Market
Wrap: 16/01/2017 (19:00)
Looking at the chart, Nifty Fut (Jan
@8435) has to sustain over 8485-8510 area for further rally towards 8545-8585
& 8645-8685 zone in the short term (under bullish case scenario).
On the other side, sustaining below
8460-8425 zone, NF may further fall towards 8380/50-8290 & 8240-8190 area
in the near term (under bear case scenario).
Nifty
Fut (Jan) today closed around 8435 (+17 points) in a range bound market after
making an opening session low 8385 and day high of 8444.
Although,
today US market is closed for a holiday, Asian & European cues were tepid
amid talks of “Hard Brexit” in UK; but Indian market looked stable supported by
better Q3 earnings expectation, better poll prospect of BJP in UP following no
let up in feud with the warring Yadav family, where father Mulayam is ready to
fight his son Akhilesh with “Cycle & Motor Cycle”.
Domestic
market today was supported by metals (buzz of MIP/ASD; better demand), reality
(affordable housing), banking (talk of PSBS recapitalization approval by the
Govt for Rs.25000 cr, budget & rate cut hopes) and Tata group of stocks
(appointment of Chandra may bring down credit costs and positive for the
overall stability for the group; depreciation of GBP is positive for Tata
Motors/JLR and better UK monthly sales figure).
But
the market was dragged by IT (tepid results/guidance/H1B visa issues), Oil
& Gas, Pharma (concern for US market) & FMCG.
Hike
in petrol & diesel prices also supported the oil marketing companies
(BPCL/IOC).
But
the market tone was also cautious ahead of Trump’s inauguration later this week
and real progress of GST.
Although,
after today’s GST meet it seems that the contentious issue of Dual Control
mechanism may have resolved, Govt/states & other stake holders are not in a
position to implement it from April’17 and now the expectation will shift
towards July-Sep’17. But still, it’s very doubtful for a Sep’17 roll out of GST
amid intense political & economical disruptions after demonetization and
series of state elections in 2017-18. Also, the Indian economy may not be prepared
yet for two successive disruptions in such a short time (demonetization &
GST) and from the overall structure of the GST, it may be against the theme of “ease
of doing business in India”, with so much rules & regulations and
supervisory hurdles.
Indian
market sentiment today was also supported by a Moody’s report that Govt may be
able to adhere the target of 3.5% fiscal deficit of GDP in FY-17, but going
forward, it may be tough to achieve the 3% fiscal deficit target due to
incremental Govt capex (infra spending). Also, another report by GS that H2FY18
may be better for the EM & India on the back of incremental growth &
earning, may have supported the market today, despite perception of a stronger
USD.
After
market hours, RIL result flashed out and apparently it seems that GRM & EBITDA
came below street estimates and thus flat core earnings, incremental capex for
R-JIO and increasing debt may weigh on the stock in the coming days.
Today
WPI came at 3.39% for Dec’16 against estimate of 3.50% (prior: 3.15% for Nov).
Although the headline number was no big surprise, the increment in core WPI may
be also an indication of broken supply chain as a result of demonetization
(cost of RM may increase).
Overall,
as of now BJP may be ahead in UP polls; but reports that Akhilesh group may get
the original poll symbol (cycle) and may also announce an official alliance with
Cong, it’s going to be a close fight in UP this time.
Reports
that IMF has cut the Indian GDP estimate for FY-17 from 7.6% to 6.6% due to
demonetization may also weigh on the domestic market sentiment tomorrow along
with tepid RIL results and delay in GST, despite the “good news” of increased withdrawal
limit from ATM.
SGX-NF
No comments:
Post a Comment