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Weekly Wrap
Derivative Note
January 30, 2015
Rollover Analysis – Jan 2015
Market Vs Nifty Rollover
Nifty/BankNifty starts the January expiry with a strong
9.4/10.8% gains (the best performance by Nifty in a month
over the past 1year). The rally which started with IT stocks
(after Infy result) got further ammunition by HDFC twins and
large cap private banks like Axis and ICICI. The undertone of
the market seems to be extremely positive as we see strong
rolls in Nifty, BankNifty and indices heavyweights despite
of run-up witnessed in January. The surge in India VIX was
mostly on account of increase in speculative position rather
than traders/investor buying option for a hedge.
90
Market rollover
Nifty Rollover
80
70
60
The Nifty index rolled ~2.5cr shares (~76%) into the next
contracts. The Nifty rolls contract wise was highest when
compared to the previous eighteen expiry. FIIs rollover has
been above five months average with long/short rolls being
83/38%. Market wide rolls were higher at 86.7% on back
of strong rolls in Cement, Pharma and Real Estate stocks.
Lower rolls were seen in Auto sector which stood at 81%
as against 84% (Dec) and 88% (Nov) in the previous two
expiry. Lower roll in Auto sector was due to below average
rolls in TVS and Ashok Leyland.
50
40
26-Jun 31-Jul 28-Aug 25-Sep 30-Oct 27-Nov 24-Dec 28-Jan
Source: Company, India Infoline Research
Nifty Options
4.0
The market has given signs of strong momentum in the
past two weeks. The past rally has been much swifter than
the street and our estimate. However, mid-cap stocks have
been laggard we expect some mid-caps to outperform the
broader indices in first half of the February series.
Call OI
(mn)
Put OI
3.5
3.0
2.5
2.0
Calls based on Rollover Strategy:
- Buy Divis Lab Feb Fut below `1794 with SL of `1750 for
target of `1860, 1880
1.5
1.0
9000
9100
Telecom
Others
8900
8800
8700
8600
8500
8400
0.0
8300
0.5
Source: Company, India Infoline Research
Sector-wise rollovers
100
Jan Expiry
Dec Expiry
Nov Expiry
90
80
70
60
Source: Company, India Infoline Research
Click here for the detailed note.
Textile
Power
Pharma
Oil & Gas
Metals
Media
Real estate
Infra
IT
FMCG
Fertilizer
Cement
Capital Goods
PSU Banks
Auto
40
Private Banks
50
India Infoline Weekly Wrap
Market Outlook
A cracker of a rally was seen in the January series with the indices
gaining over 9% each. Expectations of pro-reform measures and a
market-friendly budget ensured that traders rolled over their bullish
positions confidently. The Coal OFS issue on Friday seems to have
taken the wind off the market rally. For the week, Nifty closed
marginally lower following profit booking on Friday.
The results of public banks announced so far have been
disappointing with asset quality deteriorating significantly. Gross
NPL ratio have seen a sharp jump on sequential basis along with
elevated restructuring activity. These trends are unlikely to reverse
meaningfully over the next couple of quarters. Fundamentally
private banks are better placed than public banks.
Technical View
The Indian indices have had a dream run with the Nifty gaining
~7% in January. Long - term bullish trend remains intact and
investors should be positioned on the long side. With Friday’s
decline, possibilities are index could begin a process of
consolidation or retracement back to previous breakout level
(6,650). In any of the scenarios, the trade should be to buy on
sharp dips, and it will be much better to focus on individual
stocks.
F&O View
In the coming week, all eyes will be fixed on RBI monetary policy.
Corporate results like ACC and Bharat Forge among others will be
on tap. While the direction of the policy is clear, the pace of further
easing would be dependent on continuance of disinflationary
trends, government’s performance on fiscal consolidation and
policy reforms with regards to key inputs that could ease supply
constraints in the economy. Also, the Budget would be a critical
input in central bank’s next discourse on rates. So we don’t think
that RBI would cut the repo rate again next week.
Nifty ended volatile week with profit taking on heavy weights,
huge shorts visible on PSU banking stocks after disappointing
results, Rollovers were in tune of 76% on index and 86 % on
market wide front, for February series. Rising VIX towards 20 levels
suggest traders anticipating wild moves to continue ahead of
budget event. On options front heavy call writing visible at 9000
Feb strike with addition of nearly 18.2 lakhs shares, suggesting
market to face resistance near 9000 levels.
