise.

• The US auto major Ford on Wednesday said it is engaged with Mahindra & Mahindra for strategic cooperation to help it achieve “commercial, manufacturing and business efficiencies” in India.

Power

• Tata Power Solar has won the bid for 105MWp floating solar energy project in Kerala.

• India has emerged the top country in the Asia-Pacific region for hydro technology tenders recorded during the quarter ended June 2019 with 24 tenders and a 42.9% share followed by Nepal at 18 tenders and a 32.1% share.

• NTPC Ltd signed a Memorandum of Understanding (MoU) with the Himachal Pradesh government to set up two hydro projects totaling to 520 MW in the state.

Oil & Gas

• The government wants oil companies to pay Rs. 34,000 crore in dividend, profit petroleum and royalty in this financial year, about 15% more than they did last year, in a bid to raise resources for public spending amid economic slowdown and corporate tax cut.

• India will get two additional cargoes of liquefied petroleum gas (LPG) from United Arab Emirate’s Abu Dhabi National Oil Co (ADNOC) to make up for a shortfall from Saudi Arabia, two government officials said.

Steel

• India’s largest aluminium maker Vedanta is expanding its portfolio of value-added products and is planning to set up an aluminium flat rolled products plant with an estimated capital expenditure of Rs. 2,500 crore, a senior Vedanta official said.

• The Centre has decided that all shareholders of loss-making steelmaker Neelachal Ispat Nigam Ltd (NINL) will infuse capital proportionate to their stakes to keep the company running until its disinvestment.

Railways

• The Cabinet on Wednesday approved productivity-linked bonus equivalent to 78 days wages to over 11.52 lakh railway employees, Union Minister Prakash Javadekar has said.

Telecom

• After scaling a high propelled by 4G network expansion, the capex intensity of the telecom industry is expected to witness moderation till the point there is technology upgrade to 5G, which is still some time away, ICRA said on Thursday.

Airlines/Aviation

• GMR Infra has tied up with low-fare carrier Thai Air Asia as part of a consortium to bid for the $2 Bn expansion project of the U-Tapao airport in Thailand, one of the cornerstones in the country’s plan to become an important trade hub.

NEWS

INTERNATIONAL NEWS

• Huawei Technologies Co Ltd. founder and CEO Ren Zhengfei said on Thursday the company is willing to license its 5G mobile technology to a US firm, as it seeks to alleviate security concerns over its products.

• Thomas Cook’s German tour business filed for insolvency on Wednesday in a move aimed at separating its brands and operations from its failed parent and said it was in talks with potential new investors.

• President Donald Trump has announced the “first stage of a phenomenal new trade agreement’’ with Japan. Trump said Japan will open new markets to approximately $7 Bn in US agriculture products, including beef, pork, wheat, cheese, corn, wine and more.

• The world’s oldest travel firm Thomas Cook collapsed on Monday, stranding hundreds of thousands of holidaymakers around the globe and sparking the largest peacetime repatriation effort in British history.

TRENDSHEETSYMBOL CMP S2 S1 R1 R2 TREND

SENSEX 38822.57 38579 38701 39026 39229 Up

NIFTY 11512.40 11441 11477 11571 11629 Up

NIFTYBANK 29876.65 29499 29688 30089 30302 Up

SBIN 281.20 252 267 306 330 Down

HDFCBANK 1244.20 1196 1220 1275 1307 Up

MARUTI 6773.70 6275 6525 7100 7427 UP

ICICIBANK 449.20 415 432 462 476 Up

HDFC 2035.90 1916 1976 2145 2255 Down

RELIANCE 1309.05 1206 1258 1338 1366 Up

AXISBANK 700.60 656 678 728 755 Up

YESBANK 48.75 42 46 55 61 down

BPCL 469.80 385 427 497 525 Up

ZEEL 273.55 225 249 305 337 Down

FORTHCOMING EVENTSCOMPANY NAME EVENT EX-DATE

VRL Logistics Ltd. Dividend - Rs. - 1.00 03 Oct 2019

Reserve Bank of India Monetary Policy Statement 04 Oct 2019

KSTREET - 28TH SEPTEMBER, 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

-0.010

-0.005

0.000

0.005

0.010

0.015

0.020

0.025

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-1500.00

-1000.00

-500.00

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500.00

1000.00

1500.00

2000.00

2500.00

3000.00

3500.00

20-09-19 23-09-19 24-09-19 25-09-19 26-09-19

FII/FPI DII


BEAT THE STREET - FUNDAMENTAL ANALYSIS

Sun TV Network Ltd. CMP Rs.483Target Price Rs.584Upside 21%

Investment Rationale

• Sun TV is the largest TV network in south India and the leading regional TV network in India.

• The company operates satellite television channels across four languages of Tamil, Telugu, Kannada, and Malayalam.

• The company also operates India’s largest FM radio network with ~60 operational FM radio stations across the country.

• Sun TV owns the SunRisers Hyderabad Cricket Franchise of the Indian Premier League.

• The company has one of India’s largest Movie Distribution and Production house.

• Sun TV has digital video streaming platform (Sun NXT).

• Digitalization in South India, mainly in Tamil Nadu is the big positive move to drive significant growth in subscription revenue in coming period.

• The company constantly focuses on adding up a new channel and content to maintain its leadership in highly competitive market.

• The company is also working on content sharing deal with other OTT platforms to increase its revenue sources.

• With multiple tie-ups with partners in the digital ecosystem, Sun NXT continues to strengthen its position as the on-demand entertainment.

• We are expecting that reduction in corporate tax applicable from FY20 will further support bottom-line, going forward.

VALUE PARAMETERSFace Value (Rs.) 5.0

52 Week High/Low (Rs.) 684/389

M.Cap (Rs. Bn/US $Bn) 190.3/2.6

EPS (Rs.) 46.0

P/E Ratio (times) (FY21E) 10.5

Dividend Yield (%) 3.7

Stock Exchange BSE, NSE

P/E CHART

Valuation

The company captures largest share in South India with better understanding of the consumer expectation. Looking forward to significant growth in subscription revenue due to New Tariff Order, digitalization in Tamil Nadu and increase in download of Sun NXT. It’s a debt free company and has an opportunity to expand its business as the company maintains surplus cash balances. On a risk side, weak advertisement revenue and high content spending are the concerns for the company. We expect improvement in the margins with healthy top line performance going forward. We recommend a “BUY” on the stock with a target price of Rs. 584 and an upside potential of 21%.

