HDFC Morning Market Note - Market Outlook and technical analysis for the day - read about updates on Indian markets as well as world markets, currencies, commodities, key events, economy and corporate news, as well as stock ideas.

1. Morning Note
Retail Research
Key Indices Oct 20 % Chg
Sensex 26430 +1.23
Nifty 7879 +1.28
BSE 500 10045 +1.27
DJIA* 16399 +0.12
Nasdaq* 4,316 +1.35
MSCI Emerging Markets* 981 +0.48
MSCI AC Pacific* 133 +2.24
MSCI World* 1,626 +0.77
*= in USD
Sectoral Indices Oct 20 % Chg
Major Gainers
BSE PSU 8064 +2.64
BSE AUTO 17388 +2.17
Major Losers
BSE IT 10047 -0.83
BSE Teck 5643 -0.26
Top Gainers
(BSE-100) CMP (Rs) % Chg
United Spirits 2553.20 +7.45
Hind Petro 526.95 +7.28
Ultracemco 2450.55 +5.50
Top Losers
(BSE-100) CMP (Rs) % Chg
Jindal Steel 135.40 -8.58
Exide Inds 158.80 -3.61
LIC Housing Fin 323.40 -2.87
52 Week High Price (Rs)
Can Fin Home 499.00
Emami 759.20
52 Week Low Price (Rs)
C Mahendra 12.50
ANGL 227.00
Turnover (Rs bn) NSE BSE
Oct 20 158.18 34.07
5 days average 158.73 30.78
Advance-Decline NSE BSE
Oct 20 1.72:1 1.35:1
5 days average 0.87:1 0.85:1
Volatility Index (ViX) Nifty CBOE
Oct 20 14.19 18.57
5 days average 15.40 23.24
Net Flows (Cr) Debt FII FII MF
Oct 17 871.3 -1396.5 697.7
Cumulative for
Oct 10302.9 -4995.5 3746.6
5 days average 953.1 -873.0 429.3
Interest Rates 3 month Chg bps
MIBOR 8.88 +0.00
10 yr bond yield - -
LIBOR – UK 0.56 +0.00
LIBOR – USA 0.23 +0.00
LIBOR – Europe 0.06 +0.00
Exchange Rates Value % Chg
USD/INR 61.29 -0.53
USD/EURO 0.78 -0.31
USD/YEN 106.95 +0.04
USD/POUND 0.62 -0.45
Other# Value % Chg
RJ/CRB Index 271.13 -0.55
Gold ($ / Oz) 1,244.70 +0.46
Crude Oil ($ / Barrel) 82.71 -0.05
Brent Oil ($ / Barrel) 85.40 +1.02
1
Market Round Up Oct 21, 2014
Indian Markets
 The 30-share Sensex gained 321 points to end at 26,430 and the 50-share
Nifty surged 100 points to end at 7,879. In the broader market, the BSE Mid-cap
and Small-cap indices were up 0.6-1% each.
 Market breadth was strong with 1,610 gainers and 1,097 losers on the BSE.
NSE cash turnover was at Rs. 15810.
 BSE Auto index was the top sectoral gainer up 2.2% followed by Capital
Goods, Oil and Gas, Bankex, Metal and Power among others. IT index was
the sole loser down 0.8%. Financial shares gained on expectations of more
reforms to push the economy on the growth track. Among the financials,
HDFC, HDFC Bank, SBI, ICICI Bank gained 1-2% each.
 As per provisional figures on Monday, FIIs were net buyers of Rs 1040 cr in
the cash market and net buyers of Rs. 1846 cr in the F&O markets. DIIs
were net sellers of Rs 166 cr in the cash market.
US & European Markets
 U.S. stocks ended higher on Monday on investor hopes for a strong
earnings season, but IBM's disappointing results limited gains. The Dow
Jones rose 19.26 points, or 0.12%, to 16,399.67, the S&P 500 gained 17.25
points, or 0.91%, to 1,904 and the Nasdaq Composite added 57.64 points,
or 1.35%, to 4,316.07.
