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Events to watch this week
anticipated at March FOMC meeting
- Global growth
- Major indices
- House of
Lords seeks Brexit bill amendments
The Week ahead:
- The People’s
Bank of China meets to set interest rates on Monday, 6 March
- Q4 eurozone
gross domestic product is released on Tuesday, 7 March
releases Q4 GDP figures on Wednesday, 8 March
- China reports
its trade balance on Wednesday, 8 March
- The European
Central Bank holds a rate-setting meeting on Thursday, 9 March
- The US
February employment report is released on Friday, 10 March
the week,Global equities extended gains this week,
and strong global manufacturing data suggested that economic momentum continues
to improve. Yields on the 10-year US Treasury note rose strongly — to 2.49%
from 2.32% — as investors moved to price in an interest rate increase from the
US Federal Reserve. Despite growing economic optimism, oil prices fell this
week on increased US inventories. West Texas Intermediate crude fell $1 per
barrel to $53.00 this week while global Brent fell to $55.50 from $56.50.
Volatility remains subdued, with the Chicago Board Options Exchange Volatility
Index at 11.50.
CRUDE OIL-Rs 3,557barrel
GOLD-Rs 29,020 gram
MARKET ROUND UP
After logging gains in prior five weeks, key benchmark indices took a
breather in the week ended Friday, 3 March 2017 as investors resorted to profit
booking. Key indices edged lower in four out of five trading sessions during
In the week ended Friday, 3 March 2017, the Sensex fell 60.52 or 0.21%
to settle at 28,832.45. The Nifty 50 index fell 41.95 points or 0.47% to settle
at 8,897.55. The BSE Mid-Cap index fell 123.07 points or 0.91% to settle at
13,409.04. The BSE Small-Cap index gained 32.39 points or 0.24% to settle at
Trading for first day of the week began on a subdued note as the key
benchmark indices dropped on Monday, 27 February 2017 due to selling pressure
in bank stocks. The barometer index, the S&P BSE Sensex, fell 80.09 points
or 0.28% to settle 28,812.88, its lowest closing level since 21 February 2017.
the Economic Front,India's dominant services industry returned to growth in February for
the first time in four months, a private business survey showed on Friday, 3
March 2017. The Nikkei Services Purchasing Managers' Index, or PMI, in India
came in at 50.3 in February of 2017, up from 48.7 in January. It was the first
expansion after three months contraction but the weakest since October 2016 as
output increased while employment has shown only one noteworthy monthly
increase in the past one-and-a-half years. A reading above 50 indicates that
the services sector is generally expanding; below 50 indicates that it is
The GDP growth is estimated to be 7% in Q3 December 2016, as per the
second advance estimates of national income from Central Statistics Office
(CSO) under Ministry of Statistics and Programme Implementation. The growth in
GDP during 2016-2017 is estimated at 7.1% as compared to the growth rate of
7.9% in 2015-2016.
Major Action &Announcement:
India fell 2.37% to Rs 5,891.80. The company said its total sales
rose 10.9% to 1.30 lakh units in February 2017 over February 2016. The
announcement was made during market hours on Wednesday, 1 March 2017. The
company's total domestic sales rose 11.7% to 1.20 lakh units in February 2017
over February 2016. Exports grew by 2.2% to 9,545 units in February 2017 over
Tata Motors fell
0.41% to Rs 460.10. The company's total sales rose 2% to 47,573 vehicles in February 2017
over February 2016. The company's domestic sales of Tata commercial and
passenger vehicles rose 3% at 42,679 units in February 2017 over February 2016.
The announcement was made after market hours on Wednesday, 1 March 2017.
Mahindra (M&M) rose 0.84%. The company reported a 11% growth
in its total tractor sales to 15,007 units in February 2017 over February 2016.
The company's domestic tractor sales grew by 9% to 13,834 units in February
2017 over February 2016. Exports surged 35% to 1,173 units in February 2017
over February 2016. M&M's total auto sales declined 3% to 42,714 units in
February 2017 over February 2016. Total domestic sales fell 2% to 40,414 units
in February 2017 over February 2016. Exports dropped 13% to 2,300 units in
February 2017 over February 2016. The company announced the monthly sales
volume data during market hours on Wednesday, 1 March 2017.
Lupin rose 1.23%. The company
announced during trading hours on Thursday, 2 March 2017, the launch of generic
Prstiq (Desvenlafaxine Succinate) Extended-Release Tablets, 50 mg and 100 mg
having received an approval from the United States Food and Drug Administration
(FDA) earlier. Lupin'sDesvenlafaxine Succinate Extended-Release Tablets, 50 mg
and 100 mg is the AB rated generic equivalent of Wyeth Pharmaceuticals' Pristiq
Tablets. It is indicated for the treatment of major depressive disorder (MDD).
Pristiq Tablets had annual US sales of approximately $859.9 million (IMS MAT
India lost 2.09%. The company said that production of the company and its subsidiary
companies was 96% of targeted production at 54.30 million tonnes in February
2017. Offtake was 94% of target at 47.73 million tonnes in February 2017. The
announcement was made after market hours on Wednesday, 1 March 2017.
Wipro rose 1.41%. The company
announced that it has completed the sale of its EcoEnergy division on 1 March
2017. Wipro said that the impact of sale of EcoEnergy division is expected to
reflect in the financials of Wipro for the Q4 March 2017 and year ending 31
March 2017 (FY 2017). The announcement was made before market hours on
Thursday, 2 March 2017.
