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Events to watch this week
- US stocks
reach new high
- ECB extends
quantitative easing another year
- Renzi resigns
in wake of Italy referendum
elects establishment candidate
imports and exports on the rise
The Week ahead:
industrial production and retail sales data are released on Monday, 12
- The Federal
Open Market Committee meets on Tuesday and Wednesday, 14–15 December
eurozone's industrial production figures are released on Wednesday, 14
- US business
inventory, retail sales and industrial production data are released on
Wednesday, 14 December
- US Consumer
Price Index, NAHB housing market index and jobless claims data are
released on Thursday, 15 December
the week,Global equities recorded solid gains this
week, as major US indices set fresh records and European stocks posted their
best week since February. The S&P 500 Index gained 2.75% through Thursday
and about 4.05% for the month, setting a new all-time high. Oil prices slid
slightly this week, with West Texas Intermediate crude falling 58 cents a
barrel to $51.10 and global Brent dropping 46 cents a barrel, to $54.01, as of
early Friday morning. The yield on the 10-year US Treasury note increased 8
basis points week over week, trading at 2.46% Friday, and was about 55 basis
points higher than it was on November 8, Election Day in the US.
CRUDE OIL-Rs 3,471barrel
GOLD-Rs 27,585/10 gram
MARKET ROUND UP
Indian equity markets registered strong gains in the week ended Friday,
9 December 2016, inline with the sentiments in global markets. Barring a single
trading session on Wednesday, 7 December 2016, the two key benchmark indices
viz. the S&P BSE Sensex and the Nifty 50 index, landed in green in four out
of five trading sessions. The indices bucked positive trend in the post-noon
session on Wednesday on the heels of the Reserve Bank of India's (RBI) decision
to keep key interest rates steady.
The Sensex surged 516.52 points or 1.96% to settle at 26,747.18. The
Nifty jumped 174.95 points or 2.16% to settle at 8,261.75. The BSE Mid-Cap
index rose 2.75%. It outperformed the Sensex. The BSE Small-Cap index advanced
1.96%, matching the Sensex's gains in percentage terms.
On the Economic Front,Data released by
Markit Economics during the week showed that India's services sector activity
declined sharply last month as cash shortages hit the sector in the wake of the
government's move to demonetise higher denomination notes. The seasonally
adjusted headline Nikkei India Services Business Activity Index dropped to
46.70 in November, from 54.50 in October, registering contraction for the first
time since June 2015 and pointed to the sharpest reduction in output for almost
Major Action &Announcement:
Mahindra (M&M) was up 3.96%. The company announced that IT will be undertaking
scheduled maintenance shutdown at some of its automotive and tractor plants in
December 2016. The announcement was made after market hours on Thursday, 8
Tata Motors surged 7.16%. The
company said that Jaguar Land Rover (JLR), the UK's leading manufacturer of
premium luxury vehicles, reported its best ever November retail sales. JLR
reported 2% rise in total sales to 47,588 vehicles in November 2016 over
November 2015. The announcement was made during market hours on Thursday, 8
Cipla advanced 1.38%. The
company said it received final approval for its abbreviated new drug
application (ANDA) for Entecavir Tablets USP 0.5 mg and 1 mg, from the United
States Food and Drug Administration (USFDA). The announcement was made during
market hours on Thursday, 8 December 2016.
Laboratories (DRL) rose 0.21%. The company during market hours on Monday, 5 December
2016, announced that it has launched Nystatin and Triamcinolone Acetonide
Cream, USP in the US market, approved by the US drug regulator, US Food &
Drug Administration (USFDA).
Lupin advanced 1.81%. The
company announced that Lupin Somerset also known as Novel Laboratories, Inc
received final approval for its Hydrocodone Bitartrate and Acetaminophen
Tablets, USP, 5mg/325mg, 7.5 mg/325 mg and 10 mg/325 mg from the United States
Food and Drug Administration (FDA) to market a generic equivalent of Allergan
Sales LLC's Norco Tablets 5 mg/325 mg, 7.5 mg/325 mg and 10 mg/325 mg. The
announcement was made after market hours on Monday, 5 December 2016.
Tata Steel jumped 5.88%. Tata Steel
UK on Wednesday, 7 December 2016, reached an agreement with trade unions on a
number of proposals that would structurally reduce risks and help secure a more
sustainable future for its UK business.
Steel also announced that its subsidiary, TM International Logistics (TMILL)
has divested entire stake in its wholly owned step down subsidiary TM Harbour
Services (TMHSPL) to Adani Ports and Special Economic Zone (APSEZ) for a total
consideration of Rs 106 crore in an all cash deal.
BhartiAirtel rose 3.22%. The
company on Thursday, 8 December 2016, launched two new bundled packs for its
prepaid customers with free voice calling and substantial data benefits. These
two packs add to Airtel's wide bouquet of innovative packs and plans for
customers, offering them more flexibility. The announcement was made during
market hours on Thursday, 8 December 2016.
Corporation of India (PGCIL) was up 0.38%. The company announced that a meeting
of committee of directors for bonds is planned to be held on 14 December 2016
to consider issue of secured, redeemable, non-convertible, non-cumulative,
taxable bonds (debenture) under private placement. The announcement was made
after market hours on Thursday, 8 December 2016.
Overseas Markets,the European Central Bank (ECB) on Thursday, 8 December 2016, pledged to
continue with its programme of money printing to shore up the euro zone
recovery but surprised financial markets by reducing the amount of stimulus it
expects to provide each month.
