Team IMV wishes a very happy and prosperous new year 2017
Nifty 8185/Sensex 26626/ Bank Nifty 18177
43 Advances /8 Declines/ 0 Unchanged
Bulls have the last laugh on the final day of the year
Indian benchmark indices showcased courageous performance and went on to outclass indices around the world by vivaciously rallying around a percent in the session and settling above the psychological 8,150 (Nifty) and 26,600 (Sensex) levels.
Sentiments remained up-beat with Finance Minister Arun Jaitley’s statement that the impact of demonetisation is clearly visible with tax collection figures seeing double-digit growth. He had said that there has been a 26.2 per cent increase in central indirect tax collection till November 30, while till December 19, direct tax collection increase has been to the extent of 14.4 per cent against a growth rate of only 8.3 per cent previous year.
Adding optimism among investors, Agriculture Minister Radha Mohan Singh said that the growth in agriculture and allied sectors will be higher during this fiscal as the country is likely to harvest bumper crop buoyed by good rains. The Minister also assurance that the Centre will procure pulses and other crops if rates fall below the minimum support price (MSP) level.
Furthermore, Union government has charted out a roadmap for the early completion of 99 irrigation projects under the Accelerated Irrigation Benefits Programme (AIBP) and Pradhan Mantri Krishi Sinchayee Yojana (PMKSY).
Some support also came with the Reserve Bank of India (RBI) easing norms for working capital lending to micro and small enterprises (MSEs) on difficulties faced by them, as a result of the sudden withdrawal of legal tender status of high-value currency notes.
Meanwhile, market participants give littlie importance to RBI’s Financial Stability Report, which indicated a sharp rise in the non-performing assets (NPAs) of banks as “the banking stability indicator shows that the risks to the banking sector remained elevated due to continuous deterioration in asset quality, low profitability and liquidity”.
The stress test indicated that under the baseline scenario, the GNPA ratio may increase from 9.1% in September 2016 to 9.8% by March 2017 and further to 10.1% by March 2018.
On the global front, Asian markets ended mostly higher on Friday, despite the modest losses overnight on Wall Street. Trading volumes remain thin in the absence of any market-moving news. China’s stock exchange edge higher, taking cues from a survey by the People’s Bank of China which showed that business confidence among entrepreneurs in China rose for the third straight quarter in October-December. However, Japan's Nikkei share average slipped as investors took profits from the recent gains. Meanwhile, European stocks fell in thin trading, poised to end the year with their first annual decline since 2011 when the sovereign-debt crisis peaked.
Back home, the local benchmark got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. The frontline indices soon gathered momentum and traded with over half a percent gains through the morning session of trade. Second half of the session saw the key gauges capitalize on the momentum further and spurt to session’s highest levels in dying hour. However, a mild profit booking in dying moments of trade ensured that the key indices shut shops off the intraday highs.
FII Activity (Dec 30, 2016)
The FIIs as per Friday’s data were net sellers in equity segment, while they were net buyers in debt segment, according to data released by the NSDL.
In equity segment, the gross buying was of Rs.4482.30 crore against gross selling of Rs.5143.60 crore. Thus, FIIs stood as net sellers of Rs.661.30 crore in equities.
In the debt segment, the gross purchase was of Rs.349.80 crore with gross sales of Rs.59.19 crore. Thus, FIIs stood as net buyers of Rs.290.61 crore in debt.
Key announcements from PM Modi's New Year's Eve speech
Following the tough decision to demonetise Rs 500 and Rs 1000 currency notes, Prime Minister Narendra Modi on saturday thanked citizens for undertaking a yagna (sacrifice) to cleanse the economy of black money, and announced a number of sops that to help the poor, the rural sector, small businesses and other citizens.
Below are the key steps he announced in his speech.
Big push for housing for rural and urban poor
- To make it easier for the poor to buy their own homes, PM launched two new housing schemes for the urban poor.
- Under Pradhan Mantri Aawaz Yojana (PMAY), the poor and middle class in cities will get 4 percent exemption on interest for home loans up to Rs 9 lakh.
- And, 3 percent exemption for home loans up to Rs 12 lakh.
- Under PMAY, 33 percent more houses will be built in villages.
- Also, home loans up to Rs 2 lakh will get 3 percent exemptions for not just building a new house but also for renovation in villages.
The grass is greener for the farmers
- 3 crore Kisan credit cards will be converted into RuPay cards in 3 months.
- Government will bear 60 days interest on select farm loans.
- Last month, NABARD created a fund of Rs 21000 crore. Modi today announced that the government is adding Rs 20,000 crore more to this. The loss that NABARD will suffer by giving loans to cooperative banks and societies at low interest rate shall be borne by the government.
Happy new year for MSMEs
- Credit guarantee for small businesses doubled to Rs 2 crore.
- Banks have been asked to raise cash credit limit for small business to 25 percent from 20 percent.
- Banks have also been asked to increase working capital loans from 20 percent of turnover to 30 percent for enterprises that transact digitally.
Sops for women and elderly
- Pregnant women to get Rs 6,000 in bank accounts to reduce child, woman mortality.
- Guarantee of 8 percent rate on deposits for senior citizens up to Rs 7.5 lakh.
Samajwadi party Crisis
A day after Uttar Pradesh Chief Minister Akhilesh Yadav was expelled from the Samajwadi Party by his father Mulayam Singh Yadav, he has been taken back in the party. The decision was announced after the Uttar Pradesh Chief Minister met Mulayam Singh this afternoon at the party chief's residence. The meeting was organised by senior Samajwadi Party leader and cabinet minister Azam Khan. Akhilesh Yadav's close aide Ram Gopal Yadav, who was expelled alongside the chief minister yesterday, has been taken back as well.
Now what to expect ??
Nifty Future Levels
As expected…… Nifty flared and made high of 8207. We clearly indicated looks positive above 8130
Now what to expect?
Nifty future has support at 8100 and resistance at 8220
Above 8220 it could test it's resistance level of 8280---8320 else could test its support level of 8100 again.
Further downside panic will see only close below 8100 mark.
Nifty has now major support at 7880 and resistance at 8320. Break and close above 8320 will see sharp upside rally of 400+ points
We will update special report on Nifty soon.
Today's Top Pick
Tata Chemical
Tata chemicals ….. Formed symmetrical triangle pattern on daily chart and having breakout point at 510. Break and sustain above 510 will see sharp upside rally till 540--560 and then to 590+ mark in days to come else could test its support level of 470. It will become positional weak below 470 which is unlikely to breach in near term.
Tata chemicals is trading above 21 and 55 days exponential moving averages which is at 488 and 495 respectively. RSI too in the positive zone which indicate upside seems certain.
Trading Recommendations -
Positional Traders can buy and accumulate Tata Chemical (cash / future) above 510 with stop loss above 470 on closing basis for upside target of 540—560 and then to 590+ mark.
