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US indices hit fresh highs as money rotates out of Tech and into Financials. US Dollar trends lower along with oil as Fed rate hike gets discounted today

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Major headlines:

·         Banks shares edge higher on RBI action on defaulters

·         Asia shares lag record Wall Street, Cautious of Fed plans

·         Gold edges higher, all eyes on Fed

 

 

Indian Indices: Asian markets open in the green as overnight positive US cues see value buying, however most await on the sideline as Fed meet today to be crucial. Overnight oil cooled off further while US bond yields also saw weakness. Globally investors turn cautious as overheating in equities sees little room for complacency.


Nifty saw second half weakness give away all the gains and end marginally in the red. Metals, Auto and select Energy stocks saw weakness while Reality, Financials and Pharma witnessed buying as the Nifty drifted after a firm opening. For today expect select buying in stock/sector specific while the index remains range bound. 


the S&P BSE Sensex, was up 15.24 points or 0.05% at 31,118.73. The Nifty 50 index was down 6.10 points or 0.06% at 9,600.80. Shares from cement and metal & mining sectors declined. Investors chose to stay on the sidelines and awaited clarity on the Federal Reserve's future path for US policy.

Domestic stocks saw a quiet start to the day's trading session with the key benchmark indices trading on a flat-to-positive note in early trade.

The S&P BSE Mid-Cap index was down 0.35%. The S&P BSE Small-Cap index was up 0.04%. Both these indices underperformed the Sensex.

 

MARKET INDICATORS

·           

 

Group ATopGainers

 

 

Company

Price (Rs)

% chg

GPPL

141.85

3.81

Reliance

1347.20

2.64

Edelwiess

207.15

2.40

Beml

1342.70

2.38

Group ATopLosers

 

 

Videoind

24.55

-4.84

GVKPil

5.86

-3.62

GMRInfra

18.35

-2.65

Raymond

712.30

-2.51

INDEX PERFORMANCE

 

 

Indices

Support

Resistanes

Sensex

31195

31350

Nifty

9636

9675

 

 

Technical view: Nifty now finds support closer to 9580 which if broken can trigger a sharp fall while 9700 acts as strong resistance on the upside.


 

 

DHFL (BUY Above 441 with Stop Loss at 434.5 for Target of 454): The stock has been stuck in a trading range for over two weeks and has finally broken out from a consolidation pattern on the daily charts. The stock has surged smartly on the back of credible volumes. DHFL has rebounded from its short term moving averages support zone, which further accentuates our bullish stance on the stock.


EconomicSnippets      

The government is working on a new industrial policy with a view to promoting and developing frontier technologies, innovation and enhancing competitiveness of domestic products. (BL)


The statistics ministry is set to change the base year of national accounts to 2017-18 from 2011-12 after completion of the household consumer expenditure survey and labour force data by the end of 2018. (BS)


In the last trading session, markets gave away the opening gains and closed at the lowest point. Nifty 9500PE & 9700CE remained under selling pressure as the open interest continue to soar higher, indicating of the new floor and ceiling for Nifty during the June F&O expiry.

FIIs were net sellers in cash market segment to the tune of Rs 312 Cr.FIIs index future long short ratio at 3.3 vs 4.3x.

 

Nifty Movers: Metal and mining stocks declined. Vedanta (down 1.3%), JSW Steel (down 0.23%), Tata Steel (down 0.97%), Steel Authority of India (Sail) (down 1.06%), Hindustan Zinc (down 1.15%), Jindal Steel & Power (down 1.55%), Hindalco Industries (down 1.55%) and NMDC (down 0.88%) edged lower. Hindustan Copper (up 1.96%) and National Aluminium Company (up 0.31%) rose.

Top Sectoral& Stock Screening: Copper edged lower in the global commodities market. High Grade Copper for July 2017 delivery was currently up 0.04% at $2.5975 per pound on the COMEX. Cement stocks declined. ACC (down 1.31%), Ambuja Cements (down 0.91%), UltraTech Cement (down 1.07%) and Shree Cement (down 0.37%) fell. Grasim Industries was off 0.21%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.

 

 

 


On the global front: On the global front, Asian stocks were trading lower as investors awaited clarity on the Federal Reserve's future path for US policy after a likely rate rise later in the day. In US, the Dow and the S&P 500 closed at records yesterday, 13 June 2017, as technology shares rebounded following a two-day decline.

 

Global Signals: The US Federal Reserve's two-day meet ends today, 14 June 2017 and investors expect the central bank to raise interest rates for the third time since December. Super-low unemployment, gains in factory output and other economic data pointing to a recovery in the US economy have led investors to believe that the Fed will lift rates.

 


MARKET MOOD TO REMAIN CAUTIOUS ON THE LAST TRADING DAY OF WEEK-Research Report by Sharetipsinfo

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Domestic Market View :

Market mood to remain cautious on the last trading day of week

The Indian markets showing a lackluster trade ended marginally in red in the last session. Today, the start is likely to remain cautious and traders will be eyeing the major global developments following the mixed cues after an exit poll suggested British Prime Minister Theresa May’s Conservative party not getting majority. On the domestic front traders will be getting some support with UN trade report that despite stagnant foreign direct investment (FDI) inflow of $ 44 billion in 2016, India will most likely remain most favoured destination due to its attractiveness among MNCs for cross-border mergers and acquisitions. Meanwhile, Chief Economic Adviser Arvind Subramanian has expressed concern over growing protectionism in global markets and felt that India needs open markets to grow at 8-10%. He said that the biggest beneficiaries of the open market policy or globalisation have been middle income countries and the continuation of this is in their interest. There will be some buzz in the power and coal stocks on report that India’s coal imports in May declined 6 per cent due to lacklustre demand from the power sector and sufficient supply of domestic fuel.

Indian benchmarks settle with moderate losses; Nifty ends below 9650 mark

It turned out to be a lethargic performance from Indian benchmark indices on Thursday, as they failed to snap the session in the green territory and settled marginally below the neutral line. Today’s session largely remained characterized by choppiness, as the aimless indices moved only sideways in a tight band for most part of the day, as investors and foreign funds were adopting a cautious approach, ahead of key political and economic events in the U.S. and Europe. Sentiments remained subdued after Reserve Bank of India (RBI) raised concerns over the possibility of fiscal slippages due to the farm loan waivers. RBI Governor Urjit Patel said unless that state governments' budgets allow that fiscal space to go in for a loan waiver, it would be risky to tread on that path. RBI also cut the economic growth projection to 7.3% for the current fiscal from 7.4% earlier. The central bank, however, used a less hawkish tone and reduced the Statutory Liquidity Ratio (SLR) in its second bimonthly momany liquor stocks gained traction after Karnataka state government decided to send a proposal to the union government seeking to denotify the national highways (NH) pass through urban local bodies in Karnataka as local roads. Likewise, shares of steel companies were trading higher in an otherwise subdued market on the expectations of a revival in consumption during the current financial year 2017-18. The market breadth remained pessimistic, as there were 1328 shares on the gaining side against 1351 shares on the losing side, while 177 shares remained unchanged.netary policy for financial year 2017-18.

Traders turned anxious after chief economic adviser Arvind Subramanian expressed his unhappiness over the Reserve Bank's inflexibility on interest rates. He warned that real policy rates are becoming tighter and rising at a time of low inflation and slowing growth. However, losses remained capped with UNCTAD’s latest report that India would be the top prospective foreign direct investment (FDI) destination globally after the US and China. It also said that an improved economic outlook in major Asian economies such as India, China is likely to lift investor confidence and help boost FDI inflows by about 15 percent in 2017

 

Global Market Overview 

Asian markets end mixed on Thursday

Asian equity markets made a mixed closing on Thursday as investors awaited directional cues from three big upcoming events today and next week's Federal Reserve meeting. The European Central Bank (ECB) will announce its latest interest rate decision later today, with traders on the lookout for any hints of policy changes on rate and stimulus outlook. Polls have opened in the UK with the latest polls predicting a narrow victory for Theresa May's party over the main opposition Labour Party. Former FBI Director James Comey's testimony before the Senate Intelligence Committee also remained in the spotlight after he confirmed media reports that President Donald Trump demanded his loyalty and asked him to drop at least part of the bureau's investigation of former National Security Adviser Mike Flyn. Japanese shares ended lower as the yen edged higher in late Asian deals on a report that the Bank of Japan was re-calibrating its communications to acknowledge it is thinking about how to handle a withdrawal from its monetary stimulus. Meanwhile, Chinese shares ended higher after Chinese exports and imports data topped expectations. Exports advanced 8.7 percent year-on-year in dollar terms in May, faster than the 7.2 percent increase economists had forecast. Imports climbed 14.8 percent, much above expectations for 8.3 percent growth.

