INTELLECTUAL TRADING

The peregrinations of Narendra Modi have provided much grist to the news mill for the past two years. Mr Modi goes to phoren; he takes selfies in interesting locales; he entertains NRI crowds; he meets captains of industry; he takes selfies; he changes clothes and takes more selfies, etc. During this process, Mr Modi has also redefined diplomacy. Over the centuries, a multitude of thinkers examined the art of diplomacy through multiple lenses. Kautilya, for example, was one of the earliest muses on the subject. Kautilya saw diplomacy through the lens of national self-interest. The Arthashastra advocates that a king should establish a ring of neighbouring allies with aligned self-interests, and also that a king should build strong intelligence networks. It also advocates being prepared to go to war continuously, and instantaneously, if those interests are threatened. Carl von Clausewitz agreed that war was an alternative means of conducting diplomacy though the Prussian general w

Apart from forex markets, bond markets will see volatility because treasury yields in the pound sterling will be volatile. Forex markets will be focussed on the possibility of the Brexit through most of June. The referendum itself is on June 23 but there is already a build up of anxiety about the possibility of the UK pulling out of the common market of the European Union (EU).   We can worry about the long-term effects of a Brexit if it does occur. What is guaranteed is some short-term turmoil. Since Britain has continued to use its own currency, the pound sterling (GBP), which is of course, fully convertible, there will be a focus on the GBP. That will mean volatility for all sorts of paired currency contracts, including the liquid GBP-INR and the very liquid GBP-Euro and the GBP-USD. Apart from forex markets, bond markets will see volatility because treasury yields in GBP will be volatile. Changes in those yields will lead to traders looking at plays in other bonds. F

Foreign portfolio investors (FPIs) cut their exposure to domestic equities in Q4FY16 for the fourth consecutive quarter from their peak investments in Q4FY15. If we go by what analysts say, future foreign inflows would not come so easily with spectre of another US rate hike coming as suggested by Federal Reserve Chair Janet Yellen in her Friday’s speech.   Data showed, the total foreign ownership in the BSE-200 Index declined to $291 billion in the March quarter from $304 billion in the December 2015 quarter.    In percentage terms, FPI holdings in BSE-200 companies came down to 24.5 per cent in the March quarter against 24.8 per cent in the December 2015 quarter, Kotak Institutional Equities said in a note.   The FPI exposure in the top 200 hit a peak at $343 billion in Q4FY15, while it hit its lowest level in December quarter of FY12 (lowest in at least 20 quarters). Since Q4 of FY15, FPIs exposure in the BSE-200 stocks has fallen consecutively.   Nikhil Kamath, Co-Founder &

The stocks which could witness significant movement on May 31 are Wipro, Maruti Suzuki India Ltd., NTPC Ltd., NMDC Ltd., and Granules India Ltd. a) Wipro: Company on May 30 has declared that it plans to increase the salary of their onsite and off-shore employees. The company will give a 2 per cent hike to its onsite employees and 9.5 per cent for its off-shore employees. b) Maruti Suzuki India Ltd.: Country’s largest car maker Maruti Suzuki has temporarily suspended production at both of its plants as a fire broke down at its supplier’s factory on Sunday.  c) NTPC Ltd.: NTPC Ltd., on May 30 post market hours has declared its Q4 results. For this quarter the company’s net profit has decreased by 8 per cent. The stock on Monday has closed 3 per cent higher at Rs 143. d) NMDC Ltd.: The single largest producer of iron ore in the country has some divestment plans. Government has planned to reduce a 10 per cent stake in NMDC. The shares on bourses on Monday have closed at Rs 90.

The Credit Suisse report gives us an insight into the top ten defaulting companies, as of March 2015 Reliance Group : Anil Ambani-led Reliance Group operates in the power sector and the entertainment business. It also has business interests in insurance, wealth management and telecommunication sector. The Reliance-group owes the banks, Rs 1.25 lakh crore, the largest amount owed by any company, according to the report. GVK Group : The GVK group in a large Indian conglomerate founded by Gunupati Venkata Krishna Reddy. The company has business interests in the energy sector, hospitality industry, infrastructure and life science. The total amount of money owed by the company is Rs 33,933 crore. Videocon Group : One of the big names in India, it was famous for making television and now offers d2h services. Its founder and CEO Venugopal Dhoot also ventured into the telecommunication business. This group owes the banks about Rs 45,405 crore. Lanco Group : Lagadapati Madhusudan Rao’

Nifty weekly performance   (May 23, 2016 – May 27, 2016): Indian stock markets ended the week on a negative note. The BSE Sensex was up by 5.34%, while the NSE Nifty was up by 5.25%. The tug-o-war finally ended in favour of the bulls. They snapped back in style and have thrown the bears out of the ring with a 400-point move. It seems like the index could now trade in a range of 8,000 and 8,200 and consolidate its gains before making an up-move.  Nifty Prediction for Week   (May 30, 2016 – June 03, 2016): Support for the index lies in the zone of 8000 from where the index has broken out from the triple top formation. If the index manages to close below these levels then the index can drift to the levels of 7800 where 200 Daily SMA is lying. Resistance for the index lies in the zone of 8250 to 8300 from where the index has sold off in the month of Oct – 2015. If the index manages to close above these levels then the index can move to the levels of 8600 to 8650 levels. Broad

