· web viewfiis remained net buyers in the last week as they bought equities worth rs 3,213.17...
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Shield Research
Weekly Report 21st October to 25th October 2019.
Upcoming Week Nifty Movement:
The benchmark indices posted more than 3 percent gains in the week ended October 18 on the back of continued buying from foreign institutional investors (FIIs), earnings from India Inc. and some positive news on the global front.
The Sensex regained 39,000 marks, while Nifty also comfortably ended above the 11,600 mark.
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Shield ResearchWe may see some consolidation in Nifty after the recent surge while movement on the stock-specific would continue.
In the absence of any major event, global cues and earnings will continue to dictate the market trend.
India's retail inflation in September grew 3.99 percent against 3.21 percent in August 2019, while India's August Index of Industrial Production (IIP) stood at -1.1 percent versus 4.6 percent, on a month-on-month (MoM) basis.
FIIs remained net buyers in the last week as they bought equities worth Rs 3,213.17 crore, while Domestic Institutional Investors (DII) also bought equities worth of Rs 2,184.81 crore.
Last week, the Sensex rose 1,171.3 points (up by 3.07 percent) to end at 39,298.38, while Nifty added 356.8 points (up by 3.15 percent) to end at 11,661.85.
On a weekly basis, the rupee ended lower by 12 paise at 71.14 on October 18 against the October 11 closing of 71.02.
The S&P BSE Mid-cap index gained 4.64 percent, S&P BSE Large-cap index rose 3.49 percent and the Small-cap Index was up 2.78 percent last week.
Brushing aside slowdown fears, the bulls charge ahead on D-Street helped by consistent buying from foreign institutional investors (FIIs) for the past six trading sessions.
The buy movement helped the Sensex climb 39,000 levels while Nifty also closed above 11,600 for the week ended October 18.
While FIIs poured in nearly Rs 4000 crore in the past six trading sessions, they are still marginally net sellers for October, data showed.
However, consistent buying from FIIs revived investor’s sentiment.
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Shield ResearchRecently, the International Monetary Fund (IMF) and the World Bank trimmed India’s gross domestic product (GDP) growth prospects by a whopping 0.9 percent and 1.5 percent respectively.
Markets witnessed buying from foreign portfolio investors (FPIs) and domestic institutional investors (DIIs) on improved sentiments and better prospects going ahead for the economy.
NIFTY WEEKLY INDEX LEVELS:Nifty CMP Pivot
PointSupport1 Support2 Support3 Resistance
1Resistance2 Resistance3
11661.85 11633.20 11581.80 11501.70 11370.10 11713.30 11764.80 11896.30
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Upcoming Week Bank Nifty Movement:
Bank Nifty opened flattish but witnessed buying interest towards 29,250 levels at later part of the session. The index closed 0.45 percent higher at 29,120.25 and formed a bullish candle on daily as well as weekly scale, as strong buying interest was seen at lower levels.
It is forming higher highs - higher lows from past four sessions which indicates overall strength. Now it has to hold above 28,750 to witness momentum towards 29,500 then 30,000 levels while on the downside supports are seen at 28,500 then 28,250 levels.
The Reserve Bank of India (RBI) rejected a proposal by banks that would have allowed them provisioning relief to the tune of Rs 6,000 crore on borrowings by troubled
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Shield Researchmortgage lender Dewan Housing Finance Corp. Ltd (DHFLNSE 4.89 %), said two people aware of the development. This could dent the December quarter earnings of Indian banks. Banks have a total exposure of Rs 40,000 crore to DHFL and will be required to make 15% provisioning on the account by the end of the December quarter.
The lenders had proposed the creation of a trust that would hold 51% of the company following the conversion of some part of debt to equity. This could then be classified as an “ownership change,” said one of the people cited above. Under a clause in the regulator’s June 7 circular on the stressed asset resolution framework, additional provisions on an account can be reversed if ownership changes.
