Status quo, no woe

Global cues raised hopes, but profit bookings played party pooper in the week gone by

In the beginning of last week, domestic markets were positive, tracking global cues. But profit booking kept markets away from more highs. Support for Nifty lies at 8097, movement below this can cause intensified sell-off.

Tokyo stocks gained 1.22 per cent in the last week on speculation that the US Federal Reserve will keep interest rates near zero for longer. Pic/AFP
Tokyo stocks gained 1.22 per cent in the last week on speculation that the US Federal Reserve will keep interest rates near zero for longer. Pic/AFP

Investors with risk appetite can buy Nifty 8250 call options and can sell 8400 calls. On the back of weak demand, the services sector lost momentum. The Nikkei/Markit services purchasing managers’ index fell to 51.3 in September from 51.8.

Last week, Bajaj Corp came out with its earnings, where the company’s standalone net profit rose 24.95 per cent.

For the quarter that ended September 2015, the net profit stood at Rs 46.77 crore as compared to a net profit of Rs 37.43 crore in the same quarter a year ago. Net sales for the period under review rose by 10.68 per cent to Rs 207.64 crore compared to Rs 187.60 crore in the corresponding period last year.

According to a survey from Deutsche Borse, the domestic consumer sentiment for September fell to its lowest level since November 2012. The MNI India consumer sentiment indicator fell 3.2 per cent to 115.3 in September from 119.1 in August, which was also the lowest level since the survey began.

According to a study by UNCTAD (United Nations Conference on Trade and Development), India’s economy is expected to grow 7.5 per cent in the current year on the back of domestic demand and consumption as well as improved fiscal position. It had also projected a combined growth rate for East, South, South-East Asia in the range of 5.5 to 6 per cent in 2015.

Mutual funds
In September, investors withdrew over Rs 77000 crore from the mutual fund schemes, making it the highest outflow in six months. The major contributor to the outflow were liquid and money markets, where the liquid or money markets fund category saw a Rs 60861 crore selling and the income also witnessed a outflow of Rs 26717 crore.

Equity and equity linked schemes saw an inflow of Rs 5444 crore. The weak jobs data from the US provided some relief in global markets based on the hope of reduced interest rate hike by the Federal Reserve.

The other trigger was the Federal Reserve’s meeting minutes, where it hinted that the US central bank is not in a hurry to raise its interest rates, which was positive news. All other markets around the globe were simply following US cues.

Global watch
In the US, retail sales, inflation rate, industrial production, manufacturing production, continuing and initial jobless claims will be in focus. Industrial production, core inflation, inflation and balance of trade are the major triggers in Euro zone.

Consumer confidence, industrial production and the Bank of Japan’s monetary policy meeting minutes are important ones the watch out list for Japanese markets. In China, balance of trade and inflation rate will be data to watch out. For Indian markets industrial production, inflation and manufacturing data are important. Also, earnings will be in focus.

Major ones are Infosys, TCS, DCB Bank, Goa Carbon, Hindustan Unilever, Zee Entertainment, Unichem Laboratories, Crisil, Tata Sponge, RS Software, NIIT Technologies, Tata Metaliks, Himatseide and MindTree.

Alex K Mathews is author of Financial Services And Systems, as well as Option Trading: Bear Market Strategies published by Tata McGraw Hill and technical and derivatives research head of Geojit BNP Paribas Financial Services Ltd. He may have a vested interest in investments recommended. E-mail him at Geojit BNP Paribas has membership in, and is listed on, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

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