D-Street Buzz: Nifty Auto jumps 3% led by Hero Moto, Tata Motors; HDIL zooms 14%

The Indian benchmark indices have extended the morning gains in this afternoon session with the Nifty50 jumping 114 points, trading at 10,663 while the Sensex was up 375 points and is trading at 35,525.

Nifty Auto was the outperforming sector which jumped over 3 percent led by Hero MotoCorp, Tata Motors, Tata Motors DVR, Mahindra & Mahindra, Exide Industries, Bajaj Auto, Eicher Motors, Ashok Leyland and Motherson Sumi Systems.

Nifty Realty continued to show handsome gains up over 2 percent led by stocks like Indiabulls Real Estate which spiked close to 10 percent followed by Godrej Properties, Prestige Estates, Brigade Enterprises, DLF, Phoenix Mills and Oberoi Realty.

Metal stocks were also shining led by Hindustan Copper, Hindalco Industries, Tata Steel, SAIL, NMDC, NALCO and Jindal Steel & Power.

From the BSE midcap space, the top gainers included AB Fashion followed by 3M India and Bank of India while the top losers were Kansai Nerolac, Godrej Industries and Container Corporation of India.

The top BSE smallcap gainers were Godawari Power which zoomed 17 percent followed by Tata Steel Bsl and HDIL while the top losers were Ashapura Intimates and Rolta India.

The top gainer from NSE include Indiabulls Housing Finance, YES Bank, Hero Moto, Tata Motors and Tata Steel while the top losers included HPCL, Dr Reddy's Labs and Titan Company.

The most active stocks were Reliance Industries, YES Bank, Indiabulls Housing, Sun Pharma and Kotak Mahindra Bank.

Aavas Financiers, Sakuma Exports and Tube Investments of India have hit new 52-week high on NSE in this morning session.

28 stocks have hit new 52-week low including names like ABG Shipyard, IL&FS Transportation Networks, Punj Lloyd and Rolta India among others.

The breadth of the market favoured the advances with 1395 stocks advancing and 262 declining while 402 remained unchanged. On the BSE, 1730 stocks advanced, 546 declined and 115 remained unchanged.

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Source: Moneycontrol

Nifty wipes out most gains clocked in 2018; 22 stocks fell 20-60% from their 52-week highs

Despite Urjit Patel’s exit and setback for BJP in election results of three Hindi heartland states, Nifty5o closed in the green at 10,549.15 on Tuesday. But, the index has wiped out almost all the gains it made through the year. On December 29, 2017, the index had closed at 10,530.

During the same period, many NSE stocks fell 20-60% from their 52-week highs. As many as 22 Nifty stocks are a part of that list, which includes Tata Motors, Yes Bank, Indiabulls Housing Finance, Vedanta, Sun Pharma, IOC, Tata Steel and JSW Steel.

The loss of power in three states — Madhya Pradesh, Rajasthan, and Chattisgarh — by BJP is a major event for investors to take note. Most experts feel that the journey from here on could turn volatile and the upside is likely to remain capped at 11,000 for Nifty.

Apart from political setback which could impact markets in the short term, the bigger worry will come from the global factors. In the US markets, more than half of S&P components are in a bear phase and most global investment banking firms are penciling a slower growth which could trigger a risk-off sentiment.

Foreign investors turned net sellers in December after pumping more than Rs 10,000 crore in Indian markets in November. A slow global growth environment will hurt growth for India Inc. as well which might not auger well for D-Street.

“Given, the present scenario where global economic growth is tapering, concerns on geo-political issues are on the rise, uncertain US trade policies, currency and crude oil volatility, inclusive corporate earnings growth trajectory yet to pick up; we expect 2019 to be no different from 2018, where markets may gyrate to extreme ends,” Dharmesh Kant, Head – Retail Research, IndiaNivesh Securities told Moneycontrol.

“Empirical evidence advocates bottom up approach for stock picking, which is the need of the hour. Companies that are driven by solid business models, asset-light balance sheet, high return ratios, and consistent earnings are the ones that would ride the storm,” he said.

Where investors should bet their money?

Investors will be better off not to touch high beta names until some clarity emerges with respect to General Elections 2019. But, till that time capital goods, IT, banking, agro are certain sectors which could hog the limelight.

"The Corporate banking space looks interesting, going ahead. The NPA cycle seems to have peaked out, the asset resolution bodes well, capex-cycle is slowly gathering pace, and the base for next year is very favourable. Apart from this, Pharmaceuticals and certain consumer-related stocks should do well," Prasanna Pathak, Fund Manager-Equity at Taurus Asset Management Co. Ltd. told Moneycontrol.

Kant feels that consumption space will outperform others, specifically FMCG, white goods, electrical & electronics, agro-chemicals, and select financials.

Sahil Kapoor, Chief Market Strategist, Edelweiss Investment Research, is of the view that pharma stocks could make a comeback in 2019 as current factors have led to extensive price damage.

