MARKETS TO OPEN FLAT TO LOWER ON FED'S HAWKISH COMMENTS. SUPPORT AT 6490. EYE ON RUPEE

      Indian markets are expected to open modestly lower on weak global cues but improving domestic economy will and expectation of positive outcome from Lok Sabha elections may cap the downside. vernight, US markets ended lower following Janet Yellen’s comments as investors expect bond purchases to end by September this year and interest rates to increase around April of 2015. US government bond prices fell sharply and the dollar rallied as markets interpreted Fed’s comments as hawkish. The S&P 500 fell. 6%, Nasdaq Composite was down 0.6% while Dow Jones Industrial plunged 0.7%.The US central bank, as expected, announced a further $10 billion reduction in its monthly asset purchases and revised the interest rate forecast to 1% from 0.75% for 2015. How the rupee will react to overnight gain in US dollar may also have influence in Indian stocks. Indian markets trade near new all-time highs, spurred by continued FII flows into local financial assets in the run up to the Lok Sabha polls. FIIs yesterday too purchased Rs 1070 crs in cash markets. On Wednesday, Nifty closed with marginal gain of 7 points at 6524. Market was range bound for most part of the day. Metal and FMCG stocks witnessed smart rally while Tech stocks declined. Technology stocks witnessed sharp decline after TCS indicated fourth quarter revenues and margins to be lower than third quarter. TCS slipped by 4% to close at Rs2040. Other tech stocks like Infosys, Tech Mahindra and HCL Tech declined by 1-2%. Metal stocks witnessed biggest gain today. Hindalco surged by 4% to close at Rs120. Others like Tata Steel, JSW Steel and SSLT gained by 2-4% each. The Nifty continues to consolidate in the 6500 to 6550 area after its sharp 350 points run from the 6200 area. Opening almost unchanged at 6530, the Nifty went up a tad to 6541 and spent the whole day meandering in the 6541 high and 6506 low area to close at 6524, up a modest 7 points for a nominal 0.11% gain. The Nifty continues in the broad 6430 to 6575 band and a breakout outside this range would propel it sharply in the direction of the breakout. Resistances are at 6580 and 6620. Supports are at 6490 and 6430 (also an important breakdown point from a Bearish cross pattern formed on the weekly chart).

RBI WATCH
RBI Governor Rajan to deliver an inaugural address at CAFRAL event. 0900 IST, Mumbai.
RBI Deputy Governor Chakrabarty to speak at conference organised by CIBIL. 0940 IST, Mumbai.
RBI Governor Rajan and Deputy Governor Patel to attend meeting with economists and analysts.
1100 IST,Mumbai.

POLITICAL DIARY
Rajnath Singh to announce BJP's alliance with DMDK, PMK, and IJK. 1200 IST, Chennai.
Congress briefing. 1400 IST, New Delhi.
Congress central election committee meeting, New Delhi.
3rd Round of Chai pe Charcha with Narendra Modi, Maharashtra.

DATA ALERT
US Unemployment Insurance Weekly Claims Report - Initial Claims. 1800 IST
US Weekly Export Sales. 1800 IST
US Bloomberg Consumer Comfort Index. 1915 IST
US Existing Home Sales in Feb. 1930 IST
US Leading Indicators in Feb. 1930 IST
DJ-BTMU US Business Barometer. 1930 IST
US EIA Weekly Natural Gas Storage Report. 2000 IST

RBI COUNTER
DAILY LAF TENDERS: One set of 1-day reverse repo (at 7.00%) and 1-day repo (at 8.00%). Bids for repo tender may be submitted between 0930 IST and 1030 IST, and reverse repo between 1900 IST and 1930 IST.

MARKETS
*Call  : Seen opening near RBI's MSF rate on banks' demand to meet daily funding needs amid tight liquidity  1 day call: 8.70-9.15% vs 9.00-9.05% Wed.
*Bonds : Prices seen moving with weak bias as Fed revises outlook for interest rate hike. Yield on 8.83%, 2  023 bond is seen in 8.77-8.86% vs 8.77% Wed.
*Rupee : Seen opening lower on broad dollar strength post FOMC outcome. Local shares to lend cues intr-  aday. Range 60.80-61.40/$1 vs 60.95/$1 Wed.
*Stocks: Seen down on weak cues from overseas markets. Nifty range 6450-6570; Wednesday-end 6524.05, up 7.40 points.

FOREIGN AFFAIRS
* Pro-Russians seize Crimea naval base.
* Missing plane frustration boils over.
* Osborne sets out UK economic plans.
* Israel attacks Syrian army sites.
* Egyptian officers killed in gunfight.
* US seeks curbs on high-speed trading.
* Protesters occupy Taiwan parliament.

