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Events to watch this week
- Potential
health care loss could hinder Trump agenda
- United
Kingdom to trigger Article 50 on March 29
- Banks soak up
last of ECB’s cheap loans
- Eurozone
showing signs of accelerating growth
- BOJ chief
says stimulus here to stay
The Week ahead:
- The United
Kingdom and Europe set clocks ahead one hour for daylight savings time on
Sunday, 26 March,
- The UK is
expected to trigger Article 50 of the Lisbon Treaty on Wednesday, 29 March
- The United
States reports revised Q4 gross domestic product figures on Thursday, 30
March
- Japan reports
inflation data and unemployment figures on Friday, 31 March
- China releases
purchasing managers’ indices on Friday, 31 March
- The UK
releases revised Q4 GDP figures on Friday, 31 March
- The eurozone
reports consumer inflation data on Friday, 31 March
For the week,Global equities slipped this week amid concerns that the Trump administration’s
promised pro-growth policy agenda may become bogged down as GOP lawmakers
struggle to repeal and replace the Affordable Care Act, also known as
Obamacare. US 10-year Treasury note yields fell 10 basis points from a week ago
to 2.41%. West Texas Intermediate crude slumped to $47.80 from $49.25 last
Friday and global Brent fell to $50.60 from $52.00 as US production continued
to build. Volatility, as measured by the Chicago Board Options Exchange
Volatility Index (VIX), rose to 12.4 from 11.2..
NIFTY- 9,108.00
CRUDE OIL-Rs 3,149 barrel
GOLD-Rs 28,805 gram
Rs/$-Rs 65.42
MARKET ROUND UP
Key benchmark indices edged lower as investors pocketed some cash on
profit booking after the recent surge helped Nifty hit record closing high on
the last session of previous week. Key indices fell in three out of five
sessions of the week. Indices staged some recovery towards the closing sessions
of the week after witnessing drubbing during the initial few sessions.
The barometer index, the S&P BSE Sensex, fell 227.59 points or
0.76% at 29,421.40. The Nifty 50 index shed 52.05 points or 0.56% at 9,108.
The BSE Mid-Cap index shed 0.31%. The BSE Small-Cap index rose 0.46%.
Both these indices outperformed the Sensex.
Macro
Economic Front:
On the Economic Front,India's current
account deficit (CAD) at $7.9 billion (1.4% of GDP) in Q3 of FY 2017, was
higher than $7.1 billion (1.4% of GDP) in Q3 of FY 2016 and $3.4 billion (0.6%
of GDP) in the preceding quarter. The data was released by government after
market hours on 23 March 2017.
Despite a slightly lower trade deficit on a year-on-year (y-o-y) basis,
the CAD widened primarily on account of a decline in net invisible receipts.
Net services receipts moderated on a y-o-y basis, primarily owing to the fall
in earnings from software, financial services and charges for intellectual
property rights.
Major Action &Announcement:
Axis Bank dropped 5.38%. The bank
in a clarification issued before market hours on Wednesday, 22 March 2017,
stated that the information on the bank's MD & CEO Shikha Sharma's
resignation is false, speculative and is being circulated with the malafide
intention of misleading the investors and the general public.
Cipla declined
0.63%. In its clarification on media reports titled USFDA issued import alert
on Cipla'sTadalafil drug made at Bhagwanpur unit, Cipla during market hours on
Friday, 24 March 2017 said that the company neither directly or indirectly
imports for sale or sell Tadalafil tables in US market nor has not authorised
any third party for it. Cipla is not associated with referenced import alert of
Tadalafil product or its source at Bhagwanpur site at Uttaranchal for the US
market, the company said. Accordingly, this event has no impact on Cipla, it
added.
Sun Pharmaceutical
Industries shed 0.48%.AlmirallS.L, and the company announced the validation
of the regulatory filing of tildrakizumab with the European Medicines Agency
(EMA) by Almirall. Tildrakizumab is an investigational IL-23p19 inhibitor being
evaluated for the treatment of moderate-to-severe plaque psoriasis. The
announcement was made during market hours on Friday, 24 March 2017.
