-------- Forwarded Message --------
Subject: Nifty Closed Almost Flat In A Holiday Thinned Trade Amid
Lackluster Global Cues And Caution Before Q2 Earnings & IIP/Inflation Data
Date: Mon, 10 Oct 2016 19:29:10 +0530
From: Asis Ghosh <asis...@gmail.com>
Reply-To: asis...@gmail.com
Nifty Fut (Oct) today closed around 8745 (+0.26%) after making an
opening session high of 8776 and day low of 8732.
For most of the days Nifty traded in an extremely narrow range with some
movements in selective stocks as most of the market participants may be
busy in the "sea beaches or hill stations" for an extended holiday
rather than on the "trading screens" !!
*Technically, for next Indian Trading day (13/10/2016), sustaining below
8715-8690* area, NF may fall towards 8665/45*-8585/30-8495/75 zone in
the near to short term.*
*For any meaningful strength, NF need to sustain over 8775-95* area for
further rally up to 8840/75*-8905/35-8995/9030 zone in the immediate to
short term.*
*Broadly speaking, due to lack of any meaningful domestic as well as big
global cues, NF may be consolidating between 8840-8540 range and any
breakout or breakdown with volumes (for any reasons) may result in a
300-450 point movement on either side. *
Apart from global cues, domestic market may give more focus on the
Q2FY17 earnings (Indusind Bk, Infy & TCS this week), macros (IIP/CPI/WPI
for more clues about RBI stance in the coming Dec), progress of GST on
the ground (as par FM, GST council may finalize the rate/RNR in the
forthcoming meet to be held on Oct-18/19), preparations of FY-18 budget
(to be placed on 02/02/17).
Analysts are very hopeful for a true revival of earnings in Q2 for
autos, cements, metals because of incrementally higher demands & sales,
but certain other sectors like FMCG, IT, Pharma may drag. Also NBFC may
report good numbers, Banks (PSBS) may report some improvements in fresh
NPA/NPL creation on a sequential basis (although, rather than mere
recognition, effective resolution may be more important as of now and
transfer of NPA to some other ARC may ease the burden on the banks
temporarily, but it will not solve the basic problem of low capacity
utilization & tepid demand).
Incidentally, India is aiming around 300 MT steel production capacities
by 2025 from the projected FY: 17-18 capacity of around 100 MT and want
to be 2-nd largest steel producing country in the World after China and
will replace Japan. But, in reality it may also create a bubble (like
China/SAFTA/CIS countries today) as par the current and future trend of
steel consumption in the country.
Indian market today opened in a positive note following overnight trend
in US market on Friday. Although, headline US NFP data was below
expected, overall participation rate improved a bit and together with
other recent US incoming economic data, Fed should have no issue to
proceed with a Dec hike, if there will be no rude geo-political shock
this time.
Although, Clinton is leading in the debate and various opinion pools,
today's debate also gave Trump some lost ground amid his various
controversial remarks. So, going forward, this may be close contest on
8-th Nov (polling date), although market may be already start
discounting a Clinton win this time; but there may not be clear majority
in both the US houses this time. Market is not prepared for a ”Trumpism"
either!!
Now, more than US economic data, Fed's decision may hinge on the actual
US election outcome and other geo-political (black swan) events, like
"Real Hard Brexit", Italian referendum and EU banking crisis, China
credit & real-estate bubbles etc.
As par some reports, DB may clinch a Qatar SWF funding for a 25% stake
sale; but there seems to be no progress on the reported US-DOJ fine
issues and for this, EU market sentiment was also affected in the noon
trade today.
All eyes will be on the OPEC and stance of Russia/Iran/Iraq/Saudi Arabia
for the much expected actual production cut/freeze commitments in the
Istanbul today ahead of official meet in Vienna in Nov. If, production
cut is a reality, then one can expect Crude to hit $55-60 in the near
term, which may be negative for an oil importing country like India.
Sentiment of Indian market today also affected to some extent by the
ongoing fight between a small group of terrorists and Indian Army in J&K
and as par various reports, 250 terrorists already sneaked into India
even before the "Surgical Strike".
Thus, going ahead, ongoing geo-political tensions between Ind-Pak
(frequent cease fire violations, attempt to attack the Indian Army/BSF
camps in various parts of the J&K and activation of sleeper cells to for
targeted attacks in various Indian metros) without a full scale
war/"strategical strike" may keep the Indian market on an edge.
On the other hand a "strategical strike" instead of frequent "surgical
strike" may solve the problem of "terror hubs" in POK to a great extent,
but it may also make the FPIS nervous, at least in the short term.
Although, due to less than expected/budgeted proceeds from the recent
telecom spectrum may affect the Govt’s FY-17 fiscal deficit, it may be
supported to some extent by the windfall gain from the recent IDS &
buoyancy in the indirect tax collection; yet due to 7-CPC and increased
defense expenditure, H2FY17 capex for infra may be less.
As par reports, recent telecom spectrum will fetch around Rs.15000 cr in
FY-17 (against budgeted Rs.100000 cr); but IDS fetched Govt a windfall
gain of around Rs.15000 cr also.
Indirect tax collection also has growth of around 25.9% YOY and so far
collected around 52.5% of the FY-17 BE.
Today Nifty was supported significantly by Tata Steel ( report of
renegotiation of UK pension issues, but later denied by the UK union; EU
ADD on Chinese steel, weak GBP and better production volume in India)
and other metals; cements; IT; Asian Paints (better festival demand ?);
Cipla & Lupin.
Nifty was dragged by Bharti Airtel, RIL, HDFC, NTPC & Adani Ports.
*Update:*Aug IIP came at (-) 0.7% against poll of (+) 0.77% (prior: -
2.5% in July); although slightly negative for market sentiment this
being a old series IIP may have little impact on the overall market and
Govt is planning to release the new series shortly.
<https://4.bp.blogspot.com/-J35VRL5lX_8/V_uccljkCbI/AAAAAAAAJAU/nSS5ni61FNEwr2ZWfLEtOAO7KKa9C980gCLcB/s1600/SGX-NF-PATTERN-10-10-2016.png>
SGX-NF
--
Thanks & Regards,
Asis Ghosh
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