Nifty 8222/Sensex 26698/ Bank Nifty 18466
34 Advances /17 Declines/ 0 Unchanged
“Nifty ends above 8200, Sensex rises 183 pts ahead of Fed meet”
After volatility, benchmark indices gained strength in last couple of hours of trade on Tuesday, with the Nifty ending above 8200 level ahead of the upcoming policy meeting of Federal Reserve that will begin tonight. Positive European cues and short covering in index heavyweights helped the market recover previous day's losses. November retail inflation data (due later today) will be closely watched, especially after demonetization.
The 30-share BSE Sensex jumped 182.58 points to 26697.82 and the 50-share NSE Nifty rose 51 points to 8221.80 while the broader markets underperformed benchmarks, with the Midcap falling 0.4 percent.
Experts say they expect the Fed rate hike of 25 basis points in December policy but the more important factors to watch out for would be Trump policies and US dollar move.
"The biggest headache for global portfolio managers (PM) is making sure that their US portfolio is correctly positioned in terms of sectors. Investors would like to get through the first 100 days to get a better sense of what the actual policies are that are going to come out of the Trump administration. And also an expectation that dollar strength is front-loaded," Adrian Mowat of JPMorgan said.
Markets in Europe were trading higher as investors focused on Federal Reserve policy meeting and digested better-than-expected data out from China. France's CAC and Germany's DAX were up 0.7 percent each at the time of writing this article. Asia ended mixed.
Tata Motors gained 3.5% after around 5 crore equity shares (representing 1.7 percent of paid up equity) exchanged hands through three multiple block deals on the National Stock Exchange at Rs 474.85-486.25 apiece. At an average price of Rs 477.60 per share, these block deals were worth Rs 2,392 crore. Morgan Stanley was likely to buy 5 crore shares of the company for its client at a premium of 10 percent to Monday's closing price of Rs 454 per share, according to CNBC-TV18 quoting people close to the development.
“Fed rate hike priced in, markets look for hints at 2017”
As the Federal Reserve (Fed) kicks off its two-day monetary policy meeting on Tuesday and with markets having fully priced in a 25 basis point hike to a range of 0.50%-0.75%, investors would likely focus on the updated economic forecasts and particularly the “dot plot” showing policymakers’ expectations for the future path of interest rates, along with the follow-up press conference by Fed chief Janet Yellen.
Fed fund futures currently put the odds of a hike at this meeting at 100%.
Additionally, all 120 economists surveyed in the latest Reuters’ poll agreed that the U.S. central bank would opt to tighten policy, while a Wall Street Journal (WSJ) survey returned similar estimates.
Though there is always a possibility that the markets could be surprised by the lack of a move or a larger 50 basis point move, most experts think the chances are extremely slim based on what the Fed has communicated thus far.
“Spotlight on dot-plot in Fed economic projections”
As far as the Fed’s forecast, officials are widely expected to improve estimates on economic growth and unemployment while slightly lifting inflation forecasts.
So once again, focus will likely shift to the Fed’s dot-plot that outlines, anonymously, individual Fed projections for the future path of interest rates.
Currency strategists at Citi suggested that the biggest hawkish risk was that the number of officials that expect three or more hikes in 2017 would increase from the seven dots seen in the September projections.
“The market could probably swallow eight or nine but if it goes above 10, it would probably be viewed as a warning shot about the possibility of a steeper pace (of policy tightening) next year,” they said.
Key Results Today
NALCO
TVS Srichakra
Patel Engineering
Prime Focus
UniTech
Jagran Prakashan
TWL
Anant Raj
MTNL
RESULT ANALYSIS & POLL
IMPORTANT RESULT: TWL
TECHNICAL LEVELS: TWL
CMP 117. TWL has immediate Support at 114 and resistance at 120.
Break and sustain below 114 will take TWL to 111--108 else it can test its resistance level of 120 again. Break and sustain above 120 will take TWL to 123---127 mark.
Trade with levels only.
Now what to expect??
Nifty Future Levels
Nifty has resistance at 8300 and support is intact at 8150.
Either side break or close with volume will decide further. So traders can trade in a range with strict stop loss and wait for confirmation.
Today's Top Pick
ONGC... Support at 308 and resistance at 314
Above 314 will see sharp upside move till 321---324+++ mark.
Support and stop loss below 308.00
More will update soon!!