BhartiAirtel
declined 1.85%. The company announced that it has entered into a definitive agreement
with Tikona Digital Networks (Tikona) to acquire Tikona's 4G business including
broadband wireless access (BWA) spectrum and 350 sites, in five telecom circles
for about Rs 1600 crore. The announcement was made after market hours on
Thursday, 23 March 2017.
NTPC rose 2.53%. The company said
that the second unit of 800 megawatts (MW) of Kudgi Super Thermal Power Station
of 2400 MW has been commissioned. With this, the commissioned capacity of Kudgi
Super Thermal Power Station, NTPC and NTPC group has become 1600 MW, 42977 MW
and 49943 MW respectively. The announcement was made during market hours on
Thursday, 23 March 2017.
FMCG major, Hindustan
Unilever (HUL) fell 0.25%. HUL announced that it has commenced the commercial
production in its new manufacturing unit at Assam on 15 March 2017. The
announcement was made after market hours on Tuesday, 21 March 2017. The company
had earlier informed about setting up new manufacturing unit in Assam to
augment the production capacity of personal care products of the company.
Global Front:
In Overseas Markets,US Federal Reserve
raised interest rates as expected without accelerating its timeline for future
tightening. The Fed raised its benchmark lending rate a quarter point and
continued to project two more increases this year. Fed said that it would raise
the benchmark federal-funds rate to a range between 0.75% and 1%.
Global Economic News:
May sets date for
beginning Brexit process
British prime minister Theresa May this week set 29 March as the day
that the United Kingdom will notify the European Union of its intent to leave
the EU, beginning the two-year period set out in Article 50 of the Lisbon
Treaty for negotiating the terms under which the UK will exit. The negotiations
are expected to be thorny because the EU is loath to give the UK a “good” deal
for fear of prompting additional EU members to quit.
European banks take up more cheap loans than expected
Eurozone banks took up more super-cheap loans than expected from the
European Central Bank’s Targeted Longer-Term Refinancing Operation (TLTRO) this
week. A total of €223.5 billion of the zero percent four-year loans were
placed, far in excess of the €125 billion economists had expected. In a sign of
policy normalization, the ECB announced last month that this would be its last
TLTRO operation.
European economy extends uptick
Flash purchasing managers’ indices jumped to their highest level in
nearly six years today as the eurozone composite PMI rose to a robust 56.7.
Economists extrapolate from that data that gross domestic product growth is
growing at a rate in excess of an annualized 2%. The euro strengthened on the
data, as well as on hopes that a centrist candidate will derail populist Marine
Le Pen in the upcoming French presidential elections.
BOJ to stick to stimulus
Bank of Japan governor Haruhiko Kuroda said today that there is no
reason to withdraw monetary stimulus now, or to raise the bank's bond yield
target, since inflation remains well below the BOJ’s 2% goal. Recent upticks in
Japanese growth and inflation have raised questions as to whether the central
bank could alter its super-easy monetary policy. For now, those questions can
be been laid to rest.
Brazil buffeted by meat scandal
Exports of Brazilian meat have plummeted in the wake of a food safety
scandal. The meat products are now banned in China, Japan, Mexico and the
European Union, while the United States has redoubled food safety inspections,
according to the US Department of Agriculture. In an operation dubbed “Weak
Flesh,” dozens of Brazilian food inspectors have been arrested for ignoring
expired or adulterated processed foods in recent weeks.
Tighter Chinese liquidity eyed
Tightening liquidity conditions in China’s banking system are raising
concerns that economic growth could be negatively impacted as the year
progresses. Recently, China has been taking steps to rein in its shadow banking
system amid fears that the property market could overheat. Chinese iron ore
futures tumbled 19%, the largest weekly decline on record, as the People’s Bank
of China introduced fresh borrowing curbs on home lending.