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Source: Moneycontrol

State election results: As exit polls indicate close contest, here's what investors should do

It looks like it will be a close contest between the ruling party BJP and the biggest opposition party, Congress, when the results for the five state elections will be announced on Tuesday.

Ahead of the results, India VIX fell 3.70 percent to close at 18.59 levels on December 7. It has risen from 18.22 recorded on December 3. Higher VIX suggests more volatile swing in the market in next coming sessions.

The S&P BSE Sensex and the Nifty50 plunged below crucial support levels in trade on December 10 and exit polls suggested a tight finish between the BJP and the Congress which might not go down well with markets, suggest experts.

A loss of BJP will not push markets into a tailspin but will limit further upside. If the opposition gains ground in key states such as Madhya Pradesh, Rajasthan as well as Chhattisgarh it might hit investor sentiment.

“If BJP were to retain 2 out of 3 Hindi heartland states where it is in direct competition with the Congress, the market would heave a sigh of relief and be range bound. However, if BJP were to emerge victories only in 1 of those 3 states then it would inject a sense of uncertainty in the run-up to the general elections due in April-May 2018,” Ajay Bodke, CEO - PMS, Prabhudas Lilladher told Moneycontrol.

“The possibility of a largish correction is still looming. However, the Indian market is unlikely to breach its recent low of 10,100 due to the dramatic plunge in global crude oil prices and improvement in macros,” he said.

On the options front, maximum Put OI is placed at 10,000 followed by 10,200 strikes, while the maximum Call OI is seen at 11,000 followed by 11,500 strikes. Options band signifies a broader trading range between 10,550 and 10,850.

Most of the exit polls suggest that Congress is likely to make a comeback or at least give a tough fight to the ruling party, BJP, in Chhattisgarh, Rajasthan as well as Madhya Pradesh. The other two states, Mizoram and Telangana, are not material to the markets.

But, following exit polls blindly is also dangerous because there have been instances when they went not just off the mark but totally wrong. Hence, the outcome of the exit polls should be taken with a pinch of salt.

However, what it will certainly do is make markets volatile on Monday and on Tuesday when the actual results are scheduled to be declared. The next big question is, ‘what should investors do now’?

Well, the most straight and safe answer is avoid trading and if in case you have already placed your bets according to what you think could be the outcome and how it will play out in markets, buying put options to safeguard your portfolio can also be done, suggest experts.

“Ideally, for a situation like this when ahead of the event we have seen a big uptick from the recent lows. Anything bought can be held on to with a protection buying. Considering a negative outcome, the impact of risk premia on the buyer of the Puts post-event, be ready for a knock of about a couple of percent,” Shubham Agarwal, CEO & Head of Research at Quantsapp Private Limited told Moneycontrol.

“This limits the downside as with if not more (looking at the preceding move) the odds remain equal for either side, hence if there is upside volatility, it seldom gives chance to buy into,” he said.

Amit Gupta, Head of Derivative at ICICIdirect told Moneycontrol that history suggests that since 2016, Volatility has found it tough to move above 25 percent levels. Hence, we don’t recommend buying further Put options now in case you have bought before.

“In fact, post the event as volatility is expected to decline one can sell the options after that to capture the decline in option premiums,” he said.

How are FIIs placed?

Foreign investors have pulled put close to Rs 400 crore from the Indian stock market in the last five trading sessions amid weakness in global equities due to the arrest of a high-profile Chinese executive.

This comes following a net inflow of over Rs 6,900 crore in the equity market by Foreign Portfolio Investors (FPIs) on easing crude oil prices and a strengthening rupee.

It looks like FIIs are also moving cautiously ahead of the event, but not negative which suggests that the possibility of a big downside remain limited.

In the derivatives market, FIIs added 21,000 short Index Futures, 9,000 long Index PE and 19,000 short Stocks Futures contracts on Friday, AceEquity data showed. “Nifty DEC added 14247 contracts in Open Interest today, Banknifty DEC continued to shed OI with reduction of 8,375 contracts.

“Since last 10 days, FIIs have been a buyer in the INDEX FUTURES  & INDEX OPTIONS  segment amounting to 5174 crs &  8072 crs respectively, which indicates that FIIs have taken a hedge position ahead of not only election results but also against upcoming global events,” Rajesh palviya, Head Technical, and Derivative Analyst, Axis Securities told Moneycontrol.

Gupta of ICICIdirect said that FIIs who were absent in the previous months have started buying in both Debt and Equity markets as the rupee move has stabilized. “They have bought close to Rs. 14500 cr. in both Debt and Equity segments. This points towards some optimism before the event,” he said.

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Source: Moneycontrol

Stock picks of the day: Near-term resistance at 10,990–11,070 for Nifty

After taking a sharp U-turn during the second half of the trading session at the beginning of the week on Monday, Nifty saw a significant rally during the rest of the week.

Thursday’s trading session certainly proved the strong presence of bull as Nifty opened higher with a gap and saw mammoth buying interest throughout the session.