EQUITY

% OF SHARE HOLDING

in Rs.Mn ACTUAL ESTIMATE

YE Mar FY 19 FY 20 FY 21

REVENUE 37825 39320 43799

EBITDA 26067 25558 28776

EBITDA(%) 68.9 65.0 65.7

PAT 14333 15142 18096

EPS (Rs.) 36.4 38.4 46.0

RoE (%) 25.9 23.6 24.2

PE (x) 17.3 12.5 10.5

0

20

40

60

80

100

120

Aug

-18

Sep-

18

Oct

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Dec

-18

Jan-

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Feb-

19

Mar

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Apr

-19

May

-19

Jun-

19

Jul-

19

Aug

-19

Sun TV Sensex

75%

4%

13%

8% Promoters

FII

DII

Others


BEAT THE STREET - FUNDAMENTAL ANALYSIS

Varun Beverages Ltd. CMP Rs.644

Target Price Rs.754Upside 17%

VALUE PARAMETERSFace Value (Rs.) 10

52 Week High/Low (Rs.) 683/455

M.Cap (Rs. Bn/US $mn) 185.9/2.6

EPS (Rs.) 27.8

P/E Ratio (times) (FY20E) 23.2

Dividend Yield (%) 0.4%

Stock Exchange BSE/NSE

EQUITY

P/E CHART

Investment Rationale

• Varun Beverages Ltd. sales volume has grown at a CAGR of 17.2% to 340 Mn cases in the past 5 yrs on account of acquisition of franchisee rights in south and west territory of India that will help in alleviating the seasonal upshots and will improve profitability in second half of CY20. So we expect a significant growth in the company’s top line.

• Currently, VBL is operating at 60% of capacity utilization and has no further plans to look at any major capital expansion for at least next two years. We expect a healthy growth in the return ratios and also a significant increase of ~360 bps in RoCE for CY20.

• VBl has raised a QIP of Rs. 900 Cr, we foresee this action to be positive for the company in two ways (a) as the company has lot to acquire internationally and (b) the company might lessen their long term debt to enhance their return ratios.

• VBL further has acquired 20% equity stake in Lunarmech Technologies Private Ltd. Lunarmech Technologies Private Ltd. is engaged in the business of manufacturers, processors, buyers, sellers, importers, exporters or otherwise deal in all kinds of pet bottle caps and crown caps.

Valuation

We reckon sufficient growth levers in favor of VBL mainly robust volume growth aided by acquisition of highly under penetrated territory & innovation of new products which are less seasonal in nature and expect Varun Beverages to report revenue and EBITDA CAGR growth at 31% & 36% respectively so we value the stock at a P/E of 27.8x on CY20E EPS and recommend “BUY” with a target price of Rs. 754.

% OF SHARE HOLDING

in Rs.Mn ACTUAL ESTIMATE

YE Mar CY18 CY19E CY20E

REVENUE 51053 70507 87992

EBITDA 10066 14947 18742

EBITDA(%) 19.7% 21.2% 21.3%

PAT 2999 5237 8038

EPS (Rs.) 16.4 18.1 27.8

ROE (%) 15.0% 15.7% 19.8%

PE (x) 48.1 35.6 23.2

0

20

40

60

80

100

120

140

Aug

-18

Sep-

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Oct

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Nov

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Dec

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Jan-

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Feb-

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Mar

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Apr

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May

-19

Jun-

19

Jul-

19

Aug

-19

Varun Beverages Sensex

74%

14%

7%6%

Promoters

FII

DII

Others


EQUITY

BEAT THE STREET - TECHNICAL ANALYSIS

Tata Global Beverages Ltd

Tata Global has given price breakout in previous trading session at 280 levels and closed well above the same. The stock has closed the week with a positive return of 5.46% and bounce in the stock has seen supportive volume formation on daily charts. The stock is in uptrend and any meaningful dip in the stock may attract market participants. This would help the stock to resume its up move. Prior to that, the stock has seen sharp fall from the recent high of 328 levels and fall in the stock has placed the stock around 177 levels. Thereafter, the stock has bounced well with supportive volume formation from said lower levels. Currently, the stock is trading above all its major moving averages on daily charts. On technical setup, the 14 period RSI is pointing northward given positive crossover with signal line and trading comfortable above signal line. The parabolic SAR has triggered fresh buy on daily charts that reflects uptrend in the stock will remain intact in near term. The recent development in the stock suggests that the stock is well placed to take it up move. Hence, we are suggest buy in the stock around 275 levels for the target of 310-325 levels with a stop loss placed below 248 levels.

Page Industries Limited

PAGEIND has been our preferred pick in the consumer durable space and has outperformed majority of its peers in the last few weeks. The stock has been making higher highs and higher lows on the weekly charts and is currently placed above the major long term moving average 200-DEMA on the daily charts. After clocking all time highs of 35459 levels, the stock witnessed steep round of correction of more than 50% which dragged the counter towards 17000-17500 levels on the lower side. Thereafter, the stock managed to form a base around 17500-18000 levels and gradually attempted to move towards 21000 plus levels. The said support formed around the lower levels also coincides with the 61.8% (Golden Ratio) Fibonacci retracement levels drawn from the swing corners of 8803 and all time highs. After nine weeks of broad consolidation, the stock broke out from the range and closed well above the major moving averages on the daily charts. On the other hand, the counter has also given breakout from the sloping trend line on the daily charts drawn from the all time highs. The overall chart structure of the counter looks bullish from current levels and any breach above the range of 23500 levels may trigger fresh round of buying which may take the stock towards 29000 plus levels. On the Bollinger band (20,2), the stock price is trading around the upper band of the Bollinger with lower band facing in the northward direction indicating the price is likely to move higher. Analyzing the recent volume price action, the volumes have been encouraging in the recent up move indicating strong hands have started accumulating the stock at current levels. We expect the counter to continue its northwards move in the coming trading months and may march towards psychological mark of 30000 levels in long term time frame of 10-12 months.

STOCK TATAGLOBAL

CMP 281.95

ACTION BUY

ENTRY 275

AVERAGE 260

STOP LOSS 248

TARGET 1 310

TARGET 2 325

TIME FRAME 4-5 MONTHS

STOCK PAGEIND

CMP 22322.70

ACTION BUY

ENTRY 22200

AVERAGE 20600

STOP LOSS 19500

TARGET 1 28900

TARGET 2 30000

TIME FRAME 10-12 MONTHS


EQUITY

Sentiment

Initiation 242

Stop Loss 251

Target 230

Lot Size 3200

Margin 134000

21-DEMA 245

Open Interest Shares 28937600

Change in OI 24656000

Cost of Carry (%) 8.16

SECTORAL SNIPPETS

NIFTY FMCG (31,026.00) has ended the week with a gain of around 4% outperforming the benchmark index NIFTY which posted gains of around 2%. Technically, NIFTY FMCG index closed above all its major moving averages on all time frames (daily, weekly as well as monthly chart) which indicates inherent strength in the index. The index has opened gap-up and formed a strong bullish candle on the weekly chart for the second straight week which indicates strong buying traction. The index is placed above its parabolic SAR on the daily as well as weekly chart which suggests positive bias in the index in the coming trading sessions. The stocks which have outperformed the NIFTY FMCG index during the week were COLPAL, PGHH, ITC, MCDOWELL-N, UBL, TATAGLOBAL and BRITANNIA while GODREJIND, EMAMILTD, JUBLFOOD, DABUR, GODREJCP, NESTLEIND, HINDUNILVR, MARICO underperformed the index. On the momentum oscillator front, the 14-period RSI is placed above its 9-period signal line on the daily as well as weekly chart reflecting the index may see buying interest in the coming trading sessions. Going ahead, the index is expected to trade with positive bias. The support for the NIFTY FMCG index is pegged around 30700 levels followed by 30400-30500 levels. While on the higher side, the index may face resistance around 31200 levels followed by 31650 levels.