 European stocks ended lower. FTSE 100 in London & CAC 40 in France fell
by 0.7% & 1% respectively, while DAX 30 in Germany ended lower by 1.5%.
 Most of the ADRs ended positive. Banking stocks, HDFC Bank was up 1.7%
while ICICI Bank was up 1.6%. Infosys was up 0.3% while Wipro was down
0.3%. Tata Motors was up 4.5% while Dr Reddy’s was flat.
Latin American Markets
 Among the Latin American markets, Shares in Mexico was down 0.1% while
Brazil Bovespa was down 2.6%.
Asian Markets
 Asian markets are lower today as Chinese and Hong Kong shares fall. The
Shanghai Composite is off 0.16% while the Hang Seng is down 0.35%. The
Nikkei 225 is not trading.
 As of IST 8.30 am SGX Nifty is trading higher by 9.5 points.
Currencies
 The Indian rupee strengthened against the dollar on Monday, tracking the
gains in local equities and Asian currency markets. The home currency
ended at 61.36 per dollar, up 0.13% from its previous close of 61.44 per
dollar.
 The Euro (EUR) advanced against the US Dollar (USD) but was under
pressure against the Pound (GBP) on Monday as the markets settled down
following last week’s panic.
Commodities
 Oil for Nov 2014 contract fell by 0.1% at $82.7/barrel.
 Gold for Dec 2014 delivery ended higher by 0.5% at $1244.7/troy ounce.
Key Events for Today
 China – GDP, Industrial Production, Retail Sales
 US – Chain Store Sales, Existing Home Sales
 Japan – All Industries Activity index
Outlook
Indian markets could open flat/positive and be range-bound with a positive bias.
Banks, Capital Goods, Power could relatively outperform. Immediate support for Nifty
is at 7820 level, while immediate resistance is at 8030 level.
For fresh and / or open calls refer to page 4

2. Technical Analysis – Market Pulse Oct 21, 2014
 After showing smart recovery from the lower levels of 7725 on Friday, Nifty continued its relief rally yesterday and
witnessed smart gains of around 100 points.
 Nifty opened yesterday with an upside gap of around 116 points and later shifted into sideways consolidation for better
part of the session. It slipped into intraday correction within an opening upside gap area of around 7820-7896 levels and
recovered during afternoon session. Hence the opening upside gap has been filled partially.
 The formation of opening upside gap (green minor parallel horizontal lines) after a decent decline/from near the
support could be considered as a bullish breakaway gap (bullish breakaway gaps normally formed inline with bottom
reversal patterns) and this gap should not get filled completely with in 3-4 day’s of its formation to continue with positive
bias.
 The immediate resistance of down sloping minor trend line (brown line, which is connected from the swing high of 8160
levels-23rd Sept) has been broken on the upside, which is indicating that bulls are gradually gaining strength.
 Daily momentum oscillator like 34 period stochastic oscillators has turned up from near the oversold region of 10 levels
by showing positive crossover signal (previously, such turnarounds of stochastic from the oversold regions have resulted
in a decent bottom reversal patterns in Nifty).
 Nifty continuing its upmove yesterday, after the lower levels recovery from 7725 of Friday is indicating an emergence of
buying interest from the support area of 7725-7700 levels. This could be confirmed only when Nifty holds around the
immediate support of 7820 levels without showing any further declines.
 If Nifty manages to sustain around these supports for the next 2-3 sessions, then there is a possibility of Nifty reaching
the upside region of around 8030/8160 levels for near term.
Retail Research
2

3. Retail Research
For forthcoming Board Meeting on Oct 21, 2014
click on the following link
http://www.bseindia.com/mktlive/board_meeting.asp#1
3
News Flash Oct 21, 2014
Economy News
 The Finance Ministry has written to the RBI to consider reemploying some
restrictions on gold imports after inbound shipments surged in the last few months,
widening the trade deficit.
 India will float a company to develop Iran's Chabahar Port, a government statement
said as New Delhi aims to take advantage of a thaw in Tehran's relations with world
powers.