FIIs/MFs activity
Advance/Decline
2,400
(Rs cr)
1,200
Net FIIs inflow
(No of stocks)
Advance
Decline
Net MFs Inflows
2,000
900
1,600
1,200
600
800
400
300
0
0
(400)
20-Jan 21-Jan 22-Jan 23-Jan 27-Jan 28-Jan 29-Jan
Global performance
Sectoral performance
(%)
Nikkei
Nifty
Realty
0.9
Oil & Gas
(0.3)
Sensex
FMCG
1.9
Power
1.7
1.0
(0.3)
IT
(0.4)
Auto
(1.6)
2
(0.6)
(1.2)
Metals (3.0)
(4.2)
(5.0)
0.0
Small Cap
Banks
Shanghai
0.5
BSE-200
(1.4)
Nasdaq
2.4
Capital Goods
(1.4)
Dow Jones
8.3
(%)
Health Care
(0.3)
Hangseng
20-Jan 21-Jan 22-Jan 23-Jan 27-Jan 28-Jan 29-Jan 30-Jan
(4.0)
(3.0)
(2.0)
(1.0)
0.0
1.0
2.0
(4.5) (3.0) (1.5) 0.0 1.5 3.0 4.5 6.0 7.5 9.0
India Infoline Weekly Wrap
Technical Check
Nifty 50 & CNX 500 top 10 Losers
Nifty 50 & CNX 500 top 10 gainers
NSE Nifty
Company
BPCL
HCL Tech
%
Chg
BOB
193 (13.4) Coal India
361
(8.6)
Coal India
361
(8.6) PNB
190
(8.4)
190
(8.4) Graphite India
78
(8.4)
%
Chg
Company
749
11.0 Geojit Bnp
49
28.2
35
18.8
170
Lupin
CMP
(`)
CMP
(`)
1,585
8.8 HCC
8.4 MRPL
59
16.9
PNB
6.4 GMR Infra
19
14.9
M&M
658
13.9
Cairn India
ITC
369
5.5 HPCL
BHEL
292
4.5 Praj Ind.
63
12.5
SBI
Axis Bank
588
4.1 Dishman Pharma.
153
12.3
Kotak Bank
3.3 Welspun
383
12.1
Zee Ent.
182
11.9
Hindalco
1,448
10.3
Dr. Reddy
HDFC Bank
1,077
Reliance
915
Tech M
2,869
3.2 Tribhovandas
3.2 Bajaj Fin.
Technically strong
CMP
(`)
Total
Traded Qty
(lacs)
10 days
Average
Traded Qty
(lacs)
Company
NTPC
144
142
205.3
77.5
Bajaj Hold
Century Tex
574
565
10.8
9.3
Dabur India
256
252
23.6
16.9
NHPC
18
18
53.1
17.7
GSPL
341
335
54.9
31.1
TCS
IVRCL
Adani Ports
CMP
(`)
1,265
1,687
(7.9)
233
(7.1) Persistant
(6.2) Redington
122
(7.8)
309
(5.6) Havells
258
(7.8)
1,322
377
140
3,233
(4.6) Gitanjali Gems
47
(7.8)
(3.6) Swaraj Eng.
873
(7.7)
(3.5) Gujarat Gas
658
(7.6)
(3.5) Vardhman Tex.
