GOLDEN RULES FOR TRADING

Indian Market Outlook for the week – 09 to 13.01.2017

Indian Market Outlook for the week – 09 to 13.01.2017


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Indian Market Outlook for the week – 09 to 13.01.2017
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Domestic stocks are seen trading with a positive bias, but will be volatile in an event-heavy week. Investors now await key domestic and global economic data, and the first leg of Oct-Dec earnings. While the Central Statistics Office will detail the first advance estimate of GDP for 2016-17 (Apr-Mar) later today, the data on consumer price index-based inflation and index for industrial production will be released on Thursday. The IIP and CPI data are crucial, as they will help gauge the impact of demonetisation. Investors will also monitor the US monthly non-farm payroll data for December, due later today, which is expected to confirm a sixth straight year of over 2-mln-job addition. Global markets will also lend cues to domestic equities next week. The Nifty 50 is seen taking strong support at 8200 points. For the week, the index is likely to move in the range of 8200-8400 points. Benchmark indices yesterday ended the week with gains for the second time in a row. The Nifty 50 closed at 8243.80, down 30.00 points or 0.4% from previous close, while Sensex closed at 26759.23, down 119.01 points or 0.4%. Once the 8300-level breaks, Nifty50 will see a rally till at least 8400 points. Besides economic data, investors will monitor the earnings of information technology majors Tata Consultancy Services and Infosys, which will detail their Oct-Dec numbers on Thursday and Friday, respectively. 

Oil Stocks Outlook for the week – 09 to 13.01.2017

Oil Stocks Outlook for the week – 09 to 13.01.2017


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Oil Stocks Outlook for the week – 09 to 13.01.2017
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Stocks of public sector oil marketing companies--Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd—are expected to continue ticking higher next week, outperforming the broader Market. These stocks are backed by strong fundamentals, including robust domestic demand for fuel and strong refining and marketing margins and expectations of inventory gains due to a spike in crude oil and petroleum product prices. For upstream companies like Oil and Natural Gas Corp Ltd, Cairn India Ltd, and Oil India Ltd, the rise in prices of crude oil over the past few weeks has lent some strength for the immediate-to-near term. In the absence of any major triggers, movement in stocks of oil companies is likely to depend on crude oil prices, news flow, and the broader market. The recent spurt in prices followed the Organization of the Petroleum Exporting Countries' decision to cut output by 1.2 mln barrels per day. It was further helped by major non-OPEC producers joining the production management arrangement by agreeing to cut their output by 558,000 bpd. Though the rise in prices of crude oil will increase input costs for refiners, they are set to benefit from inventory gains due to the spike. Also, given that prices of most fuels are now market-linked, the downside of higher crude oil prices for these companies seems limited for the time being. State-owned oil marketing companies' Oct-Dec gross refining margins are expected in the healthy $6.8-$7.4 per barrel range, driven by strong product cracks and inventory gains. According to tracking crude oil, futures contracts of the commodity on both local and global exchanges are seen declining in the initial sessions next week as the ongoing rally could lose steam. Prices of crude oil rose to an 18-month high of $55.24 a bbl on Tuesday after reports said the Organization of the Petroleum Exporting Countries would adhere to output cut proposals, which come into effect this month. Crude will take a breather and some profit booking can be seen next Week. However, record high production from Russia, and rising output from Libya and Nigeria has raised doubts over the deal. However, the expected weakening of the dollar could lend some support to crude oil prices.  

Bank Stocks Outlook for the week – 09 to 13.01.2017

Bank Stocks Outlook for the week – 09 to 13.01.2017


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Bank Stocks Outlook for the week – 09 to 13.01.2017
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Bank stocks are likely to rise next week, on expectations that the retail inflation data for December will undershoot the Reserve Bank of India's near-term 5% forecast, creating space for a repo rate cut at the February policy review. Oct-Dec earnings of banks will also be eyed for cues on the sectoral trend. Low levels of inflation will provide room for the RBI to ease its inflation focus and support growth with a reduction in repo rate, which will spur lending to productive sectors of the economy. Banks stocks will also take cues from updated data on post-demonetisation deposits and any moves on liquidity tightening by the RBI, which has so far resorted to reverse repo windows and cash management bills issued under the Market Stabilisation Scheme. Banks, led by State Bank of India, have already cut their lending rates by as much as 90 basis points as they passed on the benefits of the enhanced liquidity. However, pointed out that unless the cuts in loan rates lead to a rise in credit growth, there would be a negative impact on net interest margins and thus, on profitability. Activity in banking stocks is likely to revive next week after a period of sparse trade, as the market will start factoring in earnings for the quarter ended December. Upside for the Nifty Bank index is seen capped at 18500-levels. Among individual stocks, IndusInd Bank, which rose over the week, is likely to extend its gains on Monday before it announces positive Oct-Dec earnings on Tuesday, backed by strong loan growth and non-interest income projections. 

Auto Stocks Outlook for the week – 09 to 13.01.2017

Auto Stocks Outlook for the week – 09 to 13.01.2017


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Auto Stocks Outlook for the week – 09 to 13.01.2017
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Stocks of automobile companies are likely to continue positive momentum next week after Nifty Auto index touched its one-month high of 9589.80 points yesterday. The gap that was created after the government withdrew old 500- rupee and 1,000-rupee currency notes from circulation is likely to get filled now and all the stocks in the index are looking good next week. The government's decision on Nov 8 led to a situation of cash crunch among consumers and the subsequent cut in discretionary spending caused a fall in demand for automobiles. Two-wheeler companies are expected to report a weak December quarter as they were the worst hit in the automobile industry on account of currency curbs. However, are bullish on Eicher Motors Ltd, Maruti Suzuki India Ltd and Ashok Leyland Ltd over long-term. This week, bullish on most stocks in Nifty Auto index including Maruti Suzuki India, Hero MotoCorp Ltd, Bajaj Auto Ltd, and Ashok Leyland. 