In that optimism, the index convincingly closed above the daily 200-DMA & 89-EMA, respectively, which was earlier acting as a strong wall of resistance.

On daily charts, the 9-45 EMA has signaled positive crossover during Wednesday and the impact of such development seen on Thursday.

The daily Relative Strength Index (RSI) entered above 60 levels. Also, the unfilled gap formed on October 4, 2018 got filled during Thursday’s trading session.

At this juncture, Thursday’s high of 10,883.05 coincided with the 50% retracement of its entire fall from the top of 11,760.20 to the bottom of 10,004.55, hence possibility of some profit booking can’t be ruled out.

In that scenario, 10,780–10,700 will act as an immediate support whereas on the higher side, 10,990–11,070 will be a near-term resistance for the index.

Here is a list of top three stocks which could give 9-10% return in the next 1 month:

Dr Reddy’s Laboratories: Buy around 2650 – 2625| LTP: Rs 2652| Target: Rs 2900| Stop Loss: Rs 2520| Return 9%

After confirming its breakout from broad “Descending Triangle’ pattern, the stock consolidated in a range and formed a triangle pattern on the daily chart.

During the last week, the stock confirmed its breakout from symmetrical triangle pattern, however, the follow-up buying was missing, as a result, it saw minor pullback during the current week.

On Thursday, the stock resumed its up move and eventually ended at highest point post-July 27, 2017. The daily RSI (14) entered inside the 60 level which supports our hypothesis.

Hence, we believe that the impact of Descending Triangle pattern will be seen in the coming weeks; therefore, we recommend traders to buy this stock in the range of 2650 to 2625 with a price target of 2900 and a stop loss placed below 2520.

Berger Paints: Buy above 324| LTP: Rs 319| Target: Rs 350| Stop Loss: Rs 310| Return 10%

Berger Paints has an inverse relationship with Crude Oil which has corrected sharply in the past few weeks. The impact of such development was seen during the recent past in the counter.

Off late, the stock has consolidated in a range and the daily chart resembles a formation of ‘Bullish Pennant’. The breakout of the said pattern will be seen if the stock starts trading above 324.

In that case, the stock can retest its recent high of 350. On the lower side, the level of Rs 310 will be a good support and below that our long view will be negated and traders should exit from their long positions.

Century Textiles: Sell below Rs 889| LTP: Rs 894| Target: Rs 840 – 810| Stop Loss: Rs 927| Return 9.4%

Looking at the daily chart, the stock has seen a sharp rally from the bottom of around 718 and rallied till 927. Subsequently, the bullish momentum exhausted and we are seeing a formation of Head & Shoulder pattern on the hourly chart.

The said pattern will be activated if stock breaches and sustains below 889. In that case, the stock is likely to correct till 840 – 810 levels respectively.

The weekly Lower Top and Lower Bottom formation is intact which indicates that the trend is still down. Hence, we advocate traders to go short below 889 with a price target of 840 & 810 levels respectively. Stop loss should be placed above 927.

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Worried about ATMs shutting down? Here is how you can adopt online payment methods

We all remember the horror stories of having to stand in serpentine queues to deposit/withdraw cash after the government announced note ban in November, 2016. While an event of that scale is unlikely to happen in future, you could find yourselves in long queues at Automated Teller Machines (ATMs) or your bank branches, once again.

The Confederation of ATM Industry (CATMi), the apex body of the domestic ATM industry, has said that 50% ATMs (i.e. 1.13 lakh approx.) in India are expected to close down across the country by March 2019. The country has approximately 2.21 lakh installed ATMs as on September 2018, according to Reserve Bank of India (RBI).

Sapna Tiwari, Co-founder and COO, Rupeewiz Investment Advisors said, “If and when that actually happens, several people may find their neighbourhood ATMs shutting down and people waiting in long queues to withdraw money.”

The CATMi says that it has become more expensive for ATM firms to manage their ATMs as RBI has asked them to upgrade their technology and deploy additional security.

“This is something which needs to be worked out between banks, ATM operators and the regulators. We all need to come together and find a solution to this problem,” said Navroze Dastur, Managing Director at banking Solutions Company, NCR India.

While the regulatory costs may be an added burden, the underlying problem of stagnant revenues has existed for some time now. Dastur says that the interchange fees — the fees that a bank pays to another if its own customer uses other bank’s ATM — has been stagnant. “The industry has been demanding a hike on interchange fees, but the banks have been resisting.”

If ATMs do shut down, some of us are likely to be more prepared to go for the alternative mode of making payments than we were during note ban period. Many, of course, could find themselves in long queues, all over again. Nevertheless, it makes sense to see, once again, our options if we need to go more cashless than ever before.

Let’s look at popular cashless modes of transactions which can be easily adapted as per your suitability:

i. Internet banking

At the very least, there is the age-old internet banking platform that all banks offer. Instead of paying cash, you can use your bank’s internet banking services to pay utility bills, transfer money, etc.