BUSINESS AND ECONOMY
INDIA-RELATED
* S&P says Indian cos' focus on debt cuts to aid credit profile.
* Source says PSU ETF anchor investor subscription 8.3 bln rupee.
* Headway in LNG export to Pakistan; price talks likely Mar 31.
* M&M tells analysts tractor sale to grow 8-10% in FY15.
* MTNL invites bids from banks for 5-bln-rupee short-term loan.
* IIFCL gets 26.95-bln-rupee bids for public issue of tax-free bonds.
* Nissan launches Alto rival Datsun Go hatchback at 312,270 rupees.
* Sun TV Network ties up with iTunes, YouTube for content sale.
* Shiv Sena says won't backstab BJP by fielding candidate vs Gadkari.
* Bombay Rayon declares lock-out at Bengaluru mill division.
* National People's Party Sangma says to contest from Tura.
* Crompton Greaves supplies 30,000 advanced meters to Paraguay grid.
* Source says heavy rains hit rabi crop over 168,000 ha in Karnataka.
* SEBI strips Financial Tech of 'fit & proper' tag.

WEEK AHEAD
Mar 21: RBI Deputy Governor Chakrabarty to speak at Conference on inclusion, growth and governance organised by SKOCH. 0900 IST, Delhi.
Mar 21: RBI Governor Rajan to attend convocation at IGIDR. 1100 IST, Mumbai.
Mar wk 3: Major port traffic in Apr-Feb, by Indian Ports Association.
Mar wk 3: Rail freight traffic for February, by rail ministry.
Mar wk 3: Crude, refinery output for February, from petroleum ministry.
Mar wk 3: GSM mobile subscribers data for February, by COAI.
Mar 26: Cabinet Committee on Investments Additional Secretary Swarup to be chief guest at 6th Annual India Roads Conference. 1000 IST, New Delhi.
Mar 31: Government finances for Apr-Feb, by CGA.
Mar 31: CPI for industrial workers for February, by Labour Bureau.
Mar 31: Core sector growth for February, by commerce ministry.
Apr 1: Manufacturing PMI for March, by HSBC.
Apr 1: RBI to detail first bi-monthly monetary policy review for 2014-15 (Apr-Mar). 1100 IST, Mumbai.
Apr wk 1: Foreign tourist arrivals in March, by tourism ministry.
Apr wk 1: Power generation for March, by Central Electricity Authority.
Apr 3: Services PMI for March, by HSBC.
Apr wk 2: Automobile sales data for March, by SIAM.
Apr wk 2: FDI equity inflow in February, by RBI.
Apr wk 2: Trade data for March, by commerce and industry ministry.
Apr 7: Lok Sabha election starts with first phase of voting for six seats in Assam and Tripura.
Apr 9: 2nd phase of Lok Sabha elections to cover seven parliamentary constituencies in the north-eastern states of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, and Nagaland. By-election to one Assembly constituency in Mizoram also to be held.
Apr 10: Third phase of Lok Sabha elections to cover 92 seats across 10 states and four union territories.Voting for 70 Assembly seats in Odisha and by-election in Maharashtra will also be held.
Apr 11: Index of Industrial Production for February, by CSO.
Apr 12: Fourth phase of Lok Sabha polls for five seats in Assam, Sikkim, Tripura. Voting also for 32 Assembly seats in Sikkim.
Apr 14: CPI for Combined, Rural, and Urban for March, by CSO.
Apr 17: Phase five of Lok Sabha polling. To cover 122 seats across 13 states. Voting also for 77 Assembly seats in Odisha and by-elections to two Assembly constituencies in West Bengal.
Apr 24: Phase six of Lok Sabha election. To cover 117 parliamentary constituencies in 11 states and one Union Territory. By-election for one assembly seats each in Madhya Pradesh and Tamil Nadu.
Apr 30: Phase seven of Lok Sabha polls for 89 seats across seven states and two Union Territories. Also polling for 119 assembly seats in Andhra Pradesh and by-elections for seven assembly seats in Gujarat two in Uttar Pradesh and one each in Bihar and West Bengal.
May  7: Phase eight of Lok Sabha polls. To cover 64 seats in seven states. Also, polling for 175 Assembly seats in Andhra Pradesh, two in Uttar Pradesh, and one each in Bihar and West Bengal.
May 12: Phase nine of Lok Sabha polls. To cover 41 seats across three states. Also, by-election for two Assembly seats in West Bengal.
May 16: Vote-count for the Lok Sabha, Assembly elections as well as by-poll.
May 30: GDP estimate for Jan-Mar and 2013-14, by CSO.
Jun 30: Balance of payments for Jan-Mar, 2012-13, by RBI

view more

CROSSOVER OF 6570 CRUCIAL FOR THE UPMOVE IN NIFTY TO CONTINUE. EYE ON TCS, L&T

   Indian markets are expected to open with uptick as global/domestic cues are largely supportive. U.S. stocks climbed as housing data bolstered confidence in the economy and Vladimir Putin said Russia isn’t seeking to split Ukraine. Asian stocks are mixed to negative as investors weighed the prospect of further sanctions against Russia and awaited the Fed Res. policy statement. FIIs data yesterday was quite decent as they purchased Rs 1012 crs in cash markets and Rs 415 crs in index futures.However they sold good Rs 632 crs in stock futures. Tech stocks to remain under pressures as TCS said in a meeting with analysts on Tuesday that it expects a weak fourth quarter on account of a slow start to the year after the holiday season and a softer‖ Indian market, echoing the sentiments expressed by rival Infosys Ltd last week. Top management selling L&T shares may weigh on its stock. On Tuesday, Nifty gained marginally by 12 points to close at 6516. Select large cap stocks like Maruti, SBI, Coal India, ITC and Reliance held the market in

