Tag Archives: Commodity Tips

Top Five Factors Behind Market Crash

The bear onslaught prolonged mercilessly for the fourth straight session ended at four month closing low amid a sell-off in global stocks. Nifty, Sensex tanks more than 2 percent today, Nifty tanks 172 points to end below 7600 mark at 7568 while on other side Sensex tanks 554 points and settled at 24851 below the 25000 mark. Here is a list of key Five factors behind a crash in Indian market:

China further devalues the Yuan: Chinese market halted trading for the second time in the last four trading sessions. Shanghai Composite Index tanks more than 7 percent today. Shenzhen Composite Index (which tracks stocks on China’s second exchange) dips more than 8%.

PBoC set the midpoint rate at 6.5646 to the dollar prior to market opening, which is 0.5 per cent weaker than the previous fix of 6.5314. China’s Yuan softened to its softest level against the dollar since February 2011.

PBoC (The People’s Bank of China) had devalued yuan by 034% on January 5, 0.2% on January 6, and 0.5% on January 7.

China continues to remain an important part of the global economy but considering the fact that it will remain an important part of the global economy.

Downgrades to outpace upgrades:

Sovereign downgrades are likely to outpace upgrades in 2016, there are 131 sovereigns agency which rates globally, around which 25 had negative outlooks versus eight positive outlooks on 31st Dec 2015 (ratio of 3 to 10).

World Bank slashed growth forecast: The World Bank cut its growth forecast for the global economy. Indian economy to grow at 7.8% in this year i.e. 2016 and China’s to grow at a more modest 6.7%.

The world economy as a whole would grow at 2.9%, which is a modest upturn from the growth of 2.4 % estimated for last year i.e. 2015.

Crude tanks and hits 11-year low: Crude oil dips and hits a fresh 11 year low as the world’s supply glut showed no signs of easing and slowing demand added to the gloom.

Brent crude dropped to its lowest since 2004 to $34.95 a barrel.

However, Global oil prices tanks 70% since mid 2014 as near-record output from major producers such as the OPEC (Organization of the Petroleum Exporting Countries)

Weak handover from Wall Street: US markets dips more a percent to hits three month low on the back of ongoing fresh concerns over the impact of a slowdown in China amid fall in oil prices and rising geopolitical concerns made investors to adopt a risk off mode.

The US Fed Reserve published its minutes from the last policy meeting in Dec in which it showed policymakers decided to raise interest rates last month after almost all of them gained confidence inflation was poised to rise.

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Intraday Equity & Commodity Market News

Domestic Equity Market News:

Indian markets went down. Nifty closes below 7800 level in the spot.

Nifty was dragged down by ITC, Banks along with some other heavyweights. European markets are trading in red which have triggered selling in Nifty today in the second half during closing time.

Nifty is expected to take support from present levels and could see some buying coming in. Big upside moves will not be sustained and are not on the cards. Downside support at 7750 levels, which could be used as SL in case of going Long.

Telecom, Metals & Mining went up; IT tumbles down.

Telecom sector went up over the news from TRAI and some developments taking place in a few companies. TRAI has said that it would not force any penalty before the 6th January date which will give some more time to companies to fight govt in SC. IT down over strong INR and profit booking.

Metals and Mining are not expected to do very well, so going short would be suggested. Telecom is under stress and any up move coming up will be short lived.

Domestic Commodity Market News:

India’s NG production drops by 3.9% in November.

Weak NG production suggests lower demand in the market.  Coal prices are falling along with oil, which is giving competition to NG. NG’s global supply is far above, then the demand and it is going to head further down in coming months.

NG is trading with the support of Rs. 125.50 levels. It is expected to trade in lower ranges. Sell from high could be the strategy of the moment.

Gold is trading in the range and looking for event to decide its trend.

MCX Gold is looking weak in ultra short term as international price movement will put pressure on the prices. Strong INR too will push it down.

Gold is expected to see some pressure from present levels. Support of 25300 might not sustain if the GDP data of US comes out favoring equities.

International Commodity Market News:

Gold is trading at higher ranges and could see selling coming in if US GDP comes as per forecast.

