Monday, October 16, 2017



WORLD MARKETS                             

US indices gained 0.1%-0.2% to hit fresh record highs on Friday.

The consumer price index rose 0.6% last month, below the expected gain of 0.7%. Retail sales rose 1.6%, the expected increase being 1.7%.

Treasury yields fell on the data, with the benchmark 10-year yield at 2.28%. Dollar initially slid but later recouped losses.

Bank of America jumped 1.5% on better-than-expected earnings.

Earlier, data showed China September exports rose 8.1%—in dollar terms—compared to a year ago, while imports rose 18.7%.

Oil prices surged on the back of robust China import data and after news that President Donald Trump had not reimposed sanctions on Iran. Brent crude rose 1.6% to settle at $57.17 a barrel and WTI advanced 1.7% to settle at $51.45.

European markets ended mixed with modest changes.

For the week, US indices gained 0.2%-0.4%. In Europe, FTSE and DAX gained 0.2% and 0.3% respectively but CAC fell 0.2%. In Asia, Nikkei soared 2.2% while Shanghai and Hang Seng gained 0.2% and 0.1% respectively.

In a speech on Sunday, Fed Chair Yellen indicated that inflation was likely to improve despite the unexpectedly low levels seen this year.


Sensex and Nifty climbed 0.8% and 0.7% respectively, with Nifty closing at record high while Sensex closed at the highest level since 1st August. Sensex soared 250 points to settle at 32432 while Nifty added 71 points to finish at 10167.  BSE mid-cap and small-cap indices underperformed, gaining just 0.04% and 0.1% respectively. BSE Telecom index soared 5.3%, becoming top gainer among the sectoral indices, followed by 1.3% higher Bankex. Healthcare and FMCG indices were the top losers, down 0.3% and 0.2% respectively.

FIIs net sold stocks worth Rs 1699 cr but net bought index futures and stock futures worth Rs 808 cr and 363 cr respectively. DIIs were net buyers to the tune of Rs 1590 cr.

Rupee appreciated 17 paise to end at 64.92/$.

For the week, Sensex and Nifty gained 1.9% each, extending the rising streak to second consecutive week.

Reliance Industries reported mixed set of earnings with Revenue and margin beating estimates while GRMs, though hit 9-year high at $12 per barrel, were below estimates. Jio numbers were good with the business reporting positive EBIDTA and average revenue per user of Rs 156.

India's trade deficit narrowed to a 7-month low of $8.98 bn in September as export rose at 25.6%, the highest pace in 6-months to USD 28.61 bn and imports rose 18%.


China's September CPI is up 1.6%, meeting expectation.

Asian markets are trading with gains of upto 0.8% and SGX Nifty is suggesting about 35 points higher start for our market.

Readers would recall that after Nifty took out 34-DMA hurdle of 9930, we have been recommending holding on to long positions with a trailing stop-loss. We had given targets of 10015 and 10180.

Nifty on Friday touched a high of 10192 before closing at 10167, achieving the 10180 target and vindicating our view.

A rising trendline adjoining tops made in August and September presents a resistance around 10200, a decisive crossover of which will mark a fresh breakout and next major target of 10600 would come into picture.

Meanwhile, immediate support on the hourly chart has moved up to 10045, with the stop-loss of which, existing longs should be held on to.

India's WPI for September would be released today and is expected to show a reading of 3.3%.

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