Market Wrap
<https://www.iforex.in/news/nifty-soared-life-time-high-catching-global-rally-earnings-recovery-rate-cut-hopes-after-stable-cpi-43333>:
13/10/2017 (17:00)
NSE-NF (Oct):10194 (+83; +0.82%)
(TTM PE: 26.41; Abv 2-SD of 25; TTM Q1FY18 EPS: 385; NS: 10167; Avg PE:
20; Proj FY-18 EPS: 418; Proj Fair Value: 8360)
NSE-BNF (Sep):24738 (-289; -1.19%)
(TTM PE: 28.11; Abv 2-SD of 25; TTM Q1FY18 EPS: 878; BNS: 24689; Avg PE:
20; Proj FY-18 EPS: 961; Proj Fair Value: 19220)
For 16/10/2017:
*Key support for NF: 10150-10075*
*Key resistance for NF: 10225-10275*
*Key support for BNF: 24625-24300/24000*
*Key resistance for BNF: 24875-25050*
*Hints for positional trading:*
*Technicals indicate that, NF has to sustain over 10275 area for further
rally towards 10325-10380 & 10455-10495 area in the short term (under
bullish case scenario).*
**
*On the flip side, sustaining below 10255 area, NF may fall towards
10150-10075 & 10020-9975 area in the short term (under bear case scenario).*
*Similarly, BNF has to sustain over 24875 area for further rally towards
25050-25250 & 25585-25795 area in the near term (under bullish case
scenario).*
*On the flip side, sustaining below 24825 area, BNF may fall towards
24625-24400 & 24300- 24200/24000 area in the near term (under bear case
scenario).*
*Indian market**(Nifty Fut/India-50)* today closed around 10194, soared
by almost 83 points (+0.83%) and made an opening session low of 10117
and late day high of 10219.
Indian market today opened edged up around 10130 amid mixed global cues,
upbeat macro data (CPI/IIP), telecom consolidation & hopes for an
earnings recovery in Q2 and subsequently raced to the new milestone high
of 10180 in Nifty Spot in a catch up trade tracking global market, also
hovering around new milestone highs on growth & earnings optimism.
Some market participants may be also assuming that as yesterday, CPI for
Sep came as 3.28% vs prior 3.28%-R, it may give some rooms RBI to
consider a rate cut in Dec’17 (?) and thus some rate cut hopes may be
also responsible for today’s sharp rally in the market.
But, considering the sticky nature of core inflation at 4.6% vs 4.5%,
RBI may not oblige, if we consider only growth vs inflation; also
yesterday’s upbeat IIP for Aug at 4.3% vs prior 1.2% may also calm the
nerves of the central bank policy makers after DeMo & GST distorted GDP
for Q1FY18 at 5.7%.
Thus RBI may wait for more evidences about structural slow down in the
Indian economy and thus may not change their neutral stance abruptly,
depending upon only one quarter’s data, which may raise question about
RBI credibility.
Today Nifty was supported by Bharti Airtel (favourable M&A with Tata
Tele), Infratel (buzz of tower deal), RIL (earnings optimism), Tata
Steel, Kotak Bank, Ultratech Cement, Bosch, HDFC Bank & ICICI Bank,
while it was dragged by Gail, ZEEL, DRL, M&M, Sun Pharma, BPCL, L&T,
ITC, Maruti & Auro Pharma.
Overall, Indian market was today helped by banks (hopes for NPA
resolution & rate cuts), telecom (ongoing consolidation & Bharti
Airtel-Tata Tele merger deal) & metals while dragged by energies, health
care & FMCG.
*Globally*
<https://www.iforex.in/news/asia-spikes-earnings-growth-optimism-despite-mixed-global-cues-lower-usd-43291>,
almost all the major *Asia-Pacific stock markets* spikes today and
trading around multiyear milestone highs amid growth & earnings optimism.
*Overnight US market*edged down on muted guidance from some big banks
like JPM & City, despite upbeat results coupled with AT&T for terrible
subscriber addition figures in Q3. Overall market was cautious ahead of
Q3 earning season coupled with ongoing NK “nuke earthquake” tensions.
*USD* dropped further yesterday late NY session on some USGS report
about a mild NK earthquake in the vicinity of earlier Nuke test area,
although it may be natural and not manmade (nuke)!!
DJ-30 fell around 0.14%, S&P-500 closed around 2551, down by almost
0.14%, while NQ-100 dropped by around 0.18% after hitting another
trifecta of record highs intraday as usual. Media stocks were also under
pressure whereas E-Automakers (Tesla) helped the market to some extent.