positive territory.PSU Bank, Refinery and Cement stocks witnessed buying. On the other hand Tech and Capital Goods witnessed profit booking. Maruti remained the biggest gainer after the news that the board review Gujarat project, as the board has decided to take minority shareholders nod. Maruti surged by 7% to close at Rs1865. However M&M and Tata Motors declined by 3% each. PSU banks witnessed smart rally on expectation of interest rate cut. SBI gained by 3% to close at Rs1701. Others like PNB, Bank of Baroda, Union Bank and Bank of India gained by 2-3%. Tech stocks like TCS and Infosys declined by 1% each. Among the Capital Goods stocks L&T and BHEL witnessed profit booking.The Nifty wavered in giving a direction to the market. Opening positive at 6532, the Nifty went up right at the start to 6574 and started to decline monotonously to hit 6497 and recover to end at 6516, up 12 points for a 0.19% gain. The Nifty is consolidating after its 350 points straight run from approx. 6200 to 6550. It is constricted in a narrow band between 6570 and 6480 and a closing outside this range would set the move on a larger scale. Supports are at 6497, 6450 while resistances are at 6570, 6660.In Mar series for Nifty, Highest Call OI is at 6600 strike and highest Put OI is at 6400 strike.

BOARD MEETING
GARDEN SILK MILLS to consider proposal of conversion of share warrants into shrs.
MAYUR UNIQUOTERS to consider raising fund.
PRITI MERCANTILE CO to consider allotment of bonus shares.

STOCKS
*CHAMBAL FERTILISERS: Promoter got 9 mln pledged shares released on Mar 14.
*COAL INDIA: May look at raising prices to reduce mounting pressure on profitability.
*GLAXOSMITHKLINE PHARMACEUTICALS: Maharashtra Food and Drug Administrationn has topped sale of Crocin Advance tablets besides two syrups for children Crocin Drops and Crocin Suspension saying the products are overpriced.
*INDUSIND BANK: ASHOK LEYLAND sold 5 mln shares of the company through bulk deals and normal trading.
*INFOSYS: The company has signed a five-year application development and management deal with Swedish insurer Lansforsakringar AB involving more than 200 applications.
*ING VYSYA BANK: The company has appointed Uday Sareen as deputy chief executive officer and head of wholesale banking and strategy with effect from Apr 1.
*IRB INFRASTRUCTURE: A Pune court has directed Central Bureau of Investigation to re-open the land scam case relating to murder of activist Satish Shetty in which company's chairman Virendra Mhaiskar is allegedly involved.
*LARSEN & TOUBRO: Chairman A.M. Naik sold 74,955 shares in the company for 94.78 mln rupees through open market transaction.
*MAHINDRA & MAHINDRA: Is working towards setting up an industrial training institute along with the Andhra Pradesh government at Zaheerabad.
*MARUTI SUZUKI: To stop exports to Europe for a year starting Apr-Jun.
*NHPC: The company commissioned Unit 3 of Parbati project on Mar 15.
*POWER FINANCE CORP: Arm PFC Consulting has transferred its wholly-owned arm RAPP Transmission Co to Sterlite Grid on Mar 12.
*RELIANCE INDUSTRIES: Securities Appellate Tribunal has adjourned the hearing in insider trading case against the company to Apr 16.
*RURAL ELECTRIFICATION CORP: The company has received bids worth 10.97 bln rupees for the second tranche of a public issue of tax free bonds maturing in 10, 15, and 20 years.
*SAGAR CEMENTS: France's Vicat is in talks to buy 47% in joint venture firm Vicat Sagar Cement in a deal that could value the company at 41 bln rupees.
*SESA STERLITE: Will shut its copper smelter for 22 days starting Apr 26.
*TATA CONSULTANCY SERVICES: Has said constant-currency growth would be lower in Jan-Mar compared to Oct-Dec as India business has not performed well.
*TORRENT PHARMACEUTICALS: Pfizer has sued the company in US to block sales of generic version of erectile-dysfunction drug Viagra.

POLITICAL DIARY
The central election committee of the BJP will be meeting to finalise its 5th List of candidates for the Lok Sabha polls. New Delhi. Former Lok Sabha Speaker P.A. Sangma to address a press conference to announce the formation of a 10-party front. 1600 IST, New Delhi.

