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Events to watch this week
United Kingdom triggers Article 50
Trump’s agenda questioned after health care defeat
US economic growth revised up slightly
South Africa sacks finance minister
NAFTA changes may be modest
The Week ahead:
The Bank of Japan releases its Tankan report on Monday, 3 April
Global manufacturing purchasing managers’ indices are released on Monday, 3 April
Euro-area retail sales are reported on Tuesday, 4 April
Global service sector PMIs are released on Wednesday, 5 April
The US Federal Reserve releases the minutes of its March Federal Open Market Committee meeting on Wednesday, 5 April
Trump and Chinese president Xi meet in Palm Beach on Thursday–Friday, 6–7 April
The United States releases its March employment report on Friday, 7 April
For the week,Global equities rose this week as did oil prices, while yields on 10-year US Treasury notes held steady at 2.41%. West Texas Intermediate crude advanced to $50 from $47.80 last Friday, while global Brent rallied to $52.70 from $50.60 last week. Volatility, as measured by the Chicago Board Options Exchange Volatility Index (VIX), held steady near 12.
NIFTY- 9,173.75
CRUDE OIL-Rs 3,286barrel
GOLD-Rs 28,450 gram
Rs/$-Rs 64.85
MARKET ROUND UP
Key benchmark indices logged modest gains in the week ended Friday, 31 March 2017 as the sentiment was buoyed after the LokSabha cleared four bills related to the Goods and Services Tax (GST), one of the biggest reforms, on 29 March 2017. The overall sentiment in the broader market was upbeat during the week with the BSE Small-Cap and the Mid-Cap indices outperforming the Sensex.
In the week ended Friday, 31 March 2017, the Sensex rose 199.10 or 0.68% to settle at 29,620.50. The Nifty 50 index rose 65.75 points or 0.72% to settle at 9,173.75. The BSE Mid-Cap index rose 247.47 points or 1.79% to settle at 14,096.65. The BSE Small-Cap index gained 356.25 points or 2.53% to settle at 14,433.86. Both these indices outperformed the Sensex.
Trading for first day of the week began on a subdued note as the key benchmark indices settled with modest losses on Monday, 27 March 2017 on negative global stocks. The Sensex lost 187.96 points or 0.64% to settle at 29,233.44, its lowest closing level since 22 March 2017.
Macro Economic Front:
On the Economic Front,the LokSabha cleared four bills related to the Goods and Services Tax (GST) on 29 March 2017, setting the stage for 28 states, along with Delhi and Puducherry, to enact state laws over the next three months to roll out the new tax regime from July 2017.
The four bills Integrated GST, Central GST, Union Territory GST and Compensation Bill will be followed by work in the GST council, comprising FM ArunJaitley and state finance ministers, to finalise rules and product- and service-wise rates by the end of April.
GST will replace central excise, service tax and state VAT and several other levies, in addition to subsuming existing cesses and surcharges.
Major Action &Announcement:
IT major Infosys fell 1.07% to Rs 1,020.80. The company announced during trading hours on 30 March 2017, that it has achieved Cloud Elite status in the Oracle PartnerNetwork (OPN). With this designation, Infosys is well positioned to help customers achieve cloud transformation, and provide sophisticated capabilities and next-generation services on Oracle Cloud. With strategic specialization and training programs, innovative joint solutions, and a clearly defined solutions roadmap, Infosys' Cloud Elite status will help clients derive better business value, it said in a statement.
TCS rose 0.18% to Rs 2,431.10. TCS said that the company has collaborated with SATS (SATS), Asia's leading provider of airport ground handling and food solutions services, to develop a smart watch solution that is believed to be the world's first mobile solution for airport Technical Ramp operations. The Technical Ramp Smart Watch solution is now supporting SATS' operations at Singapore's Changi Airport, a leading global hub of travel, technology adoption and efficiency. The announcement was made after market hours on 30 March 2017.
NTPC rose 1.1%. NTPC said that consequent upon testing and commissioning, 260 megawatts (MW) capacity (4x65 MW) of Bhadla solar PV project at BhadlaRajasthan, is declared on commercial operation on 25 March 2017. With this, the commercial capacity of NTPC and NTPC group has become 40,522 MW and 47,293 MW respectively. The announcement was made after market hours on 30 March 2017.