US markets closed higher following Comey's testimony

The US markets closed higher on Thursday, with the Nasdaq Composite Index finishing at a record, marking its 38th all-time closing high in 2017. The former FBI Director James Comey’s appearance in front of the US Senate Intelligence Committee concluded without any significant revelations. The street had signaled that above events don’t appear to threaten the stock market’s extended push into record territory, which has been driven by President Donald Trump’s promises of tax cuts, infrastructure spending and deregulation.

The Dow Jones added 8.84 points or 0.04 percent to 21,182.53, Nasdaq was up 24.38 points or 0.39 percent to 6,321.76, while S&P 500 edged higher by 0.65 points or 0.03 percent to 2,433.79

Economy Overview 

Indiato be one of the top prospective FDI destination: UNCTAD

 

The United Nations Conference on Trade and Development (UNCTAD), in its latest report ‘World Investment Report 2017’ has saidthat India would be the top prospective foreign direct investment (FDI) destination globally after the U.S. and China. The report however noted that although new liberalization efforts continue to improve the investment climate in India, tax-related concerns remain a deterrent for some foreign investors.

 

UNCTAD report said that an improved economic outlook in major Asian economies such as India, China is likely to lift investor confidence and help boost FDI inflows by about 15 per cent in 2017. Besides, it has said that the country’s renewed policy efforts to attract FDI may also contribute to higher inflows in 2017, adding that foreign multinational enterprises (MNEs) are increasingly relying on cross-border M&As (mergers and acquisitions) to penetrate the rapidly growing Indian market.

 

It said that in major recipients such as China, India and Indonesia, renewed policy efforts to attract FDI could contribute to an increase of inflows in 2017. However, the report found that FDI in India remained almost flat in year 2016 at about $44 billion, up only 1 per cent from 2015. At the same time India's outward FDI declined by about third from $7.572 billion in 2015 to $5.12 billion in 2016. UNCTAD has also reported that FDI inflows to developing Asia shrank by 15 per cent to $443 billion in 2016, the first decline since 2012.

Record jumpin FDI from $34,487 billion to $61,724 billion since 2013: Modi

 

Giving an overview of his three-year-old government, Prime Minister NarendraModi has said that there has been a record jump in Foreign Direct Investment (FDI) from $34,487 billion to $61,724billion since 2013. Terming India a bright spot in the cloudy global

economy, he said that doing business here has been made easier and the tax regime is more predictable and stable. He pointed out that the goods and services tax (GST) regime is also going to have long standing benefits for the nation.

Talking about his 'guiding tenet-reform to transform', Modi said that the reform agenda of government is comprehensive and inclusive, covering all sections of society, all regions of India and all aspects needing attention. He also said that it was a matter of immense happiness that a friendly spirit of competition has developed among the states for accelerating reforms and getting more investment.

 

On matters related to next-gen infrastructure for a new India, PM said that they are giving the added push to infrastructure projects with a special emphasis on timely completion. Adding further, he said that the government’s goal is a new India, powered by the skills and talent of the youth. He also said that substantial ground has been covered in the last three years and India is poised to scale newer heights of progress.

Farm loan waivers may harm country’s fiscal health, spur inflation: RBI

 

Raising concerns over the recent spate of farm loan waivers across the country, the Reserve Bank of India (RBI) Governor Urjit Patel has said that rush for such actions may harm the country’s fiscal health and may have inflationary spillovers. He said that past episodes have shown when there are significant fiscal slippages they do permeate through inflation sooner or later.

Markets ignore UK elections, pound weakness &Comeytestification and hit fresh highs. Global risk levels at highest levels since 2008 as scramble for equities sees markets in heavily overbought zone.

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Indian Indices: US markets hit fresh new all time highs as the Dow Jones nearly hit 21300 on the upside. The weakness in UK Pound saw strength in US Dollar, which further prompted buying in the S&P while the Nasdaq fell heavily after rising nonstop for the last 9 days. Asian indices saw profit taking on opening bell with the Japanese 'Nikkei" down over 150 points as North Korean rhetoric saw weak sentiment prevail.


Nifty saw last hour buying led by Metals and select Auto stocks drive the index higher even as the broader market saw corrections. For today expect range bound trade on the Nifty while stock/sector outperformance continuing. Expect defensive buying in Pharma and select mid-caps to be the theme today while selling in PSU banks and Financials may be witnessed in the light of further farm loan waivers being announced by states.


The BSE Sensex is currently trading at 31132.97, down by 129.09 points or 0.41% after trading in a range of 31070.65 and 31225.43. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.14%, while Small cap index was down by 0.09%.

The CNX Nifty is currently trading at 9625.30, down by 42.95 points or 0.44% after trading in a range of 9606.40 and 9647.05. There were 19 stocks advancing against 32 stocks declining on the index.

MARKET INDICATORS

·           

 

Group ATopGainers

 

 

Company

Price (Rs)

% chg

Mothersumi

478.45

4.14

GMRInfra

17.65

4.13

Ibrealest

183.80

4.11

Gruh

443.45

3.91

Group ATopLosers

 

 

Videoind

27.15

-4.90

Bharatfin

709.00

-3.06

Tatacomm

744.55

-2.86

IndianB

298.75

-2.62

INDEX PERFORMANCE

 

 

Indices

Support

Resistanes

Sensex

31195

31350

Nifty

9636

9675

 

Technical view: Nifty sees resistance closer to 9700 while 9580 will act as strong support, any breach either side could see Nifty chart way forward. Bank Nifty also sees strong resistance around 23750 while 23500 act as strong support.


 

Eros International (Buy Above 233.5 with Stop Loss at 229.25 for Target of 242): After being in the declining mode for over three weeks, the stock has broken out from a declining trend line. The strong bounce is seen after Eros found support at its 200-DMA. The up-thrust in price is seen on the back of smart uptick in volumes. In addition, other oscillators also indicate that the current momentum may extend further.


Derivative Snippets :

Oil and Natural Gas Corp (ONGC)is keen to acquire HPCL in a Rs422.54bn deal after finding Bharat Petroleum Corp Ltd (BPCL) too expensive to buy.

In the last trading session, markets ended on a positive note as the banking stocks continued to shine. Bank Nifty 23500CE witnessed marginal short selling as the open interest increased by ~68k shares, making 23500 level as an important support for Bank Nifty.

FIIs were net sellers in cash market segment to the tune of Rs 101 Cr.

FIIs index future long short ratio at 4.3 vs 5.6x with a significant addition of short positions to the tune of ~14k contracts, indicating of a minor correction.

Nifty Movers: The top gainers on Nifty were Sun Pharma up by 1.35%, Mahindra & Mahindra up by 1.21%, GAIL India up by 1.15%, Vedanta up by 0.76% and Tata Steel up by 0.70%. On the flip side, Wipro down by 2.83%, Bank of Baroda down by 2.13%, Larsen & Toubro down by 1.41%, Adani Ports & Special Economic Zone down by 1.24% and Tata Motors - DVR down by 1.19% were the top losers.

Top Sectoral& Stock Screening:The top gaining sectoral indices on the BSE were Realty up by 0.90%, Metal up by 0.48%, Healthcare up by 0.39%, Telecom up by 0.19% and Consumer Disc up by 0.15%, while IT down by 0.84%, Capital Goods down by 0.78%, TECK down by 0.66%, Industrials down by 0.58% and Bankex down by 0.52% were the losing indices on BSE.

 

 

On the global front: On the global front, Asian shares were trading mostly in red, as central bank meetings ahead and uncertainty over the chances for a coalition government in Britain turned investors cautious. In a report, Economic and Social Research Institute said that Japan’s Core Machinery Orders fell to -3.1%, from 1.4% in the preceding month.