Overseas Markets,the Labor Department said on Thursday, 2 February 2017 that initial
jobless claims fell to their lowest level in over 40 years in the week ended 25
February 2017, potentially adding to rate hike expectations.
US President Donald Trump promised to provide tax cuts for companies
and middle-class citizens, invest $1 trillion in infrastructure, and increase
defence spending in his maiden speech to Congress on Wednesday, 1 March 2017.
Trump made no suggestions on how he would pay for his plans.
Global Economic News:
Market prices in
March Fed move
The week began with markets pricing in about a 50% chance of a hike in
the federal funds rate at the Federal Open Market Committee meeting this month
but ended with markets almost fully pricing in a quarter-percent hike. Hawkish
comments from the troika of Fed chair Janet Yellen, Vice Chair Stanley Fischer
and New York Fed president William Dudley helped seal expectations of a March
Fresh records for major indices
More records were broken this week as the reflation rally extended
further. The Dow Jones Industrial Average closed above 21,000 for the first
time on Wednesday, while the S&P 500 Index brushed 2,400. London’s FTSE 100
also closed at a record high on Wednesday, boosted in part by a weak pound.
Brexit process hits speed bump
Despite suffering a defeat in the House of Lords over the Brexit bill,
UK prime minister Theresa May insists her timetable for triggering Article 50
will not be delayed. The Lords voted to amend the Brexit bill in order to force
the government to guarantee the rights of citizens of the European Union living
in the UK. The bill will now be referred back to the House of Commons, where
May is expected push to reject the amendment.
Earnings season draws to a close
With 98% of companies reporting for the fourth quarter of 2016, the
earnings growth rate for the S&P 500 is 4.9%. According to FactSet
Research, the fourth quarter will mark the first time the index has seen
year-over-year growth in earnings for two consecutive quarters since Q4 2014
and Q1 2015. Sales growth for Q4 is running at a 4.9% rate, according to
FactSet. The 12-month forward P/E ratio is now 17.9%, which is above the 5- and
Economic optimism continues to build
A sizable uptick in the closely watched ISM manufacturing purchasing
managers’ index and a jump to a 15-year high in the Conference Board’s consumer
confidence measure were two standout data points in the United States this
week, keeping the reflation trade firmly on track. China’s PMI showed strength
as well, though the eurozone’s and United Kingdom’s PMIs were less robust.
However, economic sentiment in the eurozone reached a six-year high. Also
notable in the eurozone this week was an energy-driven rise in inflation to
near the European Central Bank’s 2% target. This is the first time consumer
price inflation has reached the target in four years.
52-WEEK HIGH BSE (A):
52-WEEK LOWS BSE (ALL):
GAINERS IN BSE A CATEGORY:
LOSERS IN BSE A CATEGORY:
Eyes will be set on the certain US economic
data releases are:
Monday (06 Mar)
Tuesday (07 Mar)
Wednesday (08 Mar)
Thursday (09 Mar)
Jobless Claims & Natural Gas
Friday (10 Mar)
Pick of the week:
Buy GlaxoSmithKline Consumer Healthcare
Ltd For Target Rs.5,910.
GlaxoSmithKline Consumer Healthcare closed 0.6% up in trade today at
Rs5,108 vs. 0.5% fall in benchmark Nifty.
GSK Consumer is the market leader in health food drinks industry with
market share of 70%. With its flagship brands Horlicks and Boost, it has
successfully fend off competition from likes of Heinz and Mondelez.
The company would substantially benefit from lower tax rates in the GST
regime as its current tax structure is quite high compared to other players.
Based on expected EPS of Rs181, the stock trades at attractive
valuation of 28.2x FY18E earnings. We have a BUY rating on the stock with price
target of Rs5,910.
Indian Market Outlook:
Supported by the firm global cues and better than expected GDP numbers,
Nifty made a new 52-week high but finally settled with cut of nearly half a
Markets are still overbought and we might see further consolidation in
index ahead. However, the overall trend is bullish and hence we sug-gest
traders to use any decline during this phase to accumulate quality stocks from
the preferred list of sectors.
* Nifty FMCG Index witnessed marginal profit taking in the passing week
and closed slightly lower in line with the benchmark.
* Technically, it is wisely placed above its important moving averages
(50,100 & 200 EMA) on daily chart and looks upbeat for an up move .
* Traders can consider fresh buying in select counters like JUBLFOOD, HINDUNILVR, BRITANNIA from this
* Nifty Media Index also settled marginally lower after consolidating
in a narrow range.
* It tested its important support zone placed around 2945 level and
bounced back thereafter.
* Considering its overall chart formation, we expect strong surge in
the near fu-ture.
* ZEEL, SUNTV are some of the better placed stocks in this space.
Nifty traded with volatile sentiments in last
session due to profit booking at higher levels from traders. Next important
support seen at 8800 level.Nifty likely to trade with sideways sentiments in
thatsessio on profit booking at higher levels from traders. Nifty likely to
trade with sideways sentiments and 8850 at lower side will be the trend deciding
level. Higher side resistance seen at 8970 levels. However, some buying support
at lower levels may limit the downside in NIFTY. Applying momentum Indicator
RSI for 14-day period trading at level of 63.97 indicates that it is trading
near over bought zone and may face resistance at higher levels.
Now Bulls need a close above 9000 for a move towards 9050/9120/9200,
Bears will get active below 8850 for a move towards 8800/8720.
high of 8892 and low of 8850 so traded in the range, but in process broke the
channel on downside. Break of 8850 shorts can be taken as fall can be seen till
8773 and bullish above 8900 for a move towards 8960/9000. Breakout above 8995
for a move towards 9083/9150.