GLOBAL CORPORATE
NEWS
Markets fear health care failure could crimp Trump’s clout
After delaying a scheduled vote on the American Health Care Act on
Thursday, lawmakers have set a vote for late Friday despite apparently still
not having enough votes to assure passage. If passed, the bill would be sent on
to the Senate for its consideration. Observers grew concerned this week that if
the Trump administration fails to advance one of its signature agenda items
straight out of the gate that it may also struggle to pass market-friendly
items like tax reform and infrastructure investment later in the Congressional
session. A protracted fight on health care, at a minimum, would push those
pieces back on the legislative calendar, delaying their economic impact. The
failure to repeal and replace the Affordable Care Act would likely diminish the
new administration’s political capital.
NEW 52-WEEK HIGH BSE (A):
|
ADANIENT
|
106.90
|
|
BAJAJFINANCE
|
1197.80
|
|
DCBBANK
|
168.45
|
NEW 52-WEEK LOWS BSE (A):
|
NOT YET
IN (A) CAT
|
-------
|
MAJOR WEEKLY GAINERS IN BSE A
CATEGORY:
|
Kec
|
21.19
|
|
nlc india
|
13.71
|
|
sobha
|
13.71
|
MAJOR WEEKLY LOSERS IN BSE A
CATEGORY:
|
divi’s
lab
|
-18.36
|
|
idea
celluar
|
-15.80
|
|
srei
infra
|
-10.17
|
Eyes will be set on the certain US economic
data releases are:
Monday (27 Mar)
Week Bill Announcement
Tuesday (28 Mar)
Consumer Confidence
Wednesday (29 Mar)
Pending Home Sales
Thursday (30 Mar)
Natural Gas Report
Friday (31 Mar)
Consumer
Sentiment
Fundamental
Pick of the week:
Buy Glenmark Ltd For Target Rs.970.00
Glenmark Pharma reversed after taking support of its long-term moving
average 200-day SMA and also its intermediate rising trend line.
* Positive cross-over in key technical indicators from their oversold
zone is signaling that stock is on verge of turnaround and soon it will resume
the uptrend.
* On the higher side, the stock will face hurdles around its multiple
highs, which are placed in the range of Rs950-970.
* In case of major decline, recent swing low (i.e. Rs872) will work as
key reversal point for the stock.
Indian Market Outlook:
Market on March 17, 2017
The Nifty traded with a bullish bias and scaled above the 9100 mark on
a closing basis. A bigger picture shows that the Nifty held on to the trend line drawn from the previous swing lows. On the hourly chart, it has formed an
impulse on the upside, which suggests that the larger upside potential is still
intact. The range of 8980- 9000, which had earlier acted as a resistance zone,
is now providing support to the Index. On the weekly chart, the Nifty has posted
a negative close. Nevertheless, it can be taken as a part of a higher degree
fifth wave on the upside. The short-term and medium-term targets on the upside
are 9230 and 9500, respectively.
TECHNICAL VIEW:
|
S3
|
S2
|
S1
|
NIFTY
|
R1
|
R2
|
R3
|
|
8,950
|
9,000
|
9,060
|
9,108.00
|
9,160
|
9,245
|
9,340
|
Other technical observations
Last Week we gave Chopad Levels of 9150, Nifty gave Short entry on Monday which did 2 target
on Downside by Wednesday.Nifty for a single session was not able to close below
the Chopad level of 9150 suggesting Bulls were under pressure from start of the
week. LetsAnalyze how to trade Nifty as we are approaching March
Expiry and Financial Year closing.
Conclusion:
Nifty
settled marginally lower in the passing week, tracking mixed cues. Majority of
the sectoral pivots traded inline with the benchmark and failed to post any
meaningful gain.
In the
coming week, we expect Nifty to consolidate further within 9000-9300 band;
however, volatility will inch higher on stock specific front due to expiry of
March month derivatives contracts.
Considering
all, traders should focus more on the trade management part and avoid over leveraging. Investors, on the other hand, should use this phase to
gradually add quality stocks on every dips.