Global Signals:The Asian markets were trading mostly in red; Hang Seng decreased 319.7 points or 1.23% to 25,710.59, Nikkei 225 decreased 111.75 points or 0.56% to 19,901.51, Taiwan Weighted decreased 72.22 points or 0.71% to 10,127.43, KOSPI Index decreased 25.07 points or 1.05% to 2,356.62 and Shanghai Composite decreased 14.77 points or 0.47% to 3,143.63.On the other hand, Jakarta Composite increased 32.09 points or 0.57% to 5,707.61.Kuala Lumpur Stock Exchange is closed on account of National holiday.

 

WEEKLY NIFTY TRADING VIEW FOR THE WEEK JUNE12, 2017-JUNE 18, 2017

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Events to watch this week

  • UK vote muddles Brexit process
  • ECB drops possibility of lower rates
  • Comey testifies on Russia probe
  • Eurozone maintains faster growth

The Week ahead:

Date

Country/Area

Release/Event

Sun, 11 Jun

France

Parliamentary elections, round one

Tue, 13 Jun

United Kingdom

Consumer price index

Tue, 13 June

eurozone

ZEW economic sentiment index

Tue, 13 June

United States

Producer price index

Wed, 14 Jun

China

Retail sales and industrial production

Wed, 14 Jun

eurozone

Industrial production

Wed, 14 Jun

United States

Retail sales and Consumer Price Index

Wed, 14 Jun

United States

FOMC meeting, Yellen press conference

Thu, 15 Jun

Switzerland

SNB interest rate decision


For the week,The day began with the European Central Bank meeting, followed by ex-FBI director Comey’s testimony later in the day. It wound up with the Conservative Party losing its majority in the House of Commons. Prior to the news from the United Kingdom, the Dow Jones Industrial Average closed at a record high Thursday, despite Comey’s unsettling testimony regarding private meetings with US president Donald Trump. Despite increased uncertainty surrounding the Brexit process, global equities have shown little net change on the week. The yield on the US 10-year Treasury note rose three basis points to 2.20% while West Texas Intermediate crude extended its drop to $45.50 from $47.35 a week ago after a forecast from the Energy Information Agency projected that US domestic oil output will top 10 million barrels a day in 2018. Equity volatility, as measured by the Chicago Board Options Exchange Volatility Index (VIX), remained historically muted, virtually unchanged at 10.

NIFTY- 9,668.25
CRUDE OIL-Rs 2963barrel
GOLD-Rs 29,009 gram
Rs/$-Rs 64.25

MARKET ROUND UP

Key benchmark indices settled with modest gains in a volatile session of trade on Wednesday, 7 June 2017, after the RBI decided to keep the policy repo rate unchanged after a policy review meet on Wednesday, 7 June 2017. The Sensex had risen 80.72 points or 0.26% to settle at 31,271.28, its highest closing level since 5 June 2017.

Key indices settled with small losses after range-bound trade on Thursday, 8 June 2017, as caution prevailed in global markets ahead of key global events of outcome of elections in the UK and the European Central Bank's (ECB) monetary policy review. The Sensex shed 57.92 points or 0.19% to settle at 31,213.36, its lowest closing level since 6 June 2017.

Key benchmark indices settled with small gains after a lacklustre session of trade on Friday, 9 June 2017, as most global stocks rose after the surprise UK general election result left the country facing a “hung parliament,” where no single party has a majority. The Sensex had risen 48.70 points or 0.16% to settle at 31,262.06, its highest closing level since 7 June 2017.

Both the Sensex, and the Nifty, had hit record high in intraday trade on Tuesday, 6 June 2017. The Sensex fell 11.23 points or 0.03% to settle at 31,262.06. The Nifty advanced 14.75 points or 0.15% to settle at 9,668.25. Broad market depicted strength. The S&P BSE Mid-Cap index rose 0.49%. The S&P BSE Small-Cap index advanced 1.55%. Both these indices outperformed the Sensex.

Macro Economic Front:

On the Economic Front,the RBI's Monetary Policy Committee (MPC) in its meeting held on Wednesday, 7 June 2017, decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25%. Consequently, the reverse repo rate under the LAF remains at 6%, and the marginal standing facility (MSF) rate and the Bank Rate at 6.5%.

A private business survey showed activity in India's services industry accelerated in May as domestic and foreign orders rose. The Nikkei/IHS Markit Services Purchasing Managers' Index rose to a seven-month high of 52.2 in May, from April's 50.2.

Major Action &Announcement:

State Bank of India (SBI) advanced 0.38%. The bank said that it has successfully concluded India's largest ever qualified institutional placement (QIP) of Rs 15000 crore which was launched on 5 June 2017. The QIP book was oversubscribed and demand exceeded Rs 27000 crore. Post issue, the Government of India's (GoI) shareholding in the merged entity will be at 57.07%. The announcement was made during market hours on Friday, 9 June 2017.

ICICI Bank rose 1.41%. The bank said its board of directors on Monday, 5 June 2017, approved the sale of a part of its shareholding in ICICI Lombard General Insurance Company in an initial public offering by the company, subject to requisite approvals and market conditions. The size and other details of the offer would be determined in due course, the bank said. The announcement was made at the fag end of market hours on Monday, 5 June 2017.

Wipro fell 2.75%. The company issued clarification to the stock exchanges regarding media news item titled “Wipro promoters in early stage of evaluating sale of part or whole business”. The company said that the news article is baseless and malicious. There is no truth to these unsubstantiated rumors, it added. The announcement was made after market hours on Monday, 5 June 2017.

Infosys was down 2.15%. The company clarified after market hours on Wednesday, 7 June 2017 that the news reports on pricing cuts seen by the IT industry being attributed to the Infosys chief operating officer (COO) are incorrect.

Dr Reddy's Laboratories rose 3.03%. The company announced the launch of Bivalirudin for injection, 250 mg/vial, a therapeutic equivalent generic version of Anglomax (Bivalirudin) for injection in the US market. The announcement was made during market hours on Tuesday, 6 June 2017. Anglomax brand and generic had annual US sales of around $198 million MAT for the most recent twelve months ending in March 2017, according to IMS Health.

Tata Motors was down 2.37%. Jaguar Land Rover retail sales rose 1% to 45,487 vehicles in May 2017 over May 2016 with continued strong demand for the Jaguar F-PACE, since sales began 12 months ago, and solid sales growth of the long wheel base Jaguar XFL from our China joint venture. The announcement was made during market hours on Wednesday, 7 June 2017.

TCS lost 2.01%. The company announced that the company and Siemens unveiled a new collaboration around Internet of Things (IoT) innovation. Focused on customers in the manufacturing, energy, building technology, healthcare and railway industries the partnership will enable customers to benefit from new data insights and services based on MindSphere, the cloud-based, open IoT operating system from Siemens. The announcement was made after market hours on Tuesday, 6 June 2017.

Global Front:

In Overseas Markets,British Prime Minister Theresa May's Conservative party has fallen short of an outright majority in the UK's general election held on Thursday, 8 June 2017. May had unexpectedly called the snap election seven weeks ago, confident of sharply increasing the slim majority she had inherited from predecessor David Cameron before launching into the Brexit talks.

The ECB on Thursday, 8 June 2017, as expected, left interest rates unchanged but said it continued to expect interest rates “to remain at present levels for an extended period of time, and well past the horizon” of its asset-buying program, which is set to run at least through December. In previous statements, the ECB had said it expected rates “to remain at present or lower levels for an extended period of time.”

US non farm payrolls increased 138,000 in May, missing the forecast, suggesting the labour market was losing momentum despite the unemployment rate falling to a 16-year low of 4.3%. Also, the number of jobs created in March and April was reduced by 66,000 from what was previously reported.

Global Economic News:

ECB drops rate-cut reference
With the economy on the upswing, European Central Bank president Mario Draghi announced on Thursday that the bank is dropping its bias toward cutting interest rates, but it retained its bias toward increasing quantitative easing, if necessary. The bank raised its growth forecast while at the same time cutting its inflation outlook. Risks to the economy are now broadly balanced, he said. The overall tone of Draghi’s press conference was decidedly dovish.

Former FBI chief testifies
Former Federal Bureau of Investigation director James Comey testified before the Senate Intelligence Committee regarding the FBI’s investigation into Russia’s interference in the 2016 US presidential election and President Donald Trump’s desire that the Bureau end its investigation of his former national security advisor Michael Flynn. Comey said he would leave it to Special Counsel Robert Mueller to decide whether the president’s conduct rose to the level of obstruction of justice. With Mueller’s investigation in an early phase, there will likely be many months of continued policy paralysis in Washington.

