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Share markets in India remained subdued in the afternoon session and finished flat ahead of UP state elections to be announced tomorrow. At the closing bell, the BSE Sensex stood higher by 17 points, while the NSE Nifty finished up by 8 points. Meanwhile, the S&P BSE Mid Cap finished flat and the S&P BSE Small Cap finished down by 0.1%. Gains were largely seen in IT stocks and capital goods' stocks.
Top gainers on the Sensex included Bharti Airtel, Infosys, ONGC, L&T and TCS.
Kotak Mahindra Bank share price finished in green (up 0.5%) after Reserve Bank of India (RBI) has notified that Foreign Institutional Investors (FIIs)/Foreign Portfolios Investors (FPIs) can now invest from 40% to 42% of the paid up capital of Kotak Mahindra Bank, under the Portfolio Investment Scheme.
As per the reports, Kotak Mahindra Bank has passed resolutions at its Board of Directors' level and a special resolution by general body agreeing for enhancing the limit from 40% to 42% of the paid up capital of the bank.
Asian stock markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 1.48% and the Hang Seng rose 0.29%. The Shanghai Composite lost 0.12%. European markets are higher today with shares in France leading the region. The CAC 40 is up 0.49% while Germany's DAX is up 0.48% and London's FTSE 100 is up 0.39%.
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The rupee was trading at Rs 66.68 against the US$ in the afternoon session. Oil prices were trading at US$ 49.47 at the time of writing.
According to a leading financial daily, ICRA in its latest report has said that higher oil and gold imports are likely to widen the current account deficit to US$30 billion or 1.2% of GDP in the fiscal 2017-18 from US$20 billion or 0.9% of GDP in 2017, arresting the trend of moderation recorded for four consecutive years since fiscal 2014.
According to the report, merchandise exports is likely to rise by 5-6% in 2017-18, partly led by higher value of commodity-intensive exports, global trends do not augur well for a significant improvement in the services trade surplus and remittances in FY18.
It further said that since 2014, a combination of lower crude prices and a dip in gold imports had helped the country to absorb the impact of a decline in exports, services trade surplus or remittances. Though, it said that in the next financial year this cushion would not be available.
In the wake of the oil cartel OPEC's decision to jack up crude prices by cutting production, the agency expects that the average crude oil price to go up to US$55 per barrel in next financial year from US$48 in 2017. It also said that import volumes will rise 7% on the back of the domestic demand.
It noted that with the expected rise in prices, the overall oil imports to increase 24% in fiscal 2018. As per the report, imports of fertilizers and fertilizer raw materials are likely to increase marginally to US$5.4 billion in fiscal 2018 from US$5.3 billion in 2017, while the cool-off in prices and decline in volumes will lead to a US$1 billion decline in coal imports to US$13.6 billion next fiscal.
Moving on to news from stocks in energy sector. Oil India Ltd share price finished the trading day on an optimistic note (up 2.8%) after the company signed a MoU with the University of Houston in a bid to augment its reserves base and maximize recovery from its ageing oilfields.
The major focus of the MoU is collaboration in the areas of improved oil recovery and enhanced oil recovery. The company plans to augment the production from matured fields, improvement in drilling and well intervention practices, seismic interpretation and reservoir characterization studies, and unconventional hydrocarbon studies.
It is believed that this collaboration will help Oil India to further consolidate and upgrade the various initiatives the company has undertaken to improve production and contribute significantly to the energy security of the country. This will also contribute towards national obligation as set by Prime Minister Modi to reduce import dependency of oil and gas by 10% by 2022.
Meanwhile, ONGC Petro Additions (OPaL) has begun exports to Singapore and intends to float a tender soon for exporting more products to other countries. The city-based OPal is a joint venture promoted by ONGC, GAIL and Gujarat State Petroleum Corporation.
The Rs 300 billion OPal plant here is the first one set up under the petroleum, chemicals and petrochemicals investment region (PCPIR) in the Dahej SEZ, under which it has to export 50% of production.
ONGC share price finished the day up by 0.9% on the BSE.
In another development, Manappuram Finance Ltd share price fell 4.5% & Muthoot Finance Ltd share price fell 3.9% after the Reserve Bank of India (RBI) said non-banking finance companies (NBFCs) cannot issue more than Rs 20,000 in cash against gold loans.
Kotak Mahindra Bank has been in a strong uptrend since 2009. The stock rallied from Rs 52 to hit a high of Rs 738 in April 2015. It traded sideways for months before finding resistance at 730 -740 levels. Finally, the stock overcame this resistance in May 2016 and rallied more than 13% to hit a high of Rs 835.
The stock then corrected for a month before rallying strongly to hit a new 52-week high of Rs 838.95 the day before yesterday. But it formed a shooting star candlestick pattern near its previous high, indicating a pause to the uptrend.
The RSI indicator is forming a negative divergence with the price, indicating a lack of strength in the near term.
It seems the stock is facing resistance from its previous high of Rs 730. If the stock is unable to sustain above this level, the bulls might have to take a back seat. On the flip side, the stock might gain strength if it sustains above 830-840 level.
To capture big trends like Kotak Mahindra Bank, Apurva Sheth, research analyst, has launched a new trading service, Peak Profit Alert. This service is built on a proprietary trading system called SCOREFASTTM, which Apurva intends to use to generate double and triple-digit returns in just a few weeks or months.
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