Japan’s economy expanded at the fastest pace in more than two years in the third quarter

Japan’s economy expanded at the fastest pace in more than two years in the third quarter, led by a rebound in domestic demand that may ease concern of a return to recession next year. (Source: Bloomberg). Foreign direct investment in China climbed for a third month in October from a year earlier as companies bought into a strengthening economic recovery. (Source: Bloomberg). Airbus SAS and Boeing Co. the biggest commercial-plane makers, predicted airlines will emerge from a slump next year as the global economy rebounds from the worst recession in decades and fuels air travel. The 27 –nation block in the European Union plans to impose value-added tax on services delivered from non-EU nations, including India. This move is expected to put a pressure on the profit margins of companies such as TCS, Infosys and Wipro. The country’s top auto makers are struggling to meet an unexpected spurt in year-end demand, with component manufacturers failing to match a sustained surge in sales since August. FIIs reduce have reduced their holding in one-third of BSE 500 stocks. Significant selling is seen in media and entertainment sector. WPI Inflation for the month of October stood at 1.34%.

Corporate news:

The Aditya Birla Group has approved a proposal to merge the newly-created unit with its existing cement arm, UltraTech, consolidating the group’s cement business. The swap ratio is set at 4 shares of UltraTech for every 7 shares of Samruddhi. Reliance Industries Ltd. may join global oil majors in search of shale gas. Essar Group announced that they had bought a controlling stake in African telecom business from the Dhabi Group. Cairn India has successfully drilled and completed its first horizontal well at Rajasthan’s Barmer field that will add 11,000 barrels of oil per day. Future Brands is looking at creating a vertical out of licensing and franchising, which is a part of their IPR business. Grupo Mexico SAB can regain control of its bankrupt US copper miner, a judge in Texas ruled, rejecting a competing offer from Sterlite Industries. Oman Oil Company will pick up additional equity in the Bina Refinery for Rs.1220 crore.

Technical View:

Nifty: (4999): The index opened on a positive note and a saw strength throughout the day’s trading session. It ended the day with gain of 0.93%. The index has closed on a positive note around the 5000 level suggesting a near term positive bias. On the upside sustaining above 5000 can see index test higher level. Resistance levels are around 5050-5100 level. On the downside index has support around 4950,lower support is around 4905.

Derivative View:

Nifty Nov contract ends the week up by 212.5 points at a premium of 3.70 points in Nov contracts adding OI by 3.7% across all active Nifty contracts. Nifty Open Int PCR at 1.556 compared to 1.263 last week on back of addition of 1.61 Crore Nifty puts and 19.7 Lakh calls. Nifty VIX at 29.09 from 29.04 the last week. Highest OI in Nifty put at 4800 Nov strike and calls is at 5000 Nov strike. FII side saw short covering in Nifty and long build up in stock futures during the day. Long build up over the week seen TECHM, LICHSGFIN, CNXIT, SCI, NEYVELILIG, INDHOTEL, HCC, JSWSTEEL, ZEEL, OPTOCIRCUI, TATAMOTORS, TCS, ORCHIDCHEM, CENTURYTEX, INFOSYSTCH, VOLTAS, HCLTECH, RELINFRA, WIPRO, MCDOWELL-N & IDFC etc. Short build over the week seen in IOC, AUROPHARMA, IBREALEST, BHARTIARTL, EDUCOMP, SUNTV & GTLINFRA etc.