Top trading ideas by Prabhudas Lilladher: Buy Axis Bank, Bajaj Finance

Nifty outlook and few trading ideas by Vaishali Parekh, research analyst - technical research at Prabhudas Lilladher:

NIFTY VIEW
Nifty continues to slide but as of now has taken support at 34WMA with RSI now at 54 levels implying further corrective move. The support for the day is seen at 37,920/11,450 while resistance is seen at 38,380/11,580. Bank Nifty would have a range of 27,180-27,670. Most of the frontline stocks from FMCG, Metals etc, except for Tech stocks witnessed corrective move. RIL too has held the market along with Axis Bank. Pharma sector needs to stabilize for the next round of momentum. Overall we maintain a cautious view.

BUY AXIS BANK
CMP: Rs 641.80
TARGET: Rs 690
STOP LOSS: Rs 610
The stock has indicated almost a higher bottom formation pattern in the daily chart taking support at around 620 levels and looks promising for an upside move in the coming days. The stock has indicated a positive candle to signify strength and has potential to carry on the momentum still further upside. With good volume participation witnessed, we recommend a buy in this stock for an upside target of 690 keeping a stop loss of 610.

BUY BAJAJ FINANCE
CMP: Rs 2,746.30
TARGET: Rs 3,000
STOP LOSS: Rs 2,620
The stock has given a decent correction from the peak of 2995 levels to show signs of bottoming out at around 2680 levels and has given a good revival to signify strength and can carry on the momentum with positive bias in the coming days. The chart looks attractive and with good volume activity witnessed, we recommend a buy in this stock for an upside target of 3000 keeping a stop loss of 2620.

Today's picks: From Axis Bank to Nifty, hot stocks to watch on Wednesday

Nifty
Current: 11,356 (fut: 11,375) Target: NA
Stop-long positions at 11,290. Stop-short positions at 11,450. Big moves could go till 11,500, 11,250. A long 11,200p (83), short 11,200p (60) would double if the index drops below 11,250.

Bank Nifty
Current: 27,764 (futures: 27,810)
Target: NA
Stop-long positions at 27,650. Stop-short positions at 27,975. Big moves could go till 28,200, 27,400. Be prepared for excess volatility.

Axis Bank
Current price: Rs 550
Target price: Rs 540
Keep a stop at Rs 556 and go short. Add to the position between Rs 542 and Rs 544.
Book profits at Rs 540.

Tech Mahindra
Current price: Rs 681
Target price: Rs 692
Keep a stop at Rs 675 and go long. Add to the position between Rs 688 and Rs 690.
Book profits at Rs 692.

Short-term outlook for the market remains positive: Devang Shah

NIFTY
CLOSE- 10605.15 (25.05.2018)
The market closed the week in positive territory after high volatility during the week. It made a low of 10,430.35 levels on nifty & 34,302.89 levels on sensex during week. It looks like possibility of end of wave-II correction as mentioned last week.

Stock Picks:
DHFL- BUY
CLOSE – Rs 616.05
TARGET – Rs 645/680
DHFL closed weekly in positive territory. It looks like end of short term consolidation. It’s outperforming in short term. It’s trading above 40 DMA. Its weekly momentum indicators are in BUY. One can BUY with stop loss of 590 for the target of 645/680 levels in short term.

AXIS BANK- BUY
CLOSE – Rs 538.45
TARGET – Rs 560/580
AXIS BANK closed weekly in positive territory.Its trading above 20DMA. Its weekly momentum indicators care BUY. Risk reward is favorable to BUY at current levels. One can BUY with a stop loss of Rs 514 for the target of Rs 560/580 levels in short-term.

Axis Bank hits 52-week high on fund raising plans

Axis Bank hit a 52-week high of Rs 550, up 4% on the BSE in early morning trade, after the private sector lender said the board will meet on Friday, 10th November 2017 to consider fund raising plans.

“A meeting of the board of directors of Axis Bank will be held on Friday, 10th November 2017 at Mumbai, to inter-alia, consider raising of funds by issue of equity / equity linked securities through permissible mode at an appropriate time,” Axis Bank said in an exchange filing.