Metal Stocks Outlook for the week – 09 to 13.01.2017

Metal Stocks Outlook for the week – 09 to 13.01.2017


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Metal Stocks Outlook for the week – 09 to 13.01.2017
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Major mining and metals stocks are seen trading with a positive bias next week as overall demand for metals is likely to improve in the near term. Bullish on non-ferrous metal stocks and said the picture also looks good for overall metal stocks, which are likely to carry forward their 52-week gains, in near future. Metal stocks have performed well in 2016, out-performing the broader market and have given better returns than defensive stocks like IT, pharma and consumer goods. Over the last 52 weeks, the gains for the Nifty metal index have been over 50%, while consumer goods stocks have gained over 4%. Nifty-IT and Nifty-pharma lost over 7% and 10% during the period. Top picks are Hindalco, Vedanta and MOIL, and he expects demand for aluminium to rise due to shortage in supply, which would benefit Hindalco and Vedanta and also expects ferrous metal stocks to continue their positive bias next week. Stocks of major steel companies like Tata Steel, SAIL and JSW Steel have performed well over this week. gaining over 5%. We expect most metal stocks to do well next week, continuing their good run of this week. 

I.T Stocks Outlook for the week – 09 to 13.01.2017

I.T Stocks Outlook for the week – 09 to 13.01.2017


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I.T Stocks Outlook for the week – 09 to 13.01.2017
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In the upcoming week, the focus in the information technology space will remain on Oct-Dec earnings of Infosys and Tata Consultancy Services. Stocks of information technology companies are expected to trade with a negative bias initially next week due to uncertainties around US work visa norms. Today, shares of information technology companies ended down 2-4% on reports a bill seeking stringent visa norms was reintroduced in US Congress. However, stocks are likely to recover in the latter half as investors will take positions in futures and options segment ahead of Oct-Dec earnings. Sector heavy-weight Tata Consultancy Services will detail its earnings on Thursday, while Infosys will detail its earnings on Friday. The earnings of these two majors are expected to set the trend for investment in the sector for the remaining month. Poor performance may drag the sector stocks by 2-4%. Midcap companies 8K Miles Software Services and Cyient will also detail their earnings next week. These companies are likely to post better earnings as they are likely to be insulated from macro-economic challenges due to their smaller size.

Pharma Stocks Outlook for the week – 09 to 13.01.2017

Pharma Stocks Outlook for the week – 09 to 13.01.2017


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Pharma Stocks Outlook for the week – 09 to 13.01.2017
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Pharmaceutical stocks are likely to stabilise next week as most of the negative issues around the sector like regulatory concerns and pricing pressure in the US have been factored in the prices. Some stocks, which are trading near their support, may even rebound. Over the last three months, the Nifty Pharma index has corrected by nearly 10%, almost double the quantum of fall in Nifty 50, as regulatory concerns continued to weigh. Return on pharma stocks may not be much but now the downside is Limited. Cipla is the preferred pick in the sector over the long term due to its low exposure to the US market, and growth in the domestic market is expected to be robust in the long term. The downside in stock of Sun Pharmaceutical Industries, which is India's largest pharmaceutical company and the world's fifth largest speciality generics player, is expected to be limited after having slumped by nearly 16% in the last three months. The stock is down by nearly a fifth on year on regulatory concerns surrounding the company's facility at Halol. On technical charts, Sun Pharmaceutical Industries is expected to rise towards 670 rupees in the near term. Wockhardt is likely to rise further after it gained 5.6% yesterday. The company late Thursday said it has received a European Union good manufacturing for its facility at Ankleshwar. Next week, the stock is likely to face resistance around 727 rupees. While the view on the stock over the short term is positive, in the long term, market participants advise investors to avoid the stock as three of its units--Ankleshwar in Gujarat, and Waluj and Chikalthana in Maharashtra--continue to be under US Food and Drug Administration's import alert. Over the short term, Aurobindo Pharma is likely to be the top performer in the pharmaceutical sector. 

Capital Goods Stocks Outlook for the week – 09 to 13.01.2017

Capital Goods Stocks Outlook for the week – 09 to 13.01.2017


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Capital Goods Stocks Outlook for the week – 09 to 13.01.2017
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Stocks of capital goods companies are likely to move in a narrow range next week, in the absence of significant triggers. This week, while stock of major capital goods companies rose 3-8%, the BSE Capital Goods Index gained 3.1%. Sector bellwether Larsen & Toubro is expected to remain within range next week, as some of its recent order wins may carry low valuations. Stock of state-owned Bharat Heavy Electricals is likely to see an upside in the short term on the back of a positive outlook for the company, due to robust order inflows. The company received orders worth about 41.30 bln rupees during Oct-Dec, worth nearly 51.30 bln rupees in the first half of 2016-17 (Apr-Mar). Another Bullish stock on Cummins India in anticipation of good business prospects in the near term. On technical charts, the stock has shown signs of a breakout from a declining trend in the last three months.  

