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Events to watch this week
- December US
core retail sales flat
- China reports
2016 export drop
- US small
business optimism soars
- World Bank
projects modest 2017 growth uptick
The Week ahead:
- US financial
markets are closed for Martin Luther King Jr. Day on Monday, 16 January
- The World
Economic Forum in Davos begins on Tuesday, 17 January
- The European
Union reports consumer price data on Wednesday, 18 January
- The United
States reports consumer price data on Wednesday, 18 January
- The European
Central Bank holds a rate-setting meeting on Thursday, 19 January
- China reports
retail sales and gross domestic product figures on Friday, 20 January
the week,Global equities extended gains this week
as US financial firms kicked off the Q4 earning season with solid results. US
10-year Treasury note yields were steady at 2.42%. West Texas Intermediate
crude dipped to $53 a barrel from $53.90 a week ago, and Global Brent crude
dropped to $56 a barrel from $56.90. The Chicago Board Options Exchange
Volatility Index (VIX) was steady at 11.20.
CRUDE OIL-Rs 3,586barrel
GOLD-Rs 28,385 gram
MARKET ROUND UP
The market edged higher last week, backed by positive global cues. The
Sensex crossed the psychologically important 27,000 level. India's industrial production surged at 13-months
high pace of 5.7% in November 2016 over November 2015, snapping 1.8% fall recorded
in October 2016. The manufacturing sector's production jumped 5.5%, while
mining output rebounded 3.9% after three months of decline, contributing to the
increase in industrial production. The data was released by the government
after market hours on Thursday, 12 January 2017.In the week ended Friday, 13 January
2017, the Sensex rose 478.83 points or 1.79% to settle at 27,238.06. The Nifty
50 index rose 156.55 points or 1.90% to settle at 8,400.35.
The BSE Mid-Cap index gained 317.31 points or 2.58% to settle at
12,639.03. The BSE Small-Cap index 249.52 points or 2.01% to settle at
12,689.85. Both these indices outperformed the Sensex.
the Economic Front,Finance Minister ArunJaitley, in his address on the second day of vibrant
Gujarat Global Investors Summit on Wednesday, 11 January 2017, on
demonetization, said that difficult decisions initially pass through difficult
phases as historic decisions have temporary pain attached to them.
Stressing the implementation of the Goods and Services Tax (GST),
Jaitley said that most of the issues have been resolved, few critical issues
are left which will be resolved in the next few weeks. He further added that
GST Council is deliberative democracy in action and the impact of both GST and
demonetization will be felt this year.
Major Action &Announcement:
Tata Steel was top gainer in the Sensex pack last week. The stock rose 6.36% to
Rs 446.40 last week after the company announced that its total sales rose
27.45% to 29.94 lakh tonne in Q3 December 2016 over Q3 December 2015. The
growth in sales was enabled by higher sales in the automotive segment, branded
products and value-added products & scaling up of sales in new segments.
The announcement was made during market hours on Monday, 9 January 2017.
Auto major Tata
Motors rose 3.38% to Rs 514.65. Tata Motors Group's global wholesales rose 4%
to 95,081 units in December 2016 over December 2015. The announcement was made
after market hours on Tuesday, 10 January 2017. Tata Motors' subsidiary Jaguar
Land Rover reported 12% rise in total retail sales to 55,375 units in December
2016 over December 2015. The announcement was made during market hours on 9
Software major TCS
fell 1.38% to Rs 2,252. The company's consolidated net profit rose 2.9% to
Rs 6778 crore on 1.5% increase in revenue to Rs 29735 crore in Q3 December 2016
over Q2 September 2016. The result was announced after market hours on
Thursday, 12 January 2017. The results are as per International Financial
Reporting Standards (IFRS).
Infosys' consolidated net profit rose 2.8% to Rs 3708 crore on 0.2% fall
in revenue to Rs 17273 crore in Q3 December 2016 over Q2 September 2016. The
consolidated net profit rose 1.5% to $547 million on 1.4% fall in revenue to
$2551 million in Q3 December 2016 over Q2 September 2016. The results are as
per International Financial Reporting Standards (IFRS).
State-run NTPC advanced 4.36% to Rs 171.05 after the company signed a
non-binding memorandum of understanding (MoU) with Rajasthan RajyaVidyutUtpadan
and Rajasthan UrjaVikas Nigam for take-over of Chhabra thermal power plant
stage-I (4x 250 MW) and stage-II (2x660 MW) of Rajasthan UrjaVikas Nigam. The
announcement was made during market hours on Thursday, 12 January 2017.
US President-elect Donald Trump said in his first press conference late Wednesday,
11 January 2017 that pharmaceutical companies were getting away with murder
with respect to drug pricing and promised a complete turnaround, making
healthcare less expensive and better. He said that US is the largest buyer of
drugs in the world, and yet, the country does not bid properly, prioritising
bringing back drug industries back to the US. He added that US firms would
start bidding and save billions. Trump also said he would repeal and replace
Obamacarethe country's existing affordable healthcare legislation-shortly after
price approvals, which could impact pharma companies.