439
(7.5)
Technically weak
10 days
Moving
Average (`)
Company
CNX 500
%
Chg Company
%
Chg Company
1,792
DLF
NSE Nifty
CNX 500
CMP
(`)
Bulk deals
Crompton Grv
CMP
(`)
10 days
Moving
Average (`)
Total
Traded Qty
(lacs)
10 days
Average
Traded Qty
(lacs)
1,406
1,420
0.6
0.6
190
191
32.8
31.2
19
20
58.9
49.4
119
121
17.4
10.9
2,482
2,520
30.6
17.0
Book closure and record date
Qty
(lacs)
Price
(`)
Company
Date
Purpose
B/S
TORNTPHARM
02 Feb 2015
Interim Dividend - `.5.00
Zee Learn
B
25.0
31.0
MASTEK
03 Feb 2015
Interim Dividend - `.1.50
Fidelity Inv
Edelweiss
B
163.4
73.0
EDELWEISS
04 Feb 2015
Interim Dividend - `.0.80
Goldman Sachs
IBREAL
B
24.3
79.0
MRF
04 Feb 2015
Final Dividend - `.44.00
CHOLAFIN
05 Feb 2015
Interim Dividend - `.2.50
Date
Institution
Scrip name
27-Jan
JP Morgan
27-Jan
29-Jan
Nifty Future VWAP
Bank Nifty Future VWAP
Nifty Futs Close
Bank Nifty Futs Close
Nifty Vwap
Bank Nifty Vwap
21000
9100
20700
9000
20400
8900
20100
8800
19800
19500
8700
23-Jan
27-Jan
28-Jan
29-Jan
30-Jan
23-Jan
27-Jan
28-Jan
29-Jan
30-Jan
3
India Infoline Weekly Wrap
Commodity Corner
Base metals
Precious metals
Base metals continued to struggle, impacted by contracting
manufacturing activity in China. Economic activity in China has
not manifested any concrete signs of resurgence. Copper prices
categorically bore the brunt of aggressive selling. Copper has
been adversely influenced by the massive jump in LME warehouse
inventories. In this respect, LME stocks have risen by more than
50,000 tons so far this month. It seems that the palpable surplus in
the concentrate market is eventually finding its way into the refined
market. In addition, Copper prices failed to derive any support from
reports that China’s State Reserve Bureau plans to stockpile 200,000
metric tons of refined copper.
Precious metals witnessed retracement this week, failing to react to the
outcome of Greece elections. It seems the markets had already priced
in Syriza’s victory and ECB’s aggressive monetary stimulus somewhat
has overshadowed the uncertainty regarding Greece. On Greece
elections, the opposition Syriza party formed a coalition government.
In addition, FOMC policy statement was inferred to be hawkish with
the central bank not providing any indication that it will postpone the
initial interest rate hike decision inspite of the deflationary trends across
the globe. However, Fed stated that it will remain patient and monitor
the macroeconomic flow in US and international developments before
going ahead with the hike.
The broader price trajectory remains vulnerable to bearish
influence emanating from Chinese macroeconomic developments.
In the latest, Chinese government plans to cut its growth target
to around 7% in 2015, its lowest projection in some 11 years.
Inflation forecasts are also expected to be lowered till 3%. In terms
of prices outlook, we infer that Copper can still drift lower and in
the process exert downward pressure on other metals as well.
Market focus will be accentuated on US Q4 GDP readings, wherein
expectations are calling for a growth of 3.0%. A below par reading
can again roil the broader markets and in the process trigger an
upside in the precious pack. However, a healthy GDP reading can
turn the tables, with US dollar and equities proving to be the
beneficiary. On outlook, it is an onerous task to figure out the short
term price trajectory in gold, considering the fact that there are
various economic crosscurrents prevailing at the current juncture.
However, the development in Greece can prove supportive for the
precious pack. There are concerns regarding the functioning of
the new government. PM Alexis Tsipras is adopting a provoking
stance by stopping the privatization plans agreed under bailout
deals and is also planning to reinstate public sector employees that
were previously laid off.
Note: This market commentary is written at 12:00 PM IST
LME prices
Weekly inventory update
Base Metals (US$/ton)
High
Low
LTP*
Chg(%)
Copper
5,704
5,340
5,395
(2.3)
Tons
Abs Chg.