NIFTY BANK (29,876.65) has been one of the major outperformers in the last week gaining around 3% on weekly basis majorly led by heavyweight private sector banks like ICICIBANK, KOTAKBANK and HDFCBANK which gave massive price volume breakout on their respective technical charts. The other stocks which followed buying spree were two private sector majors like INDUSINDBK & AXISBANK. On the other side, PSU major SBIN remained major culprit for capping the upside in the banking index which dipped around 6.8% which was followed by BANKBARODA and PNB which witnessed cut of around 4%. The overall chart structure of the index seems to be sideways to bullish and any corrections may be utilized to create long positions for short term perspective. The immediate support for the index is pegged around 29700 levels followed by 29500 levels while near term resistance for the index is placed around 30100 followed by 30200 levels. For the upcoming week, the index is expected to consolidate with positive bias in the range of 29500-30300 levels. Short term traders may adopt stock specific approach on the index for the coming sessions and may look for accumulating stocks like HDFCBANK, ICICIBANK and KOTAKBANK on any major declines.

NIFTY METAL (1,838.40) has snapped its four week winning streak and closed the week at 2450 levels with a cut of around 2%. Index stayed volatile and was struck in the range of 2400 to 2600 and has underperformed Nifty 50 index which has gained around 2.00% during the same period. On the flipside, for the month metal space is one of the leading indexes with record gains of more than 7% and has outperformed Nifty significantly which has gained around 4.50% for the month, indicating the beaten down space is witnessing relief pull back rally on short term basis. On daily charts, the index is sustaining well above its major short term moving averages and other technical indicators are also suggesting that the rally is likely to continue on a medium term basis. On the derivative front, derivative listed stocks suggest significant some long rollovers into the current series. The breadth of the index is negative with 5 stocks ending in green and rest 10 have closed in red. Leading the leader board, MOIL, APLAPOLLO, NMDC and WELCORP have gained more than 5% during the week while most of the other stocks have ended on a negative to flat note. For now, immediate supports for the NIFTY METAL index may be assumed at 2420-2400 levels followed by 2300-2350 whereas on the upside, immediate resistances may be projected at 2520-2550 followed by 2600-2650.

NIFTY PHARMA (7,695.30) ended the week on a negative note with cuts of around 3.5% clearly underperforming the benchmark index Nifty which ended with gains of 2% on weekly basis. After consolidating for couple of weeks around psychological mark of 8000 level which is the mean of the Bollinger band (20, 2) on the weekly charts. Technically, the index has given major breakdown below 7800 levels on the daily charts and concluded well below the same. The overall chart structure of the index seems to be bearish and any selling pressure may be witnessed on any rise in the near term. The immediate support for the index is pegged around 7550 levels followed by 7400 levels while near term resistance for the index is placed around 7950 followed by 8100 levels. For the upcoming week, the index is expected to trade with negative bias in the range of 7500-8000 levels. Among the stock specific front, DIVISLAB remained the top performer last week gaining around 1.5% on weekly basis. On the flip side, GLENMARK, LUPIN & PEL remained under pressure last week and witnessed cuts of around 5-7%. Short term traders may adopt stock specific approach on the index for the coming sessions and may look for accumulating stocks like DRREDDY, DIVILAB and LUPIN on declines.

RELIANCE INDUSTRIES LIMITED: BUY RELIANCE (OCT FUTURE) | CMP: 1316 SECTOR: ENERGY

RELIANCE ended the week with a gain of over 4%. The stock is in a secular uptrend and is placed above all its major moving averages in all time frames (daily, weekly as well as monthly charts) indicating inherent strength in the counter. The stock declined from its lifetime highs around 1417 levels and placed a swing low around its previous swing support placed around 1095 levels. Thereafter, the stock has given a bullish crossover to all its major moving averages on the daily chart and is sustaining above the said moving averages. On the momentum oscillator front, the 14 period RSI is placed above its 9 period signal line on the daily as well as weekly chart and pointing northwards. The stock price is placed above the parabolic SAR on the daily as well as weekly chart which re-affirms our positive view in this counter. Hence, we suggest Smart Traders to buy the stock around 1295 levels for the target of 1360 levels with a stop loss placed below 1245 levels.

Sentiment

Initiation 1295

Stop Loss 1245

Target 1360

Lot Size 500

Margin 118000

21-DEMA 1246

Open Interest Shares 53393500

Change in OI 30827500

Cost of Carry (%) 5.69

WIPRO LIMITED: SELL WIPRO (OCT FUTURE) | CMP: 238.4 SECTOR: IT

WIPRO has traded the week with a negative bias and lost around 3.80% in the same period. The stock has broken the upward trend line and closed below it on daily chart last week and expecting it may be dragged towards 222 levels. The stock is trading below all its major moving averages on the daily and weekly chart as well exhibiting underlying weakness in the stock. On the technical indicator front, the 14 periods RSI is placed below the 9-day signal line and poised with weak bias, indicating downtrend in the counter in the near term. The parabolic SAR on the daily chart is trading above the price on the daily chart, indicating weakness is likely to continue in the stock. The technical chart indicates that stock price may decline further in the sessions to come and test the support levels around 222 levels. Hence, we recommend Smart Traders to initiate a short position on bounce towards 242 levels for the lower target of 230 keeping a stop loss above 251 levels.


WEEKLY VIEW OF THE MARKET

NIFTY (11512.50): After forming good base around 10900-11000 levels, Nifty witnessed second round of up move gaining more than 2% on weekly basis. Among the sectors, private sector banking stocks followed by select FMCG and Energy counters remained outperformers while PSU Banking and Pharmaceuticals remained major laggards. Technically, Nifty has witnessed stiff resistance to cross 11600-11650 levels on the daily charts above which an unfilled gap is placed. On the Bollinger band (20, 2), the price is trading above the mean on the weekly charts which may act as the support for the near term which is placed around 11400 levels.

If we look for a broader time frame, the index failed to make a major up move after forming a strong bullish candle in the last week indicating further consolidation is expected in the near term. Short term positional traders may adopt a “Buy on dips” strategy in the market where 11380-11400 can be considered as the best zone for creating long positions. The support for the index is pegged around 11350-11400 while resistance is pegged around 11580 and 11650 levels in the near term.

On the derivative front, NIFTY 03OCT 11500 PE is having writing of 12.31 lakh shares followed by 11400 PE which is having 11.56 lakh shares outstanding. On the flip side, NIFTY 03OCT 11600 CE is having outstanding open interest of 20.67 lakh shares which may act as a stiff resistance. Therefore, the broad range for the upcoming trading week can be pegged around 11400-11600 while any breach of the same may trigger 50-100 points move in the same direction.

DERIVATIVE STRATEGIES

DERIVATIVES

TYPE: BEAR PUT IN JINDALSTEL

FIRST LEG Buy JINDALSTEL October 100 PE @ 5.50

SECOND LEG Sell JINDALSTEL October 90 PE @ 3.00

BEP 98.50

MAX PROFIT 24000

MAX LOSS 8000

RATIONALEJINDALSTEL has lost more than 5% in previous trading session and the volumes on the down move are also higher when compared with previous session. The stock is getting resisted at its very short term moving averages and the RSI by moving below its average suggests the stock is poised for some more down move. Hence, bearish view for the near term.