Eurozone economy leads the pack
Purchasing managers’ indices released this week show that the eurozone continues to outperform other developed economies. The eurozone composite PMI, which measures both manufacturing and services, stood at 56.8, unchanged from April. Meanwhile, the United States clocked in at 53.6 and the UK at 56.7, just below April’s 56.8 three-year high. Japan’s composite PMI registered 52.6 and China’s 51.5.

Catalonia schedules referendum
The president of the Spanish region of Catalonia, CarlesPuigdemont, announced on Friday that an independence referendum will be held on 1 October. The Spanish government strongly opposes the referendum on constitutional grounds, as it did in 2014 when the country’s constitutional court ruled a previous vote invalid. Under the Spanish constitution, Madrid could resort to suspending the region’s autonomy to thwart the plebiscite.

GLOBAL CORPORATE NEWS

May severely weakened in UK vote; Tories lose majority
Prime Minister Theresa May’s gambit to improve her Brexit bargaining position by calling a snap election did exactly the opposite, increasing the uncertainty around the Brexit process. The Conservative Party lost its outright majority in the House of Commons but will be able to form a government with the backing of the 10 members of Northern Ireland’s Democratic Unionist Party. Politically, May is seen as living on borrowed time, and could be replaced as party leader in the near future. Early indications are that May’s failure to secure a larger parliamentary majority undermines the case for a “hard” Brexit, which the Tories campaigned for. That is one reason — along with a weaker pound — that markets have taken the election outcome in stride so far. A softer Brexit is seen as less disruptive to UK business interests. One side note: A very poor showing by the Scottish National Party is seen as halting momentum toward a second referendum on Scottish independence.

 

NEW 52-WEEK HIGH BSE (A):

 

BAJAJFINANCE

1380.00

CADILAHC

548.00

EDELWEISS

209.40


NEW 52-WEEK LOWS BSE (A):

VIDEOIND

28.55

IDBI

58.75


MAJOR WEEKLY GAINERS IN BSE A CATEGORY(%):

IIFL HOLDINGS

14.25

INFO EDGE

13.97

PAGE INDS

13.90


MAJOR WEEKLY LOSERS IN BSE A CATEGORY:

ADANI TRANSMISSION

-13.37

VIDEOCON INDUSTRIES

-22.31

RELAINCE COMM

-10.90


Eyes will be set on the certain US economic data releases are:

Monday (12June)

Month Bill Auction

Tuesday (13 June)

Week Bill Auction& FOMC Meeting Begins

Wednesday (14 June)

Consumer Price Index

Thursday (15 June)

Hosing Market Index& Jobless Claims

Friday (16 June)

Consumer Sentiment


Fundamental Pick of the week:

Derivative Ideas Federal Bank Ltd For Target Rs.120.00


Derivative Ideas

FEDERALBNK added around 2.5% of open interest as long positions along with some delivery based buying in previous trading session. On charts, it is trading above important moving averages in higher highs—higher lows formation on daily charts. Hence, we recommend buying FEDERALBNK June futures as per levels mentioned below.

Strategy:

BUY FEDERALBNK JUNE FUTS BETWEEN 114-115, SL 112, TARGET 120.


TECHNICAL VIEW:

S3

S2

S1

NIFTY

R1

R2

R3

9,520

9,590

9,630

9,668.25

9,710

9,770

9,820


Nifty saw small correction on friday and closed just near the gann angle also also near the lower end of range at 9640, bulls need to hold the gann angle for upmove to continue towards 9750/9790. Bearish below 9610 for a move towards 9530/9480.  As per Geometric Time Cycle big move can be seen in market in next 2 days.Low made today was again 9608 near the gann angle, as shown in below chart and we saw a good bounce back. As per time cycle if today’s low is not broken we can see an up move towards 9720/9800. Bearish below 9610 for a move towards 9530/9480. 

Conclusion:

Markets extended their winning streak to the fifth consecutive week as the index yet again closed at a fresh life time high thanks to late buying on Friday. However, throughout the week, traders and investors remained jittery amid multiple global events like ECB meet and UK elections. Even upgrades in monsoon estimates and RBI’s decision of keeping repo rate and reverse repo rate unchanged at 6.25% and 6%, respectively didn’t bring any cheer to the market.

Start of this week witnessed ITC and HUL lead the main indices as the FMCG companies helped five of the top 10 most valued Indian firms raise their market cap by more than Rs 37,000 crore. The PSU Banking stocks were in action after media reports stated that the government was examining the possibility of further consolidation in the public sector banking space without waiting for their finances to improve. OMCs like BPCL, HPCL and IOC were in action after reports stated that petrol and diesel prices will be revised every day across the country from June 16.

Global cues turn volatile as Comeytestification and UK election results see negative sentiment. British Pound sinks in early trade as Asian indices open flat.

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Indian Indices: US markets closed almost flat as the Comeytestification saw sentiment remain weak as doubts over further reforms by President Trump gathered pace. Asian indices however opened flat to mildly positive as bulls seen in full control with all risk being brushed under the carpet. With US Dollar also seeing safe haven buying against the UK pound, expect currencies to be at the centre of attention as results pour in.


Nifty gave up gains as IT downgrades saw tech stocks witness huge selling. The Pharma sector saw strong defensive buying and emerged as the biggest gainer yesterday. For today expect Pharma, Private Banks and Metals to see buying while IT, PSU Banks and Mid-caps could be under pressure.


The BSE Sensex is currently trading at 31178.33, down by 35.03 points or 0.11% after trading in a range of 31087.28 and 31200.59. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.02%, while Small cap index was up by 0.36%.

The CNX Nifty is currently trading at 9633.35, down by 13.90 points or 0.14% after trading in a range of 9608.15 and 9644.10. There were 19 stocks advancing against 32 stocks declining on the index.

MARKET INDICATORS

·           

 

Group ATopGainers

 

 

Company

Price (Rs)

% chg

Hathway

40.75

4.76

NHPC

32.95

4.60

NCC

90.20

4.58

SREinfra

113.70

3.55

Group ATopLosers

 

 

Videoind

28.55

-4.99

HDIL

86.15

-2.93

Techm

386.25

-2.81

GVKPil

6.07

-2.25

INDEX PERFORMANCE

 

 

Indices

Support

Resistanes

Sensex

31195

31350

Nifty

9636

9675

 

Technical view: Nifty has seen 9700 act as resistance and needs to close over the same for further upside, while 9580 will act as support on the downside. Bank Nifty also saw resistance around 23650 while 23350 will act as support


 

Magma Fincorp (Buy Above 135.5 with Stop Loss at 132.75 for Target of 141): After consolidating for over four weeks, the stock has finally broken out from a Symmetrical Triangle pattern on the daily hart. The price outburst has been accompanied with smart uptick in traded volumes, moreover, Magma has also convincingly closed above the 15-DMA accentuating our bullish stance on the stock.


Derivative Snippets    

Bodhtree Consulting has entered into a strategic partnership with Infosys as an application service provider wherein the clients of the Bengaluru-headquartered company will have an option to utilise the GSP platform of the former for their GST filings.

In the last trading session, markets ended on a lacklustre note. Nifty 9700CE witnessed marginal short selling as the open interest increased by ~4.5 lakh shares, making 9700 level as a new resistance point for Nifty.

FIIs were net buyers in cash market segment to the tune of Rs 91 Cr.FIIs index future long short ratio at 5.6x vs 5.5x.

Nifty Movers:  The top gainers on Nifty were Vedanta up by 1.49%, Indiabulls Housing Finance up by 1.19%, Maruti Suzuki up by 1.11%, Reliance Industries up by 0.84% and Mahindra & Mahindra up by 0.73%. On the flip side, Tech Mahindra down by 2.67%, Infosys down by 2.12%, GAIL India down by 1.87%, Adani Ports & Special Economic Zone down by 1.45% and Ultratech Cement down by 1.37% were the top losers.

Top Sectoral& Stock Screening:The top gaining sectoral indices on the BSE were Realty up by 0.70%, Healthcare up by 0.33%, Metal up by 0.29%, Consumer Disc up by 0.24% and Energy up by 0.17%, while IT down by 0.92%, TECK down by 0.74%, Oil & Gas down by 0.37%, FMCG down by 0.32% and Consumer Durables down by 0.30% were the losing indices on BSE.

