*Market Wrap: 17/04/2017 (19:00)*
*NSE-NF (April): 9166 (-16 points; -0.17%)*
*NSE-BNF (April): 21708 (-25 points; -0.12%)*
*IN 10Y G-SEC: 6.847 (+0.40%)*
*USDINR (Apr): 64.60 (+0.16%)*
*For 18/04/2017:*
*Key support for NF: 9115-9035*
*Key resistance for NF: 9200-9280*
*Key support for BNF: 21675-21500*
*Key resistance for BNF: 21775-21875*
*Time & Price action suggests that, Nifty Fut (Apr) has to sustain over
9235 area for further rally towards 9280-9310 & 9375-9425 in the short
term (under bullish case scenario).*
*On the other side, sustaining below 9215-9200 area, NF may fall towards
9160-9115 & 9085-9035 area in the short term (under bear case scenario).*
*Similarly, BNF has to sustain over 21825 area for further rally towards
21875-21975 & 22050-22150 area in the near term (under bullish case
scenario).*
*On the other side, sustaining below 21775 area, BNF may fall towards
21600-21500 & 21340-21200 area in the near term (under bear case scenario).*
Nifty Fut (Apr) today closed around 9166, slightly down after making an
opening session high of 9182 and day low of 9142 in a lacklustre day of
trading as majority of the EU markets were closed due to Easter Monday.
Indian market today opened almost flat following tepid Global/Asian cues
after US bombed a suspected ISIS hideout with a MOAB on Friday in an
apparent signal to NK on last Friday. In the weekend, there was worry
about possible HK nuke test and retaliation of US; but NK tried for a
missile test yesterday, which failed instantly. Although China is trying
to pacify both US & NK, there are still serious concerns and among all
these lingering geopolitical tensions, USD is being sold across the
board and risk trade is off.
On Friday, US economic data (core CPI & retail sales) also flashed
downbeat, which raised some concerns for Fed’s plan for a June hike.
Overall, although US consumer confidence is at record high with moderate
increase in wages but consumer spending (retail sales) are on the
decline for the last two months, which may also affect the US GDP by
some extent and thus Fed may be on the side line for the next few months
also (June & Sep).
Also, as par some reports, there may be some change in Trump’s core
economic team in the coming days in which the aggressive pro-infra
spending person (Bannon) may be replaced with more conservative aide
(Cohn). Thus, reflation trade may be now in question as Trump may not go
for an aggressive tax cuts & infra spending spree for fiscal deficit
concerns. All these are making the USD & US Bond Yields lower.
In the morning today, Chinese Q1 GDP (YOY) data flashed slightly higher
than estimate at 6.9% (estimate/prior: 6.8%); but retail sales &
industrial production came way above expectations at 10.9% & 7.6% for
March. Overall Chinese data was supported by a buoyant real estate
market & consumer spending helped by credit growth in Q1. But, despite
that, China market was down today for geopolitical concern with NK and
also for the perception that an upbeat economic data may help PBOC for
more tightening in the coming days.
Among all these ongoing global jitters, Indian market also turned
cautious ahead of TCS earning tomorrow and host of others (IIB/Yes Bank)
in the next few days after Infy’s poor report card & guidance last week.
Also, RBI’s new norms for NPA risks, weak credit growth (below 5%) may
have affected the sentiment today. IMD may also announce officially
their first monsoon forecast later this week and market may be also
concerned that it may be a deficient rain forecast this year after last
year’s near normal rain fall (El-Nino effect in line with Skymet forecasts).
Indian WPI (March) today flashed as 5.70% against estimate of 5.98%
(prior: 6.55%). Although, headline WPI declined in March after last few
month’s upper trajectory, WPI or even CPI headline data may be of little
relevance for RBI now as Patel/MPC may wait for actual monsoon,
implementation of GST, 7-CPC spillover effects on inflation & actual Fed
stance in the coming months before any rate action. There is no
requirement of a rate cut in FY-18 as nearly all the economic data/GDP &
projections are quite upbeat. Going forward, previous full rate cut
transmissions to the base rate (not MCLR) is more important for the
credit flow/growth of the Indian economy. Today’s MFG WPI came as 2.99%
against prior 3.66%, which may also indicate some lack of pricing power
for the manufacturers.
Today midcaps outperformed the broader market helped by the real estate
sectors after IBREALEST surged by over 40% amid news of restructuring
into separate commercial real estate. This move may unlock value and may
also attract REIT funding. As a result of such deleveraging, all the
other real estate scrips such as DLF also surged. Going by the price
action, the move may be exaggerated because such separation of units may
also limit the earning potential for the original entity.
Most of the leading Pharma scrips were also under pressure today because
of renewed US FDA concerns. For TCS, Q4FY17 expectations are muted
tomorrow (PAT: -2%; USD revenue: +2% on QOQ basis).
*Technically, TCS (LTP: 2315), has to sustain over 2365-2400 zone for
any rally towards 2465-2525 area; otherwise it may fall and sustaining
below 2315 area may further fall towards 2275-2255 & 2150-2105 zone in
the short to mid-term. *
<https://1.bp.blogspot.com/-cqYGp8m_H6Y/WPTTkVlrCXI/AAAAAAAALW4/SBLfyo7pG6Ebcsxzyyq6G336vc01gTLGACLcB/s1600/SGX-NF-PATTERN-17-04-2017.png>
SGX-NF
<https://4.bp.blogspot.com/-_H0liApm0KQ/WPTTmY7L3CI/AAAAAAAALW8/9heei-bmw00cWURvnONU8Q7z0rK1U-GiwCLcB/s1600/BNF-PATTERN-17-04-2017.png>
BNF
<https://4.bp.blogspot.com/-SQFsuAFMF3w/WPTTqC4n8VI/AAAAAAAALXA/JoI1whqP_WwpcfCr0mMHDh1PN79rmv7UACLcB/s1600/TCS-FIBB-17-04-2017.png>
TCS
--
Thanks & Regards,
Asis Ghosh
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