TYPE: BULL CALL LADDER IN NIFTY

FIRST LEG Buy one lot of NIFTY 03 OCT 11400 CE @ 173

SECOND LEG Sell one lot of NIFTY 03 OCT 11600 CE @ 63

THIRD LEG Sell one lot of NIFTY 03 OCT 11700 CE @ 35

LBEP 11475

UBEP 11825.00

STG OUTFLOW 5775.00

MAX PROFIT 9,225.00

MAX LOSS Unlimited above UBEP

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

TYPE: CALL LADDER IN BANKNIFTY

FIRST LEG Buy one lot of BANKNIFTY 03 OCT 29700 CE@ 567

SECOND LEG Sell one lot of BANKNIFTY 03 OCT 30000 CE @ 407

THIRD LEG Sell one lot of BANKNIFTY 03 OCT 30500 CE @ 230

MAX PROFIT 7,400

STG OUT INFLOW 1,400

LBEP 29,630

UBEP 30,870

MAX LOSS Unlimited above UBEP

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

TYPE: BULL CALL IN BATAINDIA

FIRST LEG Buy 1 Lot of BATAINDIA October 1760 CE @ 50

SECOND LEG Sell 1 Lot of BATAINDIA October 1800 CE @ 35

BEP 1775

MAX PROFIT 13750

MAX LOSS 8250

RATIONALEBATAINDIA is one of the stocks which is placed near all time highs and gained more than 13% for the month with strong long rollovers into the October series. The stocks RSI on daily chart has just over bought but the ADX with +DMI well placed above –DMI indicating strong uptrend is in place. Hence, positive view on the counter.

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7KSTREET - 28TH SEPTEMBER, 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

CONCOR 591.15 7.01 5226672 40.56

NESTLEIND 13740.9 1.79 544400 15.76

MANAPPURAM 143.45 12.29 13776000 15.49

EXIDEIND 194.15 6.91 9655200 13.39

BERGEPAINT 441.45 10.47 4571600 10.71

TATACHEM 596.5 1.02 1994400 7.94

BANKNIFTY OPTION OI CONCENTRATION CHANGE IN BANKNIFTY OPTION OI

TOP 6 SHORT CLOSURE


ADANIPORTS 408.6 7.33 11127500 -34.23

JUSTDIAL 690.7 1.81 1923600 -26.17

CHOLAFIN 310.6 6.97 3145000 -23.53

UBL 1351.2 5.88 1423800 -23.42

EQUITAS 106.2 7.22 12360000 -20.32

SUNTV 482.95 5.53 4271000 -19.84

TOP 6 SHORT BUILD UP


ZEEL 273.55 -9.24 32914700 68.07

CESC 763.10 -9.32 1626400 33.49

STAR 304.15 -15.54 3159600 20.01

MRF 62674.55 -3.04 20480 17.70

PETRONET 260.50 -2.23 21147000 17.03

RBLBANK 366.25 -4.36 13132800 12.04

TOP 6 LONG CLOSURE


APOLLOTYRE 181.85 -1.81 7062000 -30.25

JUBLFOOD 1369.50 -0.79 2292500 -27.75

NIITTECH 1394.05 -0.55 673500 -22.72

MINDTREE 707.85 -0.81 1362600 -22.68

SAIL 33.05 -3.92 78732000 -20.92

INFY 782.20 -2.83 46756800 -20.09

NIFTY OPTION OI CONCENTRATION CHANGE IN NIFTY OPTION OI

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COMMODITIES

BULLIONGlobal precious metals market witnessed downward movement in the week ended on 27th September on selling pressure. The market had started the week on a positive note extending penultimate week’s gains on emergence of fresh buying. However, the gains were not sustained in later trading days as the favourable signals to end ongoing trade war between the US and China circulated in the market. Better than expected economic data from the US weighed on the bullion market. Major economic releases during the week were flash manufacturing PMI which came at 51.0 against previous reading of 50.3 while services PMI came at 50.9 against 50.7. Consumer confidence came at 125.1 against previous reading of 134.2 while new home sales increased by 713,000 against prior reading of 666,000. Final GDP number for second quarter remained same at 2.0%. Most important factor that weighed on the bullion price was surge in the dollar index for second consecutive week which rallied to three week high of 99.30. During the week, CME gold futures fell by $46.1/Oz. while silver futures dropped by $1.33/Oz. and on domestic market, MCX gold futures fell by Rs. 795/10 grams while silver witnessed biggest drop by more than Rs. 3200 per kg. Firmness in the equity market and sluggish demand for the jewellery due to higher prices weighed on the market.

ENERGYCrude oil prices are trading lower on Friday as the worries about a global recession is weighing on the demand outlook. And on supply side fundamentals, US sanctions on Venezuela & Iran and attacks on Armaco’s oil plant are forcing prices to adopt range bound movement. On weekly basis, crude oil prices is closing the week in red extending the losses as Saudi Aramco resumed the production after the attack over its processing unit and rising inventory levels in US suggesting a decline in domestic demand. Saudi oil production from its Khurais plant is now at more than 1.3 million barrels per day while current production from its Abqaiq plant is at about 3 million bpd. Separately in US, oil and gas activity in some of the largest producing regions is declining, led by a weakening oilfield services sector as producers cut spending. Hence, Hedge fund managers remain cautious about the outlook for oil prices despite a short-term surge following the recent attacks on Saudi Arabia’s oil installations. As per EIA, crude oil inventories swell by 2.4 million bbl against the market expectation of dropdown of 0.24 million bbl in prior week. According to Reuters, Saudi Arabia held on to its spot as China’s largest supplier of crude in August for the second straight month. Middle East crude exports rebounded to 106 million bbl or 15.15 million bpd, the week ending September 22nd, albeit sill very depressed from the year-to-date average of 17.5 million bpd. Natural gas prices went down after the reports from DOE showed the rise in stocks by 102 Bcf which in prior week was 84 Bcf. EIA estimated that total working gas in storage stood at 3,205 Bcf as of Friday, September 20. And stocks were 444 Bcf higher than last year at this time and 47 Bcf below the five-year average of 3,252 Bcf. At 3,205 Bcf, total working gas is within the five-year historical range.

METALSMetals traded on a mixed to negative note during the week ended on September 27 extending the previous week trend. Appreciation in Indian rupee due to dollar weakness made the metals to witness heavy losses though the losses at LME were limited. Alumina output from China fell in August to the lowest level since November 2018, after losing 2.9% from July to 6.04 million tons. But on a yearly basis the production was higher by 3.5% compared to August 2018. During the first eight months of 2019, the output totalled 49.88 million tons with a year-over-year increase of 5.8%. China imports of copper scrap in July were down by 34.92% compared to June and down by 11.48% compared to July 2018. The July 2019 imports stood at 97,822 tons. During the first seven months of 2019, Copper scrap imports contained 829,682 tons of copper which was up 12.76% or 94,000 tons from the same period a year earlier. China’s new shipbuilding orders during Jan-Aug 2019 period were up by 6.7% compared to 2018 standing the finishing at 25.94 million deadweight tons (DWT); and the new shipbuilding orders obtained were down by 37.9% on a yearly basis to stand at 15.72 million DWT. Global mine production declined by about 1.4% in Jan – Jun 2019 period with concentrate production reducing by 1% and solvent extraction – electrowinning by 3.5%. The production in Chile, the world’s biggest copper mine producing country declined by 2.5% mainly due to lower copper head grades. Global refined production was down by about 1% in Jan – Jun 2019 declining by 1.5% and secondary production (from scrap) increasing by 1%. The fall in world refined production was mainly due to decrease in Chilean electrolytic refined output due to temporary smelter shutdowns by 38%. Also, at India, the closure of Vedanta’s production made the output to come down by 33%. Global lead deficit narrowed from -13 to -4 KT indicating an increased supply making the metal to trade negative. The rise in consumption was little less though on a yearly basis. On the other hand, Zinc which witnessed a rise in supply during June 2019 experienced a downfall during July giving supports for the prices.