 

 

On the global front: On the global front, Asian shares were trading mostly in red, as investors eyed UK poll results. A board member of South Korea’s central bank said the nation’s potential annual growth rate will stay below 3 percent due to a shrinking workforce and the high-level of household debt among the elderly.

Global Signals:The Asian markets were trading mostly in red; Hang Seng decreased 78.02 points or 0.3% to 25,985.04, Jakarta Composite decreased 13.57 points or 0.24% to 5,689.35, Taiwan Weighted decreased 7.41 points or 0.07% to 10,218.37 and Shanghai Composite decreased 0.22 points or 0.01% to 3,150.12.

On the other hand, FTSE Bursa Malaysia KLCI increased 3.64 points or 0.2% to 1,789.21, KOSPI Index increased 19.51 points or 0.83% to 2,383.08 and Nikkei 225 increased 70.66 points or 0.35% to 19,979.92.

 

Event heavy Thursday will see markets chart further direction as risk levels rise. Oil prices react sharply with higher US inventories, while US Dollar and bond yields fall.

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Indian Indices: Asian indices may remain range-bound ahead of an event filled Thursday as markets at all time highs prompt cautiousness. Energy stocks to lag while financials to gain as oil hits 4 month lows indicating lower than expected global growth.


Nifty moved up by 30 points as RBI kept rates unchanged, while Bank Nifty did scale new highs. Flows, Rupee strength and bond yields locally @ 6.6% are seeing sentiment at the most positive levels in 2017 which is seeing unbridled bullishness in stocks. Expect rallies above 9700 to be sold into as event risk will limit upside. 


The BSE Sensex is currently trading at 31240.39, down by 30.89 points or 0.10% after trading in a range of 31214.35 and 31354.51. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.22%, while Small cap index was up by 0.21%.

The CNX Nifty is currently trading at 9652.80, down by 11.10 points or 0.11% after trading in a range of 9643.05 and 9688.70. There were 19 stocks advancing against 32 stocks declining on the index.

MARKET INDICATORS

·           

 

Group ATopGainers

 

 

Company

Price (Rs)

% chg

MMTC

59.85

6.97

PVR

1475.00

5.33

Hindcopper

65.40

4.89

Jindalstel

123.70

3.82

Group ATopLosers

 

 

Adanitrans

113.85

-4.97

Videoind

30.05

-4.91

Hdil

89.50

-3.8

Naukri

1046.40

-3.16

INDEX PERFORMANCE

 

 

Indices

Support

Resistanes

Sensex

31195

31350

Nifty

9636

9675

 

Technical view: Nifty now finds support closer to 9630 which was yesterday's low while 9730 will act as resistance on the upside. Bank Nifty can also see resistance around 23750 levels while 23350 will act as support.


 

Maruti (Buy Above 7207 with Stop Loss at 7125.5 for Target of 7370): After being under pressure for four consecutive trading sessions, Maruti has once again shown signs of resuming its uptrend. The stock has broken out from a Flag pattern on the daily charts accompanied with smart uptick in traded volumes. Other oscillators also indicate that the momentum is here to stay.


Derivative Snippets    

`

In the last trading session, markets resumed its uptrend as banking stocks shimmered. Nifty and Bank Nifty OTM/ATM put option strikes remained under selling pressure as the underlying assets moved higher. Fresh long build-up was seen in Nifty and Bank Nifty ATM call option strikes, indicating of a continued upward momentum.

FIIs were net buyers in cash market segment to the tune of Rs 74 Cr.FIIs index future long short ratio at 5.5x vs 6.2x.

Nifty Movers: The top gainers on Nifty were Tata Steel up by 3.64%, Dr. Reddy’s Lab up by 3.13%, HDFC up by 1.87%, Sun Pharma up by 1.85% and Tata Motors - DVR up by 1.57%.

On the flip side, GAIL India down by 2.88%, TCS down by 2.68%, Adani Ports & Special Economic Zone down by 1.96%, BhartiInfratel down by 1.71% and ONGC down by 1.45% were the top losers.

Top Sectoral& Stock Screening:The top gaining sectoral indices on the BSE were Metal up by 1.48%, Healthcare up by 1.12%, Basic Materials up by 0.55%, Auto up by 0.10% and Bankex up by 0.09%, while IT down by 1.18%, TECK down by 1.00%, Oil & Gas down by 0.93%, Utilities down by 0.86% and Energy down by 0.64% were the losing indices on BSE.

 

 

On the global front: On the global front, Asian shares were trading mostly in green, as investors focused on risk events later in the day. South Korea’s Kospi was trading in red after North Korea fired a salvo of land-to-ship missiles on Thursday morning. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 9,700 and 31,300 levels respectively.

Global Signals:The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 1.08 points or 0.06% to 1,787.00, Shanghai Composite increased 4.02 points or 0.13% to 3,144.35, Taiwan Weighted increased 5.03 points or 0.05% to 10,215.02, Nikkei 225 increased 16.07 points or 0.08% to 20,000.69 and Hang Seng increased 47.7 points or 0.18% to 26,021.86.On the other hand, KOSPI Index decreased 1.13 points or 0.05% to 2,359.01 and Jakarta Composite decreased 0.85 points or 0.01% to 5,716.48.

 

Global markets consolidate as UK elections, EU meet and locally RBI policy holds centre stage this week. US bond yields fall to 2.14% as protection buying sees yields fall.

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Indian Indices: Asian indices opened flat as overnight US indices closed in the red as most investors stayed on the sidelines ahead of an event heavy week. The RBI policy meet in India today coupled with UK elections, EU Meet and Comey testimony on Thursday all could be the drivers for markets’ direction going forward.


Nifty hit 9700 only to see selling dominate the session and closed near the low of the day. The bout of profit booking saw very weak advance/decline ratio and mid-caps fall more as broader market corrected sharply. IT, select private Banks witnessed buying while FMCG, PSU banks and Auto bore the brunt of the selloff. Today all eyes will be on the RBI Governor on rates as near term consensus seems no change in policy.


The BSE Sensex is currently trading at 31326.41, up by 135.85 points or 0.44% after trading in a range of 31229.25 and 31346.99. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.46%, while Small cap index was up by 0.87%.

The CNX Nifty is currently trading at 9671.50, up by 34.35 points or 0.36% after trading in a range of 9648.00 and 9678.55. There were 35 stocks advancing against 16 stocks declining on the index.

MARKET INDICATORS

·           

 

Group ATopGainers

 

 

Company

Price (Rs)

% chg

IIFL

607.35

10.31

Cadilahc

526.80

7.42

Edelweiss

195.50

5.50

Naukri

1112.00

5.39

Group ATopLosers

 

 

Videoind

31.60

-4.96

RCOM

19.55

-2.74

Hexaware

251.75

-2.61

RTNPower

6.80

-1.88

INDEX PERFORMANCE

 

 

Indices

Support

Resistanes

Sensex

31195

31350

Nifty

9636

9675

 

Technical view: Nifty now finds resistance around 9700 while 9580 will act as strong support. Bank Nifty also finds strong support around 23250 while 23700 will act as resistance on the upside.


 

Union Bank Jun FUT (Sell Below 155 with Stop Loss at 158 for Target of 149): The stock has rallied for the past five sessions and has finally shown signs of a reversal. Union bank found stiff resistance at its 50-DMA which is placed at Rs 160. Other oscillators also indicate that the momentum is fading away further accentuating our short term bearish stance on the stock.


Derivative Snippets    

Adani Power has approached Gujarat UrjaVikas Nigam (GUVNL) to bail out its Mundra power plant, which stares at financial unviability after the Supreme Court in April quashed the company's plea for tariffs that would have compensated escalations in Indonesian coal costs.

In the last trading session, markets traded in a narrow range awaiting the credit policy on June 7, 2017. Huge short covering to the tune of ~3.25 lakh shares was witnessed in Bank Nifty 23500 monthly call option strike along with fresh short build-up in ATM/OTM put option strikes, indicating of a big surge of ~200 points in the Banking index above the resistance level of 23500.

FIIs were net buyers in cash market segment to the tune of Rs 61 Cr.FIIs index future long short ratio at 6.2x vs 6.3x.


Nifty Movers: The top gainers on Nifty were Mahindra & Mahindra up by 2.30%, Vedanta up by 2.05%, ICICI Bank up by 1.63%, Hindustan Unilever up by 1.62% and GAIL India up by 1.62%.

