Banks Rebound On Hopes Of RBI Cut In Aug, After Govt Cuts Small Savings
Interest Rate By 0.10%
Nifty Finished Almost 1% Lower In June, The First Monthly Drop In 2017
Amid Concern Of GST, NPA & QT
Market Wrap: 30/06/2017 (17:00)
NSE-NF (July): 9515 (-4; -0.04%) (TTM PE: 24.10; Near 2 SD of 25; TTM
EPS: 395; NS: 9521)
NSE-BNF (July): 23210 (-21; -0.09%) (TTM PE: 29.20; Near 3 SD of 30; TTM
EPS: 795; BNS: 23211)
For 03/07/2017:
*Key support for NF: 9495/9440-9395/9335*
*Key resistance for NF: 9540/9600-9670/9725*
*Key support for BNF: 23000-22800*
*Key resistance for BNF: 23350-23550*
*Time & Price action suggests that, NF has to sustain over 9615 area for
further rally towards 9670-9725 & 9775-9865 in the short term (under
bullish case scenario).*
*On the flip side, sustaining below 9600-9560 area, NF may fall towards
9495/9440-9395/9335 area in the short term (under bear case scenario).*
*Similarly, BNF has to sustain over 23350 area for further rally towards
23550-23750 & 23850-24000 area in the near term (under bullish case
scenario).*
*On the flip side, sustaining below 23300 area, BNF may fall towards
23100/23000-22800 & 22450-22300 area in the near term (under bear case
scenario).*
Nifty Fut (July) today closed around 9515, almost flat after making an
opening session low of 9451 and late day high of 9529 led by late
recovery tracking some rebound in European markets and possibly by
quarter end portfolio/fund rebalancing in a cautious tone ahead of GST
roll out tomorrow.
Indian market today opened around 9493, almost 27 points down following
negative global cues. Overnight US market (DJ-30) also closed in deep
red (-0.78%) on concern of central bankers tightening (QT) and
subsequent surge in global bond yields; tech shares/start ups were also
in huge pressure as era of easy money may end soon. Although, Q1 US GDP
headline came upbeat on 3^rd revision, fine prints of the same may not
be so much rosy.
Financials has supported the US market yesterday following Fed’s
approval of higher dividends & buy backs after successful stress tests.
Indian market also opened lower following negative global cues & ongoing
GST jitters and market continues under stress on earnings concern for
Q1-Q2FY18 due to GST disruptions and NPA blues despite great thrust on
deleveraging for stressed corporate India.
Almost all the major sectors in India from steel, power and cement to
telecom are in stress; but telecom sector may got some boost as Govt
help/bail out them by lowering interest rate & extending debt tenure.
Overall, market participants are concerned that due to hurried
implementation of GST from tomorrow in so much complex form may cause
economic activity contraction, at least in the short term. The present
form of GST is not a “one tax, one nation” as originally thought; but
it’s a multi tax dual system with a huge challenge of full compliances,
especially for the small traders (SMES).
Going forward, Nifty-Fut (July), which is closed around 9515 area today,
need to sustain above 9440-9395 area; otherwise expect more corrections
for 9335-9285 area in the coming days amid concern of GST, NPA & QT by
global central bankers.
Today banks supported the market to some extent after Govt cut interest
rate on most of the small savings instruments by around 0.10%. RBI has
some reservation about higher small savings interest rate in India,
being not aligned with the 10Y GSEC bond yield and may be one of the
major obstructions for the banks in their transmissions of the full
benefit of the lower RBI repo rate cuts. Thus, cut in small savings rate
by even 0.10%, may encourage banks to transmit more as they may have
also cut their FD/deposit rates and RBI may follow suit in Aug’17.
Govt/FM also assured the industry/market today that if the GST
compliance is good, then Govt may reconsider aligning some GST rates,
such as 12 & 19% into a single 15% for a simple GST structure of 3-4
rates against present system of 6-7 rates. This may have also calmed the
nerves of the market today.
Today Nifty was supported by BOB (Nomura upgraded it after recent steep
fall), ITC (favourable GST rate optimism), Pharma, Metals (Tata Steel
for buzz of Essar steel M&A), IT (TCE/INFY), Private Banks
(Yes/Indusind/Kotak/Axis).
Nifty was dragged by Tata Motors, TECHM, ICICI Bank, HDFC, RIL & LT; out
51 components, 31 were in red today.
*Asian Market Update:*
Elsewhere, Australia (ASX-200) was closed in deep red (-1.50%) amid
concern of a hawkish RBA next week in the changing global central banks
bandwagon of hawkish tunes despite some rebound in iron ore prices after
upbeat China PMI data today.
China (SSE) also closed almost flat in slight red (-0.15%) after PBOC
further strengthen the Yuan (CNY) and sucked out more liquidity (CNY 60
bln) today by reverse repo; there are talks that PBOC may cut RRR for
some small lenders (Banks) targeting the SME sector (real economy) and
continue its deleveraging effort for the big ones.
Although, today’s official China PMI was upbeat and above market
expectations, fine print reveals that PPP & Mfg PMI may be contracting,
which may have some negative impact on its GDP going ahead.
Japan (Nikkei-225) closed almost 0.90% lower around 20000 level,
following strength in Yen after mixed economic data today and overall
weakness of USD. In Japan, although headline CPI for May came at 0.4%,
core CPI continues to be at 0% against BOJ’s target of 2% and that may
be a big disappointment despite decades of QQE.
Subdued core CPI & wage inflation in Japan may be a structural issue
which monetary policy may not solve alone; thus Abenomics need to
undertake some changes in order to address this decade old issue
properly. In that perspective, Sunday’s Tokyo regional election may be
an acid test for the Japanese PM (Abe) & his policy of Abenomics.