Overseas Markets,investors will look forward to the policies and actions of US
President-elect Donald Trump, whose focus is on creating jobs and increasing
spending in the US. If Trump's policies run into headwinds, then the domestic
market may witness heightened volatility. China Q4
Gross Domestic Product (GDP) data for December 2016 will be announced on
Monday, 16 January 2017. China's Industrial Production data for December 2016
will be announced on Monday, 16 January 2017.
UK Consumer Price Index (CPI) data for for December 2016 will be
announced on Tuesday, 17 January 2017.
Global Economic News:
US holiday sales
US retail sales rose 0.6% in December, but were flat when excluding
automobile and gasoline sales.
China’s 2016 exports fall
Exports from China fell for a second year amid persistent weakness in
global trade. The possibility of disagreements with the United States over
trade does not brighten the outlook for 2017. In 2016, exports fell 7.7% while
imports slid 5.5%. There were some bright spots discernible, suggesting
domestic demand is improving. Record amounts of oil, iron ore, copper and
soybeans were imported in 2016.
Outlook upbeat for small businesses
The National Federation of Independent Businesses termed the jump in
its small business optimism indicator “stratospheric” as the number of business
owners who expect better business conditions jumped 38 points. The index rose
to 105.8, its highest level since 2004. The increased optimism is leading to
more business activity, such as capital investment, according to the group.
Global economy to expand 2.7% says World Bank
Despite stagnant global trade, subdued investment and heightened policy
uncertainty, the World Bank expects global growth to expand at a 2.7% rate in
2017, up from 2.3% in 2016, a post-crisis low. Hoped- for fiscal stimulus from
the US could generate fast growth, the bank said, though it cautioned that
trade protection could have adverse effects.
Pace of US stimulus questioned
President-elect Donald Trump held a press conference this week but did
not lay out a clear timeline or framework for the tax cuts and regulatory
reforms he campaigned on. Markets are growing concerned that stimulus could
come later than expected or be smaller in size than first envisioned. Trump did
say that the Affordable Care Act would be repealed and replaced “essentially
simultaneously.” The president-elect said that he would place his business
interests in a trust and transfer control of his company to his two adult sons.
GLOBAL CORPORATE NEWS
BOE’s Carney: Brexit no longer biggest risk to stability
Bank of England governor Mark Carney said this week that Brexit is no
longer the biggest single risk to financial stability in the United Kingdom.
That’s a dramatic change in tune from the nation’s top central banker. Before
the referendum in June, Carney warned of severe economic consequences if
Britons voted to leave the European Union. Now, Carney says that the bank will
very likely revise its economic forecast higher next month. The EU, Carney
said, has more to lose from a “hard” Brexit than the UK.
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
Anouncement& Month Bill Auction
Price Index &MBA Mortgage Applications
Claims& Natural Gas Report
Pick of the week:
Tata power Ltd For Target Rs. 88.00
The stock rose to two and half month closing high post giving break-out
from “Symmetrical Triangle” pattern.We believe the stock will surge in the
near-term, as (i) substantial rise in volume on the break-out day and (ii)
gradual rise in RSI & MACD post their positive cross-over is signaling
strength in the stock and in favor of probable rebound.On
the higher side, the stock will initially face resistance around prior swing
high and monthly moving average thereafter.
Long position can be initiated in
Rs79.50-79 range for target of Rs88 with a strict stop loss of Rs76.
The Nifty opened higher and ended the trading session on a positive
note. It is approaching significant resistance levels. The 20 Week Moving
Average (WMA) and the 50% retracement of the fall from 8968 to 7893 are
converging at around 8430. It would be interesting to see if the bears manage
to defend the crucial resistance level of 8430 or not. If the Nifty breaks and
sustains above 8430, then a move towards 8510-8560 is likely. However, the
Index is losing momentum on the upside. The hourly momentum indicator is
already showing a negative divergence and has also given a negative crossover.
Therefore, some caution needs to be maintained while initiating fresh long
positions. The bulls will gain momentum if the Nifty breaks and sustains above
8430. The Index is interestingly poised at this moment. It continues to make
higher top and higher bottom, indicating that the current uptrend can persist
in the near term. Traders holding long positions in the Nifty should trail stop
loss, as the momentum is weakening.
Nifty continue its uptrend now range of 8430-8435 is
very important zone of resistance,crossing the same rally can extend towards
8600. Taking resistance in zone we can see downmove towards 8250. High made
today was 8417 and low 8382 and close at 8407. As we have weekly closing
tomorrow so bulls will be happy to close above the gann resistance zone as
shown in below chart,bears will be happy to close below 8380. Close above 8440
can see next round of upmove towards 8555/8598. Bears below 8370 can move back
towards 8270-8250 range.