Drug major Lupin fell 2.61%. The company announced the launch of Abacavir and Lamivudine tablets, 600 mg/300 mg having received an approval from the United States Food and Drug Administration (FDA) earlier. The announcement was made during market hours on 29 March 2017.
Power Grid Corporation of India (PGCIL) rose 1.81%. The company announced that it has acquired Medinipur-Jeerat Transmission, the Project SPV to establish transmission system for 765kV strengthening in Eastern Region (ERSS-XVIII), on build, own, operate and maintain (BOOM) basis from PFC Consulting. The transmission system is to be progressively constructed over a period of 40 months. The announcement was made during market hours on 29 March 2017.
Axis Bank gained 0.33%. The bank said that the board of directors of the bank has passed a resolution approving the allotment of 3 year senior floating rate notes aggregating to $10 million under the MTN programme through its Dubai International Financial Centre (DIFC) branch. The announcement was made after market hours on 27 March 2017.
Hero MotoCorp lost 4.52% to Rs 3,223.85. Bahadur Chand Investments (BCIPL), one of the promoters of Hero MotoCorp, raised its holding in the two-wheeler major by picking up 4.45% stake for Rs 2996 crore from another promoter firm in an open market transaction.
Global Front:
In Overseas Markets,Activity in China's manufacturing sector expanded to 51.8 in March, an official survey showed on Friday, 31 March 2017. The services sector rose to 55.1 from 54.2 in February. The 50-point mark separates growth from contraction.
Japan's core consumer prices rose 0.2% in February. While that is the fastest annual pace in nearly two years, it is still distant from the central bank's 2% target.
The US economy, as measured by gross domestic product, expanded at a 2.1% annualized pace in the fourth quarter, slightly faster than the previously reported 1.9% rate. Separately, jobless claims fell by 3,000 to 258,000 in the latest week, near their lowest level in decades.
Global Economic News:
Beginning of the end
The United Kingdom formally began the process of withdrawing its European Union membership this week by triggering Article 50 of the Lisbon Treaty. The UK and EU now enter into a two-year negotiation to iron out such thorny issues as the legal status of EU citizens residing in the UK and that of UK citizens living within the EU, "hard" or "soft" borders and how —and how much it will cost-- to extract the UK from the EU’s finances. EU president Donald Tusk said a free trade agreement can only be discussed once sufficient progress has been made on the divorce process. Also this week, the Scottish parliament voted 69–59 to authorize a second referendum on independence from the UK. Scotland voted to remain in the EU in last June’s Brexit referendum.
Will Trump play it safe or go big?
After suffering a stinging defeat in his first major legislative initiative, President Donald Trump is likely to turn his focus to taxes in the hope of unifying the Republican congressional caucus. That may prove easier said than done, as the approximately $1 trillion in savings over 10 years that was expected from the repeal of Obamacare and its replacement with the American Health Care Act (AHCA) is now off the table. Trump must now decide whether to risk further political capital by advocating an ambitious comprehensive tax reform plan or to play it safe and advocate a smaller program of tax cuts. Should negotiations drag on, markets may not receive the fiscal stimulus that they’ve been expecting this year. Some fear stimulus could be smaller than expected and later in arriving, perhaps not until 2018.
US growth revised up
Q4 US gross domestic product was revised up to a 2.1% annual rate this week from an earlier 1.9% reading. Corporate profits showed healthy growth of 9.3%, though the persistent US trade deficit restrained economic growth. Sluggish growth is expected to persist into the first quarter of 2017.
US to seek modest NAFTA changes
A leaked draft of a US Department of Commerce memo this week showed that the Trump administration will seek quite modest changes to the North American Free Trade Agreement, countering more bombastic proposals made on the campaign trail by President Trump prior to his election. Trade jitters have been receding in recent weeks, but investors will keep a close eye on the first meeting between Trump and Chinese president Xi Jinping in Palm Beach, Florida, on 6–7 April.
German unemployment falls to record low
Unemployment in Germany, Europe’s largest labor market, fell to a post-reunification low of 5.8% in March, as joblessness fell by 30,000. That was more than the 10,000 that economists had predicted.