On the flip side, BPCL down by 1.18%, TCS down by 0.98%, Yes Bank down by 0.92%, Wipro down by 0.89% and Indiabulls Housing Finance down by 0.70% were the top losers.

Top Sectoral& Stock Screening:The top gaining sectoral indices on the BSE were Healthcare up by 1.29%, Telecom up by 1.00%, FMCG up by 0.98%, Metal up by 0.82% and Consumer Disc up by 0.64%, while IT down by 0.18% and TECK down by 0.05% were the only losing indices on BSE.

 

 

On the global front: On the global front, Asian shares were trading mostly in green, as investors remained noticeably risk averse. The street cautiously awaited a trio of potential major risk events on Thursday, including the UK election, a European Central bank review and former FBI director James Comey’s testimony to the Senate stateside.

 

Global Signals:The Asian markets were trading mostly in green; Hang Seng increased 1.28 points or 0% to 25,998.42, Nikkei 225 increased 14.59 points or 0.07% to 19,994.49, Jakarta Composite increased 18.17 points or 0.32% to 5,726.01 and Shanghai Composite increased 34.42 points or 1.11% to 3,136.55.On the other hand, Taiwan Weighted decreased 5.62 points or 0.06% to 10,200.56, KOSPI Index decreased 2.96 points or 0.12% to 2,365.66 and FTSE Bursa Malaysia KLCI decreased 1.52 points or 0.08% to 1,789.49.

 

Global markets consolidate as UK elections, EU meet and locally RBI policy holds centre stage this week. US bond yields fall to 2.14% as protection buying sees yields fall.

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Indian Indices: Asian indices opened flat as overnight US indices closed in the red as most investors stayed on the sidelines ahead of an event heavy week. The RBI policy meet in India today coupled with UK elections, EU Meet and Comey testimony on Thursday all could be the drivers for markets’ direction going forward.


Nifty hit 9700 only to see selling dominate the session and closed near the low of the day. The bout of profit booking saw very weak advance/decline ratio and mid-caps fall more as broader market corrected sharply. IT, select private Banks witnessed buying while FMCG, PSU banks and Auto bore the brunt of the selloff. Today all eyes will be on the RBI Governor on rates as near term consensus seems no change in policy.


The BSE Sensex is currently trading at 31326.41, up by 135.85 points or 0.44% after trading in a range of 31229.25 and 31346.99. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.46%, while Small cap index was up by 0.87%.

The CNX Nifty is currently trading at 9671.50, up by 34.35 points or 0.36% after trading in a range of 9648.00 and 9678.55. There were 35 stocks advancing against 16 stocks declining on the index.

MARKET INDICATORS

·           

 

Group ATopGainers

 

 

Company

Price (Rs)

% chg

IIFL

607.35

10.31

Cadilahc

526.80

7.42

Edelweiss

195.50

5.50

Naukri

1112.00

5.39

Group ATopLosers

 

 

Videoind

31.60

-4.96

RCOM

19.55

-2.74

Hexaware

251.75

-2.61

RTNPower

6.80

-1.88

INDEX PERFORMANCE

 

 

Indices

Support

Resistanes

Sensex

31195

31350

Nifty

9636

9675

 

Technical view: Nifty now finds resistance around 9700 while 9580 will act as strong support. Bank Nifty also finds strong support around 23250 while 23700 will act as resistance on the upside.


 

Union Bank Jun FUT (Sell Below 155 with Stop Loss at 158 for Target of 149): The stock has rallied for the past five sessions and has finally shown signs of a reversal. Union bank found stiff resistance at its 50-DMA which is placed at Rs 160. Other oscillators also indicate that the momentum is fading away further accentuating our short term bearish stance on the stock.


Derivative Snippets    

Adani Power has approached Gujarat UrjaVikas Nigam (GUVNL) to bail out its Mundra power plant, which stares at financial unviability after the Supreme Court in April quashed the company's plea for tariffs that would have compensated escalations in Indonesian coal costs.

In the last trading session, markets traded in a narrow range awaiting the credit policy on June 7, 2017. Huge short covering to the tune of ~3.25 lakh shares was witnessed in Bank Nifty 23500 monthly call option strike along with fresh short build-up in ATM/OTM put option strikes, indicating of a big surge of ~200 points in the Banking index above the resistance level of 23500.

FIIs were net buyers in cash market segment to the tune of Rs 61 Cr.FIIs index future long short ratio at 6.2x vs 6.3x.

Nifty Movers: The top gainers on Nifty were Mahindra & Mahindra up by 2.30%, Vedanta up by 2.05%, ICICI Bank up by 1.63%, Hindustan Unilever up by 1.62% and GAIL India up by 1.62%.

On the flip side, BPCL down by 1.18%, TCS down by 0.98%, Yes Bank down by 0.92%, Wipro down by 0.89% and Indiabulls Housing Finance down by 0.70% were the top losers.

Top Sectoral& Stock Screening:The top gaining sectoral indices on the BSE were Healthcare up by 1.29%, Telecom up by 1.00%, FMCG up by 0.98%, Metal up by 0.82% and Consumer Disc up by 0.64%, while IT down by 0.18% and TECK down by 0.05% were the only losing indices on BSE.

 

 

On the global front: On the global front, Asian shares were trading mostly in green, as investors remained noticeably risk averse. The street cautiously awaited a trio of potential major risk events on Thursday, including the UK election, a European Central bank review and former FBI director James Comey’s testimony to the Senate stateside.

 

Global Signals:The Asian markets were trading mostly in green; Hang Seng increased 1.28 points or 0% to 25,998.42, Nikkei 225 increased 14.59 points or 0.07% to 19,994.49, Jakarta Composite increased 18.17 points or 0.32% to 5,726.01 and Shanghai Composite increased 34.42 points or 1.11% to 3,136.55.On the other hand, Taiwan Weighted decreased 5.62 points or 0.06% to 10,200.56, KOSPI Index decreased 2.96 points or 0.12% to 2,365.66 and FTSE Bursa Malaysia KLCI decreased 1.52 points or 0.08% to 1,789.49.

 

US indices ignore weak jobs data to hit fresh lifetime highs as bull market in equities gathers momentum.

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Indian Indices: Asian indices opened flat as after last week's stellar rally most indices consolidate. The 'yen" weakness saw the Japanese 'Nikkei" hold over 20000 as the new fresh highs see more ETF flows chase returns. Gold prices also saw buying as fresh geopolitical risk in London saw defensive buying emerge.


Nifty gave up most gains of morning trade as profit booking above 9650 was the dominant theme for Friday. The Nifty large cap stocks saw profit booking while the midcaps saw value buying with sectoral outperformance continuing. For today expect another bout of profit booking above 9650 as both foreign & local mutual funds sell while Nifty consolidates.

The BSE Sensex is currently trading at 31271.41, down by 1.88 points or 0.01% after trading in a range of 31198.22 and 31275.35. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.53%, while Small cap index was up by 0.70%.

The CNX Nifty is currently trading at 9665.60, up by 12.10 points or 0.13% after trading in a range of 9640.70 and 9665.70. There were 35 stocks advancing against 16 stocks declining on the index.

MARKET INDICATORS

·           

 

Group ATopGainers

 

 

Company

Price (Rs)

% chg

Titan

534.55

13.19

Redington

149.35

5.21

Unitdspr

2458.40

4.91

Vakrangee

409.25

4.90

Group ATopLosers

 

 

Videoind

34.95

-4.92

Sintex

24.35

-4.13

Kpit

113.50

-2.60

Marksans

44.00

-2.55

INDEX PERFORMANCE

 

 

Indices

Support

Resistanes

Sensex

31195

31350

Nifty

9636

9675

 

Technical view: Nifty now finds strong support around 9550 while 9700 will act as resistance on the upside. Bank Nifty also finds resistance around 23500 while 23250 will act as support.

 

 

Godrej Properties (BUY Above 521 with Stop Loss at 512.5 for Target of 538): After correcting ~20% in past five weeks, the stock has finally shown signs of a recovery and has broken out from a declining trend-line breakout on the daily charts. The upthrust has also been accompanied with smart uptick in volumes. Other oscillators are also indicating the recovery is likely to extend further.