Depending on the amount you wish to transfer, you can use methods within internet banking such as National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS), Electronic Clearing Services (ECS), and Immediate Payment Service (IMPS). Using NEFT, RTGS and IMPS, you can transfer money from one bank account to another.

Under NEFT, the transactions can be initiated and settled from the bank account of one particular bank to another bank’s account across India at no additional cost apart from the standard charges.

“One of the advantages of using NEFT is the cost-effectiveness, an individual can carry out smaller value transfers without worrying about the transaction fee and service charges which is nominal,” Tiwari of Rupeewiz Investment Advisors said.

Some of the banks have their own policies concerning the NEFT service provided by them, this includes restrictions on transferring funds immediately to a newly added beneficiary restricting value of transfer beyond a specified limit in certain transfers, etc.

RTGS is a step ahead. In RTGS transfer happens on real time basis and is meant for high-value transactions, i.e. minimum Rs 2 lakh and maximum Rs 10 lakh. As soon as the transfer instructions are sent, the fund gets settled almost immediately. It is efficiently used in situations where individuals and businesses require immediate settlement of high-value funds that are well within the specified limits. Dinesh Rohira, CEO at 5nance said, “Speed and reliability make RTGS as one the most-sought medium of online fund transfers.”

IMPS functions 24/7 allowing a fund transfer at any time of the day. Similar to NEFT, IMPS also allows transfer of low value-funds but what makes it unique is, it immediately settles the funds. Navin Chandani, Chief Business Development Officer of Bankbazaar said, “IMPS functions as more or less the combined version of NEFT and RTGS, where remitters are neither worried about the size of the fund and service availability nor do they have to be concerned about the settlement speed.”

You can also use internet banking to send or receive periodic payments. ECS facilitates paperless credit / debit transaction directly linked to your bank account. Through ECS debit facility you can pay all your utility bills, mutual fund (SIP), insurance premiums, loan instalments, credit card payments, etc.

ii. Mobile banking

With growth in use of mobile handsets, people have shifted from internet banking to mobile banking due to handiness. Using mobile banking customer can access all the facilities provided to internet banking user.

The key difference between mobile banking and internet banking is that to use mobile banking user needs to download an application on the smartphone or tablet, whereas internet banking is accessed through a browser and bank website on desktop / laptop.

But it pays to be a bit careful. Chenthil Iyer, SEBI Registered Investment Adviser of Horus Financial Consultants said, “Avoid using internet banking and mobile banking facilities at public places where free wireless internet facility is provided. There is high probability of your bank account getting hacked / login details leaked.”

Further, don’t save your bank login and passwords, credit and debit card details on smartphones, tablets or laptops without a password protected file  in your laptop if you must. In case of losing these gadgets your bank account could be accessed by a theft.

iii. Mobile wallets

Going cashless works well if you’re allowed to shop without carrying all that cash in your wallet. Here’s where mobile wallets come in. Subscribe to a mobile wallet of your choice, load it up with cash and then you’re ready to shop. You don’t need to carry a credit / debit card or cash while going for shopping when you have sufficient amount in your mobile wallet.

Tiwari said: “Mobile wallets offer security as the details of your credit / debit card and bank is encrypted. These details are not accessible to others while paying / transferring an amount.”

Also, there are discounts and cashback offers to pay for utility bills, book your travel (air, train, bus tickets, hotel), etc. using mobile wallets which is not available in internet and mobile banking.

Here too, it pays to take precautions. The major risk associated with using mobile wallets is privacy of the data. Iyer said, “This is a recurring security concern wherein several mobile wallets do not automatically log the users out. So, anyone having access to the mobile phone can make financial transactions using these mobile wallet apps.

One can also access to saved debit / credit card details and personal information from the mobile wallet apps.” This risk is higher if the user loses her/his mobile phone or the mobile phone is kept unattended and unlocked.

Tiwari said, “It’s not advisable to maintain higher amount in mobile wallets. Since, the money is lying idle in mobile wallet and no interest is earned on that money.”

Also, there is lack of clarity on RBI regulations and timelines for digital payment wallets to become interoperable. Wherein, for instance a Paytm wallet user will be able to send money to a MobiKwik wallet user.

iv. Unified Payments Interface (UPI)

Now-a-days, UPI is another popular payments system. It is the fastest payments gateway and has been developed by the National Payments Corporation of India (NPCI) regulated by Reserve Bank of India (RBI).

UPI is built on the IMPS technology which enables a user to instantly transfer funds from your bank account to the end user’s bank account through UPI Virtual Address. This is unique ID generated by the bank. Biggest advantage of UPI is you don’t need to remember lengthy bank account numbers, NEFT code, etc while transferring the money. Also, you can transfer anytime immediately since it operates 365 days.

Instant transfer directly to bank account is the biggest plus point of using UPI compare to other cashless modes. However with mobile wallets, payments and cashbacks received stay in the wallet and typically impose a fee if you decide to move this money back to your bank account.