Last week, the media report suggested that the private equity (PE) firm Bain Capital is eyeing stake in Axis Bank.

“The bank in the ordinary course of its business continues to explore various means of raising capital/funds through issuance of the securities (equities and debt) to diverse set of investors, in order to meet its business/regulatory requirements,” Axis Bank said in a clarification of news report.

Post media report, in past seven trading sessions, the stock outperformed the market by gaining 14% against 0.54% rise in the S&P BSE Sensex.

At 09:53 AM; the stock was up 2.5% at Rs 540 on the BSE, as compared to 0.16% rise in the benchmark index. A combined 3.83 million shares changed hands on the counter on the BSE and NSE so far.

READ MORE

Axis Bank tanks 7% as asset quality worsens in Q2

Axis Bank dipped 7% to Rs 475 on the BSE in early morning trade after the bank’s asset quality worsen in July-September 2017 quarter (Q2FY18).

The bank’s gross non-performing assets (NPAs) and net NPAs stood at 5.9% and 3.12% in Q2FY18 against 5.03% and 2.30% in Q1FY18, respectively. In the year-ago quarter, gross NPAs were at 4.17% and net NPA were at 2.02% of the loan book.

Asset quality numbers worsened significantly on the Reserve Bank of India’s (RBI’s) assessment of its previous financial year numbers. According to rules, if the RBI’s assessment of bad debt numbers for a financial year differs from the bank’s assessment by more than 15%, the divergence should be disclosed.

However, the bank reported 36% year-on-year growth in its second-quarter net profit, aided by low provisioning. Profit for the quarter stood at Rs 432 crore, against Rs 319 crore in the year-ago quarter. Gross slippages or good assets turning bad, in the quarter rose significantly to Rs 8,936 crore, of which Rs 8,110 crore was in the corporate sector. Total slippages in the June quarter were at Rs 3,519 crore.

“High slippages in the quarter were driven by divergence assessment. Slippages largely from the low rated pool of stressed accounts. The sizeable reduction in stressed pool improves our confidence in the trajectory of the Bank’s credit costs,” Axis Bank said in a statement.

Axis Bank, Lakshmi Vilas Bank, Federal Bank fall post June quarter results

STOCK MARKET - Shares of Axis Bank, Lakshmi Vilas Bank and Federal Bank were down by up to 6% on BSE in otherwise firm market after the banks reported poor financial results for the quarter ended June 2017 (Q1FY18).

Federal Bank dipped 6% to Rs 112 on BSE in intra-day trade after the bank reported a lower than expected 26% year on year (Y-o-Y) growth in net profit at Rs 210 crore in Q1FY18 against Rs 167 crore in year ago quarter.

Net interest income during the quarter under review grew 16% to Rs 801 crore from Rs 692 crore in the corresponding quarter of previous fiscal. Net interest margin contracted 15 bps to 3.13% from 3.28% in Q1FY17.

Analysts on an average had expected profit of Rs 255 crore on net income of Rs 927 crore for the quarter.

Lakshmi Villas Bank too lost 6% to Rs 183 after the lender reported 8.9% Y-o-Y rise in its net profit at Rs 66.12 crore in Q1FY18. It had recorded Rs 60.68 crore during corresponding quarter of previous year.

Assets quality deteriorated with gross non-performing assets, as a percentage of net advances by June 30, 2017, rose to 3.78% during the quarter under review, compared to 2.14% in the same period last year. Net NPAs stood at 2.84% as on June 30, 2017 from 1.30% at the end of June 2016.

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Govt asks SBI to reconsider minimum balance penalty

BREAKING NEWS - The government on Monday asked State Bank of India (SBI) to reconsider its decision to levy penalty on non-maintenance of minimum balance, which the bank plans to hike manifold from April 1 impacting over 310 million savings bank account holders.

SBI, according to a source, has also been asked to reconsider charges it proposes to levy on cash transactions and ATM withdrawals over specified limits.