Derivative Snippets:    

Adani Ports and Special Economic Zone Ltd (APSEZ), has started construction of the first berth at the country's international transhipment project of deep-water multi-cargo port at Vizhinjam in Kerala.


In the last trading session, Nifty ended on a positive note. Huge short covering to the tune of ~5 lakh shares was witnessed in Nifty 9500 call strike, making 9500 as the new floor for Nifty during the June F&O expiry series. Bank Nifty OTM put option strikes continue to remain the selling pressure, indicating of a continued uptrend.


FIIs were net sellers in cash market segment to the tune of Rs 59 Cr.FIIs index future long short ratio at 5.8x vs 6x.


Nifty Movers: The top gainers on Nifty were Bajaj Auto up by 2.17%, Indiabulls Housing up by 1.50%, BhartiInfratel up by 1.47%, BPCL up by 1.45% and Yes Bank up by 1.36%. On the flip side, ITC down by 1.07%, Lupin down by 0.87%, Coal India down by 0.73%, Infosys down by 0.38% and HDFC down by 0.32% were the top losers.

Top Sectoral& Stock Screening:The top gainers on the Sensex were Bajaj Auto up by 2.25%, Cipla up by 1.19%, Tata Steel up by 1.04%, Sun Pharma up by 0.82% and Axis Bank up by 0.77%. On the flip side, ITC down by 1.07%, Coal India down by 0.73%, Lupin down by 0.70%, HDFC down by 0.63% and Infosys down by 0.37% were the top losers.

 

 

On the global front: On the global front, Asian counters were exhibiting mixed trend at this point of time with some indices trading in red, as the most recent US data is testing bets on improving global growth that has helped drive the value of equities worldwide. The US markets extended their gains in last session, overlooking a weaker than expected jobs data, as the World Bank forecasted a modest pickup in growth despite uncertainty about monetary policy and concern among bond traders that inflation is waning.

 

Global Signals: Asian markets were trading mixed; KOSPI Index rose 2.18 points or 0.09% to 2,373.90, FTSE Bursa Malaysia KLCI increased 8.19 points or 0.46% to 1,785.14, Jakarta Composite gained 15.7 points or 0.27% to 5,758.15 and Taiwan Weighted was up by 39.39 points or 0.39% to 10,197.54.

On the flip side, Hang Seng decreased 85.84 points or 0.33% to 25,838.21, Shanghai Composite shed 14.53 points or 0.47% to 3,091.01 and Nikkei 225 was down by 6.39 points or 0.03% to 20,170.89.

 

WEEKLY NIFTY TRADING VIEW FOR THE WEEK JUNE05, 2017-JUNE 11, 2017

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Events to watch this week

  • US nonfarm payrolls rose 138,000; March/April revised down
  • Merkel: We have to fight for our own future ourselves
  • Draghi suggests no immediate policy shift ahead
  • UK polls show narrower lead for Conservatives
  • US quits Paris agreement

The Week ahead:

Mon, 5 June

global

Service sector purchasing managers indices

Tues, 6 June

Australia

Reserve Bank of Australia interest rate decision

Tues, 6 June

eurozone

Retail sales

Wed, 7 June

China

Foreign exchange reserves

Wed, 7 June

eurozone

Gross domestic product

Thurs, 8 June

Japan

Gross domestic product

Thurs, 8 June

United Kingdom

General election

Thurs, 8 June

China

Trade balance

Thurs, 8 June

eurozone

European Central Bank rate decision

Fri, 9 June

Canada

Unemployment rate

For the week,Led by the United States, global equities extended gains this week amid moderate global growth and restrained inflation data. All three major US indices set all-time highs. After disappointing US employment data, the yield on the 10-year Treasury note slipped to 2.17% compared with 2.24% last Friday. Oil continued its drop as well, with West Texas Intermediate crude falling to $47.35 a barrel from $48.95 a week ago. Volatility, as measured by the Chicago Board Options Exchange Volatility Index (VIX), remained historically muted, falling to 9.9 from 10.8 last week.

NIFTY- 9,653.50
CRUDE OIL-Rs 3,080barrel
GOLD-Rs 28,905 gram
Rs/$-Rs 64.44

MARKET ROUND UP

Market jumped on hopes of timely arrival of southwest monsoon rains. Global markets remained mixed following a better-than-expected employment data in the US, which triggered concerns that the US Federal Reserve may soon hike rates this year. While commentary by foreign brokerages on India and benchmark indices lifted investors' sentiment.

India's key reforms, including the impending Goods and Services Tax (GST) and sticky loan resolution, may improve the country's credit profile, Moody's Investors Service said on Thursday, 1 June 2017. A foreign broker, meanwhile, rolled forward its Sensex target to 32,200 by March 2018 as against the earlier target of 31,500 for December 2017. The broker said that implementation of the GST, strong flows from domestic mutual funds and foreign investors are positives, but a lot seems to be getting priced in with valuations at 18 times estimated FY18 earnings.

In the week ended Friday, 2 June 2017, the Sensex jumped 245.08 points or 0.79% to settle at 31,273.29, a record closing high. The index hit record high of 31,332.56 in intraday trade on Friday, 2 June 2017. The Nifty 50 index surged 58.40 points or 0.61% to settle at 9,653.50, a record closing high. The index hit record high of 9,673.50 in intraday trade on Friday, 2 June 2017.

The S&P BSE Mid-Cap index rose 281.58 points or 1.94% to settle at 14,801.48. The S&P BSE Small-Cap index rose 224.91 points or 1.49% to settle at 15,311.17. Both these indices outperformed the Sensex.

Macro Economic Front:

On the Economic Front,data released by Markit Economics during market hours on Thursday, 1 June 2017, showed that Indian manufacturing sector stayed in expansion mode in May as a further upturn in new business supported output growth. That said, the headline Nikkei India Manufacturing Purchasing Managers' Index (PMI) dropped to a 3-month low of 51.6 in May from 52.5 in April.

India's Gross Domestic Product (GDP) rose at moderated pace of 6.1% in Q4 March 2017, which is the lowest pace of growth in last nine quarters. The GDP growth decelerated sharply from 7% growth recorded in the preceding last quarter and 8.7% surge posted in the corresponding quarter last year. The data was released by the government after market hours on Wednesday, 31 May 2017.

The Eight core infrastructure industries have showed 2.5% growth in output for April 2017 over April 2016. Its cumulative output growth had stood at 4.8% in FY 2017. The Base Year of the Index of Eight Core Industries has been revised from the year 2004-05 to 2011-12 from April 2017. The shift is in line with the new base year of Index of Industrial Production (IIP). The data was released by the government after market hours on Wednesday, 31 May 2017.

Major Action &Announcement:

Mahindra & Mahindra (M&M) rose 6.13% to Rs 1,423. The company's total tractor sales rose 11% to 25,599 units in May 2017 over May 2016. M&M's total auto sales rose 3% to 41,895 units in May 2017 over May 2016. Total domestic sales grew by 11% to 40,602 units in May 2017 over May 2016. Exports fell 68% to 1,293 units in May 2017 over May 2016. The announcement was made during market hours on Friday, 1 June 2017.

Bajaj Auto rose 1.06% to Rs 2,846.10. The company's total sales declined 10% to 3.13 lakh units in May 2017 over May 2016. Domestic sales fell 15% to 1.74 lakh units. Exports declined 3% to 1.39 lakh units. The announcement was made during market hours today, 2 June 2017.

Maruti Suzuki India rose 0.58% to Rs 7,114.25. The company's total sales rose 11.3% to 1.36 lakh units in May 2017 over May 2016. Domestic sales grew by 15.5% to 1.30 lakh units in May 2017 over May 2016. Export sales declined 36.3% to 6,286 units in May 2017 over May 2016. The announcement was made during market hours on Thursday, 1 June 2017.

Housing finance major HDFC rose 4.02% to Rs 1,610.10. The company said that HDFC Investments, a wholly owned subsidiary of the company subscribed 3.27 crore shares or 15% of share capital of First Housing Finance (Tanzania), Tanzania's first housing finance company. Cost of acquisition is equivalent to $1.5 million. The announcement was made after market hours on Thursday, 1 June 2017.

Coal India rose 0.17% to Rs 268.80. The company's consolidated net profit declined 38.25% to Rs 2716.09 crore on 8.01% increase in total income to Rs 25027.35 crore in Q4 March 2017 over Q4 March 2016. The result was announced after market hours on Monday, 29 May 2017.