DATA ALERT
JAPAN'S INDEXES OF BUSINESS CONDITIONS - REVISION for Jan. 1030 IST
BANK OF ENGLAND MPC MEETING MINUTES for Mar. 1500 IST
EU LABOUR COST INDEX. 1530 IST
US MBA WEEKLY MORTGAGE APPLICATIONS SURVEY. 1630 IST
US INTERNATIONAL TRANSACTIONS. 1800 IST
US EIA WEEKLY PETROLEUM STATUS REPORT. 1900 IST
FEDERAL RESERVE ECONOMIC PROJECTIONS. 2330 IST
US INTEREST RATE DECISION. 2330 IST

RBI COUNTER
DAILY LAF TENDERS: One set of 1-day reverse repo (at 7.00%) and 1-day repo (at 8.00%). Bids for repo tender may be submitted between 0930 IST and 1030 IST, and reverse repo between 1900 IST and 1930 IST. T-BILL AUCTION: RBI to auction 80 bln rupees of 91-day T-bills and 60 bln rupees of 364-day T-bills. TERM REPO AUCTION: One set of 7-day variable rate term repo for 100 bln rupees. Bids for term repo tender may be submitted between 1100 and 1130 IST.

MARKETS
Call  : Seen opening around the RBI MSF rate on demand from banks to meet daily funding needs amid tight liquidity. 1-day call: 9.00% vs 8.95-9.00% Tue.
Bonds : Seen moving with a weak bias on lack of buying support. 10-year bond yield: 8.77-8.83% vs 8.80% Mon.
Rupee : Seen steady-to-up amid caution before US Fed policy meet outcome Wed. Mo-end dlr demand may weigh. Range: 60.95-61.25/$1 vs 61.19/$1 Tue.
Stocks: Seen up on positive global cues but trade likely to be rangebound.Nifty range 6450-6580; Tuesday-end 6516.65, up 12.45 points.

BUSINESS AND ECONOMY
INDIA-RELATED
*Head says Maruti may start building Gujarat unit for Suzuki Motor.
*Govt launches PSU ETF for anchor investors; eyes 30 bln rupees.
*Toyota declares lockout at Indian units over employee pay row.
*Neyveli Lignite unions on strike after security man kills worker.
*JD(U) releases names of 47 candidates for Lok Sabha polls.
*Study says around 30% of BJP, Cong candidates face criminal cases.
*Source says fin min to make another Coal India divest bid FY15.
*Trade secy meets fin secy; seeks fast duty drawback refunds.
*PSU cos' Mar 16-31 loss on subsidised fuel sale 3.99 bln rupees/day.
*Cephalon sues Sun Pharma, Dr Reddy's for patent infringement.
*Infosys' problems not an industry-wide issue, says JP Morgan.
*Cairn Energy suspends share buyback pending Cairn India share sale.
*Reliance Jio inks pan-India tower sharing pact with Viom Networks.
*US District of Columbia extends $49.5 mln pact with Infosys arm.
*United Bank to cut base Rate to 10.25% from 10.50% from Mar 24.
*SBI pays 14.56 bln rupee advance tax for Jan-Mar vs 14.50 bln.
*Engineers India seeks bids for equipment for BPCL's Kochi ops.
*Chairman Naik sold 74,955 L&T shares today for 94.78 mln rupees.
*Puravankara CFO says co pursuing land buys in Mumbai, Delhi.
*Coal India FY14 output, despatches to fall short of target.
*Sistema Shyam cuts data svc rates; 40 GB at 999 rupees in post-paid.
*ISMA says Oct 1-Mar 15 sugar output 19.4 mln tn vs 21.1 mln yr ago.
*FMC excludes member refundable deposit from guarantee fund corpus.
*TCS warns of weak fourth quarter, but says 2014-15 will be good.
*Corporate houses may not get bank licences.
*Facebook quietly rolls out free calls in its messenger app in India.

view more

COMPANY INFO

MARUTI SUZUKI INDIA
Reviews deal structure in favour of minority shareholders
In a significant positive, Maruti Suzuki (MSIL) has decided to make key amendments to the proposed Gujarat plant deal – Gujarat capex only by depreciation/equity infusion by Suzuki and approval by minority
shareholders, which allays most of our concerns. Hence, we re-instate our valuation multiple to 15x. With concerns abating and MSIL poised to deliver 23% earnings CAGR FY14-16E on healthy product pipeline and margin expansion, we upgrade the stock to ‘BUY’. MSIL modifies Gujarat project deal structure MSIL’s board has reviewed the deal terms so that: 1) entire capex for Suzuki’s Gujarat subsidiary would be funded through depreciation and equity brought in by Suzuki as against earlier plan of post-tax profits to cover part of capex; 2) in case of termination of the agreement, the Gujarat subsidiary would be transferred to MSIL at book value; and finally 3) the deal would be consummated on approval of minority shareholders. New structure allays key concerns Our negative stance on the earlier deal was largely owing to the take-or-pay arrangement (resulting in significant variability of margins for MSIL and assured RoCE for Suzuki), parallel capacity outside MSIL and inefficient use of MSIL’s cash. We believe the new arrangement, in contrast, implies EBIT margins for MSIL at pre-deal levels, other income at levels higher than before, zero RoCE for Suzuki (implying considerably higher RoE for MSIL). Moreover, initial investment by Suzuki can be effectively viewed as an endowment to MSIL – which adds INR99 to MSIL’s share price, if the deal is approved by minority shareholders.