Challenges to switch to cashless mode

It’s easier for the younger generation to opt for cashless as most of us use a mobile phone these days. But, too many cashless payment options leads to fear among various users including elderly people.

For instance, Surekha Shah, 67, retired post office agent, residing in Mumbai avoids using mobile wallets or banks UPI app. She has a fear of fraud transactions from her bank account, credit and debit card which are linked.

Also, at her age using such apps for paying or transferring money seems bit complicated. She sensed, “The probability is high of transferring to wrong person using such mobile apps and difficult to recover later. Also, there is a risk of bank account getting hacked which is linked.”

To people who are afraid to adapt to cashless mode of transactions, Rohit Shah, Founder and CEO at Getting You Rich suggested, “Do a sample / pilot transactions with small amounts in your network to know the method. You could also take help of younger generation and use their intellect to adapt cashless modes.”

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Personal finance wrap: Steps to create a viable long-term financial plan; How balanced is your mutual fund portfolio?

Having a well thought out plan on money issues is a must for creating longterm financial security. However, not everyone is adept at dealing with money matters. Though financial planning may sound daunting to many people, it is not as difficult as it seems. The starting point is to know the steps one should take in creating a viable financial plan.

Among the many issues is assess one’s risk taking abilities and progress on the plan accordingly. For example, a mutual fund may be suitable for someone but not be suitable for another person.

The next is to set out some goals for oneself for which the money has to be saved and invested. This needs evolving a definite strategy.

Here are 5 steps to take to have a viable financial plan.

Investing in mutual funds is gaining popularity with rising inflows. A major of mutual funds is that with their wide array of offerings they help investors diversify their portfolio across asset classes in order to reduce the overall risk. One of the basic tenets of investing is not to concentrate one’s investment in one asset class but to divide in among a variety of asset classes. In such a scenario, the positive effect of growth in other asset classes will offset the negative effects of downfall in one asset class.

If you have been investing in mutual funds have you assessed whether your portfolio is diversified enough to minimise your risk? Read to know how to look at a portfolio to understand whether it is diversified enough.

Credit rating agencies play a crucial role in helping investors make investment decisions on debt issuances. Their ratings point out the quality of the issuing company and how likely it is able to honour its repayment capacities.

However, many retail investors do not take note of the rating assigned since they are unable to understand their implications.

Credit rating agencies (CRAs) assigns ratings after assessment of financial services companies by analysing risk parameters. Here are some of the risk measures you should know that CRA takes into account while analysing a company’s profile.

Life is full of uncertainties. An untimely death of a bread earner or any burglary home can cause huge financial loss. To minimise the risk of financial loss, your insurance coverage should offer protection for not only your possessions, income but also, for the loved ones you will someday leave behind.

Thus, it is better to safeguard yourself from these risks by transferring them completely to an insurance company. Here are five important insurance products which everyone should have during the lifetime to protect themselves and their family.

With rising incomes, more and more Indian are travelling abroad each year. A must-have thing in your travel kit is a travel insurance cover which would protect you and your family from health emergencies during the trip. Travel insurance can also cover emergency evacuations to the nearest and best hospital, while it covers incidents like baggage loss, baggage delay, trip delay, trip cancellation, etc.

In an interview to Moneycontrol, Parag Ved, EVP and Head Consumer Lines, Tata AIG talks on the importance of having travel insurance, benefits of multi-trip travel insurance, travel insurance for senior citizens travelling abroad and more.

This week we reviewed Aditya Birla Sun Life Tax Relief 96 which was launched on March 29, 1996. The AUM of the scheme as on October 31, 2018 is Rs 6,480 crore. It is an open-ended ELSS that provides an opportunity to save tax while growing your money through equity investments.

The objective of the scheme is longterm growth of capital through a portfolio with a target allocation of 80% equity, 20% debt and money market securities. Read to know whether you should use the fund for investing for tax planning and capital appreciation.

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Research Tactical Pick: 4 reasons why we are bullish on Federal Bank

The Federal Bank stock has corrected close to 26 percent year-to-date, under performing the Nifty (gains of 2 percent) and Bank Nifty (gains of 3 percent). However, there are several opportunities that deserve attention like the undemanding valuation at 1.1 times FY20 estimated book.

Asset quality pain: End in sight

Despite concerns over higher asset quality pain due to the Kerala floods (its key market), the same has been well contained so far. Going by the management's recent guidance, slippage in H2 FY19 is going to be much lower. Credit cost has fallen to 64 basis points (100 bps = 1 percentage point) in Q2 and the management is guiding at 70 bps of credit cost for FY19. The bank’s total stressed portfolio (standard restructured, security receipts and net NPA) stands steady at 2 percent of advances. Incidentally, the bank has no exposure to cash-strapped IL&FS.

Business picking up with a de-risking strategy

The bank is gradually reducing its corporate exposure and targets to have a balanced mix of retail, SME and corporate. It has stepped up hiring in the sales team and has been growing its high rated exposure – 71 percent of outstanding wholesale credit is rated 'A' and above.