Corporate News
 United Spirits reported a standalone net loss of Rs 55.58 crore for the three
months ended June 30. The company had posted a net profit of Rs 118.13 crore
during the same period of previous fiscal.
 Kalyani Steels reported nearly doubling of its net profitin the July-September
quarter to Rs 22.77 crore. The company had reported a net profit of Rs 11.83 crore
in the corresponding quarter last fiscal
 Oberoi Realty Ltd reported 10 per cent increase in consolidated net profit at Rs
70.54 crore for the second quarter ended September, 2014-15, on lower expenses.
 Alembic Pharmaceuticals reported 25.35% rise in consolidated net profit after tax
and share of profit of associates to Rs 77.27 crore for the second quarter ended
September 30, 2014-15 mainly on account of robust sales..
 Hero MotoCorp plans to invest over Rs 5,000 crore across the globe, including
manufacturing plants at Colombia and Bangladesh and new facilities at Gujarat and
Andhra Pradesh..
 Exide Industries has posted 6.01% rise in its net profit to Rs 125.76 crore in the
second quarter ended September 30, 2014 as compared to the same quarter
previous fiscal.
Bulk Deals
Scrip Name Quantity (in lakhs) Fund Name Price
HATHWAY +15.80 CLSA GLOBAL MARKETS PTE LTD 302.5
REPCOHOME -3.25 CREADOR I LLC 470.05
Key Corporate Action
SCRIP NAME BC/RD BC/RD FROM EX-DATE PURPOSE
HCL Tech RD 23/10/2014 21/10/2014 300% Interim Dividend
Essar India RD 22/10/2014 21/10/2014 03:02 Bonus issue
Fedders Llyo BC 27/10/2014 21/10/2014 AGM 10% Dividend
Midinfra RD 23/10/2014 21/10/2014 Stock Split from Rs. 10 to Rs.1

4. Stock Ideas Oct 21, 2014
Retail Research
4
Update of Index Futures
Date B/S Positional Call Entry at Sloss Targets
Exit
Price /
CMP Exit Date
%
G/L Comments
Time
Horizon
Avg.
Entry
Abs.
Gain/Loss
16-Oct-14 B Nifty Future 7813.15 7769 7897 7769 16-Oct-14 -0.6 Stop loss Triggered 2-3 days 7813.15 -44.1
Update of Stock and Nifty Options Calls:
Date B/S Positional Call Entry at Sloss Targets
Exit
Price /
CMP Exit Date % G/L Comments
Time
Horizon
Avg.
Entry
Abs.
Gain/Loss
17-Oct-14 B Zeel 310 Put 4 1.85 12 1.85 20-Oct-14 -53.8 Stop Loss Triggered 2-3 days 4 -2.2
17-Oct-14 B Maruti 2800 Put 20.3 13.7 45 26 17-Oct-14 28.1 Premature Profit Booked 2-3 days 20.3 5.7
17-Oct-14 B ONGC Oct 400 Puts 13.2 8.8 24 8.8 17-Oct-14 -33.3 Stopped Out/Exit 1-5 days 13.2 -4.4
16-Oct-14 B HPCL 520 Call 14.15 9 25 19 16-Oct-14 34.3 Premature Profit Booked 2-3 days 14.15 4.9
16-Oct-14 B M & M 1300 Call 13.55 8.9 25 8.9 16-Oct-14 -34.3 Stoploss Trig. 2-3 days 13.55 -4.7
16-Oct-14 B Hindalco 150 Call 3.85 1.85 6.5 1.85 -51.9 Stop Loss Triggered 2-3 days 3.85 -2.0
14 Oct 14 B Bank Baroda 900 Call 17.90 11.5 30.0 14.6 17-Oct-14 -18.4 Premature Exit 1-5 Days 17.90 -3.3
14 Oct 14 B Hindalco Oct 150 Calls 8.70 6.1 15.0 7.0 14-Oct-14 -20.1 Exit Called 1-5 days 8.70 -1.8
13-Oct-14 B Axis Bank 400 Call Oct 5.80 3.5 12.0 8.10 14-Oct-14 39.7 Premature Profit Booked 3-5 Days 5.80 2.3
13-Oct-14 B PNB OCT 900 Calls 32.50 22.8 52.0 38.00 13-Oct-14 16.9 Premature Profit Booked 1-5 days 32.50 5.5
10 Oct 14 B Sun Pharma Oct 830 Call 23.50 14.0 45.0 14.0 13-Oct-14 -40.4 Stoploss Trig. 1-5 Days 23.50 -9.5
Update of Momentum / Intra Day/Futures Calls:
Date B/S Positional Call Entry at Sloss Targets
Exit
Price /
CMP Exit Date
%
G/L Comments
Time
Horizon
Avg.