Ousted South Korean president jailed
Former South Korean president Park Geun-hye has been arrested and jailed over corruption allegations. Prosecutors have 20 days to build their case while Park is in custody. A snap election to replace Park will take place on 9 May.
GLOBAL CORPORATE NEWS
Cutting a Gordhan-ian knot
South African president Jacob Zuma fired his market-friendly finance minister PravinGordhan this week in a move that risks prompting a downgrade of the country’s sovereign debt ratings. Zuma and Gordhan are longtime political rivals and have differed sharply over South Africa’s public finances. Zuma is expected to sharply increase public expenditures now that Gordhan has been sacked. South Africa’s rand has fallen 7.5% this week against the US dollar as the battle between Zuma and Gordhan has played out.
NEW 52-WEEK HIGH BSE (A):
ADANIENT | 109.95 |
ADANIPORTS | 342.00 |
AIAENG | 1641.00 |
NEW 52-WEEK LOWS BSE (A):
NOT YET IN (A) CAT | ------- |
MAJOR WEEKLY GAINERS IN BSE A CATEGORY:
ABB INDIA | 7.53 |
BAJAJ HOLDINGS | 6.86 |
BERGER PAINTS | 5.87 |
MAJOR WEEKLY LOSERS IN BSE A CATEGORY:
AMTEK AUTO | -4.60 |
AJANTA PHARMA | -3.55 |
ASHOK LEYLAND | -3.15 |
Eyes will be set on the certain US economic data releases are:
Monday (03 Mar)
PMI Manufacturing Index
Tuesday (04 Mar)
Motor Vehicle Sales & Factory Orders
Wednesday (05 Mar)
PMI Services Index
Thursday (06 Mar)
Natural Gas Report
Friday (07 Mar)
Consumer Credit & Wholesale Trade
Fundamental Pick of the week:
Buy CESC LTDFor Target Rs.900.00
CESC is in the strong up-trend as the stock reversed after taking support of Rs790 (23.6% Fibonacci Retracement level of prior up-move Rs527-876) and later rose to Rs857.
* Key technical indicators-RSI & MACD are positively poised above their neutral line, where MACD is on the verge of positive cross-over.
* As per the current daily set-up, we believe that stock will continue the northward rally and record fresh high.
* On the higher side, the stock will face major hurdle around psychological level Rs900.Thus, long position can be initiated at around Rs830 with the target of Rs900 and a strict stop loss of Rs790.
Indian Market Outlook:
TECHNICAL VIEW:
S3 | S2 | S1 | NIFTY | R1 | R2 | R3 |
9,000 | 9,060 | 9,110 | 9,173.75 | 9,225 | 9,270 | 9,340 |
After witnessing volatile trades last week, CNX Nifty resumed its up move supported by short covering. Good recovery was seen from lower levels tracking continuation of bearishness in USD/INR futures which helped Indian equity markets to settle at higher levels. Technically, Rise in volume and fall in open interest with both sides price movement price movement indicates sideways sentiments in current week. 9100 will be the Crucial level to watch out for the current week. Benchmark Index CNX Nifty witnessed good buying support at lower levels from traders last week which indicates support at lower levels. CNX Nifty likely to trade with volatile sentiments in current week on profit booking at higher levels from traders. If it managed to sustain above 9100 level than it may witness firm sentiments till 9330 levels. Breaking of strong support 9100 level with good volume will make Nifty bearish and down side may come due to selling pressure below that level. Traders should look for the opportunity to buy at lower levels for the week.
Conclusion:
Nifty gave Short entry on Monday which did 1 target on Downside. Long was triggered by Tuesday did 1 Tgt on Thursday thus both bulls and bears were rewarded following Chopad levels. Lets Analyze how to trade Nifty as we are approach the New Financial Year.
Hourly chart was near the support line as shown in above chart and should see impulsive move towards 9200 holding 9077.
High made was 9192 so we almost did 9077 above 9077. Now for coming week break of 9200 can see fast move towards 9268/9312/9368. Bearish below 9130 for a move towards 9060/8992.Still waiting for 9312 for completion of extended abcdpattern. Bulls needs to hold 8992 for the target to come.