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Events to watch this week
bankers sing more hawkish tune
- US Q1 GDP
economic sentiment soars
president faces corruption charges
The Week ahead:
Mon, 3 Jul
manufacturing purchasing managers' index
Mon, 3 Jul
Mon, 3 Jul
Mon, 3 Jul
Mon, 3 Jul
manufacturing PMI, ISM report
Tue, 4 Jul
Wed, 5 Jul
sales, Markit services PMI
Wed, 5 Jul
Thu, 6 Jul
For the week,Global equities fell modestly this week amid central bank chatter
concerning scaling back monetary stimulus. Yields rose on the talk, with the
10-year Treasury note ending the week at 2.29%, up from 2.15% a week ago. Oil
prices recovered some of their recent losses, rising to $45.40 from $42.65 last
Friday. Volatility, as measured by the Chicago Board Options Exchange
Volatility Index, ticked up to 10.9 from 10.6.
CRUDE OIL-Rs 2968barrel
MARKET ROUND UP
Market declined last week amid negative global cues. The Sensex failed
to hold the psychological 31,000 level, which it had surpassed during the
month. Trading was volatile during the week as the June 2017 derivative
contracts expired on Thursday, 29 June 2017. The week was truncated as domestic
stock markets was closed on Monday, 26 June 2017, on account of Id-Ul-Fitr
In the week ended Friday, 30 June 2017, the Sensex fell 216.60 points
or 0.70% to settle at 30,921.61. The Nifty 50 index fell 54.05 points or 0.56%
to settle at 9,520.90.
The S&P BSE Mid-Cap index rose 60.67 points or 0.42% to settle at
14,644.48. The S&P BSE Small-Cap index rose 28.62 points or 0.19% to settle
at 15,410.52. Both these indices underperformed the Sensex.
On the Economic Front,the implementation of landmark tax reform GST will be closely
watched. There will be a special function in the Central Hall of Parliament
House tonight wherein a number of programs will be witness to the change in tax
structure and implementation of GST across the country between the night of
June 30 and July 1. The government expects GST to revolutionize India's taxing
system and is being marketed as one nation one tax.
Major Action &Announcement:
Axis Bank rose
2.28% to Rs 516.10 after the bank announced after market hours on Wednesday,
28 June 2017, that it successfully issued Rs 3500 crore Basel III compliant
additional tier 1 debentures through private placement to augment the tier 1
capital base. The perpetual debentures with a 5 year call are priced at a fine
coupon rate of 8.75%.
The board of directors of the bank had yesterday, 28 June 2017,
approved the allotment of 35,000 unsecured subordinated perpetual additional
tier 1 Basel III compliant non-convertible debentures of the face value of Rs
10 lakh each for cash at par aggregating to Rs 3500 crore, on a private
Mahindra (M&M) fell 2.06% to Rs 1,347.65. The company announced incorporating
two new subsidiary companies with effect from 25 June 2017. The announcement
was made on Monday, 26 June 2017, when the stock markets remained closed on
account of holiday.
Mahindra & Mahindra (M&M) said that Mahindra Waste Energy
Solutions is incorporated as its new subsidiary company with effect from 25
June 2017. The new company shall carry on the activities connected with
renewable energy/non renewable energy. M&M has subscribed to 10,000 shares
of Rs 10 each aggregating Rs 1 lakh.
contructon major Larsen & Toubro (L&T) fell 2.05% to Rs 1,687.80.
L&T said that the transportation, infrastructure and water effluent
treatment business has jointly bagged an EPC order worth Rs 1223 crore from
Aurangabad Industrial Township. The water and Effluent Treatment Business also
won an EPC order worth Rs 1329 crore from the Mumbai Metropolitan Region
Development Authority (MMRDA). The announcement was made during market hours on
Tuesday, 27 June 2017.
Care major Maruti
Suzuki India fell 0.27% to Rs 7217.90. A foreign brokerage house
reportedly retained its buy call on Maruti Suzuki India and raised target price
on the stock to Rs 8,824 from Rs 7,412 earlier. The stock will continue to
trade at premium valuations due to high growth visibility and consistently
improving free cash flow due to limited capex requirements, the brokerage house
In Overseas Markets,Germany
Manufacturing Purchasing Managers Index (PMI) data and UK Manufacturing PMI
data for June 2017 will be unveiled on Monday, 3 July 2017.
US ISM Manufacturing PMI data for June 2017 will also be unveiled on
Monday, 3 July 2017. US ISM non-manufacturing PMI data for June 2017 will be
unveiled on Thursday, 6 July 2017. US ADP nonfarm employment change data for
June 2017 will be unveiled on Thursday, 6 July 2017. It measures the monthly
change in non-farm, private employment, based on the payroll data of approximately
400,000 US business clients. US nonfarm payrolls data for June 2017 will be
unveiled on Friday, 7 July 2017. US unemployment rate data for June 2017 will
also be unveiled on Friday, 7 July 2017.
Global Economic News:
Easy money epoch
at an end?
Markets turned turbulent this week after a series of hawkish comments
from developed-market central bankers suggested the era of ultra-loose monetary
policy may be nearing its end. European Central Bank president Mario Draghi’s
speech on Tuesday to a gathering of central bankers in Portugal was read as
suggesting that the ECB is considering curbing its asset-buying program. The
ECB pushed back on that interpretation, but the market refused to be spun.
European bond yields rose sharply, as did the euro on foreign exchange markets.
Bank of England governor Mark Carney, after saying only a week ago that now is
not the time to raise interest rates, reversed course and said the Monetary
Policy Committee will debate a rate move in the next few months. Not to be
outdone, US Federal Reserve chair Janet Yellen and Vice Chair Stanley Fischer
both voiced concerns that equity and other asset valuations are on the rich
side, which suggests that financial stability worries could keep the Fed on a tightening
path, despite easing US inflation pressures.