The RBI said that equity holding through a trust cannot be considered a change in ownership as the loans are sitting on the banks’ books,” said a person aware of the development.
If nonconvertible debentures (NCDs) are included, banks have an exposure of around Rs 47,000 crore to DHFL. The total debt of DHFL is pegged at around Rs 1 lakh crore.
As of now DHFL is not an NPA (nonperforming asset) in the books of the banks,” said the person cited above.
But after the proposal is rejected, they will have to provision about 15% of their exposure in the books,” the person said. RBI, State Bank of India and DHFL didn’t respond to queries. State Bank of India has an exposure of about Rs 10,000 crore to DHFL. Other state-owned lenders to DHFL include Bank of India, Canara Bank and Punjab National Bank.
Union Bank of India leads the consortium of lenders while the steering committee includes SBI, Syndicate Bank. And Canara Bank. There is an impasse over the resolution plan for the mortgage lender as several mutual funds are refusing to sign the intercreditor agreement.
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Shield ResearchWhile nonbanking lenders have taken a hit on advances to DHFL, banks have yet to designate such credit as nonperforming assets. NPAs require additional provisions, denting lenders’ profit margins.
BANK NIFTY WEEKLY INDEX LEVELS:Bank Nifty CMP Pivot
PointSupport1 Support2 Support3 Resistance
1Resistance2 Resistance3
29120.25 29078.00 28906.40 28692.60 28307.20 29291.80 29463.40 29848.80
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Shield ResearchSBI's head Rajnish Kumar has been elected as the chairman of the banking industry lobby Indian Banks Association for fiscal 2019-20. The body, which represents banks' interests with the government and regulators, said it has three top bankers from various lenders as its deputy chairmen.
An official statement said these include Union Bank of India's G Rajkiran Rai, S S Mallikarjuna Rao of Punjab National Bank and Madhav Kalyan JP Morgan Chase Bank.
IDBI Bank's managing director and chief Rakesh Shamra will be the honorary secretary of the body.
The government on Friday said banks or system providers will not impose charges or Merchant Discount Rate on customers as well as merchants on digital payments made to establishments having turnover in excess of Rs 50 crore from November 1.
In her Budget speech, Finance Minister Nirmala Sitharaman had said business establishments with annual turnover of more than 50 crore should offer low cost digital modes of payment to their customers and the RBI and banks should absorb cost of transactions. Following the announcement, amendments have been made in the income tax act as well as in the Payment and Settlement Systems Act 2007.
The new provisions "shall come into force with effect from November 1, 2019," the Central Board of Direct Taxes (CBDT) said in a circular.
The CBDT has also invited applications from banks and payment system providers who are willing that their payment systems may be used for the purpose as the government plans to prescribe certain electronic modes of payment.
Banking services may be hampered on October 22 due to an all-India bank strike called by two large bank unions, while State Bank of India said the impact would be minimum as most of its employees are not members of the participating unions.
Technical Movement:
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Shield ResearchHDFC Bank Limited: -
HDFC Bank Limited: -
Trend of the stock is bearish but sentiments are buying. It took support its previous week & bounce back. Next week if it sustains above 1220 one can go for buying with stop loss at 1170 for the targets of 1160-1300 Trend of the stock is up in weekly chart and strategy advised is buy on dips.
Technical Movement:
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Shield Research Marico Limited:-
Marico Limited: -
Trend of the stock is highly bullish. It took support its previous week & bounce back. Next week if it sustains above 388 one can go for buying with stop loss at 218 for the targets of 398-410 Trend of the stock is up in weekly chart and strategy advised is buy on dips.
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Previous ArchivesLAST WEEK RECO
STOCKSRECO PRICE TGT FOLLOW UP REMARK
Adani Gas Limited. 135 143-155, SL 125 Done Final Target Made High 163, Closed at 151.
JBM Auto Limited. 230 238-255, SL 218 Done First Target Made High 239, Closed at 219.95
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