(MENAFNEditorial) TECHNICAL TREND ( NIFTY - BANK NIFTY FUTURES )
NIFTY FIFTY : - The Indian Equity benchmark Nifty 50 opened in a positive note on Monday up by 29 points or 0.33 per cent at 8612. Benchmark Index Nifty traded in a very small range of 48 points on Friday, Nifty has taken support of its two month's low of 8550. The Global cues still remain weak which lead Nifty to break its 8550 level, Market were weak in trading on Monday trading session where Nifty saw a fall of 105 points from its last trading session High. The Point to be noted here is that there is a downward gap existed at 8703-8681. last trading session, Nifty touched this gap area. A minimum requirement for wave 2 is fulfilled. Now Need to watch market reaction at this gap area. The market can take reverse any time from here on. On the downside 8550 breaking will be the first indication of completion of wave 2 and begin of Wave 3 downside. Below 8550 spot, next key level 8350. Nifty at crucial level Cautious At Current Levels. Going Forward Market started moving southward , as investors remained wary about a US rate hike on horizon which made investors skittish, as a rate hike could affect liquidity flow for emerging markets. All eyes are on the progress of GST , GST rates may be indicated Although as per various reports, there may be 4/5 rates ranging From 40% with some additional cess, it may take some more time for an overall consensus and another meeting may be called in just before the Winter Parliament session to finalize it. As suspected in last update, Nifty faced stiff resistance at gap area and reversing lower. Hence, most probably, by taking into other technical indicators, upside capped at gap area and wave 2 ended at Thursday high. Now Nifty heading lower towards to break 8550 spot level. Avoid taking long positions. Once 8550 taken out next week , then Nifty moves down in one direction towards 8350. The crucial levels for Nifty is 8573-8447 down side and 8732-8812 Up side.
BANK NIFTY : - The Bank Nifty opened in a Positive on Monday up by 116 points or 0.59 per cent at 19136. Banking stocks were the strongest, with Bank Nifty jumping up to 19500 with massive short covering seen in various Call strikes that led to a decrease in open interest. The PSU Banks have always remained in the radar, be it buying or selling. because of the Financial Performance of Public Sector Banks has been a concern , Investors have remained perplexed about holding the holding PSU Banks stocks. Public sector banks which made losses or experienced sharp dip profit in the last fiscal could lose their ability to service coupon on additional tier 1 bonds issued under Basel III
capital regulations. rating company Crisil said in a report. Stung by high cost of funds when demand for loans is at the weakest in nearly a decade, state-run banks, which used to rely on long-term fixed deposits, are increasingly not accepting any fixed deposit beyond five years. Bank Nifty has to sustain above 19600-19650* area for further rally towards 19850-19950/20000 & 20200-20350 for the Next Week. On the other side, sustain below 19450-19400 zone, Bank Nifty may further fall towards 19300-19200 & 19040-18900 zone as the session progress. The Crucial level for Bank Nifty is 19850-19960 up side and 19080-19260 is down side.
NSE - WEEKLY NEWS LETTERS
✍ TOP NEWS OF THE WEEK
WPI inflation to average 1.5% this year: Nomura - Inflation based on wholesale prices is expected to moderate further in the months ahead and is expected to average 1.5 per cent this year, says a Nomura report. According to the Japanese financial services major, despite adverse base effects the Wholesale Price Index-based inflation is set to moderate further on account of lower food prices and still weak pricing power of firms. "In the months ahead, we expect WPI inflation to moderate further despite adverse base effects due to lower food prices and still weak pricing power of firms," Nomura said in a research note. In its base case, Nomura expects WPI inflation to average 1.5 per cent in 2016 as against (-)2.7 per cent in 2015. Reversing its 7-month uptrend, wholesale inflation eased to 3.57 per cent in September, as good monsoon helped cool food prices. In September 2015, WPI inflation was (-)4.59 per cent. In August this year it stood at 3.74 per cent. "The positive WPI inflation surprise was mainly driven by a sharp moderation in food prices, while core WPI inflation was unchanged," Nomura said.
Draft bill on resolution of financial firms credit positive: Moody's - The draft bill on resolution of financial firms is credit positive for banks as it is an important step to having a comprehensive framework in place for stressed financial firms, Moody's Investors Service today said. After enacting a bankruptcy code for time-bound settlement of insolvency cases in non-financial firms, the finance ministry last month released a draft bill to set up a resolution corporation to address similar issues among financial firms. "Currently, the resolution of financial firms in India is based on minor parts of legislation enacted for other purposes," says Srikanth Vadlamani, a Moody's Vice President and Senior Credit Officer. "This bill is therefore credit positive for Indian banks in terms of enhancing overall systemic stability." In a report titled ''Draft Bill on Resolution Will Enhance Systemic Stability'', Moody's said based on the draft bill, bail-ins do not seem to be the preferred form of resolution, with significant restrictions in place for their usage. These restrictions include contractual bail-in clauses for instruments that may be bailed in and requirements that bail-ins should be used only after attempts at recovery have been made. Consequently, Moody's expects that the Indian banking system will continue to function without an operational resolution regime, and banks should continue to be rated under a basic loss given failure framework. Moody's also said the bill ranks depositors above senior unsecured creditors in a liquidation scenario. In contrast, under existing laws, senior unsecured creditors rank on equal footing with uninsured depositors.
Current account deficit likely to stay below 1 per cent of GDP this year: DBS report - India's current account deficit is likely to stay below 1 per cent of GDP this year, largely due to a sharp fall in the trade deficit as against last year, says a DBS research report. India's trade deficit in September stood at $ 8.33 billion when the trade gap was the highest in the last nine months. According to the global financial services major DBS, the widening of the trade deficit will be "watched closely", especially at a time when the services sector receiptsand private transfers are under pressure. "That said, a sharp fall in the trade deficit vis--vis last year suggests this year's current account deficit is likely to stay below 1 per cent of GDP from (-) 1.1 per cent in 2015-16," DBS said in a research note. In September, exports went up 4.62 per cent to $ 22.9 billion, while the country's imports contracted by 2.54 per cent to $ 31.22 billion, leaving a trade deficit of $ 8.33 billion. The trade gap was $ 11.66 billion in December 2015 while in September 2015, it stood at $ 10.16 billion. Regarding inflation and the consequent policy action, the report said that the Reserve Bank's policy decisions are likely to primarily take direction from CPI trends.
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