India Market Outlook for the week – 02 to 06.01.2017

India Market Outlook for the week – 02 to 06.01.2017


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India Market Outlook for the week – 02 to 06.01.2017
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The Domestic shares are likely to trade on a cautious note in the first week of the New Year, as traders expect profit booking to resume on the back of this week's 2.5% gain. A slew of macroeconomic data and Prime Minister Narendra Modi's speech on Saturday will also be in focus. In his speech, Modi is expected to detail the roadmap to deal with the impact of demonetization as well as announce some relief measures will also determine the direction equities take. The "mood is still pessimistic" after the government  demonetization move announced on Nov 8 stole the lustre in the share market. The benchmark Nifty 50 has lost 4.2% between Nov 8 and yesterday, the last day of curbs on cash withdrawal. Unless a major announcement is made, profit taking by investors and traders is likely. We are expecting a lot of selling pressure in the market as the market has run-up a lot this week. It (Nifty 50) could fall back to 8000-level next week. The rise in the share market followed buying by domestic institutional investors who bought shares worth 43.5 bln rupees till Thursday, according to provisional data available with the exchanges. This was despite institutional investors being net sellers of Indian shares this week. The only way the market is going to go up now is if the FIIs turn around their view and say they are going to buy the value story emerging in the market. A slew of data points will also be eyed, starting with the December HIS Market Purchasing Managers' Index which will be detailed on Monday. Traders will be looking at the data to gauge the impact of cash curbs on the informal economy. After a tumultuous, shaky and sometimes shocking year for the share market, indices ended 2016 on a resilient note. Heading in to the New Year, the picture, though, still remain foggy as multiple events that transpired in 2016 play out on the ground next year. From the actual impact of demonetization to the beginning of Donald Trump's presidency in the US, the first half of 2017 offers a lot of nervousness for the market. We expect weakness in the market to continue till at least March. As for the remaining part, we expect the market to enter into a strong bull run. We could see a turnaround in earnings from June quarter onwards due to lower base effect from Q1 of 2016. The Budget is expected to be a game changer in the New Year with market participants anticipating a slew of cuts in direct taxes and other stimulus for the rural economy. The roll out of the goods and services tax and an accommodating Reserve Bank of India are other major factors which the markets will be pining their hopes on for a revival in sentiment. In the short term, market is expected to remain volatile, but as the long-term growth story of the Indian economy is intact, it is expected that market would see 10-12% upside from here on in the New Year. Not all are that optimistic though. Given the uncertainties unleashed in 2016, it will be too far-fetched to make comments on the market's performance in 2017 beyond March.

FMCG Stocks Outlook the week – 02 to 06.01.2017

FMCG Stocks Outlook the week – 02 to 06.01.2017



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FMCG Stocks Outlook the week – 02 to 06.01.2017
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The shares of fast moving consumer goods companies are likely to bounce back after weeks of correction, as companies have slowly begun recovering from the impact of demonetization. The way ITC Ltd and Hindustan Unilever Ltd has recovered last week after falling for most of last month is promising. FMCG companies had been hit by the withdrawal of high-value currency notes, as sales had slowed in most parts of
the country. Companies such as HUL have issued statements saying that the cash curbs could hit their performance in the near term. With the cash curbs expected to be eased, the situation had improved in many areas, as companies have made efforts to normalize sales, and this was being reflected on the ground. The cigarette price hike undertaken by ITC had also helped the case. ITC Ltd, India's largest cigarette maker, raised the prices of packs of ten 74-mm Navy Cut cigarettes, as well as similar packs of 69-mm Gold Flake (regular) by 14.1% to 89 rupees. The shares of ITC gained following the news, hitting their highest levels in a month earlier. This week, the stock has gained 7.5%. Earlier in the week, the stock had rallied on market speculation that the tobacco industry might not see a steep increase in excise duty in the coming Union Budget. The two news reports have supported bullish sentiment for all cigarette companies and ITC is
sure to gain more in the coming days.

Pharma Stocks Outlook for the week – 02 to 06.01.2017

Pharma Stocks Outlook for the week – 02 to 06.01.2017



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Pharma Stocks Outlook for the week – 02 to 06.01.2017
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The shares of pharmaceutical companies are likely to continue their rebound next week, but investors are likely to remain cautious as they await clarity from the government on cash withdrawal limits. In today's session, the last this year, the Nifty pharma index ended 14% lower owing to regulatory issues, pricing pressure in both the US and India, and the Indian government's ban on fixed dose combination of drugs.
Market participants expect regulatory pressure to continue in the coming year, as the US Food and Drug
Administration, the regulator in one of the world's most lucrative markets, continues its stringent checks. The
Regulatory issues will also be the key issue for India's largest drugmaker, Sun Pharmaceutical Industries, whose facility at Halol, along with Ranbaxy Laboratories' four units, are due for inspection by US FDA.
Four of Ranbaxy's units have been under an import alert for as much as a decade on account of data integrity issues. Sun Pharma acquired Ranbaxy last year. The stock is expected to remain negative in the medium term, but is likely to rise next week and may test the resistance level of 660 rupees. The stock is seen finding support at 610 rupees. The general trend in pharmaceutical stocks is likely to be positive in the coming week, as the Nifty pharma index has fallen over 7%. Also, gains in the broad market are likely to buoy sentiment.

IT Stocks Outlook for the week – 02 to 06.01.2017

IT Stocks Outlook for the week – 02 to 06.01.2017



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IT Stocks Outlook for the week – 02 to 06.01.2017
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The shares of information technology companies are seen rising as market participants choose to invest in stocks that are insulated from demonetization. Prime Minister Narendra Modi is scheduled to give a speech on Saturday. In his speech, Modi is expected to detail the roadmap to deal with the impact of cash curbs as well as announce some relief measures. The broader market is likely to trade on a cautious note next week. The Indian currency, which closed at 67.92 rupees to a dollar yesterday, is likely to remain steady majority of next week. However, investors will continue to hold a cautious view on the sector ahead of Oct-Dec earnings and US president-elect Donald Trump's announcement of policies. Trump, who will take office on Jan 20, is expected to set the tone for his governance during his inaugural speech. Information technology companies' earnings for the December quarter would be crucial as it would determine if they would be able to achieve double-digit growth for the financial year that ends March. Infosys will kick off the earnings season for the sector on Jan 13. Shares of information technology giant Infosys and HCL Technologies are expected to benefit the most from this uptrend. On the other hand, Tata Consultancy Services and Wipro will see the least gains. We expect trend in midcap companies to remain positive and have also recommended certain midcap companies such as Mindtree, Ramco Systems and Hexaware Technologies.

