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Events to watch this week
- US Q3 annual
economic growth rate revised up
- Italian
government rescues Monte deiPaschi
- Scotland threatens
to leave UK
- BOJ upgrades
assessment, leaves policy unchanged
The Week ahead:
- Japan releases consumer price
and unemployment data on Monday, 26 December
- Japan reports retail sales data
on Wednesday, 28 December
- US November pending home sales
figures are released on Wednesday, 28 December
For
the week,Global equities dipped modestly this week
while US indices barely budged. The venerable Dow Jones Industrial Average
approached the psychologically significant 20,000 mark before pausing. US
Treasury yields were down slightly on the week, falling to 2.53% from 2.58% a
week ago. West Texas Intermediate crude lost about 75 cents on the week, ending
around $52.50, while the Chicago Board Options Exchange Volatility Index (VIX)
remains historically low, at 11.60.
NIFTY- 7,985.75
CRUDE OIL-Rs 3,595barrel
GOLD-Rs 27,002/10 gram
Rs/$-Rs 67.83
MARKET ROUND UP
Trading for the week ended on a
positive note as key benchmark indices snapped a seven-day losing streak and
settled with small gains after what was a volatile session of trade. The
barometer index, the SandP BSE Sensex, gained 61.10 points or 0.24% to settle
at 26,040.70. The Nifty 50 index rose 6.65 points or 0.08% at 7,985.75. The
gains for the Nifty were lower than the Sensex's gains in percentage terms. After a subdued
start to the session tracking weak Asian cues, indices reversed losses in early
afternoon trade and consolidated further in the green in mid-afternoon trade.
However, they pared gains in late trade, with the movement restricting within a
narrow range throughout the session.
The Sensex gained 61.10 points or 0.24% to settle at 26,040.70, its
highest closing level since 21 December 2016. The index rose 163.59 points or
0.62% at the day's high of 26,143.19. It lost 107.22 points or 0.41% at the
day's low of 25,872.38, its lowest level since 24 November 2016.
The Nifty 50 index rose 6.65 points or 0.08% to settle at 7,985.75, its
highest closing level since 21 December 2016. The index rose 43.50 points or
0.54% at the day's high of 8,022.60. It fell 37.05 points or 0.46% at the day's
low of 7,942.05, its lowest level since 21 November 2016.
The BSE Mid-Cap index fell 0.4% and the BSE Small-Cap index dropped
0.04%. Both these indices underperformed the Sensex.
Macro
Economic Front:
On
the Economic Front,Prime Minister NarendraModi on Saturday gave the green signal to a slew
of infrastructure projects in Mumbai and Pune, besides inaugurating the new
campus of SEBI's National Institute of Securities Markets (NISM) during his
daylong visit to Maharashtra.
Modi was received by Governor C.V. Rao, Chief Minister DevendraFadnavis
and other dignitaries on his arrival around noon by an IAF aircraft at the
ChhatrapatiShivajiMaharaj International Airport here.
Major Action &Announcement:
Sun Pharmaceutical Industries rallied 2.6% after the company has informed BSE that one
of the wholly owned subsidiaries of the company has acquired 13,000,000 Series
B Preferred Stock of scPharmaceuticals Inc. (equivalent to 14.58% fully diluted
equity stake on conversion) by way of allotment.
Wipro dipped 1%. The company
announced that it has reached an agreement with the U.S. Securities and
Exchange Commission (SEC) to formally resolve the previously disclosed
six-year-old investigation.
Reliance Defence and Engineering
Ltd rose 3.6% to Rs 55 after huge block deal. Around 12.3 million shares
or 1.7% stake of the company changed hands in a single block deal.
Welspun Enterprises plunged 4%.
Welspun Enterprises a part of $2.3 billion Welspun Group, on Thursday announced
plans to buy back up to 25% of its share capital at a price of Rs 62 per equity
share.
Deepak Nitrite tanked 3.7% to
Rs 85.80 after huge block deal. Around 3 million shares of the company changed
hands in two block deal
JK Paper rose 2%. JK
Paper Ltd has now informed BSE that the Company has decided at its meeting of
Committee of Directors held on December 22, 2016, to sell 20 per cent
shareholding of OJPPL to OHC, one of the joint venture parties.
Suzlon Energy rose 0.29% after
the company announced a joint venture with AMP Solar for the development and
construction of a 15 MW solar PV project located at Achampet, Mahaboobnagar
District, Telangana.
Tata Motors dropped 1.6%. The
sentiments that prevailed at the Tata Motors extraordinary general meeting
mirrored the EGMs at the storied group's other companies, with a majority of
shareholders speaking in favour of Tata Sons' interim chairman Ratan Tata.
Global Front:
In
Overseas Markets,European stocks were mixed with banks rising after two regional
bellwethers settled US mortgage securities probes. Deutsche Bank's $7.2 billion
settlement with the US Department of Justice over toxic mortgage securities
sold in the run-up to the 2008 financial crisis was nearly half of the fine
initially levied in September. Credit Suisse also agreed to pay $5.3 billion to
the DOJ to settle similar charges
In another boost to European financials, the Italian government
approved a decree today, 23 December 2016, to bail out Monte deiPaschi di Siena
after the world's oldest bank failed to win investor backing for a desperately
needed capital increase. Prime Minister Paolo Gentiloni said his Cabinet had
authorised a 20 billion-euro ($20.9 billion) fund to help lenders in distress -
first and foremost Monte deiPaschi.
