Economic Events - Watch Out for Key Economic Events of February 2020

Daily change & technical levels Scrip Close Change (%) R2 R1 Pivot S1 S2 GOLD 40242 -0.85 40787 40515 40335 40063 39883 SILVER 45474 -3.26 47500 46487 45957 44944 44414 CRUDE 3808 0.66 3893 3850 3807 3764 3721 NG 137.40 0.44 140.60 139.00 136.40 134.80 132.20 ALUMINI 140.15 0.00 142.30 141.20 140.30 139.20 138.30 COPPER 432.85 1.14 442.50 437.70 432.10 427.20 421.60 LEADMINI 148.70 -0.07 151.20 150.00 148.90 147.70 146.60 NICKEL 931.90 -0.58 966.90 949.40 939.00 921.50 911.10 ZINCMINI 178.75 1.19 182.15 180.45 178.00 176.30 173.85 DIAMOND 3562.10 -0.32 3575.60 3568.80 3564.20 3557.50 3552.90 STEELLONG 32290 -0.34 32610 32450 32240 32080 31870   Comex division Bullions Last close Change (%) Gold $1569.80 -0.48 Silver $17.46 -3.32   Base metal inventory Scrip Inventory Change Alumni 1248025 -12125 Copper 187250 -2825 Lead 66200 +0 Nickel 192468 -294 Zinc 50350 -75   BULLION Gold and silver prices dip; US equity markets rebound after strong consumer confidence data. Trend volatile. Review On Tuesday, gold and silver prices settled on a weaker note in international markets. Gold February futures settled at $1,569.80 per troy ounce, down by 0.48%, while silver March futures settled at $17.46 per troy ounce, down by 3.32%. Domestic markets also settled on a weaker note. Gold settled at Rs40,242 per 10 grams with a loss of 0.85%, and silver settled at Rs45,474 per kilogram with a loss of 3.26%. Gold prices corrected from a three-week high on Tuesday, and silver was badly hammered after strong US Richmond Manufacturing Index and consumer confidence data. US equity markets rebounded and the dollar index also gained after strong consumer confidence data. Ahead of the Fed meeting, we expect prices of both precious metals to remain volatile and test their next support levels. Gold has support at $1,562–1,555 and resistance at $1,574–1,584. Silver has support at $17.30–17.20, while resistance is at $17.55–17.70. ENERGY Crude oil prices rebound due to short covering and lower inventory expectations. Trend volatile. Review On Tuesday, crude oil settled on a slightly positive note in the international markets as WTI crude settled at $53.48 per barrel, while Brent settled at $59.55 per barrel. Domestic markets also settled on a positive note at Rs3,808 per barrel with a gain of 0.66%. Crude oil rebounded on Tuesday from its crucial support level of $52 per barrel in international markets. Prices rebounded due to short covering and expectations of lower US weekly inventory data. Stockpiles of US crude fell sharply last week, industry group the American Petroleum Institute (API) said Tuesday. Oil inventories posted a drop of 4.3 million barrels for the week ended January 24, API said, as compared to the build of 1.6 million barrels reported last week. The US EIA will release weekly inventory data today. Crude oil prices also got support from strong US Richmond Manufacturing Index and consumer confidence data released on Tuesday. We expect crude oil prices to remain volatile and hold the key support of $52 per barrel. Crude oil has support at $52.80–52.40 and resistance at $54.00–54.60. BASE METALS Base metals show volatility ahead of US Federal Reserve meeting. Trend volatile Review On Tuesday, base metals settled on a mixed note in international markets. 3M LME copper settled at $5,701.25 per metric ton with a loss of 0.81% from the previous close. Base metal prices witnessed volatility on Tuesday and saw some short covering in early trading sessions, but strength in the dollar index and coronavirus fears again put pressure on the prices. Strong US Richmond Manufacturing Index and consumer confidence data were also unable to lift base metal prices up. Ahead of the US Federal Reserve meeting, we expect prices to remain volatile. Today, copper has support in the range of Rs427–422, while resistance is at Rs438–442. Nickel should trade in the range of Rs918–948, zinc should trade in the range of Rs177–181, lead should trade in the range of Rs147–151, and aluminium should trade in the range of Rs139–142. AGRI COMMODITIES Edible oil and oil seeds witness strong volatility; BMD crashes by a record 10% in a single day. Trend volatile. Review On Tuesday, agricultural commodities witnessed very high volatility due to coronavirus fears and volatility in international markets. The death toll from the virus continued to rise in China, as the virus also spreads to other parts of the world. Due to strength in the dollar index, agricultural commodities traded under pressure. Bursa Malaysia KLC crashed by a record 10% in single day. Edible oil and oil seed futures witnessed very high volatility at NCDEX after the government refused to reduce import duty on edible oils. Soybean February futures settled on a slightly