Despite the somewhat more hawkish tone, inflation pressures remain
extremely muted, except in the United Kingdom, where currency pass-through is
boosting prices. To illustrate this point, the eurozone reported on Friday that
consumer prices rose only 1.3% in June versus a year ago, down from 1.4% in
May. That’s well below the ECB’s near-2% target.
US growth revised higher to start year
US economic growth in the hard-to-measure first quarter of the year was
revised higher for a second time on Thursday. Gross domestic product expanded
at a 1.4% annual rate, the US Bureau of Economic Analysis reported. That’s up
from the 1.2% reading in the last revision. Improved consumer spending was the
main driver of the revision, the BEA said. The initial Q1 reading, released in
April, was a particularly anemic 0.7%.
Eurozone confidence near a 10-year high
Theeurozone economic sentiment indicator (ESI) jumped to a nearly
10-year high of 111.1 in June from 109.2 in May, with optimism on display in
all sectors of the economy, according to a report by the European Commission.
The ESI reached 111.8 in August 2007, just before the global financial crisis
began to intensify.
Temer charged with corruption
Brazilian president Michel Temer was formally charged this week with
receiving bribes totaling $152,000. The charges come less than a year after he
took office, in the wake of the impeachment of DilmaRousseff. Temer is the
first sitting president of the country to be charged with a crime. In addition
to the bribery count, the president may also face obstruction of justice
charges, according to press reports.
Venezuelan crisis takes bizarre turn
A stolen police helicopter strafed and dropped grenades on Venezuela’s
Supreme Court and Interior Ministry headquarters this week as protests against
President Nicolas Maduro intensified. Some categorize the attack as an
attempted coup against Maduro’s government, while others say the incident was
staged by his supporters. The political tumult comes against the backdrop of a
deepening economic crisis fueled by runaway inflation, food shortages and
falling government revenues stemming from weak oil prices.
NEW 52-WEEK HIGH BSE (A):
NEW 52-WEEK LOWS BSE (A):
MAJOR WEEKLY GAINERS IN BSE A
MAJOR WEEKLY LOSERS IN BSE A
Eyes will be set on the certain US economic
data releases are:
PMI Manufaturing Index
Tuesday (04 July)
Wednesday (05 July)
MBA Mortagage Applications& Factory Orders
Thursday (06 July)
Claims & PMI Services Index
Friday (07 July)
of the week:
DaburIndia Ltd For Target Rs. 320.00
* Dabur India Ltd (DIL) is the second largest FMCG company in India, in
terms of Product portfolio. It has a strong portfolio of brands
(DaburChyawanprash, Real, Hajmola, Vatika, Amla, Fem, Honey, Meswak, Dabur Red)
with the focus largely on ayurvedic& healthcare offerings.The company’s
diverse product portfolio (hair care, oral care, skin care, home care, health
supplements, digestives, OTC ðicals) and presence in niche categories
has aided revenue growth at a robust ~12% CAGR in FY10-17.
* After retesting lower band of
its consolidation range in May 2017, it has rebounded swiftly in last one month
and now reached closer to the breakout area. The prolong consolidation phase
combined with indications from the chart pattern is pointing towards
possibility of strong surge in near future. Thus we advise traders to accumulate
in the given range of 290-293 with close below stop loss of 276 for the target
India Ltd @ 290-293 Stoploss 276 Target 320
The NIFTY balance is clearly
favoring the BEARS, while the EXPIRY compulsions pointed to a temporary
BOUNCE-BACK. On the daily chart, Index broke its last two weeks low @ 9560 and
has formed a real black body candle over the week. In addition, momentum
oscillator i.e. RSI has broken 50 levels for the first time this year. All in
all, Index is expected to stay under pressure and could lead to retest 9450
levels which is a confluence zone formed by (i) 50DMA, (ii) Rising trend line
and (iii) 61.8 retracement level of near-term rise (9341 - 9709). A clear break
below 9450 level would indicate that Index has moved into medium term bearish
phase (with an immediate downside of 9280 levels).On the flip side, previous
support zone around 9560 will now act as a resistance zone, as is clearly
demarcated in the EXPIRY supply zone.
Other technical observations
In continuation to its sideways trend, the domestic benchmark index,
Nifty slipped nearly half percent amid volatility.Participants are focusing on
GST roll out and will react to the cues next week. Besides, indications from the
global front, movement on currency front and further monsoon update will
dictate the market trend.
* Technically, Nifty has crucial support at 9400 and any breakdown will
trigger further selling pressure ahead. Having said that, the overall trend is
still positive and we advise investors to utilise this corrective phase to
accumulate quality index majors.
* Broadly , we expect Nifty to trade in a range of 9300-9700 in the up
Indian equity market extended its losing streak to the third consecutive week
as traders and investors continued to trade cautiously ahead of the GST
rollout. Outflows by foreign funds and weak global cues further added to
concerns. CDSL saw a bumper debut and closed near 75% higher on the street
while AU Small Finance Bank IPO was oversubscribed by over 50x times. Eris
Lifesciences got listed 2% over issue price on the bourses this week, however,
it closed slightly lower. Tejas Networks witnessed a tepid listing; however,
the stock picked up momentum as the week progressed. Rashtriya Chemicals &
Fertilizers’ (RCF) offer-for-sale was subscribed 791%. Monsoon has touched
majority of Indian subcontinent and is just 1% below estimates. Government of
India has in principle given an approval for sale of Air India.
volatility ruled the roost throughout the week on account of a historic F&O
expiry which saw highest turnover ever. Banking stocks remained in focus
following reports of an RBI order seeking hefty provisions for accounts
referred to bankruptcy courts.