Equity Research Report Ways2Capital 25 April 2016


Posted April 25, 2016 by ways2capital

NIFTY FIFTY : The Market has opened sharply higher on Monday with the Nifty raise more than 58 points or 0.7 per cent

 
TECHNICAL TREND ( NIFTY - BANK NIFTY FUTURES )
NIFTY FIFTY : The Market has opened sharply higher on Monday with the Nifty raise more than 58 points or 0.7 per cent. Crude oil prices tumbled some 5 per cent early Monday after the failure of talks between the oil exporting countries in Doha shown result in return of some risk off sentiment, impacted the market. The domestic market has many reasons on the macro front to be euphoric last week, after industrial production showed a spike, CPI inflation slipped and the Met department predicted a good monsoon ahead. And the WPI data miss the consensus. On the domestic front the indian trade deficit has narrow to its lowest level of 5 Years. Fourth quarter earnings will be the key driving force for the domestic stock market in the upcoming trading sessions. Data released by the US labour department showed The number of US worker who applied for the unemployment benefits decline last week to its 43 year lower level. The European Central Bank on Thursday maintained status quo on policy rate. The Nifty is moving toward the 7950-8000 level which will be the crucial breakout for the Nifty. The Resistance for Nifty is 7980-8020 and Support is 7850-7800.

BANK NIFTY : - The Bank Nifty opened on Monday in a positive notes at 16328 up by 50 points and 0.31 per cent. Only the Reserve Bank of India knows the absolute mess that the country's banking sector is faced with, as it recently declined the Supreme Court order to make the figure of bad loans public. Assocham thinks that number may touch Rs 10 lakh crore this quarter. Rating agency Moody's feels that the "under-recognition" of bad loans can further deteriorate asset quality of the public lenders. We should brace ourselves for another bloodbath. The European Central Bank on Thursday maintained status quo on policy rate. The weak US economic data reinforced views that Federal Reserve monetary policy would remain dovish. The Crucial Support for the Nifty is around 15980-15660 and the Resistance is 16800-17200.

NSE - WEEKLY NEWS LETTERS
✍ TOP NEWS OF THE WEEK
India continues to maintain high growth: Arun Jaitley - Union Finance Minister Arun Jaitley has given the Speech at the IMFC Plenary Session in Washington D.C.s where the Finance Minister spoke about the Global Economy, Indian Economy and the role of IMF among other issues: Global Economy As outlined in the GPA, global growth remains disappointing. Advanced economies and EMEs are also expected to grow at a lower rate than previously projected. We support the policy options advocated by the GPA, particularly the emphasis on structural reforms for improving productivity and potential growth. Collective policy actions would also be helpful in mutually reinforcing economic activity and stability.

Indian economy like 'one-eyed' king in land of blind says Rajan - With India being described as 'the bright spot in the global economy', Reserve Bank of India Governor Raghuram Rajan expects this as a case of "the one-eyed man" being king in the land of the blind, according to reports. "I think we have still to get to a place where we feel satisfied. We have this saying -- 'In the land of the blind, the one-eyed man is king'. We are a little bit that way," Rajan said. Rajan was for Spring Meetings of the World Bank and the IMF, as also for the G20 Meeting of Finance Ministers and Central Bank Governors. We feel things are turning to the point where we could achieve what we believe is our medium-run growth potential," Rajan said.

Stress assets of banks may notch upto Rs.10 lakh crore in Q4 - Given the slowdown in certain important sectors like steel, textiles, aluminium etc, and the ongoing Asset Quality Review, may push stressed assets of the banks to Rs. 10 lakh crore mark in the fourth quarter of the current fiscal, reveals the ASSOCHAM latest study. At the end of December, the total stressed assets Gross NPA+ restructured assets of all the banks were at Rs. 8 lakh crore which is expected to see a significant jump in the current quarter itself, adds the study. Asset Quality Review undertaken by the RBI and other factors have resulted in a spike in bad assets with lenders recognising nearly Rs. one lakh of NPAs. Total stressed assets of banks increased to Rs. 7.40 lakh crore at the end of March 2015 from Rs 2.33 lakh crore as on March 2011, nearly a four-fold increase. As regards the Gross NPAs, it surged to Rs. 4,01,590 crore at the end of December 2015 from Rs 2,98,641 crore, a jump of over Rs 1 lakh crore in nine months of the current fiscal.