positive note in domestic markets at Rs4,042 per quintal with a gain of 0.90%. CBOT settled at 895 cents. Other agricultural commodities settled on a mixed note at NCDEX. Chana March futures settled with a gain of 0.64%, and castor seed futures settled with a gain of 0.05%. RM seed closed with a gain of 0.41%. Guar seed settled with a loss of 1.24%, and guar gum settled with a loss of 1.27%. The spices pack settled on a mixed note; coriander settled positive, while jeera and turmeric settled negative. Cotton seed oilcake February futures closed negative with a loss of 2.11%. Refined soy oil February futures closed positive at Rs855.60. We expect refined soy oil to trade in the range of Rs842–868. News Source: Bloomberg, investing.com, kitco.com and ticker news. 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In-line quarter, PAT growth boosted by lower input cost & taxesRating: HOLD | CMP: Rs 748.20 | Target Price: Rs 810 | Upside: 8.30%Escorts reported Q3FY20 results which are in line with our estimates. Garnering of market share from other dominant players and higher operating efficiencies were key highlights. EBITDA was up by 6% and Profit by 11.19% on YoY basis. Strong dealer network in northern and central India, better Rabi crop prospects, lower interest rate regime, rural recovery aided by ongoing food inflation and better product offering augurs well for the company. All its business divisions stand on a strong footing and are poised to capture growth. Pick up is expected in Agri Machinery, Construction Equipment and Railway Products division.Recommendation: HOLD We have been recommending a buy on Escorts since per share price of Rs.598. Buy recommendation has there on it in both our advisory porfolio’s namely ‘Short Term Advisory Portfolio’ and ‘Multicap Advisory Portfolio’. The company stands on strong financials. The balance sheet is almost net-debt free, has healthy return ratios and operating margins, and ROE is in excess of 20%. We recommend to hold the same for a per share target price of Rs. 810, valuing the company at a PER of 18xFY21e.In-line quarter, Encouraging volume growth Rating: BUY | CMP: Rs 741 | Target Price: Rs 875 | Upside: 17.92%Godrej Consumer products reported healthy Q3FY20 numbers. The company did remarkably well to register 7% volume growth for India business. In a slowing economy and falling discretionary consumer spends the company managed to pull off revenue growth of around 2% and Net Profit growth of 5%. Household insecticides remained its forte where both volume and value growth was delivered. Blended realization was lower for soaps and hair colours segment on account of price discounts and consumer offers, topline of both segments de-grew by around 4%. International business was better off delivering a constant currency sales growth of 11% and EBITDA margin expansion of 80 bps on YoY basis. Going forward we believe the company’s new product offering will garner traction as economy recovers and discretionary consumer spends return back with fury. Recommendation : BUYWe have recommended a buy on Godrej Consumer Products LTD. in our Multicap Advisory portfolio at per share price of Rs. 692. Company’s healthy balance sheet, high return ratios, robust cash flows, and high operating margin provide much needed margin of safety in times of economic slowdown. We believe the company will embark on a journey of mid teen top and bottom line growth from FY21 onwards. We recommend buy on it for a per share target price of Rs. 875, valuing the company at a PER of 35xFY21e. 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This document is based on technical and derivative analysis center on studying charts of a stock’s price movement, outstanding positions and trading volume, as opposed to focusing on a company’s fundamentals and, as such, may not match with a report on a company’s fundamentals. Nothing in this document constitutes investment, legal, accounting and/or tax advice or a representation that any investment or strategy is suitable or appropriate to recipients’ specific circumstances. INSL does not accept any responsibility or whatever nature for the information, assurances, statements and opinion given, made available or expressed herein or for any omission or for any liability arising from the use of this document. Opinions expressed are our current opinions as of the date appearing on this document only. The opinions are subject to change without any notice. INSL directors/employees and its clients may have holdings in the stocks mentioned in the document. This report is based / focused on fundamentals of the Company and forward-looking statements as such, may not match with a report on a company’s technical analysis report. Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report: Dharmesh Kant)