Gold has moved up in the past weak and is trading at very important levels. Gold gained strength even after the US Fed’s interest rate hike shows that investors are still confused on equities. Today’s GDP data of US might crush this view.

Gold is expected to go down from present levels if the GDP data comes as per the forecast. Gold is trading at $1082 – $1074 level; $1082 is a very important resistance level.

Crude oil prices are trying to find support at present levels.

Crude oil is running weak and is expected to lay low in the near future, but intraday spikes could come up in this weak because of inventory data and other global data.

Crude oil is trading with the resistance of $36.40 and is looking positive if closes above it in the next 1-2 hr, till $36.80 – $37.

Global steel production went down by 4% in the month of November.

Global crude steel production went down in the past month, suggesting weakness in the global economy, which again has been led by China as it is the biggest consumer of steel worldwide.

Weakness in steel and other metals is likely to stay in coming days. Weak demand will push prices further down. Equities too will run weak if commodities do not get support in mid term.

Both:

Data due tomorrow: UK’s GDP Data (q/q), Canada’s GDP Data & US’s Consumer Sentiments, Durable Goods Order, New Home Sales, Crude Oil Inventories.

US will post its GDP data today, which is expected to come around at 1.9%; If it manages to clock in more than the forecasted then markets will surge up tomorrow.

US’s GDP data will decide the course for the remaining days of this week. Tomorrow is a crucial day from global data perspective. Keep focus on tomorrow’s data as Indian markets will decide its course on that.

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Markets Tanks Nearly 1% to End at 3-month Low

Market Wrap-up:

Markets tanks nearly 1 percent to end at 3-month low.

After a weak opening, markets bounced back & managed to wash away today day low and closed with smart gains on the back of favorable macroeconomic numbers and Buying in index heavyweights and positive European cues ahead of Draghi speech & Fed policy meet helped the market gain.

ABOUT WPI NUMBERS:

Wholesale price inflation (WPI) in India remained negative  fell for the 13th straight month in November, index coming in at -1.99% in November compared to -3.81%in October and versus a forecast of -2.59%.

HEADLINES:

  • IOC gains as plans to invest Rs 1.75 trn for expansion.
  • Infosys up 2 percent; invests USD 3 million in Whoop.
  • Tata Motors, M&M tanks on NGT’s Delhi order.
  • Just Dial tanks on Sequoia Capital sells stake.
  • DCB Bank slashes BPLR by 15 bps to 17.95%

STOCKS IN FOCUS:

  • IL&FS Engineering gains after wins new metro rail project in Gujarat worth Rs 3.75 billon.
  • Sugar stocks like Shree Renuka Sugars, Balrampur Chini Mills moved higher after government plans to increase cess.
  • Natco Pharma moved higher after gets nod from DCGI for generic Daclatasvir tablets for Hepatitis C.
  • NTPC ends on a flat to negative note on the media reports that co raises Rs.500 crore via private placement.
  • Jindal Stainless gains more than 10 percent today after government imposed anti-dumping duty on stainless steel imports.
  • Kalyani Forge rallied company plans to double turnover to Rs. 500 crore in the next 2-3 years
  • Global Offshore tanks in an positive market; sells Anchor Handling Tug cum Supply vessel.
  • Nalco shares up over 1% on BSE after reserving bauxite mines in Odisha.

                                                  TECHNICAL FRONT

DAILY CALLS:

  • After gap down opening Fortis EQ recovered from its day low and gains in the first half of day, expected to give breakouts of its today’s high. Buy above 180.30 targets 182.10/183.90/187.80 SL 178.

  • Trend of NCLIND EQ is Bullish and today stock closed near its resistance if sustain above this level fresh buying could be seen in stock. One can entre above 174.60 targets 176.30/178.10/179.90 maintain SL of 172.50.

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Market Falls to Three Month Lows

Market Wrap-up:

Market falls to three-month lows as hopes of GST passage dwindle.

The bear grip tightened toady as the market fell for the sixth consecutive session as Investors remained cautious due to uncertainty over GST Bill hopes seem to fade away as well as weakness in global markets weighed on the markets.