Telecom Stocks Outlook for the week – 02 to 06.01.2017

Telecom Stocks Outlook for the week – 02 to 06.01.2017



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Telecom Stocks Outlook for the week – 02 to 06.01.2017
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The shares of major telecommunication companies are likely to see a negative trend next week due to concern about intense competition hitting pricing power and margins. Traders are likely to view any rise in stock prices as an opportunity to sell. A slew of macroeconomic data, as well as Prime Minister Narendra Modi's speech on Saturday will also be in focus. Free data services by Reliance Industries Ltd's subsidiary Reliance Jio Infocomm, as part of its welcome offer, have led to concern among peers about erosion in market share and a fall in average revenue per user, both for data services and voice calls. Following Reliance Jio extending its free offer till Mar 31, most telecom operators have cut tariffs steeply. Competition in the telecom industry, triggered by the new entrant, continues to put pressure on the margins of operators such as Bharti Airtel and Idea Cellular. For Bharti Airtel, a fall in the company's average revenue per user in the September quarter has weighed on sentiment. Shares of Bharti Airtel may face resistance at 312 rupees and get support at 295 rupees, a Mumbai-based. Tata Communications, which has so far outperformed the sector, is in a consolidation mode, the analyst said. Resistance for the stock is expected at 650 rupees, while support is seen at 612 rupees. The Idea Cellular stock is seen facing resistance at 78 rupees and getting support at 70 rupees. In the past three months, the stock has fallen 7.1%, and lost nearly half its value this year. The Reliance Communications stock, which has been under pressure for some time, is seen continuing with the downtrend. It may get support at 31 rupees, while resistance level is expected at 36 rupees. The stock has also fallen almost 20% in the last three months, while more than half its value has been eroded in the past year.

Oil Stocks Outlook for the week – 02 to 06.01.2017

Oil Stocks Outlook for the week – 02 to 06.01.2017



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Oil Stocks Outlook for the week – 02 to 06.01.2017
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The trend for shares of public sector oil marketing companies Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd is positive for next week and they are expected to outperform the broad market. These stocks are backed by strong fundamentals, including robust domestic demand for fuel and strong refining and marketing margins. For stocks of upstream companies such as Oil and Natural Gas Corp Ltd, Cairn India Ltd, and Oil India Ltd, the rise in prices of crude oil over the past few weeks has lent some strength for the immediate-to-near term. The recent spurt in prices followed the Organization of the Petroleum Exporting Countries' decision to cut output by 1.2 mln barrels per day from January. It was further helped by major non-OPEC producers joining the production management arrangement by agreeing to cut their output by 558,000 bpd. Given that the production cut is scheduled to come into effect from Sunday, crude oil prices may rise next week, which could further help stocks of upstream oil companies. Though the rise in prices of crude oil will increase input costs for refiners, they are set to benefit from inventory gains due to the spike. Also, given that prices of most fuels are now market-linked, the downside of higher crude oil prices for these companies seems limited for the time being. According to analysts tracking crude oil, futures contracts of the black liquid are likely to extend gains on both domestic as well as global markets next week, with the production curbs kicking in. However, only mid way through January will investors have an idea about how much production is being cut by the producers. Next week, the January contract of crude oil on the Multi Commodity Exchange of India may find support at 3,600 rupees a bbl and face resistance at 3,850 rupees. The February-delivery contract on the New York Mercantile Exchange is seen trading in the range of $52.5-$56.5 a bbl. Fluctuation in the dollar-rupee exchange rates is also likely to affect shares of oil companies. A weaker rupee will benefit upstream companies as they sell oil and gas in dollars. Refiners, however, will lose if the dollar strengthens, as their outgo on buying oil and gas will
increase.

Cement Stocks Outlook for the week – 02 to 06.01.2017

Cement Stocks Outlook for the week – 02 to 06.01.2017



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Cement Stocks Outlook for the week – 02 to 06.01.2017
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Prime Minister Narendra Modi's speech on Saturday is expected to set the trend for shares of cement manufacturing companies in the coming week, as demand for the commodity took a beating post the demonetization of 500-and 1,000-rupee notes on Nov 8. Though cement stocks ended higher this week, this is believed to be a short-term year-end rally led by foreign funds, and is unlikely to sustain in January. Large-cap cement stocks such as UltraTech Cement, ACC Ltd, and Ambuja Cements closed 2-5% higher, while mid-cap stocks Jaiprakash Associates, India Cements, and Shree Cement closed up 4-9% this week. Next week, cement stocks are seen tracking any specific announcement by the government on measures to revive demand in the economy, as well as spends on rural and urban infrastructure. Dealers across the country were forced to undertake a 10-15% price cut to clear inventories after the government demonetized high-value currency notes.

Bank Stocks Outlook for the week – 02 to 06.01.2017

Bank Stocks Outlook for the week – 02 to 06.01.2017


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Bank Stocks Outlook for the week – 02 to 06.01.2017
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Next week, bank stocks are seen trading range-bound with a negative bias due to lack of sector-specific triggers. However, any new announcements on demonetized currency notes by Prime Minister Narendra Modi on Saturday might provide fresh triggers. Fresh announcements on withdrawal limits from banks are likely, as the deadline for banks to accept deposit of old notes expired yesterday. The Reserve Bank of India yesterday said that withdrawn 500- and 1,000-rupee currency notes cannot form part of banks' cash balances from Saturday.
Banks' deposits have surged since the government withdrew the legal tender status of high-denomination currency notes. Limits on currency withdrawal are expected to be lifted in a phased manner, and this is seen positive for banks as a sudden relaxation might affect banks' operations. Banks have asked the government and the Reserve Bank of India to continue the withdrawal limits on cash beyond Dec 30, till there is adequate availability of currency notes in the system. Earlier, State Bank of India Chairman Arundhati Bhattacharya had said that the bank's ability to dispense cash was limited to the quantum available with it and, therefore, irrespective of whether restrictions on cash withdrawal were lifted or not, its paying ability would remain constrained.