MPHASIS LTD
PRICE: RS.381
TARGET PRICE: RS.390
 FY14E P/E: 10.4X
M&A activity, buyback / de-listing at significantly higher price, if any, are the risks to our call. Mphasis' operating results were lower than estimates. With revenues falling 3.4% QoQ, margins were also impacted. Shrinking HP revenues as well as flattish direct business revenues impacted overall growth. HP business remains a drag and is expected to de-grow in the foreseeable future. This will keep the overall growth of Mphasis relatively low, we believe. EBIDTA margins were sharply lower QoQ by about 200bps, largely due to the lower revenues and increased sales costs. Pressure on revenue growth and salary hikes may keep margins subdued over the forseeable future. Our FY15E (March end) earnings stand at Rs.36.8. For FY15, we have assumed the rupee to average 61 / USD. Our FY15-based TP stands revised to Rs.390 (Rs.413 earlier). At that level, our FY15E earnings will be discounted by 10.5x. We maintain REDUCE. M&A activity, buy-back offer / de-listing at a significantly higher price, if any, can provide upsides to the stock.

USD revenues down 3.4% QoQ
Mphasis reported about 2% QoQ fall in headline revenues in USD terms (exclud-ing the impact of hedging losses). However, after negating the impact of revenue reversal made in 4QFY13, the fall was at about 3.4% QoQ. The company has entered into a definitive agree-ment to sell a part of its EM (India) business. The HP business continued to suffer with further scale downs as well as seasonal shut-downs during the quarter. We understand that, the shut-downs impacted revenues by about 0.5%, but the balance impact was due to further scale-sown of business.


KOTAK SECURITIES
Economy News
Liquidity constraints, approval delays and the lingering slowdown have forced developers not to take up large infrastructure and road projects on PPP basis, compelling government agencies to award projects as cash-contracts, say industry experts. Import of natural rubber was up by 91% to 18,141 tonnes in February this year on fall in domestic roduction amid strong demand for the commodity. The rubber import stood at 9,497 tonnes in the same month last year, according to the Rubber Board data. Tea exports from India, the world's second-biggest producer, dipped by 13.24 per cent to $695.64 mn during April-February this fiscal due to slowdown in global market. Wholesale inflation fell to a nine-month low of 4.68 per cent in February from 5.05 per cent in the previous month, as prices of food items rose at a lower pace, official data showed on Friday.

Corporate News
Infosys has been selected by Volvo Cars as a strategic supplier to provide application development services for its global operations. This agreement builds on the long-standing relationship between the two companies.
Infosys has been supporting Volvo Cars since 2010 to rationalize and integrate its enterprise systems. (ToI)
Reliance Industries' telecommunications unit, which holds nationwide 4G permits, has agreed to lease mobile phone masts from infrastructure provider Viom Networks, the companies said. Directorate General of Hydrocarbon (DGH) has backed ONGC's demand for appointment of an international expert to assess if RIL was drawing out any of its gas in the KG basin. ONGC says at least three wells drilled by RIL in the eastern offshore KG-D6 block are within "few hundred meters" of its gas fields and it fears the two may be sharing the same pool of reservoir. BP Plc and Niko Resources, the partners of Reliance Industries in the controversial KG D-6 block, may have to join ongoing arbitration proceeding before the government could accept bank guarantees from them and allow these companies to charge higher prices for their share of gas from April 1, a petroleum ministry official said. State Bank of India is all set to bring down its bad assets by offloading about Rs 50 Bn of its total dud assets valued at Rs 677.99 Bn to asset restructuring companies (ARCs) before the end of the current fiscal. (Deccan) Buoyed by nearly 30% rise in exports in 2013-14, Steel Authority of India Ltd aims to more than double the shipments to 1 mn tonnes next fiscal docking special quality products from its expanded capacity. Indian Oil Corp plans to invest Rs 76.5 Bn in setting up a petrochemical complex at its almost complete Paradip refinery in Odisha in the next 3-4 years, a company executive said. A 22-member lenders' consortium led by ICICI Bank has failed to agree on a proposal from ABG Shipyard to recast its Rs 115 Bn loan, a majority of which turned into dud assets on their books, sources said here.

KOTAK INSTITUTIONAL EQUITIES

Infosys(INFO)
Moderate cut in estimates/TP. As a follow-up to our previous report, after Infosys’ senior leadership indicated near-term revenue growth challenges, we cut our revenue growth expectation for FY2015E to 10%. Stock performance over the next 12 months will depend on results of sales effectiveness initiatives. Current valuations at 15X FY2015E EPS are undemanding even in the context of near-term challenges. We cut FY2015-16E earnings by ~2% and TP to `3,800 (from `4,000 earlier). Retain ADD.


