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Events to watch this week
- Upbeat US
data fuel growth, inflation hopes
- Yellen: Risky
to wait too long to raise rates
confirmed as US Treasury Secretary
- Greek bailout
deadline in doubt
The Week ahead:
- US markets
are closed for President's Day on Monday, 20 February
- China reports
trade data on Tuesday, 21 February
purchasing managers’ indices are released globally on Tuesday, 21 February
consumer price data is reported on Wednesday, 22 February
- UK Q4 gross
domestic product are reported on Wednesday, 22 February
- US existing
home sales data are released on Wednesday, 22 February
the week,Global equities continued their advance on
increasing evidence of improved US economic growth and rebounding inflation.
Major US indices again notched record highs during the week, though bond yields
held steady. Despite the strong data, the yield on the 10-year US Treasury note
fell to 2.415% from 2.43% a week ago. Oil prices dipped, with West Texas
Intermediate crude at $53.50 a barrel versus $54.10 last week and global Brent
falling to $55.60 from $57.10. Volatility, as measured by the Chicago Board
Options Exchange Volatility Index (VIX), edged up to 12 from 10.9.
CRUDE OIL-Rs 3,607barrel
GOLD-Rs 29,355 gram
MARKET ROUND UP
Indian equity benchmark indices viz. the S&P BSE Sensex and the
Nifty 50 index registered small gains in the week ended Friday, 17 February
2017 amid mixed global cues. However, the overall sentiment in the broader
market was subdued during the week.
The Sensex rose 134.50 points or 0.47% to settle at 28,468.75. The
Nifty advanced 28.15 points or 0.32% to settle at 8,821.70. The BSE Mid-Cap
index fell 0.33% and the BSE Small-Cap index declined 0.98%. Both these indices
underperformed the Sensex.
Key benchmark indices eked out small gains in what was a volatile first
trading day of the week on Monday, 13 February 2017. The Sensex had risen 17.37
points or 0.06% to settle at 28,351.62, its highest closing level since 6
Key benchmark indices settled with small declines in what was a lacklustre
session of trade on Tuesday, 14 February 2017. The Sensex fell 12.31 points or
0.04% to settle at 28,339.31, its lowest closing level since 10 February 2017.
the Economic Front,India's industrial production declined 0.4% in December 2016 over
December 2015, snapping strong 5.7% growth recorded in November 2016. The
manufacturing sector's production declined 2% in December 2016, contributing to
the overall decline in industrial production.
The all-India general consumer price index (CPI) inflation dipped to
3.17% in January 2017 compared with 3.41% in December 2016. The data was
announced after market hours on Monday, 13 February 2017.
The monthly inflation data based on wholesale price index (WPI) rose
5.25% (provisional) for the month of January 2017 as compared to 3.39%
(provisional) for December 2016 and minus 1.07% during January 2016. The data
was announced during market hours on Tuesday, 14 February 2017.
India's exports rose 4.32% to $22.11 billion in January 2017 and imports
rose 10.7% to $31.95 billion. The data was announced after market hours on
Wednesday, 15 February 2017. The monthly trade deficit narrowed slightly to
Major Action &Announcement:
tumbled 11.13%. The company's consolidated net profit fell 96.22% to Rs 111.57
crore on 4.31% decline in total income to Rs 68708.48 crore in Q3 December 2016
over Q3 December 2015. The result was announced during market hours on Tuesday,
14 February 2017.
Industries (Sun Pharma) rose 3.11%. The company's consolidated net profit
fell 4.72% to Rs 1471.82 crore on 10.13% rise in total income to Rs 8034.81
crore in Q3 December 2016 over Q3 December 2015. The result was announced
during market hours on Tuesday, 14 February 2017.
Laboratories (DRL) declined 2.01%. The company said it received an unfavorable ruling in
a US court regarding a patent infringement case. The announcement was made
during market hours on Thursday, 16 February 2017.
DRL announced that the United
States District Court for the District of New Jersey issued its opinion
regarding Helsinn Healthcare's patent infringement claims against the company's
proposed palonosetron product, pursuant to a paper NDA under section 505(b)(2)
of the Food, Drug and Cosmetic Act.
Cipla advanced 2.29%. The
company announced that it has launched adult Hepatitis B vaccine in India.
Under a co-exclusive agreement with Serum Institute of India (SII), Cipla will
market the vaccine for adults while SII will market it for adults and children.
The announcement was made during trading hours on Friday, 17 February 2017.
Adani Ports and
Special Economic Zone (APSEZ) fell 4.37%. The company's consolidated net profit rose 25.82%
to Rs 849.75 crore on 29.48% rise in total income to Rs 2429.56 crore in Q3
December 2016 over Q3 December 2015. The result was announced during market
hours on Tuesday, 14 February 2017.
TCS wasup 0.48%. The
company said that its board will meet on 20 February 2017 to consider buyback
of equity shares. The announcement was made after trading hours on Wednesday,
15 February 2017.
Tata Steel was up 0.04%. The
company said that the National Trade Union Steel Coordinating Committee (Steel
Committee) in the UK announced that its members have voted to support the company's
proposals, including the proposal to close the pension scheme in the UK to
future accrual. The announcement was made after trading hours on Wednesday, 15
Overseas Markets,Japan's economy slowed again in the final quarter of 2016, as feeble
spending by consumers took the shine off a pickup in exports and business
investment. Japan's real gross domestic product grew 1% on an annualized basis
in the three months through December for the fourth consecutive quarter of expansion,
the longest stretch of gains since 2013, according to Cabinet Office data
released on Monday, 13 February 2017.
China's producer price inflation picked up more than expected in
January to near six-year highs. China consumer inflation also rose more than
expected, nearing a three-year high as fuel and food prices jumped, data showed
on Tuesday, 14 February 2017.