Metal Stocks Outlook for the week – 02 to 06.01.2017

Metal Stocks Outlook for the week – 02 to 06.01.2017


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Metal Stocks Outlook for the week – 02 to 06.01.2017
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The major stocks in the mining and metals segment are expected to trade in a narrow range in the first week of 2017 as we see no major immediate positive triggers to carry forward the gains made in 2016. The Nifty Metal index rose over 1% this week, gaining 29.40 points to 2652.50 points. The index underperformed the broader Nifty 50 index which rose 2.5% over the week. The Nifty Metal index, however, has gained 45% in 2016, while the Nifty 50 gained only 2% in the same period. Metal stocks rose this year mainly due to the positive sentiment amid gains in commodity prices. Stocks of most major ferrous producers' shares ended flat this week. In fact, we see the ferrous stocks in the consolidation phase for the first two quarters of 2017. However, he said that the non-ferrous producers' stocks could be in the limelight due to buoyant metal prices. The rise in manganese prices seen in 2016 has still left some more room for MOIL to increase prices and earn higher profits.

India Market Outlook for the week – 02 to 06.01.2017

India Market Outlook for the week – 02 to 06.01.2017
(Cautious in first week of 2017, PM's speech key)

The Domestic shares are likely to trade on a cautious note in the first week of the New Year, as traders expect profit booking to resume on the back of this week's 2.5% gain. A slew of macroeconomic data and Prime Minister Narendra Modi's speech on Saturday will also be in focus. In his speech, Modi is expected to detail the roadmap to deal with the impact of demonetization as well as announce some relief measures will also determine the direction equities take.

The "mood is still pessimistic" after the government demonetization move announced on Nov 8 stole the lustre in the share market. The benchmark Nifty 50 has lost 4.2% between Nov 8 and yesterday, the last day of curbs on cash withdrawal. Unless a major announcement is made, profit taking by investors and traders is likely.

We are expecting a lot of selling pressure in the market as the market has run-up a lot this week. It (Nifty 50) could fall back to 8000-level next week. The rise in the share market followed buying by domestic institutional investors who bought shares worth 43.5 bln rupees till Thursday, according to provisional data available with the exchanges. This was despite institutional investors being net sellers of Indian shares this week. The only way the market is going to go up now is if the FIIs turn around their view and say they are going to buy the value story emerging in the market. A slew of data points will also be eyed, starting with the December HIS Market Purchasing Managers' Index which will be detailed on Monday. Traders will be looking at the data to gauge the
impact of cash curbs on the informal economy.

After a tumultuous, shaky and sometimes shocking year for the share market, indices ended 2016 on a resilient note. Heading in to the New Year, the picture, though, still remain foggy as multiple events that transpired in 2016 play out on the ground next year. From the actual impact of demonetization to the beginning of Donald Trump's presidency in the US, the first half of 2017 offers a lot of nervousness for the market.

We expect weakness in the market to continue till at least March. As for the remaining part, we expect the market to enter into a strong bull run. We could see a turnaround in earnings from June quarter onwards due to lower base effect from Q1 of 2016.

The Budget is expected to be a game changer in the New Year with market participants anticipating a slew of cuts in direct taxes and other stimulus for the rural economy. The roll out of the goods and services tax and an accommodating Reserve Bank of India are other major factors which the markets will be pining their hopes on for a revival in sentiment.

In the short term, market is expected to remain volatile, but as the long-term growth story of the Indian economy is intact, it is expected that market would see 10-12% upside from here on in the New Year. Not all are that optimistic though. Given the uncertainties unleashed in 2016, it will be too far-fetched to make comments on the market's performance in 2017 beyond March.

FMCG Stocks Outlook the week – 02 to 06.01.2017

(May bounce back as cos recover from cash curbs?)
The shares of fast moving consumer goods companies are likely to bounce back after weeks of correction, as companies have slowly begun recovering from the impact of demonetization. The way ITC Ltd and Hindustan Unilever Ltd has recovered last week after falling for most of last month is promising. FMCG companies had been hit by the withdrawal of high-value currency notes, as sales had slowed in most parts of the country. Companies such as HUL have issued statements saying that the cash curbs could hit their performance in the near term. With the cash curbs expected to be eased, the situation had improved in many areas, as companies have made efforts to normalize sales, and this was being reflected on the ground. The cigarette price hike undertaken by ITC had also helped the case.

ITC Ltd, India's largest cigarette maker, raised the prices of packs of ten 74-mm Navy Cut cigarettes, as well as similar packs of 69-mm Gold Flake (regular) by 14.1% to 89 rupees. The shares of ITC gained following the news, hitting their highest levels in a month earlier. This week, the stock has gained 7.5%. Earlier in the week, the stock had rallied on market speculation that the tobacco industry might not see a steep increase in excise duty in the coming Union Budget. The two news reports have supported bullish sentiment for all cigarette companies and ITC is sure to gain more in the coming days.

Pharma Stocks Outlook for the week – 02 to 06.01.2017
(To continue rally next week but mood cautious)

The shares of pharmaceutical companies are likely to continue their rebound next week, but investors are likely to remain cautious as they await clarity from the government on cash withdrawal limits. In today's session, the last this year, the Nifty pharma index ended 14% lower owing to regulatory issues, pricing pressure in both the US and India, and the Indian government's ban on fixed dose combination of drugs.

Market participants expect regulatory pressure to continue in the coming year, as the US Food and Drug Administration, the regulator in one of the world's most lucrative markets, continues its stringent checks. The Regulatory issues will also be the key issue for India's largest drugmaker, Sun Pharmaceutical Industries, whose facility at Halol, along with Ranbaxy Laboratories' four units, are due for inspection by US FDA.