Indian Currency:

The rupee hit a more than 2 year low against US Dollar on Friday as domestic shares fell after an underwhelming stimulus package from the ECB (European Central Bank) forcing the RBI (Reserve Bank of India) to sell dollars via state-run banks.

HEADLINES:

  • Bharat Forge falls and hits fresh low on earning warnings.
  • Jain Irrigation wins new water project in Africa worth Rs 2.20 billion.
  • Yes Bank commits USD 5 billion for climate action in India.
  • NBCC bags business worth Rs 1.93 billion in last month.
  • Havells India drops as plans to divest stake in Sylvania.

STOCKS IN FOCUS:

  • BHEL surged in an otherwise negative market on the reports that Government denies further stake sale.
  • Rajesh Exports rallied after securing new export order worth Rs 1122 crore f designer range of gold and diamond studded jewellery and medallions from the UAE.
  • Jubilant Foodworks launches winter flavors Custard Bliss dessert, Double Cheese Crunch pizza and Cheese Burst pizza in regular size for the winter season; stock dips.
  • PFC to hold a Board meeting on the 16th of this month to consider interim dividend for 2015-16; stock shown strength today.
  • Bharti Airtel slips 2 percent and hits fresh low. The stock opened at 317.25 and made a low of 308.10.
  • Shoppers Stop ends on a flat to negative note today, despite opening a new store in New Delhi.
  • Indian Oil, Oil India down shares tanks more than  a percent as planned to acquire 20 percent stake in Rosneft asset.

                                                  TECHNICAL FRONT

DAILY CALLS:

  • Marksans Pharma tanks for the fourth consecutive day and closed near its support, a strong trend line could be seen on below daily charts as well as the stock closed below 100 DMA so looks more bearish from here. SELL below 95 targets 94/93/92 SL 96.10.

  • Axis Bank EQ is hovering and sustain around its important support level and hence it is expected to give negative breakouts in the coming session. Sell below 445.90 targets 441.40/437/432.60 maintain SL of 450.50.

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Auto Sales Numbers

Nifty Auto Index tanks nearly one percent as shares of index were under pressure on the back of lower than expected November sales number

1. Maruti Suzuki:

Expectations:

Nomura had expected near around 14 pct hike in sales number year on year, while Motilal Oswal expected 16.5 percent growth at 1.28 lakh units. Motilal Oswal said in their report that Baleno has received overwhelming response and bookings crossed 25000 units from the day of launch.

Actual:

The country’s largest car manufacturer Maruti Suzuki today reported lower than expected November sales numbers due to fall in the mini car segment, Sales hike, 9.7 percent as sold 120824 vehicles against 110147 vehicles in the same month last year.

Domestic sales up by 10.6 percent Y-o-Y to 1.1 lakh units, Exports marginally rise by 1 percent.

Maruti reported disappointing numbers due to in the mini car segment as Mini cars sales tanks by 4.7% compared on a yearly basis which stood at 35,981 units. Mid-size car segment sales rise 5.3 percent stood at 5509 units and in compact cars segment sales hike 19.5% at 44626 units. Utility vehicle sales hike, 57.5 percent.

FROM TECHNICAL FRONT:

Today stock will dip nearly 2 percent on lower than expected sales figure, trend line seen in daily charts, more selling pressure could be seen further if able to give a breakout of the trend line. For now 4492 will act as near term support and 4700 will work as resistance.

 2. Eicher Motors:

Expectations:

Nomura expected 52.5 percent sales growth of RE i.e. Royal Enfield while Motilal Oswal has high expectations of 67 percent growth in Royal Enfield.

Actual:

Eicher Motors reported a 48 percent hike in the Royal Enfield sales number which was lower than expected sales number for the month sold 40769 units. While growth of 52 percent reported in which engine capacity up to 350cc and growth of 13 percent in which engine capacity more than 350 cc.

Exports rise by 33 percent stood at 457 units against 344 units in the same month last year.

FROM TECHNICAL FRONT:

Shares of Eicher Motor tanks as reported below than expected sales number, stock is currently trading near its support, i.e. of 16174 and breakouts could be seen in next trading session while 17050 is immediate resistance for stock.

3. Ashok Leyland:

Expectations:

Nomura expected segment growth of 25 percent in Medium and heavy commercial vehicle while Motilal Oswal expected 29% growth in total sales on a yearly basis.