ONGC fell 1.08% to Rs 173.90 after net profit declined 6.14% to Rs 4340.18 crore on 26.81% rise in total income to Rs 26233.56 crore in Q4 March 2017 over Q4 March 2016. The result was announced after market hours on Friday, 26 May 2017.

Global Front:

In Overseas Markets,data released by the private payroll firm ADP on Thursday, 1 June 2017, showed that private US companies hired at a blistering pace in May, accelerating from the pause in April. Non-farm private employment surged 253,000 in May. An improving labor market will likely support investors' expectations that the Federal Reserve will raise interest rates further in the coming months.

Global Economic News:

US adds fewer jobs than forecast
The May employment report was a disappointment save for a continued drop in the unemployment rate. 138,000 new jobs were added last month, while revisions to March and April data trimmed 66,000 from pervious totals. Economists had expected a rise of 184,000 nonfarm payrolls. Wage gains were steady at 2.5% versus a year ago. The bright spot in the report was the continued fall in the unemployment rate, which edged down to a 16 year low of 4.3%. While weaker than expected, the data likely won’t dissuade the US Federal Reserve from hiking rates later this month.

Merkel downplays past partnerships
Speaking at a campaign event inside a Bavarian beer tent shortly after the Nato and G7 summits, German chancellor Angela Merkel said the times when Europe could rely on others were over. She said while friendly relations with the US and UK are needed, she added that “we have to fight for our own future ourselves”. The German federal election takes place on 24 September.

Draghi: Not ready to unwind stimulus
Appearing before the European Parliament’s committee on economic affairs this week, European Central Bank president Mario Draghi downplayed the odds of any shift in policy at next week’s rate-setting meeting. Economic growth is improving but inflation remains subdued, the central banker said, adding that the economy still requires substantial stimulus. Some analysts had expected the ECB to signal that it will begin tapering bond purchases later this year. Very subdued eurozone inflation data (+1.4% year over year) released later in the week further tamped down expectations of a policy shift.

UK polls tighten
Opinion polls ahead of next week’s UK general election have been all over the map, with some showing the Conservatives with a lead as small as 3% and others indicating a lead as wide as 15%. What is not in doubt is that the race has tightened. Recall that the Conservatives held a 22% advantage on the day the election was called back in April. Not helping the Conservatives, Prime Minister Theresa May was criticized for skipping a BBC-sponsored debate, choosing instead to send a surrogate. Labour Party leader Jeremy Corbyn pounced on the decision. May tried to keep the focus on Brexit, saying Corbyn is ill suited to lead those negotiations with the European Union.

US pulls out of Paris Agreement
Saying he was elected to represent the voters of Pittsburgh, not Paris, US president Donald Trump this week announced that the United States would pull out of the Paris climate deal. The agreement put the US at a disadvantage, Trump said, highlighting its lack of enforcement mechanisms. Trump offered to renegotiate the deal, though Germany, France and Italy balked at the notion.

Italy moving closer to early elections
Elections could come as early as this autumn if the Italian parliament adopts a new election law resembling German’s proportional system, with a 5% cutoff for smaller parties. If the law is approved in the coming weeks, as expected, Italians could go back to the polls around the same time as Germany votes on 24 September. The ruling Democratic Party and the eurosceptic Five Star Movement are nearly tied atop the polls.

Europe continues to hog the growth spotlight
While manufacturing in the US and China moderated slightly in May, Europe continues to show strength. The eurozone manufacturing purchasing managers’ index firmed to 57.0 from 56.7 in April, the highest in six years. UK PMI stayed robust at 56.7, down from April’s 57.3, while the US ISM Manufacturing Index saw slight improvement to 54.9 In May from 54.8 in saw slight improvement to 54.9 In May from 54.8 in April. China’s official PMI stood unchanged at 51.2, though the Caixin PMI dipped to 49.6 from 50.3.

GLOBAL CORPORATE NEWS

Beige Book less upbeat
Optimism waned in a few districts, the Fed reported this week in its Beige Book. Seven of the 12 Fed districts reported growth as “modest” since the last report on 19 April, while four reported “moderate” growth and one district — New York— was flat. Markets still expect the Fed to hike rates later this month, but with inflation pressures moderating, future rate hikes are less certain than they were earlier in the year.

 

NEW 52-WEEK HIGH BSE (A):

 

ADANITRANS

132.75

BALKRISIND

1615.00

BAYERCROP

5050.00

NEW 52-WEEK LOWS BSE (A):

VIDEOIND

36.75

MAJOR WEEKLY GAINERS IN BSE A CATEGORY(%):

M&m FIN

24.34

BAYER CROPSCIENCE

16.46

ADANI TRANSMISSION

15.23

MAJOR WEEKLY LOSERS IN BSE A CATEGORY:

RELIANCE COMM

-19.96

VIDEOCON INDUSTRIES

-22.30

SINTEX INDS

-16.03


Eyes will be set on the certain US economic data releases are:

Monday (05June)

PMI Services Index & Factory Orders

Tuesday (06 June)

Week Bill Auction

Wednesday (07 June)

Consumer Credit

Thursday (08 June)

Fed Balance Sheet& Jobless Claims

Friday (09 June)

Wholesale Trade

Fundamental Pick of the week:

Buy Emami Ltd For Target Rs.1,260.00

Investment Rationale

* Emami is one of the leading players in the personal & healthcare consumer products industry in India, with portfolio of household brand names such as BoroPlus, Navratna, Fair &Handsome, Zandu Balm, MenthoPlus Balm and Fast Relief. It has a portfolio of over 300 products with presence across 40lac plus retails outlets through a network of 2,900 distributors.

* For FY18, the company is targeting double digit volume growth, likely to be driven by revival in urban and rural consumption and launches in new categories and brands extensions. Focus will remain on power brands. New products are likely to contribute 2-3% of overall sales.

* After a subdued performance in FY17, the company expects its overseas business to grow in double digits, led by ramp-up of demand in Middle East.

GST rates of 18% for personal care and 12% for Ayurveda will benefit the company. Further the company expects its debt to be re-paid by FY18.

Recommendation

Buy Emami Ltd @1135-1145 Stoploss 1065 CMP 1139.10  Target 1260

Domestic Market Overview

The Indian markets showing a lackluster trade ended marginally in red again in last session, as slew of disappointing economic reports on GDP, core sector output and manufacturing stirred concerns about the state of the economy. Today, the start is likely to see some recovery on positive global cues. Traders will be getting some support with NITI Aayog Vice Chairman ArvindPanagariya’s statement that India will regain the crown of the fastest growing major economy, overtaking China, as early as the first quarter of 2017- 18. He said that India, on an annual basis, is ahead of China and will regain the growth momentum soon on the back of host of reforms initiated by the Modi government in the last three years. Meanwhile, Finance Minister ArunJaitley while maintaining that the decline in fourth quarter GDP print cannot be attributed to demonetisation alone has said that India growing at 7-8 percent is 'fairly reasonable' in the current global context. Also, the Moody’s Investors Service has said that India’s key reforms, including the impending goods and services tax and resolution of sticky loans may improve the country’s credit profile. Realty sector may see some action, as the government has set a target of constructing 51 lakh houses by March 2018 to reach halfway towards its goal of building 1crore houses by 2019.

TECHNICAL VIEW:

S3

S2

S1

NIFTY

R1

R2

R3

9,485

9,565

9,610

9,653.50

9,688

9,720

9,800

Till we are above 9610 we can move towards 9669/9700/9767. Bearish below 9570 for a move towards 9500. Prices cannot stay near gann angles for so long so brace for a trending move. Nifty closed above 9610 on Friday and we finally had a gap up opening which did the first target of 9669 now as long as bulls held on to 9610 we can march for higher target of 9700/9779. Bearish below 9580 for a move towards 9520/9470. 

Conclusion:

Jubilation continues in the passing week as Nifty gained nearly half a percent and made a new record high above 9650.Encouraging Q4 earnings along with positive global cues and early arrival of monsoon helped the index to maintain its momentum for the sixth consecutive week.The coming week will be again a crucial week wherein RBI monetary policy is scheduled on 7th June.

Technically speaking, we‘re in a bull run and we expect the prevailing momentum to extend further. So, any intermediate dip should be considered as buying opportunity but do maintain caution in stock selection

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