Four of Ranbaxy's units have been under an import alert for as much as a decade on account of data integrity issues. Sun Pharma acquired Ranbaxy last year.  The stock is expected to remain negative in the medium term, but is likely to rise next week and may test the resistance level of 660 rupees. The stock is seen finding support at 610 rupees. The general trend in pharmaceutical stocks is likely to be positive in the coming week, as the Nifty pharma index has fallen over 7%. Also, gains in the
broad market are likely to buoy sentiment.

IT Stocks Outlook for the week – 02 to 06.01.2017
(Seen positive; Infosys, HCL Tech seen top gainers)

The shares of information technology companies are seen rising as market participants choose to invest in stocks that are insulated from demonetization. Prime Minister Narendra Modi is scheduled to give a speech on Saturday. In his speech, Modi is expected to detail the roadmap to deal with the impact of cash curbs as well as announce some relief measures. The broader market is likely to trade on a cautious note next week. The Indian currency, which closed at 67.92 rupees to a dollar yesterday, is likely to remain steady majority of next week. However, investors will continue to hold a cautious view on the sector ahead of Oct-Dec earnings and US president-elect Donald Trump's announcement
of policies. Trump, who will take office on Jan 20, is expected to set the tone for his governance during his inaugural speech.

Information technology companies' earnings for the December quarter would be crucial as it would determine if they would be able to achieve double-digit growth for the financial year that ends March. Infosys will kick off the earnings season for the sector on Jan 13. Shares of information technology giant Infosys and HCL Technologies are expected to benefit the most from this uptrend. On the other hand, Tata Consultancy Services and Wipro will see the least gains.

We expect trend in midcap companies to remain positive and have also recommended certain midcap companies such as Mindtree, Ramco Systems and Hexaware Technologies.

Telecom Stocks Outlook for the week – 02 to 06.01.2017
(Seen subdued as margins under pressure)
The shares of major telecommunication companies are likely to see a negative trend next week due to concern about intense competition hitting pricing power and margins. Traders are likely to view any rise in stock prices as an opportunity to sell. A slew of macroeconomic data, as well as Prime Minister Narendra Modi's speech on Saturday will also be in focus. Free data services by Reliance Industries Ltd's subsidiary Reliance Jio Infocomm, as part of its welcome offer, have led to concern among peers about erosion in market share and a fall in average revenue per user, both for data services and voice calls.

Following Reliance Jio extending its free offer till Mar 31, most telecom operators have cut tariffs steeply. Competition in the telecom industry, triggered by the new entrant, continues to put pressure on the margins of operators such as Bharti Airtel and Idea Cellular. For Bharti Airtel, a fall in the company's average revenue per user in the September quarter has weighed on sentiment. Shares of Bharti Airtel may face resistance at 312 rupees and get support at 295 rupees, a Mumbai-based.
Tata Communications, which has so far outperformed the sector, is in a consolidation mode, the analyst said. Resistance for the stock is expected at 650 rupees, while support is seen at 612 rupees. The Idea Cellular stock is seen facing resistance at 78 rupees and getting support at 70 rupees. In the past three months, the stock has fallen 7.1%, and lost nearly half its value this year.
The Reliance Communications stock, which has been under pressure for some time, is seen continuing with the downtrend. It may get support at 31 rupees, while resistance level is expected at 36 rupees. The stock has also fallen  almost 20% in the last three months, while more than half its value has been eroded in the past year.


Oil Stocks Outlook for the week – 02 to 06.01.2017
(PSU refiners seen strong; crude prices eyed)

The trend for shares of public sector oil marketing companies Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd is positive for next week and they are expected to outperform the broad market. These stocks are backed by strong fundamentals, including robust domestic demand for fuel and strong refining and marketing margins. For stocks of upstream companies such as Oil and Natural Gas Corp Ltd, Cairn India Ltd, and Oil India Ltd, the rise in prices of crude oil over the past few weeks has lent some strength for the immediate-to-near term.
The recent spurt in prices followed the Organization of the Petroleum Exporting Countries' decision to cut output by 1.2 mln barrels per day from January. It was further helped by major non-OPEC producers joining the production management arrangement by agreeing to cut their output by 558,000 bpd. Given that the production cut is scheduled to come into effect from Sunday, crude oil prices may rise next week, which could further help stocks of upstream
oil companies. Though the rise in prices of crude oil will increase input costs for refiners, they are set to benefit from
inventory gains due to the spike.
Also, given that prices of most fuels are now market-linked, the downside of higher crude oil prices for these
companies seems limited for the time being. According to analysts tracking crude oil, futures contracts of the black
liquid are likely to extend gains on both domestic as well as global markets next week, with the production curbs
kicking in.
However, only mid way through January will investors have an idea about how much production is being cut by the
producers. Next week, the January contract of crude oil on the Multi Commodity Exchange of India may find
support at 3,600 rupees a bbl and face resistance at 3,850 rupees. The February-delivery contract on the New York
Mercantile Exchange is seen trading in the range of $52.5-$56.5 a bbl. Fluctuation in the dollar-rupee exchange rates
is also likely to affect shares of oil companies. A weaker rupee will benefit upstream companies as they sell oil and
gas in dollars. Refiners, however, will lose if the dollar strengthens, as their outgo on buying oil and gas will
increase.

Cement Stocks Outlook for the week – 02 to 06.01.2017
(PM's speech Sat likely to set trend next week)
Prime Minister Narendra Modi's speech on Saturday is expected to set the trend for shares of cement manufacturing
companies in the coming week, as demand for the commodity took a beating post the demonetization of 500-and
1,000-rupee notes on Nov 8.
Though cement stocks ended higher this week, this is believed to be a short-term year-end rally led by foreign funds,
and is unlikely to sustain in January. Large-cap cement stocks such as UltraTech Cement, ACC Ltd, and Ambuja
Cements closed 2-5% higher, while mid-cap stocks Jaiprakash Associates, India Cements, and Shree Cement closed
up 4-9% this week.
Next week, cement stocks are seen tracking any specific announcement by the government on measures to revive
demand in the economy, as well as spends on rural and urban infrastructure. Dealers across the country were forced
to undertake a 10-15% price cut to clear inventories after the government demonetized high-value currency notes.

