Stock Market Updates For March 20th, 2014…

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Corporate News/Results Corner

Govt allows five more banks to import gold in India – Easy availability will lead to reduction in premiums over the market rate; Marginally positive for jewellery industry – Titan, TBZ etc

The Reserve Bank has allowed 5 domestic private banks to import gold. The move could boost supplies and bring down premiums in the domestic market. The central bank has allowed imports by HDFC Bank , Axis Bank, Kotak Mahindra Bank, IndusInd Bank and YES Bank.The government had enforced an 80/20 rule in July, making it mandatory to export a fifth of all gold imports. Under that, only six banks and three state-run trading agencies that had facilitated export of gold or jewellery in 3 years were allowed to import.

The six banks were mostly state-run lenders. The move to allow more banks to import gold may raise shipments to 40 tonnes a month from more than 20 in February. India used to ship in 70 tonnes a month, the biggest import after oil that had pushed the current account deficit to a record in the year ended March 2013. We believe this development to be marginally positive for jewellery industry – Titan, TBZ etc.

Economic and Other News

RBI wants government to consider outsiders as PSU bank heads

The RBI has recommended that the government dissociate itself from the selection process involved in picking the heads of state-run banks. The central bank has also suggested that top executives of public sector banks (PSBs) be selected from a wider pool that includes private sector candidates, rather than be confined to those from the state-run lenders. It also recommended that such executives be paid salaries that are comparable with those in other industries.

Amid Ukraine muddle, global prices for wheat surge 3% to $290-300 a tonne

Russia’s standoff with the West over Ukraine and the threat of sanctions by the US seem to have come as a boon for Indian wheat traders. Global wheat prices rose by 3% to $290-300 a tonne in a week’s time. Indian traders feel that it is a good opportunity to cash in on and want the government to allow more wheat exports from the government stock. However, the pace of exports from the government granaries has been very slow. From August 2013, wheat exports have been only 1.1 million tonne so far out of the targeted 2 million tonne till June 30.

World News

Fed Tapers, Drops Unemployment Target

The Federal Reserve trimmed another $10bn from its monthly asset-purchase program, lowering the monthly bond buys to $55bn. The central bank also altered its forward guidance on interest rates, saying key borrowing costs would be 1.00% by the end of 2015 and 2.25% a year later. The decision followed the first meeting led by new Fed Chairman Janet Yellen. The vote in favor of this policy action was 8-1. Officials see the unemployment rate dropping to a 6.1-6.3% range by the end of 2014 and 5.6-5.9% range by the end of 2015, dropped from earlier target of 6.5% in favor of a broader range of indicators.

Chancellor Osborne Raises U.K. Growth Forecasts

The U.K. economy is set to grow faster-than-expected in the next two years, latest forecasts announced by Chancellor George Osborne. Citing projections from the Office for Budget Responsibility, Osborne said in his annual budget speech that the economy is set to expand 2.7% this year, which is much greater than the December prediction of 2.4%. “That’s the biggest upward revision to growth between Budgets for at least 30 years,” Osborne noted. The better outlook gives a boost to the government as the country heads for elections next year.

Market Trend

NIFTY – CMP 6524

Synopsis

• Nifty opened with a negative bias, c0uld not cross 6550 & retested6500 & finally closed 0.2% positive for the day.
• Post opening, Going forward, Till Nifty holds 6460, it can moveupto 6550-6555 zone where it will face high resistance.
• If Nifty breaks 6460 support zone, then 6430-6410 would beretested.
• Daily as well as Weekly Momentum is in positive indicating buyingsupport on all dips.

Bank Nifty – CMP – 12186

Synopsis

• Bank opened with a negative bias, could not cross 12250 &retested 12130 & finally closed 0.3% positive for the day..
• Post Opening, Going forward, till it holds 11,990, it can moveupto 12,350 zone where it will face high resistance.
• If breaks & sustains below 11,990, would fall upto 11600-11650.
• Daily as well as Weekly Momentum is in positive indicatingbuying support on all dips.

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