The country’s largest lender has announced imposing penalty ranging from Rs 20-100 on non-maintenance of minimum average balance (MAB) in savings bank accounts from April 1.

The penalty is as high as Rs 500 in case of current accounts.

The penalty for breach of MAB is being reintroduced after a gap of five years.

The bank has also increased the minimum balance requirement by many times, which is as high as Rs 5,000 for account maintained with branches in six metro cities.

SBI has also imposed restrictions on withdrawals of cash from its branches as well as ATMs. These will attract charges after certain specified limits.(READ MORE)

Cash withdrawal fee: 78 per cent disagree with banks' move

BREAKING NEWS - Banks, including HDFC Bank, ICICI Bank and Axis Bank, from March 1 started imposing a minimum charge of Rs 150 per transaction for cash deposits and withdrawals beyond four free transactions in a month. The new charges would apply to savings as well as salary accounts. The bank would also cap the third party cash transactions at Rs 25,000 per day, while cash handling charges would be withdrawn.

You can read about then details of this move here:  Banks to levy Rs 150 after 4 cash transactions

Business Standard did a quick poll on Twitter yesterday and the results show how unpopular this move is

We asked: Are banks justified in charging customers for cash transactions in their own accounts?

Out of 575 responses, 78 per cent replied in the negative while 22 per cent supported the banks' move

But why did banks make this move? What prompted this decision? We tried to decode this decision for you.

While these charges have become a reality, you can still transact up to Rs 2 lakh a month at your home branch for free.

So, will banks stick to their decision or will they respond to the negative public reaction to this move? We will keep you informed whatever happens.(READ MORE)

Read: You can still transact up to Rs 2 lakh a month at your home branch for free

Pay Rs 150 after 4 cash transactions in a month at HDFC Bank, ICICI, Axis

Breaking News - Banks including HDFC Bank, ICICI Bank and Axis Bank today began charging a minimum amount of Rs 150 per transaction for cash deposits and withdrawals beyond four free transactions in a month.

The charges would apply to savings as well as salary accounts effective from today, leading private sector player HDFC Bank said in a circular.

The bank would also cap the third party cash transactions at Rs 25,000 per day, while cash handling charges would be withdrawn effective today, the circular added.

The move was seen in some quarters as aimed at discouraging cash transactions and furthering the digital payment drive.

For the basic no-frills accounts, maximum four cash withdrawals would continue to remain free and there would be no fees for cash deposits.(READ MORE)

Midnight truce: Petrol pumps to accept debit and credit cards till Jan 13

Latest Business News - Petrol-pump owners on Sunday night deferred till January 13 their decision to not accept credit- and debit-card payments for fuel sales, after banks put off the move to levy a charge on every plastic transaction. 

The roll-back was announced within hours of petrol pump associations saying they would not accept card payments from Monday. The decision covers a majority of the 56,000 outlets in the country. The four banks that had said they would levy a charge on card usage at fuel pumps are HDFC Bank, Axis Bank, ICICI Bank and Punjab National Bank.

A D Sathyanarayan, president of the Consortium of India Petroleum Dealers, had earlier told this newspaper: “We have been informed by these four banks that we will be charged one per cent on all credit card transactions and between 0.25 per cent and one per cent on all debit card transactions from January 9. Reports suggest even State Bank of India is planning to charge the same. We feel banks are using this as an excuse to improve their bottom line through transactions at fuel stations. Hence, we have decided not to accept any card transactions from Monday.”

The association claims to have about 25,000 motor fuel outlets as members. Later, the All India Petroleum Dealers’ Association stated the same. Its members’ margins, it said, were fixed on a per kilolitre (kl) basis and there was no scope to absorb the new charges. Dealers say a one per cent charge would mean 30 per cent of the gross dealer margin on petrol and 40 per cent on diesel. “Our margins will be wiped out if we accept this. We have specific mechanisms to compute the margin and these do not have any scope for credit card merchant discount rates,” Sathyanarayan added.(Read More)