Exit from Stop Loss hit Camilin  Fine Sciences Ltd    

Nifty weekly performance  (May 16, 2016 – May 20, 2016): Indian stock markets ended the week on a negative note. The BSE Sensex was down by 0.74%, while the NSE Nifty was down by 0.74%.  The index ended the week with a loss of 0.83% at 7,750. The index slipped outside the 100-point range of 7,800 to 7,900 in the latter half of the week. It had traded in this range over the last 10 days and seems like bears are gain an edge.  Nifty Prediction for Week  (May 23, 2016 – May 27, 2016): Minor support for the index lies in the zone of 7700 to 7750. Support for the index lies in the zone of 7500 to 7550 from where the index has broken down after making the double bottom pattern and 100 Daily SMA is lying. If the index manages to close below these levels then the index can drift to the levels of 7250 to 7300 where the index has opened gap up on 02/03/2016. The index has closed around the resistance zone of 7820 where 200 Daily SMA is lying. Resistance for the index lie

Subramanian Swamy has gone after the Gandhi family over the last few years and been fairly successful at it. Now he seems to have moved on to a new target-the Reserve Bank of India(RBI) governor, Raghuram Rajan. Swamy, who recently became a Rajya Sabha member, wrote a letter to the prime minister Narendra Modi, asking him to terminate the services of the RBI governor immediately or when his term ends in September, later this year. As Swamy writes in the letter: "The reason why I recommend this is that I am shocked by the wilful and apparently deliberate attempt by Dr Rajan to wreck the Indian economy. For example the concept of containing inflation by rising interest rates is disastrous." Let's take the point of Rajan raising interest rates turning out to be disastrous. When Rajan took over as the RBI governor, inflation was close to 10%. Interest rates offered on bank fixed deposits were lower than that. Hence, people were losing money once inflation was taken int

Stocks like GNFC, GSFC, COROMANDEL, RCF, NFL, RALLIS, PIIND, DHANUKA can be considered for 6-8% upside in next 1-2 weeks as these stocks can spurt once Monsoon hits Mumbai. 

In a little over a week, the Narendra Modi government will complete two years in office. The finance minister Arun Jaitley, has already started to give interviews in the media, highlighting the success of the Modi government on the economic front. The Vice Chairman of the NITI Aayog, Arvind Panagariya, has written columns around the same, as well. What both of them haven't really talked about is the oil price and its dramatic fall, during the time the Modi government has governed India. On May 26, 2014, the day Modi was sworn in as the prime minister, the price of Indian basket of crude oil was $ 108.05 per barrel. Nearly two years later, as on May 16, 2016, the price of the Indian basket of crude oil stood at $46.18 per barrel. Interestingly, it even touched a low of $26.95 per barrel on February 12, earlier this year. This was a massive fall of 75%. The point being if this hadn't happened, the finances of the Modi government would have gone for a toss totally. The petrol

Nifty weekly performance  (May 09, 2016 – May 13, 2016): Indian stock markets registered gains during the week. The BSE Sensex was up by 1% and the NSE Nifty was up by 1.1%.  The index ended the week with gains of a percent at 7,813. But we doubt whether bulls would be rejoicing as the index traded with extremely high volatility and choppiness during the week. This left both the bulls as well as the bears perplexed as none of the camps could get a clear sense of the direction. The picture isn't clear as of now. Nifty Prediction for Week  (May 16, 2016 – May 20, 2016): Minor support for the index lies in the zone of 7700 to 7750. Support for the index lies in the zone of 7500 to 7550 from where the index has broken down after making the double bottom pattern and 100 Daily SMA is lying. If the index manages to close below these levels then the index can drift to the levels of 7250 to 7300 where the index has opened gap up on 02/03/2016. The index has closed around the

Camlin Fine Sciences Ltd     CMP : 98.75   BUY range  96 - 100  Stop Loss  90    Target Price  122    Potential Upside/Downside +23% About the company: Camlin Fine sciences (CFIN) came into existence after its demerger from  Camlin Ltd in December 2006. It is one of the leading manufacturer of food‐grade antioxidants in the  world. CFIN operates into three major segments– antioxidants, performance chemicals (through its acquisition of Borregaard, Italy) and aromatic (which is a new segment). Almost 56% of sales comes from Antioxidants, 23% from performance chemicals, 20% from Borregaard, Italy and 1% from  Aromatic. Period Simple Exponential MA5 99.76 Sell 99.14 Sell MA10 98.68 Buy 99.43 Sell MA20 100.13 Sell 98.46 Buy MA50 93.87 Buy 96.50 Buy MA100 94.96 Buy 95.95 Buy MA200 98.39 Buy 96.54 Buy Buy:  8 Sell:  4 Summary:  BUY 1)  Stock was depicting downward sloping channel movement from the high of  121 of November 2015 to the low of 76