Healthcare stocks were mixed after Trump signed another executive order
for some modifications of health insurance coverage in the Obamacare,
which may not be good for the average Americans because it could cost
them higher for insurance premium.
Also, the original tax reform plan of Trump may not be good for ordinary
(lower/middle) income American people and also for the US/state
treasuries; this tax plan may not help the US consumer spending and
growth. Thus, market response so far is quite muted after initial
euphoria. Market will focus on fresh “adjustments” by Trump in his tax
reform plan by next few weeks.
Overall, US market may be expecting around 4.5% EPS growth in Q3 against
double digit growths for the previous two quarters to justify the
premium valuations of S&P-500, now trading around almost 25 TTM PE. So
far, on YTD basis, DJ-30 has gained around 16%, S&P-500 is up by almost
14%, while NQ-100 rallied by around 23%. Trump is also very proud and
has given all the credit to himself for the “phenomenal” 25% rise in
DJ-30 since 6^th Nov’16, his Election Day win.
Apart from hopes of Trumponomics, overall upbeat PMI data from China,
Japan, EZ to US and solid earnings has boosted the overall global market
sentiment, which is at now record high. Also upbeat PPI data from China
has boosted the global reflation narrative because ultimately, China is
the global growth engine and manufacturing power house of the world.
Today *China’s trade data* for Sep flashed as mixed; although export
came little below expectation at 8.1% vs 8.8% eyed (prior: 5.5%), there
is visible improvement from Aug after PBOC refrained from further Yuan
strengthening. China import for Sep surged by 18.7% vs estimate of 13.5%
(prior: 13.3%); today’s trade figures may be also distorted by the
golden week holiday, but overall it removes the concern of China slow-down.
*US stock future (SPX-500)*is now trading around 2548, almost unchanged
ahead of EU market opening and earnings dump later today.
*USDJPY*is now trading around 112.15, down by almost 0.15% and so far
made a low of 112.09 from yesterday’s NY session high of 112.50 mapped
after an upbeat US PPI data, distorted by the dual hurricanes. Overall,
Fed’s inflation dilemma, leadership (policy continuity) uncertainty and
NK rhetoric is affecting the USD sentiment despite mixed economic data
and an assured Dec’17 rate hike.
All eyes will be now on the US CPI, retail sales today as inflation &
consumer spending/wage growth is now Fed’s prime concern for further
policy tightening (normalization). But today’s data may be also affected
by Harvey & Irma hurricanes. Thus, market may keep finger crossed for
the overall Nov-Dec (1^ST WK NFP) US economic data before Fed at Dec
2^ND WK.
*EURUSD*is now trading around 1.1845, up by almost 0.12% on a trail
balloon by ECB that they may go for gradual QE tapering from Jan’18 with
bond purchase of EUR 30 bln/pm till Sep’18 in lieu of present EUR 60
bln/pm. Although the figure may be little disappointing for the hardcore
EUR bull, still it’s a decent start.
Overall, it now seems that Draghi & Co is gathering enough courage to
announce a formal QE tapering on 26^th Oct, considering the ongoing
Catalonian political crisis, sufficient to keep EUR under some stress.
Thus, ECB may go on for their gradual QE tapering without worrying too
much for the EUR strength!!
*GBPUSD*is now trading around 1.3276, up by almost 0.11% on prospect of
a “soft Brexit” after reports that EU may offer 2 yrs transitional
period to UK as par Theresa’s desire; but all these proposals may be
also subjected to payment of the divorce bill, although the whole story
is still not confirmed by the EU authorities officially.
Earlier, there was news that UK may go for the “hard Brexit” without any
deal at all as the whole negotiation process is practically stalled for
the last few months on certain core issues. Also, UK may go for another
2^nd (confirmatory) Brexit referendum, considering the overall exit mess.
If such Brexit squabbling will continue and EU does not confirm the
“Soft Brexit” narrative, then it may be very tough for Carney to go for
the Nov’17 rate hike also, despite it can erode the BOE credibility
completely. Even if BOE goes for the Nov rate hike with demonstrable
courage amid such Brexit & UK political uncertainty, it may be “one &
off” until March’19 (dovish hike).
Elsewhere, *Australian market (ASX-200)* closed around 5814, up by
almost 0.30% despite AUDUSD is edged up today; AU market was today
helped by telecoms, utilities, consumer staples, banks & financials,
mining stocks (on upbeat China trade data despite overnight fall of iron
ore) while dragged by energies & gold miners to some extent. CBA edged
down for change its employee’s incentive policy from financial product
selling targets to customer service quality.