Entry
Abs.
Gain/Loss
20-Oct-14 B TVS Motors 235.8 227.0 255.0 242.6 20-Oct-14 2.9 Premature Profit Booked 3-5 Days 235.80 6.8
20-Oct-14 B PNB 946.15 910.0 1050.0 970.0 2.5 hold 1-5 days 946.15 23.9
20-Oct-14 B Auro Pharma 931.7 899.5 995.0 937.0 0.6 Hold 3-5 Days 931.70 5.3
17-Oct-14 S SAIL 75.75 77.0 71.0 77.0 20-Oct-14 -1.6 Stoploss Trig. 3-7 Days 75.75 -1.3
17-Oct-14 S Century Textile Oct Fut 508.45 530.0 465.0 523.4 -2.9 Hold 3-5 Days 508.45 -15.0
17-Oct-14 B ABG Shipyard 223.65 215.0 239.0 222.8 -0.4 Hold 3-5 Days 223.65 -0.8
16-Oct-14 B Wondrela 314.70 305.00 340.00 322.9 16-Oct-14 2.6 Premature Profit Booked 2-3 days 314.70 8.2
16-Oct-14 B Thomas Cook 150.8 145.0 165.0 147.6 16-Oct-14 -2.1 Exit Called 2-7 days 150.80 -3.2
16-Oct-14 B Pidilite Ind 387.95 375.0 415.0 391.9 16-Oct-14 1.0 Premature Profit Booked 3-5 Days 387.95 3.9
16-Oct-14 S Bharat Forge Oct Fut 768.65 801.0 703.0 738.8 16-Oct-14 4.0 Premature Profit Booked 3-5 Days 768.65 29.9
14-Oct-14 B McDowell 2455.00 2350.0 2660.0 2350.0 17-Oct-14 -4.3 Stoploss Trig. 3-5 Days 2455.00 -105.0
14-Oct-14 B Raymond 467.00 450.0 490.0 468.0 17-Oct-14 0.2 Hold 3 - 7 Days 467.00 1.0
14-Oct-14 B Monsanto 3045.00 2925.0 3400.0 2925.0 16-Oct-14 -3.9 Stop loss Triggered 2-7 days 3045.00 -120.0
14-Oct-14 B Engineers India 239.30 232.0 255.0 233.8 16-Oct-14 -2.3 Exit Called 1-5 days 239.30 -5.6
14-Oct-14 B B F Utilities 670.00 643.0 720.0 720.0 14-Oct-14 7.5 Target Achieved 3-5 Days 670.00 50.0
14-Oct-14 B ABG Shipyard 226.40 217.0 245.0 240.7 14-Oct-14 6.3 Premature Profit Booked 3-5 Days 226.40 14.3
14-Oct-14 B CEAT 783.5,763 749.0 830.0 808.0 14-Oct-14 3.1 Premature Profit Booked 3 - 7 Days 783.50 24.5
13-Oct-14 B Indus Ind Bank 632.00 615.0 670.0 644.0 14-Oct-14 1.9 Premature Profit Booked 1-5 days 632.00 12.0
10-Oct-14 B VIP Industries 122.85 117.5 135.0 120.9 16-Oct-14 -1.6 Premature Exit 3-5 Days 122.85 -2.0
10-Oct-14 B Balaji Tele 78, 80.5 76.5 87.0 76.5 14-Oct-14 -3.5 Stop loss Triggered 2-3 days 79.25 -2.8
10-Oct-14 B Bajaj Electricals 282.70 269.0 307.0 287.4 13-Oct-14 1.7 Premature Profit Booked 3-5 Days 282.70 4.7
10-Oct-14 S Bharti Airtel Fut 392.85 410.0 358.0 383.1 13-Oct-14 2.6 Premature Profit Booked 1-5 days 392.85 9.8
9-Oct-14 B Aptech 82.45 79.9 88.0 79.9 16-Oct-14 -3.1 Stop loss Triggered 2-3 days 82.45 -2.6
9-Oct-14 B SBBJ 563.00 542.0 600.0 542.0 16-Oct-14 -3.7 Stop loss Triggered 3 - 7 Days 563.00 -21.0