In the year gone by, Federal Bank’s share in incremental credit and deposit of the system stood at close to 2.2 percent and 2 percent, respectively, which is much higher than its absolute share at 1.1 percent and 1 percent, respectively, thereby exhibiting success in its efforts to gain market share.

Given the opportunity presented by the weak state of public sector banks and funding challenges of non-banking financial companies (NBFCs), the bank is targeting 20-25 percent credit growth going forward.

Profitability set to look up

Falling cost of deposits has helped Federal Bank maintain its interest margin. At present, 96 percent of the deposits are retail. While low cost current and savings account has stagnated in recent times, the contribution from non-resident rupee (NRE) deposits remain meaningful.

The bank is mindful of the need to step-up CASA and has identified it as a focused strategy. For FY19, it is targeting a CASA of close to 34.5 percent from 33.9 percent at present.

Federal Bank is taking initiatives to counter falling yields in the corporate book by foraying into relatively high margin businesses like unsecured retail credit and commercial vehicle financing. It is open to the idea of acquiring a micro finance lender as well.

Improvement in CASA, overall efficiency and lower slippages (hence lower interest reversal) has prompted the management to guide at an improvement in interest margin to 3.2 percent in FY19 from 3.12 percent at present. The bank is also targeting a 1 percent return on assets (RoA) by fiscal end.

Focused approach to step up fees

To focus on improving its share of core fees, the bank has recently acquired stake in Equirus Capital: a boutique investment firm and has recruited specialists for treasury sales and government business. The company has brought on board a strategic investor -- True North Managers -- in its non-banking subsidiary FedFina, which should help it scale-up the business.

The bank is well capitalised and has to show consistent delivery for a rerating in the future.

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Yes Bank in damage control mode: Is stock a value buy or risky bet?

Yes Bank has lost half its value in the past few months and the stock has remained volatile since the Reserve Bank of India asked Rana Kapoor to trim his term as MD & CEO.

Rana Kapoor's term will now end in January 2019.

After that, the bank's board saw high-profile exits with Rentala Chandrashekhar, independent director, Vasant Gujarathi, independent director and Ashok Chawla, non-executive (independent) chairman of the board resigning.

The bank said these resignations bear no impact on the selection process of new MD & CEO. "Therefore, the new MD & CEO selection process is on track, as per committed timelines."

"The Search & Selection Committee ("SSC") and the N&RC is scheduled to convene on December 12, 2018 to discuss the final shortlist for new MD & CEO appointment," the bank said in a BSE filing dated November 20.

"Pursuant to this meeting, the Board of Directors is scheduled to convene on December 13, 2018," it added.

After these developments and weak earnings in Q2, experts advised avoiding the stock that has fallen 50 percent in the last three months amid corporate governance issues. However, it had rallied 1,144 percent in last nine years before this correction.

"The recent news flow in Yes bank has dampened the sentiment for the stock and it is moving southwards," said Astha Jain, Senior Research Analyst at Hem Securities who advises investors to stay away from the counter as it is surrounded by lot of uncertainties.

Also in Q2FY19, bottomline of the bank has shown de-growth on a YoY as well as QoQ basis.

She recommended 'sell' on the stock with target of Rs 170 in medium term.

The private sector lender's second quarter profit fell 3.8 percent year-on-year to Rs 964.7 crore, dented by sharp rise in provisions and weak asset quality performance.

Its asset quality deteriorated during the quarter. Gross non-performing assets (as a percentage gross advances) increased to 1.60 percent against 1.31 percent in June quarter. Net NPA was also higher at 0.84 percent against 0.59 percent in previous quarter.

Prashanth Tapse, AVP Research, Mehta Equities also said as on date, investors should avoid Yes Bank with wait-and-watch strategy.

"The recent hiccups are all because of the top-level developments taking place in the recent past and the way it has been handled. Fundamentally, these developments would create low confidence in investors and high volatility in the price movement, hence it would be on risk to invest for medium," he reasoned.

He said the 50 percent fall in the stock from the recent high of Rs 398 levels means the problem is genuine and highly mismanaged; hence, Yes Bank is not an investment bet but can be traded on technical levels with trading stop loss of Rs 166 with target of Rs 234.

Vineeta Sharma, Head of Research, Narnolia Financial Advisors said the bank's financials in terms of deposits and liquidity remain robust, but the Risk-based Supervision (RBS) Audit report by RBI for the last two years showed that there has been divergence to the tune of Rs 4,177 crore and Rs 6,355 crore of GNPA for FY16 and FY17, respectively.

Also, the way RBI has been firm towards restricting the extension of current CEO's term as head of the bank, the market has sensed concerns. The RBS supervision report, which is pending for FY18, may show up further higher divergence, according to her.

The company also has capital constraints which should hamper growth going forward, she believes.

The banks promoters — Rana Kapoor and Madhu Kapur — have locked horns in a legal battle.