Chg (%)
Copper (LME)
248,125
12,975
Nickel
15,070
14,015
14,900
3.8
5.5
Nickel (LME)
426,240
3,204
0.8
Zinc
2,150
2,068
2,090
(0.1)
Zinc (LME)
Aluminium
1,887
1,812
1,819
(0.7)
Aluminium (LME)
Lead
1,890
1,816
1,860
0.8
630,750
(15,025)
(2.3)
4,048,900
(37,275)
(0.9)
215,000
(100)
(0.0)
11,810
(180)
(1.5)
137,042
2,905
2.2
85,639
9,286
12.2
187,114
1,043
0.6
Lead (LME)
Tin (LME)
Precious Metals (US$/ounce)
Gold
High
Low
LTP*
Chg(%)
1,303
1,252
1,263
(2.4)
Shanghai Zinc
18.5
16.7
17.0
(7.2)
Shanghai Aluminium
Silver
* Last Traded Price
LME Copper
10500
Shanghai Copper
COMEX Gold
US$/ ton
2050
Copper (LME)
US$/ ounce
Gold
1900
9500
1750
8500
1600
7500
1450
6500
4
Jan-15
Jul-14
Oct-14
Jan-14
Apr-14
Jul-13
Oct-13
Jan-13
Apr-13
Jul-12
Oct-12
Apr-12
Jan-12
Jul-11
Oct-11
Apr-11
Jan-11
Jan-15
Jul-14
Oct-14
Apr-14
Jan-14
Jul-13
Oct-13
Jan-13
Apr-13
Oct-12
Jul-12
Jan-12
Apr-12
Jul-11
Oct-11
1000
Jan-11
4500
Apr-11
1150
Oct-10
5500
Oct-10
1300
7
0
6
(2)
5
110
100
30
(%)
Six core Ind.
(INR/EURO)
(INR/USD)
(INR/GBP)
(INR/JPY)
IIP and Six core Industries
IIP
130
12
8
4
0
(4)
Currency Movements
90
60
40
120
40
95
80
90
70
85
70
Jul-12
Nymex Crude
Jan-14
Jan-15
Oct-14
Jul-14
Apr-14
10yr Gsec yield
3mth CP rate
Oct-13
Jul-13
Apr-13
Jan-13
4
Oct-12
6
Jan-12
8
Apr-12
12
Jul-11
10
(%)
Oct-11
13
Apr-11
14
Jan-11
MFG Products
Oct-10
Dec-14
Sep-14
Jun-14
Mar-14
Monthly Inflation
Dec-13
Sep-13
Jun-13
Mar-13
Dec-12
Sep-12
12
(%)
Jun-12
Mar-12
Dec-11
Sep-11
14
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
2
Jun-11
Inflation
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
(8)
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
16
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
India Infoline Weekly Wrap
Chartbook
Interest Rate
5yr AAA bond yield
11
10
9
8
Crude (Brent/ Nymex)
Brent Crude
110
100
90
80
70
60
50
Dollar Index
100
Dollar Index
50
80
75
Source: Bloomberg
5
6
Source: Bloomberg
50,000
29x
40,000
24x
30,000
18x
20,000
10,000
13x
7x
0
22.0
PE (x)
Cur. Yr
Sensex
24.0
Nasdaq
60,000
Mexico Bolsa
Sensex PE Band
1,550
PE Comparision
1-Yr Fwd
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
28-Jan
20-Jan
12-Jan
4-Jan
27-Dec
15
(Rs)
S&P 500
20
19-Dec
1,570
Dow Jones
25
FTSE
1,575
11-Dec
30
3-Dec
35
Straits
1,590
25-Nov
VIX
DAX
Volatility Index
17-Nov
250
Taiwan
40
9-Nov
300
Shanghai
Jan-15
Oct-14
Jul-14
Apr-14
Jan-14
Oct-13
Jul-13
Apr-13
Jan-13
Oct-12
Jul-12
Apr-12
Jan-12
Oct-11
Jul-11
50
Apr-11
60
Jan-11
China
1-Nov
PMI
Hang Seng
US
Jan-15
Germany
Dec-13
Euro Zone
Dec-12
India
Nov-11
Oct-10
Oct-09
40
Sep-08
Aug-07
Aug-06
Jul-05
(%)
Jun-04
Jun-03
10
May-02
Apr-01
45
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
65
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
India Infoline Weekly Wrap
Chartbook...