*AUDUSD*is now trading around 0.78343, up by almost 0.10% on fall in US
bond yields coupled with upbeat China economic data, its biggest trading
partner.
*Japan (Nikkei-225)*closed around 21155, at another 21 yrs milestone
high, rallied by almost 0.96% today despite higher Yen. JP market was
today helped by retailers, while dragged by auto makers, exporters,
energies, metals and selected financials, Overall, JP market sentiment
is being supported by Abe election prospect optimism and recent spate of
upbeat economic data and growth & earnings hope.
*China (SSE)*closed around 3393, edged up by almost 0.13% as market may
be cautious ahead of earnings deluge and party congress amid an upbeat
China trade data today; it was dragged by commodities/energies on winter
pollution concern while helped by healthcare stocks on medical reforms.
Today PBOC fixed the mid-point of USDCNY at 6.5866 vs 6.5808, little
higher with rollover of 498 bln Yuan via MLF 1 YR loans at 3.2%.
*Hong-Kong stock future (HKG-33)*is now trading around 28475, up by
almost 0.20%. HK market was today helped by banks & financials, while
dragged by energies tracking mainland peers. Overall market may be also
cautious for stretched valuation, new land policy and may focus on
earnings & China party congress, which is set to guide the regional as
well global market direction to some extent.
Meanwhile, *Crude Oil (WTI)* is now trading around 51.25, up by almost
1.50% on better than expected drawdown (inventory) report from EIA last
night; yesterday it slipped by more than 1% on EIA forecast of less oil
demand in 2018, coupled with prospect of higher US production. Also,
ongoing OPEC jawboning and Kurdish conflicts may be helping oil at this
moment, but end of summer driving session is also a headwind.
*European Stocks
<https://www.iforex.in/news/european-stocks-edged-bayer-deleveraging-move-under-pressure-higher-eur-after-subdued-us-inflation-43335>
Edged Up On Bayer Deleveraging Move, But Under Pressure On Higher EUR
After Subdued US Inflation*
*EU stocks*today edged up on support of Bayer’s deleveraging news
coupled with miners/basic materials, telecom & energies tracking upbeat
import data from China for iron ore & crude oil, while dragged by banks
& financials (lower bond yields) and health care.
Stoxx-600 is now up by almost 0.33%, while DAX-30 gained by around
0.20%, CAC-40 is almost unchanged (+0.01%), IBEX-35 is also almost flat
(-0.03%), while FTSE-100 edged down by around 0.15%.
Overall EU market rally capped today as EUR goes higher after subdued US
inflation & retail sales coupled with an imminent ECB QE tapering buzz
from Jan’18. Market is also cautious ahead of earnings deluge.
*FTSE-100*is also under pressure on higher GBP amid talks of a
transition period offer by EU (soft Brexit); it was further dragged by
an engineering share GKN for guidance warning, while supported by
Provident Financial on upbeat prospect after falling almost 70% this
year (subprime home credit business).
Overall, an environment of low interest, low inflation & decent wage
growth may be supporting the overall EU market sentiment despite s
relatively strong EUR. As par IMF’s Lagarde, she is reasonably
optimistic about global economic growth, noting that it’s broad based,
more solid and should get better, but needs to be sustainable and get
benefit for all.
USDJPY On Back Foot
<https://www.iforex.in/news/usdjpy-back-foot-after-another-subdued-us-inflation-report-tensions-any-weekend-nk-missile-thriller-43353>
After Another Subdued US Inflation Report & Tensions For Any Weekend
NK Missile Thriller
<https://1.bp.blogspot.com/-xdHnLK81kQU/WeEOKaWEH8I/AAAAAAAANcg/ef85KPFnqmANKpMhYW1aSP8UdMgHgbF3QCLcBGAs/s1600/SGX-NF-PATTERN-13-10-2017.png>
SGX-NF
<https://4.bp.blogspot.com/-Q1TYx4rG7OI/WeEONTp4wNI/AAAAAAAANck/8exflXgRT6E71jBgbJcfQkHLZPic6jEMQCLcBGAs/s1600/BNF-PATTERN-13-10-2017.png>
BNF
<https://3.bp.blogspot.com/-AJ9-sdYH-JY/WeEOTHfXfRI/AAAAAAAANco/Zj8QDypeUewjGDkD4Jphr_9x1JO13lOzgCLcBGAs/s1600/USDJPY-FIBB-13-10-2017.png>
USDJPY
--
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.