view more

Indian markets are poised to open with a positive uptick given the constructive global cues. U.S. stocks finished Monday with strong gains as investors shrugged off the narrow scope of EU and U.S. sanctions following the vote in Crimea in favor of leaving Ukraine. Investors instead focused on better-than-expected economic data, including industrial production and manufacturing activity in the New York region. However, stocks rose amid the lowest trading volumes this year. Asian equity markets rose on Tuesday, stabilizing after recent volatility, as the implementation of sanctions on Russia lifted global risk appetite. Focus now turns to the start of the Federal Open Market Committee's two-day meeting later on Tuesday, which is expected to see policy makers continuing to taper asset purchases. Back home, FIIs data on Friday was mixed. While they purchased a good Rs 982 crs in cash market, they were sellers of Rs 679 crs in index futures and Rs 568 crs in stock futures. On Friday, Nifty gained marginally by 11 points to close at 6504.20. Market bounced back last hour. Nifty recovered by 72 from the intra-day low of 6432. Traders covered short position on account of long holiday. Moreover WPI data for the month of February came in at 10- month low at 4.68%. However global markets witnessed sharp decline due to weak Chinese data and persisting tension between Ukraine and Russia. Capital Goods, Realty and Auto stocks recovered smartly. However Banking and Tech stocks were laggards. Indian Oil declined by 3% to close at Rs269. Government concluded sale of 10% stake in Indian Oil. ONGC, Oil India to buy 5% stake each offline at 220 rupees a share. Tech Mahindra gained marginally to close at Rs1785. RBI has allowed Tech Mahindra to increase the FII limit up to 48% from 45%. Capital Goods stocks witnessed smart rally on account of strong order book. L&T has gained 3% to close at Rs1255. Siemens, Voltas and BHEL gained 3% each. The Nifty has made a Spinning Top formation on the weekly chart closing at 6504 against the opening of the week of 6491. However, it has closed mildly weak in respect of the previous week. The Nifty is in the 6350 to 6650 band with major support at the gap around 6400 and the 50 and 100 days SMAs at 6200. For the day resistance lies at 6560 and 6600 and support exists at 6432 and 6400.

WPI INFLATION
Headline declines, core inches up
WPI inflation in February 2014 eased to ~4.7% YoY (Edel estimate: 4.8%) from 5.0% in January, led by continued decline in food inflation, especially vegetables. With this, the spike in vegetables seen since July last year is largely reversed. However, recent weather disruptions seen in several parts of India could lead to renewed upward trend in some food items. Meanwhile, core inflation has gradually inched higher in the last few months, perhaps reflecting impact of large currency depreciation, continued fuel price hikes and low base effect. This may continue for next two-three months, before reversing. Going ahead, therefore, we expect headline WPI to inch higher (possibly by 50-100bps) in next three months, depending on the extent of crop damage amidst disruptive weather conditions.
WPI inflation marginally lower than expected 
WPI inflation for February fell to ~4.7% YoY from ~5% in January. The lower inflation print was predominantly led by decline in food inflation, especially vegetables. Similar trend was observed in CPI data too. Among broad components, while agri and fuel inflation eased, core inflation inched marginally higher.
Food spike largely reversed 
The primary articles inflation has fallen very sharply in recent months, from ~15% YoY levels in November 2013 to ~6.3% in February. The dip was predominantly due to the crash in vegetables prices from unusually high levels. Some other categories such as egg, meat and fish have also eased in recent months (although in this category the level of inflation still remains elevated). Broadly, what one could say is that the food spike led by vegetables that started in July/August 2013 has largely reversed.
Going ahead, it is possible that inflation in some food items could start to rise once again. This is because, weather conditions have been poor in recent weeks in several parts of India including Maharashtra and Madhya Pradesh. These regions have seen unseasonal and untimely rains, which have raised concerns about potential damage to the Rabi crop. While it is still early to assess the extent of damage, initial indications are
that there would be some impact on horticulture crops especially fruits, wheat and few oilseeds. Further, if unfavourable weather continues, it could impact vegetable crops too, especially potato and onions.

DATA ALERT
GERMANY ZEW INDICATOR OF ECON SENTIMENT for Mar. 1530 IST
EU FOREIGN TRADE for Jan. 1530 IST
US ICSC-GOLDMAN SACHS CHAIN STORE SALES INDEX. 1715 IST
US REAL EARNINGS for Feb. 1800 IST
US CPI for Feb. 1800 IST
US NEW RESIDENTIAL CONSTRUCTION for Feb. 1800 IST
US JOHNSON REDBOOK RETAIL SALES INDEX. 1825 IST.

RBI COUNTER
DAILY LAF TENDERS: One set of 1-day reverse repo (at 7.00%) and 1-day repo (at 8.00%). Bids for repo tender may be submitted between 0930 IST and 1030 IST, and reverse repo between 1900 IST and 1930 IST.
BOND BUYBACK: Government to buy back up to 150 bln rupees worth of 6.07%,
2014 bond, 10.00%, 2014 bond, 7.32%, 2014 bond, 10.50%, 2014 bond, 7.56%,
2014 bond, 11.83%, 2014 bond, and 10.47%, 2015 bond.
MARKETS
Call  : Seen opening firm above the RBI's repo rate as banks may borrow funds
to meet advance tax outflow. 1-day call: 8.50% vs 8.95% 3-day Sat.
Bonds : Seen tracking global cues. Trade may be subdued ahead of financial
year end. 10-yr yld: 8.77-8.83% vs 8.74% Fri.
Rupee : Global cues, local share indices to impact opening.
Range: 60.80-61.55/$1 Tue vs 61.19/$1 Fri.
Stocks: Seen up on positive cues from overseas markets
Nifty range 6450-6560; Friday-end 6504.20, up 11.10 points.

