Wall Street closes in the green after triple digit losses on Greek elections :: HDFC Securities

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Key U.S. Indices closed in the green on Monday after suffering triple digit losses in the morning as the markets digested the news of the election of the leftist Syriza party in Greece.

The Dow Jones Industrial Average, which fell 105 points in the opening trade, managed to wriggle its way back in the green with a gain of 6 points at 17,679. The same story was repeated by the other indices. The S&P 500 and the Nasdaq opened sharply lower but closed with modest moderate gains. The S&P 500 closed with 5 points gain at 2,057 and the Nasdaq Composite gained 14 points at 4,772.

The relative calmness demonstrated by the equity markets was attributed largely to the lingering effects of the quantitative easing program announced by the European Central Bank last week, which overshadowed the election results in Greece. The markets believe that the ECB is adequately armed to handle the repercussions.

Athens ATG stock index was down 3.2% after anti-austerity party 
Syriza won the general election in Greece, igniting fears that the new government could compromise the terms of Greece's bailout package. This in turn could trigger Greece's exit from the Eurozone.

Since 2010, the European Union and International Monetary Fund have lent 240 billion euros ($277.8 billion) to Greece. The risk trade-off sentiment appears to have eased as Syriza leadership insists that it wishes to keep Greece in the Eurozone.

Crude oil prices pared earlier losses and hovered above $45 a barrel following reassurance from the secretary-general of OPEC that the oil prices would bottom out at current levels. Without new investment, crude oil prices could recover to $200-a-barrel levels as the supply-demand dynamic restabilises over the next few years, the Secretary General said.

West Texas Intermediate crude oil was down 0.9% to $45.17 a barrel. Prices fell more than 1% earlier as Saudi Arabia's successor reiterated the country's commitment to previous oil production policies. The biggest OPEC producer has been under pressure to limit output in the face of global oversupply.

Energy producers Exxon Mobil, Chevron, Royal Dutch Shell and BP were all higher. The Energy Select Sector SPDR ETF climbed 1.4%. The clear losers on stock markets Monday were Russian ADRs which slid after S&P downgraded the nation's sovereign credit rating to "junk" status, below the investment grade. Mobile TeleSystems, VimpelCom , Yandex and Qiwi plummeted, though were already trading lower on worsening violence in Ukraine and the threat of further sanctions against Russia. The Direxion Daily Russia ETF tumbled more than 21%.

Across other markets, gold for February fell $12, or 0.8%, to $1,282.50 an ounce. London-traded copper hit a five-and-an-half year low in Asia, hit by a stronger dollar and continued concerns about Chinese demand for the commodity.

The 10-year Treasury yields rose 2 basis points to 1.8%.

State of Emergency declared in USA

An emergency has been declared in several US states as a storm bringing hurricane-force winds and 90cm (36ins) of snow is going to hit the North East. Non-emergency vehicles have been banned on New York City's 6,000 miles of roads after 23:00 local time.

Heavy snowfall is forecast from Philadelphia to Maine, falling up to four inches an hour in some areas. The storm is expected to be one of the worst storms in the New York City?s history, with meteorologists forecasting more than two feet of snow and blustery gusts of 65 mph.

Ultratech Cement NP fell on higher interest cost

UltraTech Cement?s net profit fell 1.5% Y-o-Y as against the expected growth of 4% to Rs 364 crore in Q3FY15 dented by higher tax & finance expenses, and lower other income. However, total income grew by an estimated 16% to Rs 5,601 crore during the quarter as sales volume registered double digit growth. Operating profit jumped 20% on yearly basis to Rs 957 crore and margin expanded 60 bps to 17.1% during the quarter despite higher operating expenses.

The management said demand growth in the long term is likely to be around 8%, driven by housing and infrastructure sectors. Meanwhile, the board approved signing of the definitive agreement with Jaiprakash Associates for the acquisition of Bela and Sidhi in Madhya Pradesh (having a capacity of 4.9 million tonne per annum together with 180 MW TPP). This acquisition will propel the UltraTech's cement capacity in 
India to 65 mtpa from 60 mtpa.

