-------- Forwarded Message --------
Subject: Nifty Closed The Oct Exp At 8615 After After A Volatile Day
Marked By Tata-Mistry Duets---What's In Store For Nov?
Date: Thu, 27 Oct 2016 19:45:25 +0530
From: Asis Ghosh <asis...@gmail.com>
Reply-To: asis...@gmail.com
*Market Wrap: 27/10/2016 (17:00)*
Nifty Fut (Oct) today closed around 8615, almost flat after a wild day
of swing and made a session low of 8547 and late day high of 8624.
For the Oct Exp, Nifty also finished almost flat after making "Surgical
Strike" induced low of around 8505 and later marked by "Cyexit".
*Technically, NF-NOV (LTP: 8655) has to close above 8700 zone for at
least three consecutive days for target of 9000-9200 in Nov-Dec in
extreme bull case scenario.*
*On the other side, consecutive closing below 8480 zone for at least
three days, NF may fall towards 8000-7925 area by Nov-Dec in the worst
bear case scenario.*
*For tomorrow (28/10/2016), NF has to sustain over 8680-8720* area for
further rally towards 8760/8790*-8815/8850 zone in the immediate to
short term.*
*On the flip side, sustaining below 8660-8620* area, NF may further fall
towards 8600/8540*-8500/8480-8450/8425 zone in the immediate to short term.*
Overnight US market recovered from negative to close flat on the back of
robust earnings of Boeing and rally in Oil amid surprise inventory draw
down by a Govt report, contrary to earlier Pvt Report. But, eventually,
Crude was not able to sustain above $50, because of skepticism about
OPEC's plan of production cut or even freeze.
Indian market today opened lower (gap down) following tepid global cues
and most of the days traded in deep negative amid "Cyexit" jitters,
which have not only affected some of the Tata Group shares
significantly, but also affected the sentiment of the overall market.
Also, largely "in line with estimates" earnings, but tepid guidance may
have failed to convince the market and along with that, the continuing
uptrend of the NPA woes of the banking sector may have also made the
market jittery to some extent.
Market sentiment was improved today in the last hour, after Govt
announced its plan to sale its stake for 17 PSUS (although there is no
definitive time line). If sold successfully, then it may help the Govt
to reduce the burgeoning fiscal deficit because of high infra capex &
defence expenditure and 7-CPC/OROP pay outs. Govt today announced
another "Diwali Gift" to the central Govt employees in the form of 2% DA.
Also, Tata Sons response to the "Letter Bomb" by Mistry helped to calm
the nerves of the market/Tata shares by some extent. Although, the
verbal duel will go on for some days, it has already dented
shareholder's worth by a huge amount and already damaged the reputation
of brand "TATA" for various reasons.
Now, regulators (SEBI), stock exchanges (NSE/BSE), various rating
agencies and also banks are getting concerned and seeking clarifications
regarding alleged write down probability of $18 bln in various group
cos, corporate governance, cash flow issues etc. SBI may also review its
total exposure of more than Rs.70000 cr with the Tata groups shortly.
From the overall flow of events, it seems that no big name (like Indra
Nooyi), outside Tata family may be willing to act as a "Lame Duck" TATA
SONS chairman, and in that scenario, Noel Tata may be an ideal candidate
(being half brother of R.Tata, he may be an “Yes man”). But, Noel Tata
has also married the sister of Mistry and it may be very doubtful also
for him to be the next Chairman of TATA SONS.
Thus, in this board room war & family saga, R. Tata may continue for
another 1-2 years as interim Chairman till they found any "suitable" big
name, who can act as a "Lame Duck" Chairman and also be a global
ambassador of brand/image “TATA”.
Eventually, moral & confidence of key people in the group may
deteriorate and investors may lose faith in the Tata groups as public
spat between Tata & Mistry gets uglier day by day.
The main concern for the market may be the continuation of the present
strategy of deleveraging employed primarily by Mistry, irrespective of
“passion & emotion” attached with a non-viable business for Tata
("Hotspots" like Tata Steel UK/Corus, Tata Motors PV/Nano, Tata
Power/Mundra, Indian Hotels, Airline ventures/Air Asia & Vistara).
Overall, sentiment of the global market was subdued in the early Asian
session today after some verbal jawboning by BOJ-Kuroda, which made the
Yen stronger.
But, later in the EU session, better than expected UK GDP data helped
the "risk on" sentiment and Indian market also rebound from the days low.
Although, UK's GDP data may be revised later, but it also showed a
"resilient" economy supported by dual benefit of a weaker currency and
EZ/EU trade access. It does not capture the likely fall out of a "Real
Brexit", be it "soft" or "hard" and did not alter the high probability
of invocation of Article-50 in the coming months (March'17 or by Dec'17)
and uncertainty with it.
Thus, US election risk (Trump is now getting closer to Clinton as par
latest poll), Fed hike (Dec'16) and subsequent dot-plots (1-2 hike in
2017), Real Brexit, China Yuan devaluation & credit concerns, EU/Italian
banking crisis may be some of the global head winds, which may affect
the market in Nov-Dec, despite India being a "sweet spot" in the global
economy.
Domestically, all eyes will be on the Q2FY17 earnings, current spate of
Tata saga, progress of GST & budget and ongoing geo-political tensions
with Pakistan which is taking the shape of a virtual "Mini War" amid
daily incidence of cease fire violations.
Overall, Nifty can break the present trading range amid various
geo-political events & domestic cues and can move significantly in
either way (500 points) by Nov-Dec'16.
<https://1.bp.blogspot.com/-uP_pU3ipVF4/WBIKV7OWh1I/AAAAAAAAJRk/IjIftYldkZUmbbdk8HjiAK4oFlZiV94DgCLcB/s1600/SGX-NF-PATTERN-27-10-2016.png>
SGX-NF
--
Thanks & Regards,
Asis Ghosh
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