In US, retail sales rose 0.4% in January, a faster pace than had been
expected, while the consumer price index rose 0.6% in the month, the largest
amount in four years, though this was largely due to a rebound in the price of
Global Economic News:
US economy shows
signs of strength
After a run of strong economic data from the United States, hopes
intensified this week that the reflationary period underway since late 2016
would prove more durable than the four prior upturns during the current
business cycle, which began in early 2009. January retail sales were a major
bright spot, rising a better-than-expected 0.4%, while December sales were
revised up 1% versus a previously reported 0.6% advance. Firmer consumer prices
at both the headline and core level, buoyant manufacturing output and upbeat
regional Fed manufacturing surveys—particularly the Philadelphia Fed's
manufacturing index — which soared to a 33-year high — added to investor
Fed’s Yellen reiterates case for rate hikes
After a string of strong economic reports, markets expect the US
Federal Reserve to hike rates in the first half of 2017, perhaps as soon as
next month’s meeting of the Fed’s rate-setting committee. In congressional
testimony this week, Chair Janet Yellen said that it would be risky to wait too
long to raise interest rates and that the committee would consider hiking rates
in coming meetings. Yellen holds press conferences once per quarter, and the
two rate hikes this cycle have both come at meetings that were followed by
press briefings. Her next press conference is scheduled for 15 March, with
another on 14 June.
Mnuchin confirmed as Treasury pick
US president Donald Trump’s pick for treasury secretary, Steven
Mnuchin, was confirmed by the US Senate this week and sworn into office shortly
thereafter. Tax reform is expected to be Mnuchin's early focus with Trump
unveiling his tax reform package in the next few weeks.
Greek bailout lenders at loggerheads
The International Monetary Fund and eurozone finance ministers remain
at odds over the direction of the Greek bailout process. The two sides hope to
iron out a deal early next week to allow the IMF to release €7 billion in aid
to Greece ahead of European elections, which kick off next month. The creditors
hope to keep Greece from becoming a campaign issue in elections in the
Netherlands in March and in France in April and May for fear that the matter
could further fuel an anti-European Union populist backlash. IMF and Eurogroup
finance ministers have been unable to reach agreement on the IMF’s proposal to
grant Greece some level of debt relief. Without that relief, the fund says,
Greece’s debt is unsustainable.
GLOBAL CORPORATE NEWS
Comings and goings in Washington
It was an eventful week for appointees of President Trump. In addition
to Mnuchin taking the helm at Treasury, the president accepted the resignation
of his national security advisor, General Michael Flynn. Trump scrambled to
nominate R. Alexander Acosta as labor secretary after fast food executive
Andrew F. Puzder withdrew his nomination.
S&P 500 earnings on pace for back-to-back gains
With 75% of S&P 500 companies having reported (as of 15 February),
aggregate earnings are up 5.2% year over year while revenues have grown 4.3%.
According to Hedgeye Risk Management, if these trends hold up, the fourth
quarter of 2016 will be the first time in two years that companies will have
generated positive earnings for two straight quarters.
52-WEEK HIGH BSE (A):
52-WEEK LOWS BSE (A):
GAINERS IN BSE A CATEGORY:
LOSERS IN BSE A CATEGORY:
Eyes will be set on the certain US economic data
Monday (20 Feb)
US Holiday Market Closed
Tuesday (21 Feb)
Wednesday (22 Feb)
Existing Home Sales
Thursday (23 Feb)
Friday (24 Feb)
Pick of the week:
Derivative Ideas Glenmark
Pharmaceuticals Ltd For Target Rs. 980.00
After trading with bearish bias for over a week, GLENMARK posted decent
recovery from day’s low on 16th February and settled near day’s high,
indicating buyer’s interest at current levels. Early signs of recovery are also
visible on the daily chart. Considering all, we recommend buying this stock.
Pharmaceuticals Limited @ 926-930 Stoploss 905 Target
Markets rebounded swiftly today and gained over half a percent. The
upbeat trade deficit figure aided a firm start which was supported by select
index majors. Mostly sectoral indices traded in line with the benchmark and
ended higher. Besides, recovery in the midcap and smallcap space added to the
positivity. We feel the consolidation is not over yet and its range has
slightly broadened now. A decisive move above 8850 in Nifty will trigger
further up move else range bound bias will continue. Amidst all, stocks are
witnessing moves on both sides so traders should focus more on trade management
and maintain a balanced portfolio. .
Cabinet approved the merger of State Bank of India and its 5 associate banks -
State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State
Bank of Mysore (SBM), State Bank of Patiala (SBP) and State Bank of Travancore
(SBT). The listed associate banks closed up 3-4.5%.
*Bharat Forge announced signing
an agreement for a Joint Venture with Israel Aerospace Industries (IAI).
Kalyani Strategic Systems (KSSL) and IAI signed the MoU during the Aero-India
exhibition at Bangalore. Shares of Bharat Forge closed up 6%.
Healthcare announced that the USFDA has inspected the company's Moraiya plant and
did not issue observation (483) which meant that the plant met the
manufacturing norms successfully. Shares closed up by 19.8%.
The NIFTY seems to be locked in a tussle spacing
8827-8715, that’s around a 115 points. Index may now look for an immediate
technical trigger to break this deadlock. Some correction towards 8640-8580
levels may set in, if prices break the low @ 8715 mark. In the medium term, the
SUPPORT zone now shifts upwards to 8537, the 3 week LOW; followed by 8330, that
corresponds to 5 week’s LOW. On the other hand, If 8850 gets breached
convincingly, upside to the July 2016 HIGH @ 8935 would be in contention.