Technically, for Nikkei-225, the area of 19800-19700 may be a big
support as of now.
Hong Kong (HSI) also closed lower (-0.60%) tracking negative global cues
ahead of “Hand Over” day tomorrow, when Chinese premier may announce
some sops for the market/economy; looking ahead HSI, which is trading
around 25600 now, need to stay over 25300 area for any rebound;
otherwise may correct more.
In commodities, Crude Oil is now trading around 45.20, stabilizing to
some extent after recent slump on concern of supply glut & OPEC
squabbling; surprised fall in US supply & better drawdown of gasoline
may be supporting the Oil right now, although that may be seasonal in
nature.
Another point may be that stock of Crude Oil may be converting into
gasoline stock piles considering the recent spate of refinery expansion.
All eyes may be on today’s Baker Hughes Oil rigs data to gauze the
underlying supply sentiment.
*European market update:*
Elsewhere, in Europe stocks recovered slightly after upbeat EU economic
data; specially inflation. Headline CPI for June flashed as 1.3% against
estimate of 1.2% (prior: 1.4%). Similarly core CPI came as 1.1% against
estimate of 1% (prior: 0.9%).
But EURUSD did not react too much even after upbeat EU core CPI data as
bund yields fall; although, core CPI came around 1.1% from earlier 0.9%
and quite encouraging, it may be far below ECB’s target of 2% (unless
ECB officially lower its inflation target).
European market was also under some pressure today following overnight
slump in US market; Banks are supporting, but healthcare & commodity
related stocks are dragging. Bayer is under huge selling pressure after
its guidance warning citing some headwinds from its Brazil business.
In UK, although Q1 GDP came as expected at 2% (YOY) & 0.2% (QOQ), the
underlying details may be less impressive with 1.4% fall in real
disposable income; as a result BOE may not run for an immediate hike
despite its recent hawkish script. Subsequently GBPUSD dropped by some
extent.
DAX is now trading around 12390 area, down by 0.17%; looking ahead, it
need to stay over 12300 area; otherwise expect more fall towards
12170-11970 area in the coming days.
FTSE is now trading around 7350,almost flat (+0.03%) amid some fall in
GBP; technically it now need to sustain over 7240 area for any bounce;
otherwise it may fall further towards 7125-7030 zone in the days ahead
amid increasing QT coordination among G-10 Central Banks.
*US market update:*
SPX-500 (US-500) is now trading around 2420 after making a session high
of 2428 following mixed US economic data; core PCE, a favourite
indicator of Fed to gauze underlying inflation pressure on US economy
came in line for May as 0.1% (MOM) & 1.4% (YOY) against prior 1.5%.
Although US personal income for May came as upbeat at 0.4% against prior
0.3% (MOM-May), personal spending came disappointed at 0.1% against
prior 0.4%.
Chicago PMI (June) came upbeat at 65.7 against estimate of 58 (prior:
59.4); U-Mich consumer sentiment for June also flashed well at 95.1
against estimate of 94.5 (prior: 94.5).
Overall data may be good but may not be block buster enough to move the
Fed above the side line in the coming days and may have also failed to
lift the sentiment of USDJPY & SPX-500; both are down to some extent
after the data.
Although, U-Mich consumer sentiment data has beat the estimate, it’s at
7 month low, which may be also indicating that consumers are fast losing
hopes in “Trumponomics” after the election amid increasing uncertainty
about US economic prospect and political jitters. Trump’s election
rhetoric now need to be transformed fast into real action; otherwise US
consumers may soon lose all the hopes on Trump to make “America great
again”.
<https://3.bp.blogspot.com/-wUUgtlTNtRE/WVaCsEreuDI/AAAAAAAAMOA/qEUBRcOxyDcqxP_gbXFiD0ubYtDLOE4OgCLcBGAs/s1600/SGX-NF-PATTERN-30-06-2017.png>
SGX-NF
<https://1.bp.blogspot.com/-dLd00m1IAWY/WVaCuF9npfI/AAAAAAAAMOE/oR7nWwOOvuUIQzwvzzJ6es3TRwGdfNNNgCLcBGAs/s1600/BNF-PATTERN-30-06-2017.png>
BNF
<https://1.bp.blogspot.com/-IFpu1r8Py1E/WVaCxPPWDGI/AAAAAAAAMOI/cWBp7hs_SpcVIu6yYp_zSay9QMXFnIwhgCLcBGAs/s1600/DAX-FIBB-30-06-2017.png>
DAX-30
--
Thanks & Regards,
Asis Ghosh
--
Kindly email stock reports at
STOCKRESEARCHER@googlegroups.com
For sharing knowledge
-- NIFTYVIEWS.COM NOW A FREE OPEN SOURCE WEBSITE.
http://www.niftyviews.com/
Disclaimer :-
"The opinions expressed by the members on this board are based on
their individual experience and perceptions and to share information
with other members with the best of intentions to help fellow members
in investment decisions as equity investment is a risky venture.The administrator of
www.Niftyviews.com just provide a platform for the authors to express their opinion
and take no guarantee for the genuineness of the same."ANY member of this forum
doesnt prepare or publish any research report; or ii. provide research report; or
iii. make 'buy/sell/hold' recommendation; or iv. give price target;
---
You received this message because you are subscribed to the Google Groups "Niftyviews.com" group.
To unsubscribe from this group and stop receiving emails from it, send an email
to stockresearcher+unsubscr...@googlegroups.com.
For more options, visit https://groups.google.com/d/optout.