Global Economic News:
US, UK growth
revised higher
Already strong US gross domestic product figures
were revised higher in the final reading for the third quarter. Originally
reported at an annual rate of 3.3%, the economy grew 3.5%, according to an
estimate by the US Bureau of Economic Analysis. Q4 growth looks to be somewhat
less robust, with estimates in the 2.0% to 2.5% range at the moment. In the
United Kingdom, Q3 growth was also revised higher. On a quarter-over-quarter
basis, the UK economy expanded 0.6% in the three months following the Brexit
vote, up from an earlier 0.5% estimate.
Italy rescues world’s oldest bank
Italy’s government has authorized €20 billion
bailout of that country’s third-largest lender, Monte deiPaschi di Siena, after
the bank failed to raise sufficient capital in the financial markets to stay
afloat. Monte deiPaschi has been in operation since 1742.
Scotland threatens to bolt UK
If the United Kingdom does not remain a member of
the European Union’s single market, Scotland will hold another referendum on withdrawing
from it, Scottish first
minister Nicola Sturgeon said this week. Scotland voted to remain within in the
EU in last June’s referendum, as did Northern Ireland, but England and Wales
produced large enough majorities to win the day for the Leave campaign. In
2014, Scotland held a referendum on independence that was defeated 55% to 45%.
BOJ upgrades economic outlook
The Bank of Japan upgraded its economic assessment,
noting that a moderate recovery trend had continued while exports had picked
up. Improved foreign demand was credited with the export boost, along with a
weaker yen, which should help solidify the recovery, the bank said. The BOJ’s
super-easy monetary policy was left unchanged.
Pair of European banks settle US mortgage cases
Deutsche Bank and Credit Suisse each agreed to
settle outstanding cases with the US Department of Justice involving the
mis-selling of mortgage-backed securities dating back to the global financial
crisis. Deutsche Bank settled for $7.2 billion, roughly half what the DOJ
proposed in September. Credit Suisse agreed to pay roughly $5.3 billion.
UK-based Barclays was unable to come to an agreement, and the DOJ has since
filed suit in the matter.
GLOBAL CORPORATE NEWS
Praxair and Linde agree to merge
After a two-year courtship, industrial gas giants
Praxair and Linde have agreed to merge their operations. The combined value of
the deal is $66.6 billion.
NEW
52-WEEK HIGH BSE (A):
NEW
52-WEEK LOWS BSE (A):
|
APOLLOHOSP
|
1133.00
|
|
BFUTILITIE
|
386.15
|
|
BLUEDART
|
4301.55
|
MAJOR WEEKLY
GAINERS IN BSE A CATEGORY:
|
EDELWEISS FIN
|
17.79
|
|
CHOLAMANDALAM
|
12.85
|
|
ALOK INDS
|
12.14
|
MAJOR WEEKLY
LOSERS IN BSE A CATEGORY:
|
DIVI’S
LAB
|
-24.87
|
|
BHARAT
FIN
|
-18.87
|
|
PIRAMAL
ENT
|
-13.06
|
Eyes will be set on the certain US economic data
releases are:
Monday
(26 Dec)
US
Holiday, Market Closed
Tuesday(27 Dec)
Consumer
Confidence
Wednesday(28
Dec)
Pending
Home Sales Index
Thursday(29 Dec)
Jobless
Claims
Friday(30 Dec)
Chicago PMI
Fundamental
Pick of the week:
Sell
REC Ltd For Target Rs. 120.00
The stock is making lower tops after
forming a double top pattern at 140 resisting to cross the short term
averages.The key technical indicators and RSI has also reversed turning
downwards and as the stock is in poised for a breakdown from current levels.
The stock has closed below its short term averages confirming the
downtrend and the recent swing high will continue to act as strong resistance
for the stock.
Recommendation
Short position can be initiated at
Rs129-130 for target of Rs120 with a stop loss of Rs 134.
Indian
Market Outlook:
Even as Nifty closed at 8000 levels this week, the Index tested levels
of 7950 which is just 30 points shy of the previous month low of 7921. The
benchmark Index remained weak in the last five trading sessions with FII's
turning out as net sellers in the market. Nifty dropped almost 200 points from
8148 to 7953 in the course of the week's trading session.
This week the IT index was up by 2.26% expectation of growth backed by
PM Mr. NarendraModi’s digital India stance post the demonetization.
TECHNICAL VIEW:
|
S3
|
S2
|
S1
|
NIFTY
|
R1
|
R2
|
R3
|
|
7,860
|
7,902
|
7,944
|
7,985.75
|
8,030
|
8,105
|
8,190
|
NIFTY
OUTLOOK
Nifty index traded
with negative bias for most part of the week and finally concluded with cut of over
1.5%.
Technically,
charts are still pointing toward further fall wherein 7900 spot is the
immediate support. Also, we have derivatives expiry for the Dec month scheduled
in the coming week and it’ll largely guide the market ahead , in absence of any
major event.
Conclusion:
Nifty made low of
7942 but failed to close above 8000,Till we do not see closed above 8000 Bears
have upper hand and high probability we can break swing low of 7916. Range of
7880-7900 is again the important zone, break of the range on downside move towards
7800/7700. Holding the same move towards 8130/8250.