Pressure points

Things are not looking good on the Nifty, as a downfall is being witnessed due to earnings of top companies

In the last week, the markets mainly remained in the sellers’ zone as the investors focus was shifted towards the earnings corner. Nifty crossing its crucial support and the announcement of Infosys earnings on Friday added pressure to the downfall.

Nifty has support at 8250 (200 DMA), 8236 and 8147. Resistance for Nifty is at 8324 above 8365 and 8400 levels. In the F&O space the investors can buy the options of BPCL (780 Put), HDFC (1220 Put), Reliance (860 Put) and M&M (1160 Put).

Monsoon worries
The Indian Meteorological Department (IMD), the weather office of India released its forecast on the monsoon in the last week where it stated that the country’s rains could be below average in 2015 due to an impact of El Nino weather pattern.

The IMD said that the monsoon would be 93 per cent of the Long Period Average which is below normal and according to their parameters, below 90 per cent is defined as deficient, 90-96 per cent is considered as below normal, 96 to 104 per cent as normal and above which is quoted as excess.

The forecast news has raised concerns on the output for the summer crops. For February 2015, India’s services exports rose by 7.1 per cent to $ 14.1 billion as compared to the same month last year. The data was at $ 13.16 billion in February 2014.

Imports for the month under review increased by 23.64 per cent to $ 7.9 billion against $ 6.39 billion in a year earlier period. For April-February 2014-15 period, the total exports stood at $ 146.46 billion while the imports were at $ 83.69 billion. The services sector contributes about 60 per cent to the country GDP.

On the earnings front, Symphony LTD posted jump of 35 per cent in the net profit of Rs 36.5 crore for the quarter ended March 2015 as compared to Rs 27 crore in the same quarter last year. The net sales also increased by 22 per cent to Rs  137.50 crore for the period under review as compared to Rs 113 crore in the same period last year.

The company follows the financial year from July to June. For the nine month period, the company net profit stood at Rs 94 crore up around 42 per cent as compared to Rs 66 crore for the corresponding period last year. Also, the net sales for the period were at R 392 crore against Rs 300 crore on a yearly basis.

Everest Industries came out with its earnings in the last week, where it posted an over three fold increase in its net profit on the back of strong operational performance. For the quarter that ended March 2015, the net profit of the company stood at Rs 10.07 crore as compared to a net profit of Rs  3.04 crore in a year ago period.

During the quarter under review, the total operational income of the company stood at R 318 crore from a year ago period. The board of directors has recommended a dividend at 50 per cent (R 5 per equity share) for the financial year 2014-15.

International earnings
On the global front, the US markets remained weak in the beginning of the last week, but managed to rebound on the back of buying in the counters and on the better earnings reports. In the Asian markets, the Chinese central bank’s move to cut reserve ratios was overshadowed by the weak PMI data.

In the US markets, Markit services PMI flash, composite PMI flash, pending home sales, consumer confidence, GDP, ISM manufacturing PMI, total vehicle sales, initial and continuing jobless claims are the important data to watch out. In the Euro zone, core inflation, inflation rate, unemployment, consumer and business confidence are the triggers.

This week, the major earnings to hit the streets includes UPL, Maruti, Bharti Infratel, ICICI Bank, JSW Energy, Granules, Geometric, Alembic LTD, Andhra Bank, Tata elxsi, Marico Kaya, Idea, DHFL, TVS motors, Federal Bank, Atul, IDFC, Polaris, Coromandel, Axis Bank, Astra Micro, Srei infra and Elecon Engineering.

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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