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Buy Canara Bank, target Rs 287

Canara Bank witnessed a significant long build up in the November derivative series. PSU banks have been outperforming fat last couple of weeks. The stock price has started forming higher tops and higher bottoms on the daily chart. “Flag” pattern breakout is also observed on the charts.

Considering the technical evidences discussed above, we recommend buying the stock at CMP for the target of Rs 287, keeping stop loss at Rs 248 on closing basis.

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Sundram Fasteners may test Rs 760: Anand Rathi

Sundram Fasteners'revenue from operations improved by 22.4 percent year on-year to Rs. 971 crore.

The company achieved the reported PAT of Rs 106 crore, a growth of 17.8 percent year-on-year with a net margin of 10.9 percent.

The company is significantly adding capacity and has incurred Rs 200-300 crore capital expenditure in FY18.

Management expects to invest Rs 350 crore in FY2019.

Company is expanding its capacity and making concentrated efforts to improve the product mix with focus on high-value products and
increased contribution of exports.

Company is a quality ancillary player with robust return ratios and is poised to further improve its earnings growth momentum.

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Nifty target for March at 9,500; retail flows & Modi's win in 2019 big risks: UBS

The second edition of the UBS Evidence Lab Market Thinking Game was sent to investors in the week of October 31, 2018. The survey, instead of asking investors their own views, asked investors to predict what other investors think.

Specifically asked were two questions:

1) to rank five possible drivers for the Nifty in order of importance, according to their perception of other investors' views; and

2) to predict market sentiment around the Nifty ranging from very bearish (a score of 1) to very bullish (a score of 5).

Sentiment has turned bearish; oil, liquidity top drivers

About 61 percent of the respondents indicate a bearish sentiment for the Nifty compared to 31 percent in the previous survey. Only 7 percent of respondents remain bullish compared to 28 percent last time.

The responses indicate oil prices continue to be the most important driver– much like the first survey conducted in July 2018.

Liquidity for financials is considered to be the second most important driver, followed by politics/elections. Notably, fund flows appear to have lost their importance in investors' minds and has been assigned the least important ranking. The rupee exchange rate continues to be ranked lower.

Investor sentiment at UBS India Conference

At the 14th UBS India Conference, overseas investors indicated continued robust interest in India. However, the recent market correction and key developments (liquidity crunch, oil, and RBI-government issues) were clearly a consideration among investors.

Most global/global emerging market (GEM) investors appear to be willing to weather the above, given India’s relative growth potential. Most global investors appear to be presuming that PM Narendra Modi will come back in 2019, and the markets may not be pricing in any build-up of potentially adverse perceptions into May 2019.

Rich valuations and elections/local flows risk mispriced

Markets have de-rated from 19x one-year forward PE to 16x. Perhaps, the above bearish sentiment suggests a potential bottoming out?

In our view, one of the major factors behind the fall in markets (recent liquidity squeeze) would not turn into a prolonged credit crunch although we believe the easy money seen over the past 3-4 years is behind us.

The worst of rupee depreciation against GEM currencies may be behind us too. However, two key risks remain for the markets: 1) whether Modi will win in 2019; and 2) retail flows.

H2FY19 growth may also not enthuse markets, as the base effect wears off and the impact of tight liquidity is felt. Under the base case, UBS has a target of 9,500 for March 2019 on Nifty and upside/downside scenario of 11,100/8,300 – implying unattractive risk-reward.

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Top intraday trading ideas for afternoon trade for Friday

NEW DELHI: Equity benchmarks Sensex and Nifty50 were trading higher on Friday led by buying across pharma stocks.

ETMarkets.com collated a list of trading ideas from various experts and here's what they had recommended for today's afternoon trade:

Manas Jaiswal of manasjaiswal.com

Reliance IndustriesNSE 2.43 % is a 'Buy' call with a target price of Rs 1175 and a stop loss of Rs 1100.

RaymondNSE 1.86 % is a 'Buy' call with a target price of Rs 835 and a stop loss of Rs 765.

Bharti AirtelNSE 5.62 % is a 'Buy' call with a target price of Rs 350 and a stop loss of Rs 307.

Shrikant Chouhan of Kotak Securities

Escorts is a 'Buy' call with a target price of Rs 700 and a stop loss of Rs 651.

Aurobindo Pharma is a 'Sell' call with a target price of Rs 765 and a stop loss of Rs 792.

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Lemon Tree, Eicher Motors among 5 top stock picks of global brokerages

Stocks woke up to a sunny morning on Friday, mirroring positive global cues, amid softer oil prices and a rising rupee. 

The 50-share Nifty was up 63 points, or 0.59 per cent, at 10,680 at around 9.55 am while the 30-scrip Sensex rallied 247 points, or 0.70 per cent, to 35,507.

Take a look at five stocks as recommended by global brokerages such as CLSA, Deutsche Bank, Morgan Stanley, among others.