COTTONCotton prices traded mixed to down during the week ended on 27th September on robust crop expectation for year 2019-20. Reports of better crop progress in southern region especially in Telangana supported by favorable monsoon rainfall weighed on prices during the week. Higher crop outlook driven by rise in acreages under cotton prompted speculators to enlarge short positions at futures platform.

Total cotton acreages for year 2019-20 were reported at 127.63 lakh hectares as on 27th September against the 121.05 lakh hectares of prior year for corresponding period as per the data released by Ministry of Agriculture. Apart from that, looming uncertainty over the trade negotiation between US and China restricted major upward move in prices as millers remained away from the bulk buying. Moreover, tumbling prices of cotton yarn in line with shrinking exports pressurized whole value chain prices during the week. Meanwhile, Ministry of Agriculture trimmed its production estimates for cotton during year 2018-19 estimated at 287 lakh bales in its fourth and final advance estimates and projected cotton production in 2019-20 at 322 lakh bales. At global front, weakness in ICE cotton futures remained intact on better crop outlook. Sluggish demand outlook driven by ongoing trade war with China and expectation of bumper crop harvest weighed on cotton prices in US market. USDA released its weekly export sales data for the week ending 19th September that showed net sales of 155,200 RB for 2019/2020 were up 83% from the previous week and 33% from the prior 4-week average. Increases were primarily for Pakistan (35,400 RB), Guatemala (30,300 RB), Vietnam (19,800 RB), Colombia (16,200 RB), and China (14,400 RB). Exports of 175,900 RB were up 6% from the previous week but down 4% from the prior 4-week average. Exports were primarily to Vietnam (48,700 RB), Indonesia (25,200 RB), Turkey (17,000 RB), Bangladesh (13,200 RB), and India (12,200 RB).

SOYBEAN Soybean prices ruled higher for most part of the week ended on 27th September due to growing concerns over crop damage in Madhya Pradesh. Excess rainfall in Madhya Pradesh and Maharashtra impacted crop progress adversely and supported prices in domestic as well as at futures platform. Total acreages under soybean in India were reported at 113.98 lakh hectares till 27th September against the 113.09 lakh hectares of prior year for corresponding period. However, soybean futures lost its major part of gains on Friday in terms of profit booking supported by lowering demand outlook. Rising prices disparity of Indian meal in international market due to expanding spread between Indian soymeal prices and Argentina meal prices prompted speculators to trim its long positions at futures platform. Moreover, expectation of improvement in arrivals in coming week and limited buying from stockiest pressurized prices at futures platform. Similarly, Mustard seed prices remained down due to adequate supply condition at major trading centers. Prices tracked negative cues from selling of mustard seed stocks by NAFED. NAFED has sold about 2529 MT of mustard seeds stocks with averages prices of Rs. 3870 per quintal wherein 16759 MT were reported under progressive sale as on 26th September. Surging selling pressure in phsycial market kept mustard seeds prices under pressure. At the same time, CPO prices ruled under pressure for most part of the week due to expectation of higher production in September. Weakness in rival veg oil prices also impacted market sentiments negatively. US soyoil futures on the Chicago Board of Trade were 0.3% lower on Friday. Malaysia has exempted export duty for crude palm kernel oil and RBD palm kernel oil from 1st October until 30th June, 2020 in a bid to reduce stockpiles in the domestic market.

GUARGuar complex futures witnessed a sharp fall during the week ended on 27th September as prices moved down more than a 2.5% whereas gum prices fell by more than a 4% and touched a new low of 7600 per quintal during this month after a long wait fresh arrivals of guar seeds were present in major belts of Rajasthan. However, as per the expectation, crop size was affected as per the market sentiments. Spot market also witnessed low demand amid higher arrivals on the major region in Rajasthan. Speculators have ignored the fresh positions in the market which led to a fall in prices. Meal prices were also affected due to weak demand in the market. Fall in gum / seed ratio to 1.90 to 2.00 during the week had indicated low buying for gum for the export and industries purpose. Rajasthan government had released its first advanced estimates that showed total guar production for the year 2019-20 at 17.16 lakh tonnes whereas the Gujarat first advance estimation showed105.64 thousand tonnes of guar production in the year 2019-20. During the week in Rajasthan, arrivals were recorded around 71164 quintals from 23rd September to 27th September which was down by 52081 quintals from the previous week. Guar seed most active October contract touched a low of Rs. 3936 per quintal and closed the weekly session at Rs. 4003 per quintal falling by 2.79% whereas gum futures for the same contract made a low of Rs. 7603 per quintal and closed the weekly session at Rs. 7695 per quintal, tumbling by 4.05%.


COMMODITIES

GOLD

TRENDSHEET

Commodities 20-Sep 27-Sep % Change 52 Week High% Change from 52

Week High52 Week Low

% Change from 52 Week Low

MCX Gold (Rs/10 gms) 37697.0 37490.0 -0.5% 39885.00 -6.00% 30107.00 24.52%

MCX Silver (Rs/Kg) 46465.0 45326.0 -2.5% 50672.00 -10.55% 34981.00 29.57%

MCX Crude Oil (Rs/bbl) 4178.0 3894.0 -6.8% 5669.00 -31.31% 2993.00 30.10%

MCX Natural Gas (Rs/mmBtu) 180.1 171.0 -5.1% 358.70 -52.33% 144.60 18.26%

MCX Copper (Rs/kg) 443.4 435.4 -1.8% 469.35 -7.24% 397.40 9.55%

MCX Lead (Rs/kg) 155.4 153.8 -1.0% 168.00 -8.45% 123.80 24.23%

MCX Zinc (Rs/kg) 183.1 179.8 -1.8% 233.65 -23.07% 167.20 7.51%

MCX Nickel (Rs/kg) 1264.5 1248.0 -1.3% 1314.80 -5.08% 735.00 69.80%

MCX Aluminium (Rs/kg) 138.8 133.1 -4.1% 167.80 -20.71% 124.75 6.65%

NCDEX Soybean (Rs/Quintal) 4065.0 3980.0 -2.1% 4097.00 -2.86% 3149.00 26.39%

NCDEX Refined Soy Oil (Rs/10 kg) 761.1 763.9 0.4% 784.00 -2.57% 713.60 7.04%

NCDEX RM Seed (Rs/Quintal) 3962.0 3983.0 0.5% 4241.00 -6.08% 3711.00 7.33%

MCX CPO (Rs/10 kg) 554.1 547.9 -1.1% 597.10 -8.24% 483.40 13.34%

NCDEX Castor Seed (Rs/Quintal) 5804.0 5136.0 -11.5% 6300.00 -18.48% 4566.00 12.48%