9-Oct-14 B JB Che Pharma 230.75 220.0 250.0 233.2 14-Oct-14 1.1 Premature Profit Booked 1-5 days 230.75 2.4
9-Oct-14 B India Glycol 123, 127.3 121.0 138.5 121.0 13-Oct-14 -3.3 Stop loss Triggered 2-3 days 125.15 -4.2
7-Oct-14 B Sundram Fastner 158, 166.25 156.0 179.0 173.0 15-Oct-14 4.1 Exit 2-3 days 166.25 6.8
Update of Positional Calls:
Date B/S Positional Call Entry at Sloss Targets
Exit
Price /
CMP Exit Date
%
G/L Comments
Time
Horizon
Avg.
Entry
Abs.
Gain/Loss
20-Oct-14 B SKS Micro Finance 288, 297.65 282.0 320.0 313.7 20-Oct-14 5.4 Premature Profit Booked 5-7 days 297.65 16.0
17-Oct-14 S Allahabad Bank Fut. 101.00 105.0 93.0 105.0 20-Oct-14 -3.8 Stop loss Triggered 2 Weeks 101.00 -4.0
14-Oct-14 B BHEL 223.80 213.5 244.0 222.0 17-Oct-14 -0.8 Premature Exit 5-7 Days 223.80 -1.8
13-Oct-14 S Ambuja Cements Oct Fut 208.10 216.5 192.0 213.0 20-Oct-14 -2.3 Premature Exit 5-7 Days 208.10 -4.8
13-Oct-14 B NDTV 131, 135 127.5 155.0 127.5 14-Oct-14 -5.6 Stop loss Triggered 5-7 days 135.00 -7.5
7-Oct-14 S SR Trans Fin Fut. 887.00 940.0 790.0 887.0 14-Oct-14 0.0 Premature Exit 3-14 days 887.00 0.0
7-Oct-14 S LIC Housing Fin. Oct Fut 314.50 329.0 286.0 313.6 13-Oct-14 0.3 Premature Exit 5-7 Days 314.50 0.9
32,080.
30-Sep-14 B MRF 32,080.00 30500.0 36000.0 31194.6 14-Oct-14 -2.8 Premature Exit 5-10 days
00 -885.5
25-Sep-14 S ONGC Oct Fut. 402 - 410 420.0 360.0 420.0 20-Oct-14 -3.3 Stop loss Triggered 2 Weeks 406.00 -14.0

5. Retail Research
5
HDFC securities Limited, I Think Techno Campus, Building –B, ”Alpha”, Office Floor 8, Near Kanjurmarg Station,
Opp. Crompton Greaves, Kanjurmarg (East), Mumbai 400 042 Fax: (022) 30753435
Disclaimer: This document has been prepared by HDFC securities Limited and is meant for sole use by the recipient and not for circulation. This
document is not to be reported or copied or made available to others. It should not be considered to be taken as an offer to sell or a solicitation to
buy any security. The information contained herein is from sources believed reliable. We do not represent that it is accurate or complete and it
should not be relied upon as such. We may have from time to time positions or options on, and buy and sell securities referred to herein. We may
from time to time solicit from, or perform investment banking, or other services for, any company mentioned in this document. This report is
intended for Retail Clients only and not for any other category of clients, including, but not limited to, Institutional Clients