Lemon Tree Hotels


CLSA retained ‘Buy’ rating on Lemon Tree with a target price of Rs 87 (Rs 90 earlier). It believes that premium valuations are justified, given the company’s high growth plans, opportune capital allocation and shift to an asset-light model.


Eicher Motors NSE 2.05 %

Deutsche Bank has ‘Buy’ call on Eicher Motors with a target price of Rs 28,000. “Royal Enfield expands addressable market even as Jawa enters,” the global financial services firm said. It sees FY18-21E EPS CAGR Of 17 per cent for Eicher Motors. Deutsche Bank also believes that the company may sell 8.7 lakh units of Royal Enfield in FY19.


IPCA Laboratories 

Morgan Stanley is ‘Overweight' on IPCA Labs with a target price of Rs 853. “IPCA stabilised its base business after disruption due to FDA issues. Now, it appears poised for mid-teens sales growth and steady operating profit margin expansion driven by operating leverage,” Morgan Stanley said.

Glenmark Pharma

Nomura retained ‘Buy’ on Glenmark Pharma with a target price of Rs 825. “September quarter was a steady quarter, with some pick-up in US sales. We expect strong second half, driven by higher seasonal sales in emerging markets, pick-up in API sales and increased contribution from new launches in the US,” Nomura said.

Coal IndiaNSE 0.74 %

CLSA maintains ‘Buy’ on Coal India with a target price of Rs 360. “Q2 EBITDA ahead of estimates led by better-than-expected realisations. We continue to like the stock, given decent earnings growth outlook and attractive valuation,” CLSA said.

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शेयरों पर नजर (Stocks to Watch) : टेक महिंद्रा, डॉ रेड्डीज, इन्फोसिस, ओएनजीसी और रिलायंस इंडस्ट्रीज

खबरों के कारण जो शेयर आज नजर में रहेंगे उनमें टेक महिंद्रा, डॉ रेड्डीज, इन्फोसिस, ओएनजीसी और रिलायंस इंडस्ट्रीज शामिल हैं।

टेक महिंद्रा - बाल्बिक्स ने कृत्रिम बुद्धिमत्ता आधारित साइबर सुरक्षा प्लेटफॉर्म के लिए कंपनी के साथ करार किया।

डॉ रेड्डीज - कंपनी को मेक्सिको में स्थित संयंत्र के लिए अमेरिकी दवा नियामक से ईआईआर मिली।

ब्लू स्टार - कंपनी जम्मू-कश्मीर में नया संयंत्र स्थापित करने की योजना।

इन्फोसिस - ऐक्सॉस प्लेटफार्म पर नयी क्षमताओं का विकास करने के लिए इन्फोसिस ने कैलीक्स के साथ साझेदारी की।

लेमन ट्री - सहायक कंपनी ने विजयवाड़ा में 120 कमरों वाले होटल के लिए लैला होटल के साथ करार किया।

एयू स्मॉल - एयू स्मॉल ने बचत खाते पर ब्याज दर में 50 आधार अंकों की बढ़ोतरी की।

सोमानी सेरामिक्स - बोर्ड ने करनजोत इंडस्ट्री की 51% हिस्सेदारी को खरीदने की मंजूरी दी।

हिमाचल फ्यूचुरस्टिक - कंपनी को बीएसएनएल से 579 करोड़ रुपये का ठेका मिला।

मैग्मा फिनकॉर्प - बोर्ड ने 155 रुपये प्रति शेयर के इश्यू भाव पर क्यूआईपी को मंजूरी दी।

ओएनजीसी, रिलायंस इंडस्ट्रीज - दोनों कंपनियों ने पूर्वी तट गैस बेचने के लिए ग्राहकों के साथ वार्ता की।

मैक्स फाइनेंशियल - आईडीबीआई फेडरल लाइफ की हिस्सेदारी खरीदने के लिए कंपनी सबसे आगे।

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Stock Market Tips, Airtel acquires India leg of GBI submarine cable

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Telecom major Bharti Airtel says it has acquired India leg of Gulf Bridge International submarine cable which will boost its data carrying capacity

 Telecom major Bharti Airtel on Tuesday said it has acquired India leg of Gulf Bridge International submarine cable which will boost its data carrying capacity.

“Under the agreement, Airtel will acquire the ownership of the India leg of GBI’s India-Middle East-Europe submarine cable. Airtel will also pick up a significant capacity on Middle East-Europe leg of GBI’s cable system,” Airtel said in a statement.

Submarine cables are considered backbone of internet. Airtel and GBI have also agreed to formulate joint “go to market” strategies and leverage the footprint of their respective global networks to serve global customers.

“With this, we are adding a large capacity to meet the growing data, content demand in markets like India as well as serve the connectivity needs of global carriers and enterprise customers. This will also complement Airtel’s existing global network spanning 250,000 Rkms with presence in 50 countries and contribute to our vision of serving customers with a future ready network,” Ajay Chitkara, director and CEO for Global Voice and Data Business, Bharti Airtel said.