NCDEX Turmeric (Rs/Quintal) 6378.0 6108.0 -4.2% 7360.00 -17.01% 5870.00 4.05%

NCDEX Jeera (Rs/Quintal) 17405.0 16770.0 -3.6% 21000.00 -20.14% 15140.00 10.77%

NCDEX Dhaniya (Rs/Quintal) 6028.0 5429.0 -9.9% 7688.00 -29.38% 4781.00 13.55%

MCX Cardamom (Rs/kg) 3050.7 3101.8 1.7% 4265.30 -27.28% 1361.00 127.91%

NCDEX Wheat (Rs/Quintal) 2021.0 2082.0 3.0% 2162.00 -3.70% 1770.00 17.63%

NCDEX Guar Seed (Rs/Quintal) 4146.5 3958.0 -4.5% 4869.50 -18.72% 3936.00 0.56%

NCDEX Guar Gum (Rs/Quintal) 8034.0 7526.0 -6.3% 10510.00 -28.39% 7512.00 0.19%

MCX Cotton (Rs/Bale) 19820.0 19670.0 -0.8% 23300.00 -15.58% 19320.00 1.81%

NCDEX Cocud (Rs/Quintal) 3562.5 2135.0 -40.1% 3698.00 -42.27% 1632.00 30.82%

MCX Mentha Oil (Rs/kg) 1268.7 1244.1 -1.9% 1846.10 -32.61% 1176.00 5.79%

TECHNICAL RECOMMENDATIONS

CRUDE OIL

GUAR SEED

As on 27th September, Gold October contract delivery futures at the MCX platform are trading around Rs. 37500/10grams. Since last several weeks, prices moving lower after making a record high of Rs. 39884/10grams. At present, prices are trading between the 8, 13 EMA Support 36900 and resistance of 37100 respectively. The weekly momentum indicator RSI-14 is trading around 67 which has a potential to move lower towards the 50 mark. Overall long term bearish trend is in progress however, corrections towards the 36900/36650 are due.

Recommendations: Sell at 37800-37700 TP 36900/650 SL 37250

Crude oil October delivery contract prices are trading around Rs. 4000/barrel. In the mentioned price chart, it is visible that prices have breached falling trend line and also the weekly 8,13 EMA resistance levels around Rs. 3900 and hovering above the same. The weekly momentum indicator RSI-14 is trading around 49 near the neutral zone. Weekly resistances are seen around Rs. 4200 and the trend interrupting point is seen around 3700 mark. Overall we recommend building long positions.

Recommendations: Buy at 3900-3910 TP 4200 SL 3700

Guar Seed October contract delivery futures at the NCDEX platform are trading around Rs. 4000/quintal. Since last several sessions, prices are trading below the weekly 8, 13 EMA support levels (Rs. 4130-4150). The momentum indicator RSI-14 (Weekly) is near the oversold zone (38). In the bigger scenario, bearish trend is in progress. However, from the current levels, pullback towards the resistance levels of 4060-4080 (previous consolidation phase break out point) is expected. Overall we recommend building short position for a target of Rs. 3850 levels.

Recommendations: Sell at 4060-4080 TP 3850 SL 4180


COMMODITIES

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

CALENDAR SPREAD NYMEX - CRUDE OIL CALENDAR SPREAD NYMEX – NATURAL GAS

NEWS DIGEST

• Gold prices have been trading with a positive bias from the past few sessions due to the increase in uncertainty and weak US economic numbers. President trump commented that a deal to end a nearly 15-month trade war with China could happen sooner than people think and that the Chinese were making big agricultural purchases from the US.

• The Indian currency had been in downward trajectory since the Finance Minister, Nirmala Sitharaman announced a corporation tax rate cut bringing us at par with other Asian countries. This will bring foreign investment and so our currency got appreciated. Now Indian rupee has bottomed out around Rs. 71/ US dollar and not sustaining below Rs. 70.80 inspite of strong equity market.

• Brent crude is expected to trade in a range of $60.50-$66. After all the excitement, crude oil prices have stabilized. Now next trigger would be US inventory. US is ready to supply oil from its strategic reserves and Saudi has said they will put 100% production online in a month, so there is no bullish news for crude.

• President Donald Trump and Japanese Prime Minister Shinzo Abe could open Japanese markets to US agricultural commodities such as beef, pork and wheat.

• The soybean crop this season (September-October) may be lower than that in 2018-19 due to the relentless rain in Madhya Pradesh, the largest grower of the oilseed in India. Output figures and the extent of losses, however, will be confirmed by mid-October.

• USDA kept the inventory figures unchanged at 7.20 million bales which led to doubt for the sustainability of the gains in cotton.

• A Memorandum of Understanding (MoU) was signed between The Solvent Extractors’ Association (SEA) of India, the Malaysian Palm Oil Board (MPOB) and Global Sustainability support organisation-Solidaridad Network Asia Limited (SNAL) during the Globoil Annual Conference held on 26th September at Mumbai. The objective of this MoU is to jointly promote Malaysian Sustainable Palm Oil (MSPO) and Indian Palm Oil Sustainability Framework (IPOS) through harmonization between the two national standards.

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COMMODITIES

FUTURE PRICES (% CHANGE)

LME WAREHOUSE STOCKS (IN TONS)

Commodity Previous week This week Change % Change

Copper 283550 266225 -17325 -6.11%

Zinc 62150 67750 5600 9.01%

Aluminium 895625 914725 19100 2.13%

Lead 73750 70000 -3750 -5.08%

Nickel 156954 158112 1158 0.74%

SHANGHAI WAREHOUSE STOCKS (IN TONS)*

Commodity Previous week This week Change % Change

Copper 141379 117455 -23924 -16.92%

Zinc 79393 67200 -12193 -15.36%

Aluminium 338046 318988 -19058 -5.64%

*Until Wednesday, (Chinese market was closed last week)

GLOBAL STOCK POSITION (IN TONS)

COMEX WAREHOUSE STOCKS (IN TONS)