WEEK AHEAD
Mar 20: CPI for rural and farm labourers for February, by Labour Bureau.
Mar 20: RBI Governor Rajan to deliver an inaugural address at the CAFRAL event.
0900 IST, Mumbai.
Mar 20: RBI Deputy Governor Chakrabarty to speak at conference organised by
CIBIL. 0940 IST, Mumbai.
Mar 20: RBI Governor Rajan and Deputy Governor Patel to attend meeting with
            economists and analysts. 1100 IST, Mumbai.
Mar 21: RBI Deputy Governor Chakrabarty to speak at Conference on inclusion,
           growth and governance organised by SKOCH. 0900 IST, Delhi.
Mar 21: RBI Governor Rajan to attend convocation at IGIDR. 1100 IST, Mumbai.
Mar wk 3: Major port traffic in Apr-Feb, by Indian Ports Association.
Mar wk 3: Rail freight traffic for February, by rail ministry.
Mar wk 3: Crude, refinery output for February, from petroleum ministry.
Mar wk 3: GSM mobile subscribers data for February, by COAI.
Mar 26: Cabinet Committee on Investments Additional Secretary Swarup to be
        chief guest at 6th Annual India Roads Conference. 1000 IST, New Delhi.
Mar 31: Government finances for Apr-Feb, by CGA.
Mar 31: CPI for industrial workers for February, by Labour Bureau.
Mar 31: Core sector growth for February, by commerce ministry.
Apr  1: Manufacturing PMI for March, by HSBC.
Apr  1: RBI to detail first bi-monthly monetary policy review for
        2014-15 (Apr-Mar). 1100 IST, Mumbai.
Apr wk 1: Foreign tourist arrivals in March, by tourism ministry.
Apr wk 1: Power generation for March, by Central Electricity Authority.
Apr  3: Services PMI for March, by HSBC.
Apr wk 2: Automobile sales data for March, by SIAM.
Apr wk 2: FDI equity inflow in February, by RBI.
Apr wk 2: Trade data for March, by commerce and industry ministry.
Apr  7: Lok Sabha election starts with first phase of voting for six seats in
        Assam and Tripura.
Apr  9: Second phase of Lok Sabha elections to cover seven parliamentary
        constituencies in the north-eastern states of Arunachal Pradesh,
        Manipur, Meghalaya, Mizoram, and Nagaland. By-election to one Assembly
        constituency in Mizoram also to be held.
Apr 10: Third phase of Lok Sabha elections to cover 92 seats across 10 states
        and four union territories. Voting for 70 Assembly seats in Odisha
        and by-election in Maharashtra will also be held.
Apr 11: Index of Industrial Production for February, by CSO.
Apr 12: Fourth phase of Lok Sabha polls for five seats in Assam, Sikkim,
        Tripura. Voting also for 32 Assembly seats in Sikkim.
Apr 14: CPI for Combined, Rural, and Urban for March, by CSO.
Apr 17: Phase five of Lok Sabha polling. To cover 122 seats across 13 states.
Voting also for 77 Assembly seats in Odisha and by-elections to two
Assembly constituencies in West Bengal.
Apr 24: Phase six of Lok Sabha election. To cover 117 parliamentary
constituencies in 11 states and one Union Territory. By-election for
one assembly seats each in Madhya Pradesh and Tamil Nadu.
Apr 30: Phase seven of Lok Sabha polls for 89 seats across seven states and two
Union Territories. Also polling for 119 assembly seats in Andhra
Pradesh and by-elections for seven assembly seats in Gujarat, two in
Uttar Pradesh and one each in Bihar and West Bengal.
May  7: Phase eight of Lok Sabha polls. To cover 64 seats in seven states.
Also, polling for 175 Assembly seats in Andhra Pradesh, two in Uttar
Pradesh, and one each in Bihar and West Bengal.
May 12: Phase nine of Lok Sabha polls. To cover 41 seats across three states.
        Also, by-election for two Assembly seats in West Bengal.
May 16: Vote-count for the Lok Sabha, Assembly elections as well as by-poll.
May 30: GDP estimate for Jan-Mar and 2013-14, by CSO.
Jun 30: Balance of payments for Jan-Mar, 2012-13, by RBI.

view more

MARKETS TO OPEN LOWER ON WEAK GLOBAL CUES. SUPPORT AT 6450/6400. EYE ON WPI INFLATION, CROMPTON GR.