Bank Stocks Outlook for the week – 02 to 06.01.2017
(Seen in range with negative bias; PM speech eyed)
Next week, bank stocks are seen trading range-bound with a negative bias due to lack of sector-specific triggers.
However, any new announcements on demonetized currency notes by Prime Minister Narendra Modi on Saturday
might provide fresh triggers. Fresh announcements on withdrawal limits from banks are likely, as the deadline for
banks to accept deposit of old notes expired yesterday. The Reserve Bank of India yesterday said that withdrawn
500- and 1,000-rupee currency notes cannot form part of banks' cash balances from Saturday.
Banks' deposits have surged since the government withdrew the legal tender status of high-denomination currency
notes. Limits on currency withdrawal are expected to be lifted in a phased manner, and this is seen positive for banks
as a sudden relaxation might affect banks' operations.

Banks have asked the government and the Reserve Bank of India to continue the withdrawal limits on cash beyond Dec 30, till there is adequate availability of currency notes in
the system. Earlier, State Bank of India Chairman Arundhati Bhattacharya had said that the bank's ability to dispense cash was
limited to the quantum available with it and, therefore, irrespective of whether restrictions on cash withdrawal were
lifted or not, its paying ability would remain constrained

Metal Stocks Outlook for the week – 02 to 06.01.2017
(Likely to trade in a narrow range next week)
The major stocks in the mining and metals segment are expected to trade in a narrow range in the first week of 2017
as we see no major immediate positive triggers to carry forward the gains made in 2016. The Nifty Metal index rose
over 1% this week, gaining 29.40 points to 2652.50 points. The index underperformed the broader Nifty 50 index
which rose 2.5% over the week.
The Nifty Metal index, however, has gained 45% in 2016, while the Nifty 50 gained only 2% in the same period.
Metal stocks rose this year mainly due to the positive sentiment amid gains in commodity prices. Stocks of most
major ferrous producers' shares ended flat this week.
In fact, we see the ferrous stocks in the consolidation phase for the first two quarters of 2017. However, he said that
the non-ferrous producers' stocks could be in the limelight due to buoyant metal prices. The rise in manganese prices
seen in 2016 has still left some more room for MOIL to increase prices and earn higher profits. 

India Market Outlook for the week – 26 to 30.12.2016

India Market Outlook for the week – 26 to 30.12.2016


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India Market Outlook for the week – 26 to 30.12.2016   
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The Indian Equities are expected to trade in a thin band next week with some amount of volatility due to the expiry of the December futures and options series. The market is expected to trade in a narrow range given lack of major triggers in the near future and holiday mood across the globe. However, we believe that building up of short positions in the Nifty 50 yesterday points towards a further weakness. The market can see some more correction till the expiry of the current series. Traders are unlikely to carry their bearish bets into the New Year and will likely take a fresh view of the market in the January series. The markets are likely to support on Monday from the Goods and Services Tax Council approving the primary draft of the Central and State GST legislations. However, gains are likely to be limited as investors will wait to see if the bill gets implemented as per schedule. Focus will be on global markets for direction due to the absence of triggers in the local market. The resolution to the tussle between Deutsche Bank AG and the US State and the Italian government's plan to fund domestic banks are likely to lift stocks. Investors should take this opportunity to aggressively accumulate quality stocks for long term as valuations have turned attractive.

Bank Stocks Outlook for the week – 26 to 30.12.2016

Bank Stocks Outlook for the week – 26 to 30.12.2016


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Bank Stocks Outlook for the week – 26 to 30.12.2016  
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Amid lack of fresh sector-specific cues, bank stocks are expected to move in tandem with the trend in the broader market next week. The bias, however, is seen negative due to continuous selling by foreign institutional investors. Heavy selling by foreign institutional investors this week, which hit banking stocks, is expected to continue next week as well. We believe any further decline in the Nifty will be triggered by the banking space. Activity in the broader markets is seen range-bound due to lack of major triggers, as well as holidays globally. The Nifty Bank index is expected to find support at 17500-17000, while resistance is seen at 18700-18300. The banking index, which closed down 2.3% on week, is likely to record volatility due to rollovers amid the expiry of the December contract next week. We feel 18200 is likely to act as a stiff hurdle for December expiry. The bounce in the index should be utilised to create short positions. Market participants are awaiting fresh triggers from the announcement of corporate earnings for the December quarter, which begin on Jan 7. Among individual stocks, Union bank of India and Canara Bank are likely to be in focus, as new short positions were taken in these stocks.

Capital Goods Stocks Outlook for the week – 26 to 30.12.2016

Capital Goods Stocks Outlook for the week – 26 to 30.12.2016


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Capital Goods Stocks Outlook for the week – 26 to 30.12.2016
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The shares of capital goods companies are expected to see further correction next week, in line with the broader market, and in the absence of positive cues in the short term. This week, shares of major capital goods companies fell 1.7-6.8%, with the BSE Capital Goods Index down 2% during this period. The sector is likely to be bereft of any major trigger in the next few weeks some stock-specific action at best. Sector bellwether Larsen & Toubro is likely to trade range-bound next week. Shares of Crompton Greaves, which have been falling since the company's announcement to call off the sale of its overseas transmission and distribution business to a US private equity fund, are expected to correct further. The stock, which lost about 3% through the week, might find strong support at 45 rupees in the near term. The Stateowned Bharat Heavy Electricals, which lost 3% this week, could slip further in the next seven day.  

