TECHNICAL TREND ( NIFTY - BANK NIFTY FUTURES )
NIFTY FIFTY : - The Market opened gap up after an extended Weekend and Sustained above 8900 throughout the day’s trading Session. The 50 Shares Index Nifty 50 Opened at 8852 up by 43 points or 0.48 per cent. After giving a breakout from 8670 levels. Nifty has managed to gain nearly 400 points. This rally has been triggered due to speculation of the US Fed not raising the interest rate in near future. Since the Nifty has touch above 9000 crucial Psychological level. Market may find resistance at this level. However the bull Market is intact and Secular in nature. It is important to note that the NSE small cap Index registered all time high of 6303. The Nifty could consolidate within the range of 8874-8971 due to lack of triggered from domestic or global market. From this point the Logical levels for Nifty will be 9025-9050 up side, and the 8860-8820 would be the important level down side.
BANK NIFTY : - The Bank Nifty opened in a positive note up by 107 points or 0.53 per cent at 19990. The Bank Nifty got significant boost from the Public Sector Banks Stocks as FM talked about some political consensus for privatization of the same, Although it is too early to think about that, as the main priority will be recapitalization and actual resolution of stressed assets of the Public Sector Banks as of now. Although the underlying fundamental factors are optimistic for Bank Nifty the chances of technical correction or at least a retrenchment is increasing in probability. Recent decline in bond yields also aided the rally in Bank stocks by causing adjustments on their balance sheet, especially on Public sector banks. On Daily chart the price action becomes clearer and we see market is trading in price channel structure. Also some traders are pointing out upcoming monetary policy stance as the main mover behind the rally. The Crucial Levels for Bank Nifty is 20827-20556 up side and 20029-19773 is down side.

NSE - WEEKLY NEWS LETTERS
✍ TOP NEWS OF THE WEEK
SIT on Black Money asks RBI to develop institutional mechanism to track illicit financial flows - Chairman, Special Investigation Team on Black Money, appointed by the Hon’ble Supreme Court, in a letter dated 11-Aug, to Governor, RBI has impressed upon the imperative need to establish the following institutional mechanism for sharing of data with the RBI in its various data bases with the Enforcement Authorities so that the data could be cross checked with other information available with Enforcement Authorities and illicit financial flows could be curbed. (a) Foreign Exchange Transactions Electronic Reporting System: FET–ERS was introduced through RBI Circular No.77 dated 13.March-04. All authorized dealers are obligated to report each foreign exchange transactions. Access to this database would needs to be given to authorities like Enforcement Directorate and Directorate of Revenue Intelligence, so that the above analysis could be done. For this, SIT has suggested that FET–ERS data should capture the PAN number of the importer or the exporter and that RBI take necessary steps for the same to get this done on an urgent basis.

Nikkei India August services PMI at 54.7 - August saw a solid rebound in the rate of expansion in Indian service sector business activity. Output was raised in response to a marked improvement in new work inflows and increased levels of business confidence. The trend in employment remained comparatively subdued, however, with a slight decrease in jobs signal led for the first time since September of last year. At 54.7 in August, up from 51.9 in July, the seasonally adjusted Nikkei India Services Business Activity Index posted its highest level for over three-and-a-half years. The headline index has now signal led expansion in each of the past 14 months. Output grew in five of the six monitored categories, the exception being Hotels & Restaurants. With growth of manufacturing production also ticking higher, the seasonally adjusted Nikkei India Composite PMI Output Index climbed from 52.4 in July to a 42-month high of 54.6 in August, highlighting a stronger improvement in private sector economic activity. Measured across the service economy, the level of incoming new work rose at the quickest pace for three-and-a-half years. Where an expansion was registered, companies mainly linked this to improved market conditions. Similarly,manufacturing order books increased at a sharp rate that was the quickest since December 2014.

RBI Governor argues for Independent Central Bank for macroeconomic stability of the country - In his last public speech as the RBI Governor at St.Stephens College in New Delhi, Dr. Raghuram G. Rajan explained why central banking was not as easy as it appeared - just raising or cutting interest rates - and why it needed decisions, sometimes unpopular or hard-to-explain ones, to be made under conditions of extreme uncertainty and argued in favor of having an independent central bank and the role and responsibilities of the central bank governor.

The central bank governor has to make difficult policy choices often in the face of uncertainties after weighing the alternatives as best as one can. He cited the example of 2013, when due to weak macro fundamentals the rupee tumbled and it was necessary to get back the confidence of international investors and how he, who had just taken over as the Governor of the Reserve Bank of India, had to decide on introducing the FCNR scheme in the midst of uncertainties. That the decision proved to be beneficial for the country, the Reserve Bank and the banks, taught him that "Policy making invariably involves taking measured risks in the face of uncertainty." He then made out a case for India to have a strong and independent central bank so that it could ensure macroeconomic stability.

It is for taking complex decisions - often difficult for the common citizens to understand - That the central banks should be independent and should be able to say 'no' to seemingly attractive proposals, he argued but added that at the same time, it also cannot become free of all constraints. "It has to work under a framework set by the Government," he said. In his view, "Frameworks reduce the space for differences" and it was important that the constitutional authorities clearly outlined the central bank's responsibilities. He gave two examples - a framework for inflation objective and a risk management framework for RBI that indicated the level of equity the RBI needed, given the risks it faced, to be adopted by the RBI Board. "The RBI did not have the luxury of economic inconsistency," he said, be it interest rates, exchange rate, pushing banks to clean up or paying dividend to the government.

In a poor country like India where so many people lived at the margin, the role of the central bank was to ensure that growth did not exceed the country's potential, adopting prudential policies that reduce the risk, and building sufficient buffers that the country was protected against shocks. The Governor also explained the economic rationale of why the RBI cannot pay special dividend to the government - in addition to the entire surplus being paid out for the last three years.



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