Copper 30204 30600 396 1.31%

Copper 30204 30600 396 1.31%

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

Commodity Exchange Contract 20-Sep 27-Sep % change

Aluminium LME 3M 1785.50 1739.00 -2.60%

Copper LME 3M 5755.00 5721.00 -0.59%

Lead LME 3M 2116.00 2093.00 -1.09%

Nickel LME 3M 17380.00 17245.00 -0.78%

Zinc LME 3M 2293.50 2292.00 -0.07%

Gold CME Aug 1538.10 1538.10 0.00%

Silver CME July 14.28 14.28 0.00%

WTI Crude oil CME June 58.09 56.54 -2.67%

Natural Gas CME June 2.54 2.41 -4.85%

INTERNATIONAL COMMODITY PRICES

Commodity Exchange Contract 20-Sep 27-Sep % change

Soybean CBOT July 908.25 914.25 0.66%

Soy oil CBOT July 27.98 27.98 0.00%

CPO BMD Aug 2027.00 2027.00 0.00%

Cotton ICE July 66.23 66.23 0.00%

FIRST ADVANCED ESTIMATES OF KHARIF 2019-20

2018-19 4th Advanced Estimates Target 1st Advanced

Estimate

Cereals (Million tons) 133.12 137.80 132.35

Paddy (Million tons) 102.13 102.00 100.35

Maize (Million tons) 19.04 21.30 19.89

Others (Million tons) 11.95 14.50 12.11

Pulses (Million tons) 8.59 10.10 8.23

Tur (Million tons) 3.59 4.60 3.54

Urad (Million tons) 2.56 2.90 2.43

Moong (Million tons) 1.84 1.60 1.42

Others (Million tons) 0.60 1.00 0.84

Oilseeds (Lakh tons) 212.78 258.39 223.89

Groundnut (Lakh tons) 53.63 75.68 63.11

Soybean (Lakh tons) 137.86 149.64 135.05

Castor (Lakh tons) 12.15 19.32 17.37

Others (Lakh tons) 9.14 13.75 8.36

Sugarcane (Lakh tons) 4001.57 3855.00 3777.66

Cotton (Lakh bales of 170 kg each 287.08 357.50 322.67

Source: Ministry of Agriculture, Government of India

-11.51%

-9.94%

-6.80%

-6.32%

-5.05%

-4.55%

-4.23%

-4.11%

-3.65%

-2.45%

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1.68%

3.02%

-14.00% -12.00% -10.00% -8.00% -6.00% -4.00% -2.00% 0.00% 2.00% 4.00%

Castor Seed

Dhaniya

Crude Oil

Guar Gum

Natural Gas

Guar Seed

Turmeric

Aluminum

Jeera

Silver

Soybean

Mentha Oil

Zinc

Copper

Nickel

CPO

Lead

Cotton

Gold

Barley

Soy Oil

RM Seed

Cardamom

Wheat


USD/INR

USDINR traded negative during the week, it made a high of 71.1325 and low of 70.5275. The RSI is at 52.73. Moving average of 32 is at 70.19 and 55 is at 69.69. The trend is looking sideways for the week. Hence, recommend Buying at 70.50 TP 71.30 SL 70.30.

EUR/INR

EURINR traded negative during the week, it made a high of 78.3025 and low of 77.11. The RSI is trading at 41.28. Moving average of 32 is at 78.60 and 55 is at 78.98. The trend is looking negative for the week. Hence, recommend selling at 77.80 TP 78.80 SL 78.80.

GBP/INR

GBPINR traded volatile during the week and closed in red. It made a high of 88.6925 and low of 86.7350. The RSI is trading at 41.04. Moving average of 32 is at 87.69 and 55 is at 87.53. The trend is looking negative for the week. Hence, recommend selling at 87.30 TP 86.00 SL 88.00.

JPY/INR

JPYINR traded negative during the week, it made a high of 66.3050 and low of 65.2275. The RSI is at 40.05. Moving average of 32 is at 66.19 and 55 is at 65.83. The trend is looking negative for the week. Hence, recommend Selling at 65.60 TP 65.00 SL 65.90.

TECHNICAL RECOMMENDATIONMARKET STANCE

USD/INR closed for the week at 70.56 after hitting weekly high of 71.13 and low of 70.51. The pair after trading quite range bound till afternoon but suddenly became volatile towards the end of the session. As per sources, India looks to ease foreign investment limits in government bonds. India is also planning a creation of separate window for foreign passive investors to get its bond included in global index. Sensex was down 167 points at 38,822 while Nifty was down 58 points at 11,512. Sitharaman has called for Ministries to provide their capex plans for the next four quarters. The details are expected to come within a week. Rupee gained in the last few sessions against USD as investor sentiment got lifted after US President Donald Trump said a trade deal with China could happen sooner than expected, falling crude oil prices also helped Rupee gain against USD in the past 3-4 sessions. Indian stock market posted its biggest single-day gains in 10 years recently after Finance Minister Nirmala Sitharaman announced a cut in corporate tax rates few days back. Finance Minister said there are no plans to revise the fiscal deficit target for the current fiscal at the moment. The bold move by the government to cut the corporate tax rate to 25%, down from 35% (inclusive of surcharge and cess), and a 17% special tax rate for new companies, effective from October 1 proved to be a major trigger for Indian markets. The renewed buying interest and improved sentiment since September 20 helped the Indian equity index gain over 5% in September series. India’s crude oil imports rose to a 4-month peak in August while fuel oil imports climbed to the highest in more than eight years. From the global news, Euro fell below crucial 1.1000 levels after weak readings on German manufacturing lowered the confidence, trades currently at 1.0923. US House of Representatives moved to open a formal impeachment inquiry against President Donald Trump. Also, weak US consumer confidence data heightened worries over the Sino-US trade row though US GDP numbers came in line. UK Supreme Court ruled that Prime Minister Boris Johnson’s decision to suspend parliament for five weeks was unlawful. This is a further blow to his ambition to pull Britain out of European Union next month. British consumer sentiment has fallen to a six-year low due to increased worries about job security. St. Louis Fed President James Bullard said that he thinks the central bank should continue cutting interest rates, with his preference one more quarter-point move lower by the end of the year. USD/INR is likely to trade in the range of 70.70 to 71.70 in the coming week.

NEWS FLOWS OF LAST WEEK

• US and Japan may fall short of signing a trade deal this week, as negotiators from both countries grapple with how to resolve President Trump’s threat to place tariffs on cars from Japan.

• Japanese manufacturing activity shrank at the fastest pace in seven months in September.

• Saudi Arabia has restored more than 75% of crude output lost after attacks on its facilities and will return to full volumes by early next week.

• US House of Representatives moved to open a formal impeachment inquiry against President Donald Trump. Also, weak US consumer confidence data heightened worries over the Sino-US trade row.

• UK Supreme Court ruled that Prime Minister Boris Johnson’s decision to suspend parliament for five weeks was unlawful. This is a further blow to his ambition to pull Britain out of European Union next month.

• China to buy more US farm products in latest goodwill gesture.

• St. Louis Fed President James Bullard said that he thinks the central bank should continue cutting interest rates, with his preference one more quarter-point move lower by the end of the year.

• British consumer sentiment has fallen to a six-year low due to increased worries about job security.

• Pound traded close to a two-week low after the European Union’s Brexit negotiator said Britain had yet to provide “legal and operational” proposals for an agreement on exiting the bloc.

• Finance Minister Nirmala Sitharaman said there are no plans to revise the fiscal deficit target for the current fiscal at the moment.

• Thomas I. Barkin, Richmond Federal Reserve President said the US economy looked strong and it was too early to tell whether further rate cuts were needed.

• Bank credit and deposits grew at 10.26% and 10.02% to Rs. 97.01 lakh crore and

• Rs. 127.22 lakh crore, respectively in the fortnight ended September 13.

• As per sources, India looks to ease foreign investment limits in government bonds. India is also planning a creation of separate window for foreign passive investors to get its bond included in global index.