ECB left interest rates unchanged and said it would continue its
programme of quantitative easing (QE) to next December or beyond if necessary.
But the central bank said it would reduce its monthly asset buys to 60 billion
euros as of April, from the current 80 billion euros. It, however, said it
reserved the right to increase the size of purchases again.
Global Economic News:
continued to post strong gains this week as investors moved out of defensive
asset classes, taking on more risk. The strongest pockets of the US market
since the election have been materials, industrials, energy, financials and
technology. Meanwhile, high-yield bond sector spreads remained compressed, with
most sectors sitting at 52-week lows, indicating that investors are still
seeking yield opportunities. Emerging market bond spreads also shrank this
week, while US investment-grade bond spreads narrowed as well, albeit slightly.
Yields on municipal bonds also fell this week, indicating a reversal of a
recent selloff in the asset class.
ECB will continue QE through 2017
The European Central Bank announced that it would extend its
quantitative easing program until December 2017, although it reduced its
monthly purchases to €60 billion from €80 billion. The ECB tweaked its rules to
allow the purchase of bonds yielding less than its -0.4% deposit rate. Markets
were mixed on the news. Longer-dated German government bond yields increased,
while shorter-term German yields fell. The euro declined about 1.39% against
the US dollar.
Italians reject constitutional reform
Italian voters rejected a referendum on constitutional reform early
last week, prompting Prime Minister MatteoRenzi to resign. The result
continues the anti-establishment trend in the United States and Europe. Renzi
agreed to remain in office until the Italian Senate passes a 2017 budget.
Moody's cut Italy's sovereign rating outlook to negative from stable after the
vote. The outlook change means the credit rating agency could downgrade Italian
debt if current conditions remain the same. The country's debt is currently
rated two notches above junk status. Shares of Italian banks fell after the
vote. The Italian government is preparing to take a €2 billion controlling
stake in the bank Monte deiPaschi, whose shares fell 15% on the week.
Austrian voters buck anti-establishment trend
Austrian voters elected pro-European candidate Alexander Van der Bellen
as president this week, bucking the anti-establishment mood in the European
Union. Van der Bellen won a close contest in May, but voting irregularities
forced the week's runoff election.
China's exports rise
China's trade data surprised analysts to the upside this week as
imports and exports both increased sharply in November. Exports rose 0.1 % year
over year, reversing a 7.3% decline recorded in October, while imports grew
6.7%, the fastest pace since 2014. The growth in imports suggests stronger
domestic demand while the rise in exports indicates that global demand has also
strengthened. Despite these increases, however, China's imports and exports
remained negative for the year through November. The yuan has fallen about 3%
versus the US dollar since October, while China's foreign exchange reserves
fell to their lowest level since March 2011. China's reserves fell $69 billion
in November, which was its fifth straight monthly decline.
52-WEEK HIGH BSE (A):
52-WEEK LOWS BSE (B):
GAINERS IN BSE A CATEGORY:
LOSERS IN BSE A CATEGORY:
Eyes will be set on the certain US economic data
Begins & NFIB Small Business
Sales & FOMC Forecasts
Price Index &Jobless Claims
Pick of the week:
biocon Ltd For Target Rs. 28.00
BIOCON added around 11% of open interest as long positions along with
some delivery based buying in previous session. It has also witnessed breakout
from ‘Inverted Head & Shoulder’ pattern on daily charts. We recommend doing
a bull spread as per levels given below.
BUY BIOCON 940 CE AT 27-28 & SELL 980 CE AT 12-13, SPREAD AT 15, SL
9, TARGET 28.
This week markets witnessed one of the historic events in the Indian
Economy where after the Demonetization, markets were keenly expecting a minimum
of 25 bps rate cut. But, to surprise all, Mr. Urjit Patel kept the RBI's stance
unchanged shocking the markets on Wednesday. Nifty made a low of 8095 post RBI
policy, just 20 points short of its Monday's low of 8075.
Monday through Wednesday, Nifty rose by 142 points and fell sharply by
122 points post RBI. However, markets have regained their strength and rose by
200 points from its Wednesday's low of 8095 to make a high 8295. This upside
rally was contributed by strong fundamentals of the Indian economy accompanied
with strong International markets.
Nifty gave multiple Long entry on Monday and
Wednesday and did the 3 target on upside our 3 target was 8280, High made
was 8275 so disciplined Chopad Followers were rewarded again by
Market. Lets analyze how to trade nifty in coming week as we have
Fed policy outcome on 14 Dec. Now for coming week 8091 will play crucial role above which again a
move towards 8175/8250. Bearish below 8031 for 7900.
Tomorrow will be very
crucial as mostly we should see a trending move, Bulls above 8130 again will
move towards 8200/8250, Bears below 8100 will see move towards 8056/8011. Nifty
opened above 8130 made low of 8150 and did both target of 8200/8250 High made
was 8256 . Thats the beauty of gann price and time analysis it gives you an
extra edge, As I have been discussing Bulls need a close above 8250, as we have
weekly closing tomorrow close above 8250 will be big booster for Bulls.Close
above 8250 target 8330/8370/8444. Unable to close above it another move towards
8200/8153. Bulls finally were able to close above 8250 and sustaining above it
nifty should move towards 8330/8370/8444. Any close below 8250 bears will get
upper hand and push nifty towards 8181/8150/8097. Expect good trending move in
next 2 trading days.