Good rains can propel Growth to 8.5 % expect rate cut : Arun Jaitley - Finance minister Arun Jaitley said India's economic growth could surge to 8.5%, especially if the monsoon is as bountiful as forecast, adding that he hopes interest rates will fall further as prices trend lower. For his part, Reserve Bank of India governor Raghuram Rajan too has his eye on the June-September rainy season, which will be a key determinant of how much further he wants to take the central bank's accommodative stance. Jaitley "highlighted that GDP growth target could move 7.5 to 8-8.5 % if monsoon is 16 % as forecast.

Separate morality from NPA clean-up: Raghuram Rajan - RBI Governor Raghuram Rajan said on Tuesday that the issue of bad loans gets loaded with a lot of morality and it is necessary to keep criminal liability separate to put stressed assets back on track. “What is happening on the NPA front...this becomes loaded with a lot of morality; are these good people, bad people. I think one should take out the morality from the NPA clean-up,” he said in a Lecture at Columbia Law School in New York.

Services Sector Driving Indian Economy : President Pranab Mukherjee - The Indian Service Industry which contribute the 72 per cent of the GDP, it is the main source of indian economy to create the systematic way to overcome the deficit type things. Terming the services sector as the "sector of the current millennium", President Pranab Mukherjee on Wednesday said it has emerged as an agent of change for the country and is driving the Indian economy in an inclusive and equitable manner. "This sector drives the Indian economy in an inclusive and equitable manner. It is the 'sector of the current millennium', in terms of generating employment, skill development, bringing in FDI, enhancing trade and boosting strategic partnerships," President said.

India to become $10 trillion economy by 2032: Amitabh Kant - Niti Aayog CEO Amitabh Kant on Thursday gave a 2032 date to India becoming a $10-trillion economy, a year after Prime Minister Narendra Modi said India should dream of a $20 trillion economy but did not fix a target. The PM, while speaking at the ET Global Summit last year had asked why the country could not dream of a $20-trillion economy and said his government was preparing the ground for it. Kant, in a presentation before the Prime Minister on Thursday, said the country needs work towards a 10% growth rate year-onyear against its projected growth rate of 7.4% to achieve a $10 trillion economy by 2032.

India trims American govt securities exposure to $118.8 billion - After hiking its exposure to US government securities in the past few months, India trimmed the holdings to $ 118.8 billion in February even as neighbouring China purchased more such instruments. All the BRIC nations, except China, cut their exposure to these securities in February, with Russia reducing its holding by $ 9 billion to $ 87.6 billion. Latest data available with the US Treasury Department shows that India's holding came down to $ 118.8 billion in February compared to $ 119.8 billion recorded in January this year. Since November, India had been raising its exposure and at that time the holdings were worth $ 115.4 billion. It went up marginally to $ 116.8 billion in December.

India's trade deficit hits worrying level; non-trade barriers hamper export potential - It was known India would be faring poorly on the exports front during the year gone by. What came in as a big surprise was the surge in India's trade deficit with China, which compounded at an annual growth rate of 30 per cent between FY06 and 2016, or thrice as fast as India’s overall trade deficit. That, when India’s trade deficit for 2016 actually narrowed to a six-year low of 5.7 per cent of GDP in 2016 from 6.7 per cent in 2015 and 8 per cent in 2010. During FY16, India’s exports fell 15.9% to $261.1 billion in 2015-16 while imports contracted by 15.3% to $379.6 billion. The trade deficit for the year was $118.5 billion. A sharp decline in the gold imports helped narrow India’s trade deficit to a record low, as merchandise imports contracted faster than exports in March amid tepid global demand.


✍ TOP ECONOMY NEWS
The Union Civil Aviation Ministry has dropped the proposal to auction unused bilateral traffic rights on international routes, as per the draft National Civil Aviation Policy.

The Department of Telecommunications is likely to get around 202 megahertz spectrum in the 1,800 MHz band due to harmonization of airwaves by early next month.

Major global oil producing countries failed to reach an agreement over a proposal to freeze oil production at the end of their ministerial meeting in Doha on Sunday amid differences over the wording of the pact.




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Last Updated April 25, 2016