Stocks in news:
Cipla : The company has come under the scanner of the income tax authorities on thursaday for alleged tax invasion
Sun Pharmaceutical Industries: India's biggest drugmaker by market value, is looking for partnerships or acquisitions to enter Japan, an especially lucrative market for manufacturers of low-cost drugs, said media reports.
Manappuram Finance Limited: MFL announced the public issue of non-convertible debentures aggregating Rs 100 crore (with an option to retain over-subscription up to Rs 100 crore) for a tenure ranging from 400 days to 70 months, saiod media reports.
NCC Ltd: Rating agency CrisilBSE 0.45 % has downgraded its ratings on the debt instruments and bank facilities of the city-based infrastructure major NCC Ltd, said media reports.
Reliance Communications Ltd: Reliance Globalcom, the international unit of India's Reliance Communications Ltd, is no longer up for sale and may raise debt or equity to fund its expansion plans, Globalcom's newly installed chief executive said.
United Breweries Ltd: UB Group chairman Vijay Mallya has pledged another portion of his holding in his beer company, United Breweries. Kamsco Industries, a UB group company, has said it pledged 2.9 million share of United Breweries, maker of the country's largest selling Kingfisher beer, said media reports.
Bharti Airtel Ltd: Standard & Poor's Ratings Services said that it had raised its long-term corporate credit rating on Bharti Airtel Ltd. to 'BBB-' from 'BB+'. The outlook is stable.
Era Infra Engineering Ltd: EIEL has secured contracts worth Rs 128 crore in Maharashtra from Mumbai Railway Vikas Corporation (MRVCL) for escalators and other provisions at some stations in Mumbai.
SAIL: Noting that exports by SAIL are likely to go up in coming years, a high-level panel has asked the state-run PSU to look into possibilities of strengthening presence in international market by setting up offices abroad.
Lupin Ltd: Drug firm Lupin today said it has received US health regulator USFDA'S approval to market a generic version of Bayer's Cipro, used to treat infections, in the American market.
SpiceJet Ltd: Media baron Kalanithi Maran owned SpiceJet announced the appointment of Kaneswaran Avili as its new Chief Commercial Officer. Prior to this, Avili was serving TigerAirways in Singapore as its Commercial Director, a company statement said.
News on markets
Indian markets are expected to trade higher on Friday following positive trend seen in other Asian markets. The key support for the index is around 6,326 levels.
"The Nifty is expected to trend up till 6450 in the next couple of days. In this period the key support will be at 6326 and resistance will be at 6450," said Somil Mehta, Senior Tech Analyst (Equity) at Sharekhan.
"The Nifty has been forming higher tops and higher bottoms; it has also closed above the previous swing's high which is a positive sign for the market," he added.
Mehta is of the view that the short-term bias remains positive for a target of 6500 with reversal at 6150. The medium-term outlook has changed to positive as the index has started forming higher tops and higher bottoms on the weekly chart.
Pre-market: Nifty all set to hit fresh record highs on Friday
(Source: Economic Times)
The 50-share Nifty index is expected to open higher on Friday and is likely to surge past its previous all-time high levels of 6415.25 following positive trend seen in other Asian markets.
At 07:30 a.m., Nifty India stock futures in Singapore were trading 33 points higher at 6468.50, indicating a higher opening on the domestic market.
Technically, Sensex made a fresh all time high after December 9, 2013 and Nifty is around 10 points away from breaking the all-time highs.
However, the important thing to note here is the fact that none of the 30-Sensex constituents rose to their fresh 52-week highs or all-time highs, a complete divergence, say analysts.
The Nifty has now given a close above all important resistance levels and has negated the bearishness after moving beyond 6360 levels.
"The bearish view on positional basis thus gets negated and now going forward the level of 6200 will turn as a support on positional basis and above that 6300 is an immediate support for the index," GEPL Capital said in a report.
"In the next few sessions, if Nifty manages to continuously trade above 6200 then it may scale higher till 6713 over the course of next few weeks. The bullish view will be intact as long as 6200 is held as a support," added the brokerage report.
Short-covering in 6300, 6400 calls expected to fuel market rally, say experts
(Source : Economic Times)
Sellers of call options of 6300 and 6400 Nifty strikes were trapped when markets hit and settled at a new high Thursday. And, heavy unwinding by these traders could push up markets by another 100-150 points, said derivatives analysts.
Wealthy investors, prop brokers and a few others wrote or sold these options over the past week on the hope that markets would not break the 6000-6300 band decisively. They pocketed premiums of around Rs30-50, selling every call. But, Thursday's close above 6400 caught them on the wrong foot and exposed them to huge losses.
Premium, price paid by a buyer of an option, on the 6300 call jumped by Rs58.40 from Wednesday to Rs161 at closing on Thursday. That on the 6400 call rose by Rs 42.15 to Rs90.5. This price jump benefited buyers of these calls but trapped sellers who will now have to pay this difference in premium to the former by buying back the options to contain their losses. "More unwinding in these options is almost certain and the short covering could give a further filip to markets," said Siddharth Bhamre, head of derivatives at Angel Broking. "The breach of the 6250 resistance has been key to Thursday's move."
Sellers have unwound 6300 calls big time on Thursday, while that on 6400 has just begun as many of these sell positions were initiated a day or two earlier, according to Chetan Jain, derivatives analyst, Anand Rathi. The NSE bhav copy showed that open interest - outstanding positions - in the 6300 call declined by 610,900 units to 4.2 mn units on Thursday from the earlier trading session. That on the 6400 call fell by 194,200 units to around 5.3 mn units.
Another interesting feature of Thursday's rally was the rise in implied volatility - traders' perception of price swings -- of the calls despite markets having risen. Normally, IVs move opposite to market direction. When markets rise IVs fall and vice versa.
The rise in IVs despite markets rising was attributed to the buying back by sellers of 6300 and 6400 calls. Buying increases the prices of the options. The price of options is itself dependent on five factors, volatility (vega) being one of them. Analysts like Bhavin Desai of Motilal Oswal Financial Services believe that the intensity of the rise in premia of the two options, because of the buyback, pushed up their IVs. Desai, too, feels markets could rise on further short-covering in these two strikes.
Buyers of options were the stronger hands, the FIIs, who have been buying in the cash as well as derivatives market. When this happens, markets tend to rise despite the weaker hands - retail, HNI, brokers - lacking conviction in the rally. FIIs have been net buyers in both segments over the past few days on hopes of a BJP-led government winning the Union elections and factors such as a decline in current account deficit.
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