Market Mantra – January 31, 2017

Market Mantra

Tuesday, January 31, 2017


Market Mantra

Trump rhetoric irks global markets into correction mode as treasury yields rise while US$ falls!!


Asian markets opened weak as overnight globally we saw a big sell off with equities losing ground. The sentiment turned negative as President Trump's rhetoric on immigration ban across 7 countries saw both Corporate & diplomatic sources give a big thumbs down to the same.US$ weakened while yields hardened while gold prices rebounded.The Dow Jones after being down over 222 recovered in the last hour to end down 122 for the session. 


Nifty may also see weakness creep in as with the Union Budget to be announced tomorrow investors would tend to book profit after the heady rally of the last fortnight.For once after November & the double whammy of Trump victory & local 'demonetization' Indian markets seem the best to be against the weak global back drop with expectations that the budget could be path breaking & stroke the necessary kick start to the economy.For today expect caution to be the buzzword as strong bouts of volatility see both sided movements on the Nifty.  


Technical view: Nifty will face resistance around 8700 while 8580-8600 will act as strong support.Bank Nifty also finds resistance around 19800 while 19350 acts as strong support.



Trading ideas  (Time period: 1-3 days)  


Castrol India (Buy above Rs 415 for target of Rs 430, SL at Rs 407.5): The stock has smartly rallied and has broken out from an Ascending triangle pattern. The breakout has been accompanied with expansion of traded volumes surpassing 10 days average volumes. The stock has also closed above its long term 200-DMA which was placed at Rs 411 which further accentuates our bullish stance on the stock.


Derivative strategies  (Time period: Till expiry)


Sell MRF February future @ 52000-52300, Stop loss 53500 & Target 51150-52250


Corporate Snippets


Lakshmi Machine Works has showcased 10 machines at IMTEX 2017, now underway in Bengaluru. (BL)


Zee Entertainment Ent. has announced the launch of two new channels, Zee Bollymovies and Zee Bollynova, which will broadcast on Africa’s new pay-TV network, Kwesé TV. (BL)


Vodafone was in talks to merge its Indian operations with rival Idea Cellular in an all-share deal that would create a new market leader better able to cope with the brutal price war convulsing the industry. (BL)


Piramal Enterprises has formalising a deal to acquire the portfolio of spasticity and pain management drugs from Mallinckrodt LLC in an all-cash deal of USD171mn (Rs11.60bn).


Reliance Defence and Engineering (RDEL) has signed a Rs9.16bn contract with the Defence Ministry for the design and construction of 14 fast patrol vessels for the Indian Coast Guard. (BL)


Suven Life Sciences has been granted a product patent by the US for the treatment of disorders associated with neuro-degenerative diseases. (BL)


Kakinada SEZ Ltd, a subsidiary of GMR Infrastructure Ltd, has signed a series of MoUs with firms interested in setting up manufacturing units in Kakinada SEZ. (BL)


Ashoka Buildcon has bagged a power project worth Rs1.17bn in Bihar. (BL)


Gokaldas Exports has entered in to a memorandum of understanding (MoU) with the Andhra Pradesh Government for setting up four apparel manufacturing units in Chittoor district over next three years. (BL)


Rural Electrification Corporation Ltd  has inked three pacts to extend financial assistance of around Rs600bn to Andhra Pradesh. (ET) 


IFFCO has envisaged interest in taking 10% stake in Rs59bn floating LNG import terminal being set up by Swan Energy in Gujarat. (ET)


Wipro  has invested an undisclosed amount in San Francisco's Tradeshift  through its strategic investment arm Wipro Ventures. (BS)



Economy Front Page:


About 70,000 officers of the Central Excise and customs have protested against the decisions of the GST council which they say will make the new regime and its implementation almost entirely a responsibility of state governments and not that of the Centre. (ET)



Results Table

Rs m


YoY %


YoY %

Bajaj Finance





Bajaj Finserv





Dish TV










Godrej Consumer










Info Edge (India)





Shree Cement





Shriram City Union





Tech Mahindra








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India Infoline Research



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We recommend a BUY based on improved lending towards high-yielding retail products and reducing credit-costs through improvement in loan profile. Strong NII growth, expanding NIM and improving asset quality is expected to improve return multiples. The stock is trading at 3x FY18E BVPS. (Target Price- Rs 1550) …Read More


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Result Express

Shree Cement Ltd 

Shree Cement Ltd's Q3FY17 standalone net profit rises 0.4% yoy to Rs.235 crore : Estimates mixed…Read More


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