Market radar: The world leads... ... and India follows
Global scenario gives major cues
Global markets gave major cues to the Indian markets, to follow them. The buying interest though, in almost all counters, supported the markets from more downslide. Going forward, Nifty will face resistance at 7550, once that level has taken off, then Nifty can move up towards 7627 and 7651. Nifty has strong support at 7393 levels, a decisive move below this level can cause further downtrend. It can bring Nifty further towards 7000 levels.
The Container Corporation of India said that the Indian Government is selling up to 9748710 equity shares or 5 per cent of the total paid up equity share capital. The days were set as March 9, 2016 for non retail investors and March 10, 2016 for retail and non-retail investors. The floor price for the offer shall be Rs 1195 per equity of the company and at the floor price it may fetch Rs 1165 crore to the exchequer. A 5 per cent additional discount is being offered to retail investors for those bidding shares worth up to Rs 2 lakh. The promoters holding in the company is at 61.79 per cent, whereas the stake of Institution and non institutions are at 35.08 per cent and 3.12 per cent respectively.
According to Fitch ratings, a consolidated banking structure will be positive for the long term development of the country’s banking system. The credit rating agency also said that large banks in a consolidated banking system will enjoy benefits, which may lead to better diversification of risks and stronger overall profits. This, in turn may contribute to higher credit ratings. Fitch also says that the banking system would need sufficient lending capacity to fund large corporates, as India expands and extends its global reach. On the other hand, it lowered the country’s economic growth forecast for the next fiscal to 7.7 per cent and maintained at 7.5 per cent, for the current fiscal.
In February, domestic passenger car sales declined 4.21 per cent to 164469 units from 171703 units, in the same month last year. According to Society of Indian Automobile Manufacturers (SIAM) data, motorcycles sales in the last month jumped 11.05 per cent. Total two wheeler sales in February rose 12.76 per cent. Vehicle sales across categories showed a growth of 11.76 per cent in the period, under review as compared to same period last fiscal.
Feverish activity was seen in real estate companies, as the Real Estate Regulation Bill has been passed. The Bill is implemented to secure the interest of home buyers and developers in equal measure, and, remove corruption from the sector. According to the Bill, if the builders cause delays in transferring properties to buyers, the appellate tribunal would intervene and slap fines on them within 60 days. Also, developers will be responsible for fixing structural defects for five years after transferring the property to the buyers. The real estate has a weightage of 9 per cent in the GDP and the Bill is a crucial one for the growth of the economy.
On the economic front, the Chinese consumer price data came out last week, which rose the most since mid 2014 in February, as the cost of foods rose. Another major trigger for the markets was the European central bank’s monetary policy. In its meeting, the central bank reduced its interest rates to all time low on the fears of an economic slowdown. The ECB expanded its QE programme to 80 billion euro a moth from 60 billion euro.
For the US markets, retail sales, inflation, core inflation, industrial production, manufacturing production, current account, initial jobless claims, consumer sentiment and FED’s policy meet will be in focus. Balance of trade, industrial production and Bank of Japan’s interest rate decision are the events on the Japanese front.
For this week, inflation manufacturing data and balance of trade are important triggers for Indian markets. Gold made new yearly highs, but failed to stay at higher levels due to several reasons. Support for gold will be at $1238 and resistance will be at $1265. Investors can buy Nifty 7500 call options and they can buy 7400 put options when Nifty comes very close to 7627 levels.