Maruti to report its Q3FY15 earnings

Revenue is expected to grow 14% Y-o-Y in Q3FY15 at Rs 12415 crore, driven by 12% rise in volumes, led by improving consumer sentiments, particularly with the return of first-time buyers. While PAT is likely to post 23% growth at Rs 835 crore along with an improvement in margins.

M&M to expand renewables biz; to invest Rs 4,500 crore

Indian conglomerate Mahindra Group plans to expand its renewable energy business and invest Rs 4,500 crore ($732.5 million) over the next three to four years, its head said, amid a government-led push to increase the use of clean energy.

The investment will mainly be financed by taking on Rs 3,300 crore in debt, with the rest funded through cash, Mahindra Group Chairman and Managing Director Anand Mahindra said.

The group also plans to commission 500 megawatts (mW) of solar power projects by the end of March 2016 from 180 MW it expects to complete by end-March this year, he added.

Prime Minister Narendra Modi has ramped up his target for solar energy by 33 times to 100,000 mW by 2022 as he bets on renewables to help meet rising power demand and overcome the frequent outages that plague Asia's third largest economy.

Barack Obama announces $4 billion government-backed investments & lending to India 

US President Barack Obama on Monday announced $4 billion in government-backed investments and lending to India, as he sought to scale up a trade relationship he said was "defined by so much untapped potential". 

At a CEO summit hosted by Prime Minister Narendra Modi in New Delhi, Obama said that US Export-Import Bank would finance $1 billion in exports of 'Made-in-America' products. 

The Overseas Private Investment Corporation will lend $1 billion to small- and medium-sized enterprises in underserved rural areas of India. Another $2 billion will be committed by the US Trade and Development Agency for renewable energy, Obama said in a speech. 

Obama said there were still too many barriers doing business in India as he hailed moves by PM Narendra Modi to cut the red tape. "There are still too many barriers, hoops to jump through," Obama said in an address to a group of US and Indian CEOs in New Delhi. 
Obama emphasised the importance of Indo-US relations, saying, "Even as this visit is rich with symbolism, it is also rich with substance. India and US can grow and prosper together." "US exports to India are substantial; Indian investments in US are growing as well. Our growing trade relations are also a win for India. Both Indian and US workers are benefitting from the ties," Obama said. 

Stating that there is a lot of 'untapped trade potential', Obama said, "PM Modi agrees that there is a lot of scope to improve the trade relations. We have to focus on making doing business easier in both our countries." 

"We can work together to develop technologies that will help India move forward. US is ready to help in broadband connectivity; build better roads. We need to make sure that economic growth in both India and US is inclusive," Obama added. 

UltraTech signs deal to acquire 2 more units of Jaiprakash Associates

UltraTech Cement has signed a definitive agreement to acquire the cement business of Jaiprakash Associates, a deal which will help consolidate its position as India's biggest cement maker.

Under the agreement, Ultra-Tech will issue non-convertible debentures worth Rs 4,538 crore to Jaiprakash Associates. The company will also take overRs 636.50 crore of debt.
In the F&O pack, Idea, Karnataka Bank, Maruti,Titan and Union bank are going to announce their quarterly result today.

Indian Markets

Last Week, Nifty surged 3.78% with the help of large cap stocks. Midcap and Small cap indices significantly underperformed, as they marginally gained 0.58% and 0.50% respectively. Nifty made a new all time high and closed above 8800 decisively. 

Upward sloping channel, comprising two trend lines on the weekly chart has been acting as a support and resistance for last 6 months. According the upper trend line of the channel, resistance for the Nifty is projected between 8950 and 9000. Earlier all time high of 8627, made in December 2014 is now expected to act as a support going forward. If the Nifty closes below 8627, it would indicate short-term trend reversal.

We advise holding longs in Nifty for the target between 8950 and 9000. Stop loss in long positions should be kept at 8627 on the closing basis.