Latest Indian Share Market Updates & News in Jan 2019


Indian resilience now slowly visible
 
NIFTY 50 continued its downward spell in tandem with the global markets albeit with good resilience. Gloomy forecasts are running high on the streets as trade war tensions and geopolitical posturing seems to be overriding concerns for the world. In India too micro concerns are emerging, NBFCs and HFCs are expected to report a steep 50% reduction in the top line (interest income) as there were serious liquidity issues post the infamous IL&FS saga. Corporate quarterly results for Q3, which will start coming out from the next week, are likely to be moderate. NIFTY 50 companies are expected to report a growth of mere 6-7% compared to 13% last year. Companies in the Auto, cement, oil & gas, pharma and telecom sectors are expected to post disappointing numbers whereas private banks, IT, Insurance and FMCG are expected to maintain their growth trajectories.
 
A look at the global markets suggest that everything seems to be going wrong with the US markets whether it be US Fed tussle with President Donald Trump or slowdown in the economy at ground level. Moody's has forecasted a flat growth of just 1.5% in the year 2020 as against 2.5% in the year 2019 which indicates that a significant slowdown in the economy is around the corner for the US economy which will further impact the global market growth. "It is like the US sneezes and the world catches a cold". But hopefully India is expected to remain strong given the young demography and resilient economy, nonetheless the stock market may remain subdued till the general elections.
 
Events of the Week:
 
The government has at last moved ahead with the merger of Bank of Baroda, Dena Bank and Vijaya Bank, the combined entity will be the "Third Largest" bank in the country. However, it would be unwise to arrive at an investment decision until a clear picture about the merged entity becomes available. Investors would fare better in the private sector banks rather than betting on the dark horse.
 
The auto sales numbers were out this week with the majority of the manufacturers reporting flat growth or de-growth which was somewhat in line with the market expectations except for Eicher Motors which posted a 13% de-growth YoY. Even though a majority of weakness was discounted already, the Nifty Auto index fell a massive 3.05% on 2nd January followed by a 1.52% fall on the next day with Eicher Motors as the top loser losing around 13% in just two days.
 
Technical Outlook:
 
Market is expected to oscillate in a range with 10950 on the upper side and 10500 on the lower side with a further downside support at 10300 in Nifty50. The movement is expected to be rangebound which will prove to be a nightmare for the traders. Stock specific moves will be the highlight for the coming weeks but Nifty50 is expected to be in a range. Traders can take contra bets on stocks that rise significantly due to quarterly numbers and at the same time buy stocks which are beaten down due disappointing numbers.
 
Nifty Today
 
Expectations for the Week:
 
The market will shift its focus to corporate numbers which will keep off the global gloom for the time being. Since Q3 numbers are widely known and predictable, very few surprises are to be expected and markets are not likely to overreact. However, stock specific action may be witnessed in some scrips. IT stocks are expected to drift lower, as the trigger for INR devaluation is already over, and there is every possibility that INR will appreciate from here on given the high Real interest rates prevailing in the economy which will attract dollar inflows from FPIs. One should book profits in the IT sector on every rise and not make any fresh investment in the sector at current levels. No sharp correction is expected due to results season save and except due to the impact of global events. Investors are advised to stay away currently and begin buying selectively post results season. Nifty50 ended the week at 10727.35 down by 1.22%