CURRENCY

CURRENCY TABLE

Currency Pair Open High Low Close

USDINR 71.04 71.13 70.51 70.56

EURINR 78.23 78.34 77.07 77.16

GBPINR 88.78 88.79 86.69 86.81

JPYINR 65.96 66.38 65.24 65.28


ECONOMIC GAUGE FOR THE NEXT WEEK

Date Time Country Indicator Name Period Reuters Poll Prefix Unit Prior

30 Sep 17:30 India Infrastructure Output YY Aug 2019 Percent 2.1

30 Sep 7:15 China (Mainland) Caixin Mfg PMI Final Sep 2019 Diff.Idx 50.4

30 Sep 6:30 China (Mainland) NBS Non-Mfg PMI Sep 2019 Diff.Idx 53.8

30 Sep 6:30 China (Mainland) NBS Manufacturing PMI Sep 2019 49.5 Diff.Idx 49.5

30 Sep 6:30 China (Mainland) Composite PMI Sep 2019 Diff.Idx 53

30 Sep 14:00 United Kingdom BOE Consumer Credit Aug 2019 0.9 Bln GBP 0.897

30 Sep 14:00 United Kingdom Mortgage Lending Aug 2019 4.2 Bln GBP 4.611

30 Sep 14:00 United Kingdom Mortgage Approvals Aug 2019 66.5 Thou No. of 67.306

30 Sep 14:00 United Kingdom M4 Money Supply Aug 2019 Percent 0.7

30 Sep 14:00 United Kingdom Broad Money Aug 2019 Mln GBP 2443419

30 Sep 14:00 United Kingdom GDP QQ Q2 2019 -0.2 Percent -0.2

30 Sep 14:00 United Kingdom GDP YY Q2 2019 1.2 Percent 1.2

30 Sep 14:00 United Kingdom Business Invest QQ Q2 2019 Percent -0.5

30 Sep 14:00 United Kingdom Business invest YY Q2 2019 Percent -1.6

30 Sep 14:00 United Kingdom Current Account GBP Q2 2019 -19.75 Bln GBP -30.045

30 Sep 14:30 Euro Zone Unemployment Rate Aug 2019 7.5 Percent 7.5

30 Sep 15:30 India Fed Fiscal Deficit, INR Aug 2019 Bln INR 5476.05

30 Sep 19:15 United States Chicago PMI Sep 2019 49.9 Index 50.4

30 Sep 20:00 United States Dallas Fed Mfg Bus Idx Sep 2019 Index 2.7

30 Sep : India External Debt Q2 2019 Bln USD 543

1 Oct 10:30 India IHS Markit Mfg PMI Sep 2019 Diff.Idx 51.4

1 Oct 13:30 Euro Zone Markit Mfg Final PMI Sep 2019 Diff.Idx

1 Oct 19:30 United States Construction Spending MM Aug 2019 0.4 Percent 0.1

1 Oct 19:30 United States ISM Manufacturing PMI Sep 2019 Index 49.1

1 Oct 19:30 United States ISM Mfg Prices Paid Sep 2019 Index 46

1 Oct 19:30 United States ISM Manuf Employment Idx Sep 2019 Index 47.4

1 Oct 19:30 United States ISM Manuf New Orders Idx Sep 2019 Index 47.2

1 Oct 11:30 United Kingdom Nationwide house price yy Sep 2019 0.5 Percent 0.6

2 Oct 14:00 United Kingdom Markit/CIPS Cons PMI Sep 2019 Diff.Idx 45

2 Oct 19:15 United States ISM-New York Index Sep 2019 Index 879

2 Oct 19:15 United States ISM NY Biz Conditions Sep 2019 Index 50.3

2 Oct 17:45 United States ADP National Employment Sep 2019 Thou Person 195

2 Oct 23:00 United States EIA Ethanol Ref Stk W 20 Sep Thou Barrel 22500

2 Oct 16:30 United States MBA Mortgage Applications W 20 Sep Percent -10.1

3 Oct 14:30 Euro Zone Producer Prices MM Aug 2019 Percent 0.2

3 Oct 14:30 Euro Zone Producer Prices YY Aug 2019 -0.4 Percent 0.2

3 Oct 13:30 Euro Zone Markit Serv Final PMI Sep 2019 52 Diff.Idx 52

3 Oct 13:30 Euro Zone Markit Comp Final PMI Sep 2019 Diff.Idx

3 Oct 14:00 United Kingdom Markit/CIPS Serv PMI Sep 2019 50.3 Diff.Idx 50.6

CURRENCY


3 Oct 14:00 United Kingdom Composite PMI Sep 2019 Diff.Idx 50.2

3 Oct 14:00 United Kingdom Reserve Assets Total Sep 2019 Mln USD 174374.65

3 Oct 14:30 Euro Zone Retail Sales MM Aug 2019 Percent -0.6

3 Oct 14:30 Euro Zone Retail Sales YY Aug 2019 1.9 Percent 2.2

3 Oct 17:00 United States Challenger Layoffs Sep 2019 Thou Person 53.48

3 Oct 18:00 United States Initial Jobless Claims W 14 Sep 212 Thou Person 204

3 Oct 19:15 United States Markit Comp Final PMI Sep 2019 Diff.Idx 51

3 Oct 19:15 United States Markit Svcs PMI Final Sep 2019 Diff.Idx

3 Oct 19:30 United States Durables Ex-Def, R MM Aug 2019 Percent

3 Oct 19:30 United States Durable Goods, R MM Aug 2019 Percent 0.2

3 Oct 19:30 United States Factory Orders MM Aug 2019 -0.5 Percent 1.4

3 Oct 19:30 United States Durables Ex-Transpt R MM Aug 2019 Percent

3 Oct 19:30 United States Nondef Cap Ex-Air R MM Aug 2019 Percent

3 Oct 19:30 United States Factory Ex-Transp MM Aug 2019 Percent 0.3

3 Oct 19:30 United States ISM N-Mfg PMI Sep 2019 Index 56.4

3 Oct 19:30 United States ISM N-Mfg Bus Act Sep 2019 Index 61.5

3 Oct 19:30 United States ISM N-Mfg New Orders Idx Sep 2019 Index 60.3

3 Oct 19:30 United States ISM N-Mfg Price Paid Idx Sep 2019 Index 58.2

3 Oct 2:30 United States All Car Sales Sep 2019 4.58

3 Oct 2:30 United States All Truck Sales Sep 2019 12.39

4 Oct 10:30 India IHS Markit Svcs PMI Sep 2019 Diff.Idx 52.4

4 Oct 18:00 United States International Trade $ Aug 2019 -54.6 Bln USD -54

4 Oct 18:00 United States Goods Trade Balance (R) Aug 2019 Bln USD -72.83

4 Oct 13:30 United Kingdom New Passenger cars Registration Sep 2019 No. of 92573

4 Oct 15:30 United Kingdom BBA Mortgage Rate Sep 2019 Percent 4.3

4 Oct 18:00 United States Non-Farm Payrolls Sep 2019 140 Thou Person 130

4 Oct 18:00 United States Private Payrolls Sep 2019 Thou Person 96

4 Oct 18:00 United States Manufacturing Payrolls Sep 2019 4 Thou Person 3

4 Oct 18:00 United States Government Payrolls Sep 2019 Thou Person 34

4 Oct 18:00 United States Unemployment Rate Sep 2019 Percent 3.7

4 Oct 18:00 United States Average Earnings MM Sep 2019 Percent 0.4

4 Oct 18:00 United States Average Workweek Hrs Sep 2019 Hour 34.4

4 Oct 18:00 United States U6 Underemployment Sep 2019 Percent 7.2

CURRENCY


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