Actual:

Ashok Leyland reported a 16 percent rise in November sales number which is lower than what Nomura and Motilal Oswal had expected. The company had sold 8971 units in the last month.

MHCV i.e. Medium and heavy commercial vehicle sales up 21 percent at 6297 units and LCV i.e. light commercial vehicle sales increased 6% to 2674 units compared on a yearly basis.

FROM TECHNICAL FRONT:

Ashokley shares tanks and closed near its support, the trend of the stock is bullish but for short term stock may remain under pressure due to November sales number. 92.80 is immediate support, and 97.20 may act as a resistance.

 4. M&M

Expectations:

  • Nomura expected growth of 25.7 percent on a yearly basis on the back of favorable base and new launches in utility vehicles (TUV 3OO).

Actual:

  • M&M sales for the November month hike, 21 percent stood at 41590 units from 34292 which lower than what Nomura expected.
  • Domestic sales up by 23% stood at 39383 units. Exports grew marginally 1 percent at 2207 units in the last month.
  • Passenger vehicle sales up 36% at 19662 vehicles and utility vehicle sales up 37% to 18,686 vehicles compared year on year basis.

FROM TECHNICAL FRONT:

  • M&M stock ends on a flat to positive note. Fresh buying could be seen if able to give breakouts and sustain above its resistance, i.e. 1385 (which can be seen in daily charts). For now 1349 will act as an immediate support.

Daily News Alerts:

NEWS UPDATE: MARKET IS SHOWING KNEE – JERK REACTION; NIFTY IS LIKELY TO GET STABLE ALONG WITH OTHER LARGE AND LID CAPS STOCKS.

POLICY UPDATE: RBI KEEPS RATES UNCHANGED; REPO RATE AT 6.75 PERCENT. KEEPS GROWTH FORECASTS AT 7.4 PERCENT. CPI COULD INCREASE MILDLY FROM HERE IN NEAR TERM. ASKS BANKS TO REDUCE INTEREST RATES FURTHER AS THEY ARE NOT TRANSMITTING EARLIER RATE CUTS.

RBI POLICY UPDATE: RBI IS SCHEDULED TO UNVEIL ITS POLICY AT 11 AM TODAY; IT IS EXPECTED TO HOLD ON TO ITS RATES. MARKET WOULD REACT NEGATIVELY IF RBI COMES UP WITH HIKE IN ANY OF THE FOLLOWING RATES LIKE CRR, SLR OR REPO.

US UPDATE: CHICAGO BASED PMI AND PENDING HOME SALES DATA WENT DOWN SUGGESTING UNEVEN GROWTH IN US; THIS WEAK DATA HAS PUSHED GOLD TO A HIGHER ORBIT. GOLD IS LESS LIKELY TO SUSTAIN AT ABOVE LEVELS AND IS EXPECTED TO COME BACK TO ITS DOWNSIDE SUPPORT OF USD 1143-40 ONCE.

NEWS UPDATE: INDIAN MARKETS OPENED UP. NIFTY OPENED ON A HIGHER NOTE ON THE BACK OF GOOD Q2 GDP GROWTH DATA. INDIAN ECONOMY GREW BY 7.4 PERCENT IN THE QUARTER ENDED ON SEPTEMBER. GROWTH IS LED BY MANUFACTURING SECTOR. IOC REDUCED PETROL AND DIESEL PRICES WHILE INCREASES NON SUBSIDIZED LPG PRICES BY RS 62 PER CYLINDER. JSW STEEL HAS BEEN FINED BY US DISTRICT COURT. AIRTEL ANNOUNCES ITS BIG INVESTMENT PLAN ‘BIG LEAP’ OF RS. 60000 CRORE EXPENDITURE IN NEXT THREE YEARS. CAPITAL GOODS AND HEAVY INDUSTRIES STOCKS ARE EXPECTED TO GAIN TODAY. CHINESE MFG PMI WENT FURTHER DOWN; BAD FOR MARKET AND COMMODITIES; NIFTY MIGHT LOSE ITS INITIAL GAINS IN THE SECOND HALF.

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