Indian markers are poised to open gap down on shaky global cues. U.S. stocks fell sharply as weaker-than-forecast data from China and tension in
Ukraine overshadowed reports showing an improving American economy. China’s industrial-output, investment and retail-sales growth cooled more than
estimated in January and February. China announced an economic growth target of 7.5% last week, the weakest since 1990. Asian markets too are
trading lower today. Back home, close watch will be on WPI inflation numbers for February that will be released today and is forecasted to fall to below 5%
from 5.05%. FIIs data yesterday was mixed. While they purchased Rs 517 crs in cash market which was the lowest in last six sessions, they purchased
Rs 427 crs in index futures, highest in last four sessions. However, their selling in stock futures got intensified at Rs 599 crs, higher than last session. On
Thursday, Nifty declined by 24 points to close at 6493. It was a drop of 68 points from intra-day high of 6561. There was profit booking in the market in last
hour of trade. Banking, Auto, Metal, Tech and Pharma stocks witnessed profit booking. However Oil companies like HPCL. BPCL (up 7%), IOC and
ONGC witnessed fresh buying led by stable Brent crude at $108/bbl and fall in USDINR to 61. Infosys nose-dived by 8% after the company's negative
comment on near term growth in recent investor interaction. TCS, Wipro and Tech Mahindra declined marginally. Pharma major Sun Pharma slipped by
5% to close at Rs573. The U.S. FDA has imposed a ban on imports from generic drug maker Sun Pharmaceutical's plant at Karkhadi in Gujarat. Banking
stocks witnessed profit booking from the day's high. The Nifty opened weak to recover and ended near the day's opening once again. Opening weak at
6491, the Nifty went up near the high of this week to 6561 and maintained itself near the 6550 area. But, late in the day it faced severe selling to go down
to 6476 to close at 6493, down 23 points for a 0.37% loss. For the day coming by the market is expected to open gap down on weak global cues on
Ukraine & China's economy front. Markets opening below 6487 would breach a strong support and thus form a double top pattern and this can take the
nifty down to about 6430 level.Highest OI at 6400 put would lend strong support.

view more

TODAY 'S BOARD MEETING

CORPORATE EVENTS

BOARD MEETING of

MPHASIS, earnings for quarter ended January.
SHARP TRADING & FINANCE, to consider stock split.
IFB AGRO INDUSTRIES, to mull issuing shares on pref basis to NURPUR GASES.
ACRYSIL, to consider operational budget.

POLITICAL DIARY
Meeting of Bharatiya Janata Party's central election committee to decide on
third list of candidates for Lok Sabha polls. Party expected to release list
of more than 100 candidates. 1100 IST, New Delhi.

DATA ALERT
from OVERSEAS
JAPAN ELECTRIC POWER OUTPUT for Feb. 0730 IST
EUROPEAN CENTRAL BANK BULLETIN for Mar. 1430 IST
UK CPI BASKET OF GOODS AND SERVICES ANNUAL REVIEW. 1500 IST
UK COUNCIL OF MORTGAGE LENDERS LENDING TRENDS for Jan; 1500 IST
US UNEMPLOYMENT INSURANCE CLAIMS -INITIAL CLAIMS for wk to Mar 8; 1800 IST
US IMPORT AND EXPORT PRICE INDEXES for February. 1800 IST
US WEEKLY EXPORT SALES. 1800 IST
US ADVANCE SALES FOR RETAIL & FOOD SERVICES for Feb; 1800 IST
US CONSUMER COMFORT INDEX; 1915 IST
US MANUFACTURING & TRADE: INVENTORIES & SALES for Jan; 1930 IST
US EIA NATURAL GAS STORAGE REPORT for week ended Mar 7; 2000 IST

more

Peak Deficit at 3.3% - lowest level since Jan-07

       

All India generation in February was up 10.4% YoY due to low base. During April- Feb’14 generation grew 6% YoY and capacity addition stood at 12 GW.

•       The all India PLF was flat YoY at 50%. Coal based PLF was down 200 bps YoY to 61%

•       The average coal inventory stood at 12 days in Feb-14 as against 9 days in Feb-13.

•       The coal base generation of IPP’s was up 30% YoY, however PLF at 56% was down 200 bps. Amongst the major IPP’s, JSW energy’s Ratnagiri TPS’ PLF was down ~20 pps YoY to 60% as merchant capacity continues to suffer. The Vijaynagar TPS continues to operate at robust PLF at 96%. Reliance Power’s Rosa TPS operated at PLF of 75%. Mundra UMPP PLF was down 500 bps YoY to 80% Adani Power’s 4.6 GW Mundra TPS reported PLF of 69% down 12 pps MoM as few units were under shut down. Also 1.98 GW Tirora TPS operated at sub-optimal PLF of 62%.

•       The PAF for NTPC’s coal based plants continues to be robust as for fourth consecutive month all the coal based reported PAF >95%. In February, NTPC’s coal based generation was up 7.5% YoY and coal based PLF stood at 90% (up 500 bps YoY) was highest in 21 months.

•       In Feb-14, energy demand grew 2% YoY but supply grew a robust at 6.6% leading to deficit at 3.8% down 400 bps YoY. The peak deficit in Feb stood at lowest level since January’07 at 3.3 % and was down 500 bps YoY.

•       RB coal index prices were down 8% MoM to USD 74 and Indonesian low grade coal (4200 Kcal) prices were down 1.5% MoM to USD 44.

•       In February, the average IEX prices were up 17.5% YoY and 11% MoM to Rs 3.34/kwh In Southern Region prices in S1 (AP and Karnataka) were up 10.5% YoY to Rs 5.16/kwh.

View More