Support at various levels key to bounce back
Domestic markets witnessed selling, but support at the lower level and improved global conditions towards the fag end of the week, helped markets recover. Nifty may test its 200 DMA at 8373 and 8400 on the north and may find support at 8203 (50 DMA).
A break above or below the major resistance and support level will give further course of the market. Investors can create ratio spread on Nifty October series by buying 8300 call one lot and selling two lots of 8400 call.
On the growth front core digital, e-commerce and enterprise businesses, Zensar Technologies reported a 35.7 per cent rise in the net profit to Rs 91.34 crore for the quarter ended September 30, 2015.
The company reported a net profit of Rs 67.31 crore for the same quarter last year. The total income from the operations rose to Rs 758.65 crore for the period under review as compared to Rs 655.88 crore last year.
For the six months that ended September 30, 2015, the company’s consolidated net profit stood at Rs 167.42 crore showing a growth of 35.81 per cent on yearly basis.
The Standard & Poor (S&P) in the week, has kept its ‘BBB-’long term and ‘A — 3’ short term sovereign credit rating for the country. The international rating agency said that the outlook for India remains stable. It also stated though that the sound external position was offset by low income and weak public finances.
S&P said that it does not expect to change the country’s rating this year or in 2016 based on its current forecast. In April, the Moody’s Investors service kept its lowest investment grade rating on the country but raised its outlook to ‘positive’ from ‘stable’.
According to a study, the country’s manufacturing growth improved in October because of help of the manufacturing sector but the mining and electricity sector stood in the dragger’s side. The monthly SBI composite Index, an indicator for manufacturing activity increased to 50.8 in October from 48.4 in September.
However, the yearly index for the same month stood at 53.6, compared to 53.9. According to this report sectors like power, steel and green energy may have a strong credit demand in the coming quarters. An index value of 42 to 46 means moderate decline, 46 to 50 shows a low decline and 50 to 52 is a low growth. On the other side, 52 to 55 indicates a moderate growth and above 55 shows a high growth.
The Chinese GDP data was the first trigger for the last week on the global front, where the economy expanded 6.9 per cent on yearly basis in the third quarter which was above the expectations. But the Industrial production data rose 5.7 per cent on a year on year basis in September missed the estimates.
Also, the corporate earnings made the markets to recover. But the major reason for the recovery was the comments from the European Central Bank (ECB) in its meeting. The ECB signaled that it is prepared to cut its interest rates and step up the quantitative easing to support the region.
For the US markets, new home sales, durable goods orders, markit services PMI flash, markit composite PMI flash, consumer confidence, GDP growth, initial and continuing jobless claims will be the important data for the coming week. Industrial sentiment, economic sentiment, inflation, core inflation, unemployment rate, consumer confidence and business confidence will be the major triggers in the Euro zone area.
In the earnings corner, companies like Blue Starco, Orient Bell, ENIL, Dish TV, Vedanta, Polymed, Thermax, Strides Arcolab, Tata Communication, Dabur, Sun TV, Syndicate Bank, Just Dial, Ambuja Cement, Colgate, ADF Foods, MRPL, IFCI, NTPC, Polaris, Thomas cook, Alstom T&D, Grind Well, Astra Micro, Indoco, LT, Century Textiles, Apollo Tyre, BEL, GAEL, Andhra Sugar, Poly Plex, Granules and IFB Agro may come out with their numbers.
Crude is weak and is likely to trade lower in the coming days due to higher inventory. Last major support for crude is at $45.02 per barrel, movements below this level can cause intensified sell-off.
Alex K Mathews is the author of Financial Services And Systems, as well as Option Trading: Bear Market Strategies published by Tata McGraw Hill. He is also the technical and derivatives research head of Geojit BNP Paribas Financial Services Ltd.
The author may have a vested interest in investments he has recommended. Feel free to e-mail him at firstname.lastname@example.org. Geojit BNP Paribas has membership in, and is listed on, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).