US Initial Jobless Claims
550
500
Initial Jobless Claims ('000)
55
450
400
350
Sensex Earning Estimates
FY15
1,585
1,580
1,565
1,560
1,555
India Infoline Weekly Wrap
News Recap
The Cabinet today approved a base price of `37.05bn per
megahertz (MHz) for 3G spectrum auction, a move which
would help the government garner over ` 1tn along with sale
of other mobile frequencies. (ET)
The government has taken a big step forward to assure the
foreign investors by not appealing against the Bombay High
Court order October last year, which ruled that Vodafone was
not liable to be taxed in India in a transfer pricing dispute with
the tax department. This will help other companies like Shell
that also won a similar reprieve in the Bombay High Court last
year. (BS)
The union government proposes to fund upto `10bn worth
infrastructure works in each of the cities selected under smart
city project over the next ten years. (BS)
Adani Enterprises, the holding company of the Adani Group,
is planning a mega restructuring of its businesses under which
the shareholders of holding firm, Adani Enterprises are likely to
get direct shares in its power and port subsidiaries. (BS)
The government today fixed ` 358 a share as the floor price
for up to 10% stake sale in Coal India, which may help the
exchequer garner about `226bn. (BS)
NTPC has restricted the building of three new solar power
projects to domestic manufacturers, even as India pushes for
overseas companies to lead fresh investments into a renewable
energy drive. (BS)
Japan's Suzuki group plans to set up three plants in Gujarat's
Hansalpur, which will exclusively supply to Maruti Suzuki India
Limited. (ET
Oil and Natural Gas Corp said its natural gas output will jump
81% to 116 mscmd by 2019 after it bring newer fields in
western and eastern offshore into production. (BS)
Targeting revenue of up to US$5bn from the digital vertical in
the next few years, TCS has hired 1,500 experienced hands in
the segment so far this fiscal. (BS)
Reliance Industries and its partner BP plc of UK will invest about
`60bn by 2016 to help sustain and improve recovery from the
two main gas fields in the eastern offshore KG-D6 block. (BL)
The government will sell up to 10% stake in the Coal India Ltd
through offer for sale on Friday and is expected to mop up
around `240bn at current market price. (BL)
Tata Motors intends to utilise `75bn, which it plans to raise via
rights issue, to fund various activities, including introduction
of more than 100 new commercial vehicles over next three
years and passenger vehicles on new modular platform from
FY 2016-17. (ET)
Terming the January 30 stake sale in Coal India as a “betrayal”
and “violation” of assurances given by the Coal Ministry after
their strike earlier this month, trade unions said they will hold
day-long protests and dharnas on Friday against 10% stake
sale in the public sector entity. (BL)
SpiceJet, under its revival plan, plans to increase its daily flights
by almost 30% to 280 within three months. (BS)
Bharti Airtel, through its wholly-owned subsidiary Airtel M
Commerce Services Ltd. (AMSL), is applying for a Payments
Bank licence with Kotak Mahindra Bank as a partner. (ET)
Tata Power will acquire group firm Nelco's defence business of
Unattended Ground Sensors for about `83mn. (ET)
SpiceJet is offering 0.5mn discounted seats in a three day sale
beginning, with tickets priced from ` 1,499 onwards. Discount
tickets are available for travel from February 15-June 30. (BS)
Jaiprakash Power Ventures Ltd said it was likely to default on
payments for convertible bonds worth US$200mn due on Feb
13 this year, as it could not generate enough revenue from its
operations. (BS)
Event Calendar
Period: 2nd Feb – 6th Feb 2015
US
• Personal income MoM (2 Feb)
•
Market Manufacturing PMI Final (2 Feb)
•
Construction spending (MoM (2 Feb)
•
Total Vehicle sales (4 Feb)
India
• HSBC Manufacturing PMI (2 Feb)
•
RBI interest rate decision (3 Jan)
•
HSBC India Services PMI (4 Jan)
China
• HSBC Manufacturing PMI Final (2 Feb)
•
HSBC China Services PMI (4 Feb)
Europe
• PPI MoM (3 Feb)
•
Retail sales MoM (4 Feb)
IIFL, IIFL Centre, Kamala City, Senapati Bapat Marg, Lower Parel (W), Mumbai 400 013
The information in this newsletter is generally provided from the press reports, electronic media, research, websites and other media. The information also includes information from interviews
conducted, analysis, views expressed by our research team. Investors should not rely solely on the information contained in this publication and must make their own investment decisions based on their
specific investment objectives and financial position and using such independent advisors as they believe necessary. The materials and information provided by this newsletter are not, and should not be
construed as an advice to buy or sell any of the securities named in this newsletter. India Infoline may or may not hold positions in any of the securities named in this newsletter as a part of its business.
Past performance is not necessarily an indication of future performance. India Infoline does not assure for accuracy or correctness of information or reports in the newsletter.
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