Auto Stocks Outlook for the week – 26 to 30.12.2016

Auto Stocks Outlook for the week – 26 to 30.12.2016


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Auto Stocks Outlook for the week – 26 to 30.12.2016  
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The shares of automobile companies are seen trading with a negative bias next week, with heavyweights such as Tata Motors Ltd and Mahindra & Mahindra Ltd expected to drag the Nifty auto index lower. Tata Motors and M&M are looking very vulnerable next week and are likely to induce more weakness in the already weak Nifty auto index. Tata Motors is likely to fall further and could test the support level of 430 rupees, and M&M is also expected to decline, with support at 1,100 rupees. This week, shares of most auto companies ended lower compared to the last, with Eicher Motors registering the steepest decline of 3.8%. The government's announcement on Nov 8 to withdraw 500-, and 1,000-rupee notes from circulation led to a cash crunch and hit automobile sales. Delhi, West Bengal, Uttar Pradesh saw a sharp drop of 32-42% in vehicle registration during the first week of December compared to November. Rajasthan and Jharkhand saw a moderate recovery during the period but the numbers are still below the usual figures. TVS Motor is likely to be the top gainer, outperforming the market. It is likely to find support at 360 rupees, a Mumbai-based. The Nifty auto index, which fell 1.8% on week, is seen trading on the lower side next week, in a range of 8750-9200 points. The Bajaj Auto stock is likely to trade with a neutral bias but could test the resistance level of 2,800 rupees. Hero MotoCorp Ltd is seen drifting lower towards 2,950 rupees. Eicher Motors is expected to trade with a negative bias next week. The stock is likely to find support at 19,500 rupees. Shares of commercial vehicle makers are likely to remain under pressure, as the ongoing cash crunch will keep logistics operations subdued in the near term. 

IT Stocks Outlook for the week – 26 to 30.12.2016

IT Stocks Outlook for the week – 26 to 30.12.2016


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IT Stocks Outlook for the week – 26 to 30.12.2016
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The sentiment over information technology companies is expected to be mixed next week. Investors will continue to hold a cautious view on the sector but are likely to invest in large-cap stocks. With IT firms not expected to perform well in the Oct-Dec earnings and US President-elect Donald Trump's likely antiimmigrants and anti-trade policies, the cautious view on the sector is likely to continue over the next three months. We expect IT shares to rise next week after they fell this week due to profit taking. With volatility in domestic markets, investors are expected to turn towards the defensive IT sector. Broader markets are seen trading in a thin band next week due to volatility from the expiry of December futures and options series. However, a stronger rupee is seen weighing over the sentiment in the sector and would limit the gains in the stocks. The rupee is likely to open slightly higher on Monday against the dollar due to profit booking in the US currency. However, recommend avoiding investing in mid-cap technology firms as the returns on these investments are expected to be low.

Oil Stocks Outlook for the week – 26 to 30.12.2016

Oil Stocks Outlook for the week – 26 to 30.12.2016


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Oil Stocks Outlook for the week – 26 to 30.12.2016
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In the absence of any major sectoral triggers, shares of public sector oil marketing companies--Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd--are likely to trade range-bound next week, even as they are backed by strong fundamentals, including strong fuel demand and robust refining and marketing margins. In the coming week, movement in the stocks of oil companies will primarily depend on crude oil prices, news flow, and the broader market. For stocks of upstream companies such as Oil and Natural Gas Corp Ltd, Cairn India Ltd, and Oil India Ltd, the rise in crude oil prices over the past few weeks has lent some strength for the immediate-to-near term. The recent spurt in prices followed the Organization of the Petroleum Exporting Countries' decision to cut output by 1.2 mln barrels per day. It was further helped by major non-OPEC producers joining the production management arrangement by agreeing to cut their output by 558,000 bpd. Though the rise in prices of crude oil will increase input costs for refiners, they are set to benefit from inventory gains due to the spike. Also, given that prices of most fuels are now market-linked, the downside of higher crude oil prices for these companies seems limited for the time being. Futures contracts of crude oil are likely to move in a narrow range on the domestic bourse, mirroring parent contracts on the New York Mercantile Exchange. NYMEX is likely to see thin trade because of Year-end holidays. Investors will eye statements by major oil producers such as Saudi Arabia, Russia and Libya for cues on whether they will stick to the output cut deal, and whether producers exempt from the deal will ramp up production. Fluctuation in the dollar-rupee exchange rates is also likely to affect the shares of oil companies. A weaker rupee will benefit upstream companies, as they sell oil and gas in dollars. But refiners will lose if the dollar strengthens, as their outgo on buying oil and gas will increase. In terms of technical charts, it is likely to be a mixed bag for stocks of oil companies.

Metal Stocks Outlook for the week – 26 to 30.12.2016

Metal Stocks Outlook for the week – 26 to 30.12.2016


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Metal Stocks Outlook for the week – 26 to 30.12.2016
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The major stocks in the mining and metals segment are expected to continue their poor show next week due to lack of positive triggers in the near term. The Nifty Metal index underperformed the broader market this week, falling 4.4% to 2623.10 points. Stocks of most major metal and mining companies were in the red with Hindustan Zinc falling by more than 8% over the week, the highest decline among metal stocks. Shares in the segment will largely depend upon prices of metals on the London Stock Exchange. We expect uncertainty in trading activity coupled with liquidity crunch in the market because of Christmas and New Year holidays ahead. The year-end may see profit booking in the sector. The index is expected to hover around 2518 points. Hindalco Industries remains a prized stock even though it has fallen over 12% since Dec 9. We recommend a 'buy' for the stock once it reaches a support price of 147 rupees. Hindustan Copper has a 'buy' rating with a target price of 66 rupees. Both SAIL and Tata Steel have lost over 5% this week. Pressure on metals and mining stocks is likely if the dollar strengthens against other currencies.