High notes

FII buying saw the Nifty soar to top-notch levels last week

The continuous FII buying supported the Indian markets, helped to touch new highs in the last week. Also, the volatility ahead of January’s F&O expiry was seen in the markets. The immediate major resistance for the Nifty lies at 9000 and 9162. Immediate support for the Nifty is at 8689 and 8529.

Industry
Pidilite Industries last week announced its quarterly numbers, where the consolidated net profit of the company stood at Rs 124.36 crore for the quarter that ended December 2014 as compared to Rs 97.24 crore in the same period last year.

The consolidated net sales of the company for the period under review rose by 12.59 per cent to Rs 1196.34 crore as compared to Rs 1062.55 crore in the corresponding period last year. The company is the markets leader in the adhesives segment.

On the back of lower expenses, the paints and coating maker Akzo Nobel reported an 87.85 per cent jump in its net profit for the quarter that ended December 31, 2014. The net profit stood at Rs 50.74 crore as compared to Rs 27.01 crore for the same period last year.

Net sales of the company stood at R 671.41 crore against R 643.93 crore for the corresponding period last year. The company has a face value of Rs 10 per share.

Disinvestment
In the year, the government kick started its disinvestment plan by selling 10 per cent of its stake in Coal India on 30 Friday, January. The government is selling 31.58 crore shares or 5 per cent stake in a public offer with an option to sell another 5 per cent through Offer For Sale (OFS) or auction route.

The floor price for the issue was fixed Rs 358 a share, a nearly 5 per cent below last Thursday’s closing price and may help the exchequer to garner about Rs 22600 crore. About 20 per cent shares were also reserved for the retail investors who will also get 5 per cent price discount.

The government has planned to raise $ 10 billion by selling its stakes in state run companies in this fiscal. On the back of the government taking steps to attract investments, the FDI inflows to the services sector rose by 20 per cent to $ 1.84 billion in the April to November period.

According to the data available from Department of Industrial Policy and Promotion (DIPP) the data stood at $ 1.46 billion for the same period last year. The overall inflows of the company also grew 22 per cent to $ 18.88 billion during the eight months of the current fiscal as against $ 15.45 billion in the corresponding period of 2013-14.

Earnings
There were weak earnings weighted in the US markets in the beginning last week. Also, the falling oil prices and concerns regarding strong dollar made the markets to trade volatile. But coming to end of last week, the markets rebounded and the Asian markets were simply tracking the footsteps of the US markets.

Investors can create call ratio spread in the short term by buying 1 lot of 8900 call option and selling 2 lots of 9100 call options or the one who is slightly bearish on market can buy 8900 put option and can sell 8700 put option. In both the cases risk is limited.

Crude outlook is weak but it slightly over sold and having support at $ 43.58 per barrel. Gold is getting support at $ 1257 and having resistance at $1297 and $ 1324 per troy ounce. In the US markets, factory orders, manufacturing PMI, services PMI, balance of trade, non-farm payroll data and composite PMI are the data to watch in the week to come.

On the Chinese front, the data to focus on are HSBC manufacturing PMI final, services PMI and balance of trade. The major earnings in the last week were Tata steel , Tata chemicals, Tata motors, ACC, Timken, STAR, Redington, UPL, Rsystems, FDC, TV Today, GAIL, KRBL, PSB, Paper Products, Eastcoast Papers, GEShip, RCF, TVS Motors, PNB, Jubilant, Bharti Airtel, APLLTD, BBTC, Century Textiles, Finolex Pipes and JK Cement.

Alex K Mathews is the author of Financial Services And Systems, as well as Option Trading: Bear Market Strategies published by Tata McGraw Hill. He is also the technical and derivatives research head of Geojit BNP Paribas Financial Services Ltd. The author may have a vested interest in investments he has recommended. Feel free to e-mail him at alex@geojit.com. Geojit BNP Paribas has membership in, and is listed on, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

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