Latest Indian Share Market Updates & News in Nov 2018

Is it the calm before a storm or markets will sustain the rally?
 
Post the result season, markets have calmed down keeping behind fears of liquidity and global sell-off. Macro-economic factors have started to turn in favor of corporates. Massive fall in crude oil and rise in Rupee will have double impact on the cost structures, it will boost companies such as OMCs, aviation and paints. Indian indices have quickly adjusted themselves to such macro dynamics and have been rising since the past three weeks, however, we must still wait for some clarity to determine their trend. Markets are expected to move decisively only post December with the outcome of the Vidhan Sabha elections but till then they are expected to be volatile but rangebound.
 
SEBI's past corporate governance measures have borne fruits. The pillars behind Apollo Tyres, Onkar Kanwar and Neeraj Kanwar have voluntarily reduced their compensation by 30%, earlier they were drawing individually Rs 42 Crs, an obscene amount by any standard, Ashok Chawla from Yes Bank and Vinod Dasari from Ashok Leyland have also resigned for whatever reasons but - all these facts boil down to only one point that corporate governance has indeed taken center stage in the true spirit which will go a long way in creating a healthy capital market.
 
Events of the Week:
 
All aviation stocks had reported losses for the previous quarter, however this is the historical impact which portrays an image from the rear-view mirror, but losses does not mean that the stocks can't be bought, currently, the industry's dynamics is undergoing several changes with oil prices declining, excise reduced by the government and rumors of Tata bailing out Jet Airways have all lead to sudden change in sentiments from fear to hope. Who says people can't double their capital in a span of one month! They can indeed, and Jet is a live example. This stock doubled from dreadful lows of Rs 164 in October to euphoric Rs 342 levels. This was a 360 degree turn in its fortunes on the stockprice but what will happen on the business front eventually is a matter of speculation. Therefore, traders are advised not to preempt the outcome and stay cautious.
 
Technical Outlook:
 
Nifty50 has exactly completed the retracement of 38% of the entire fall. Generally, it is observed that Nifty50 retraces around 50% and hence there is some room left on the upside, nonetheless any weakness from the current levels can take the Nifty50 back to 10000 levels. On observing weakness short positions are advised but longs on breakouts should be avoided as most likely all breakouts might turn out to be false signals.
 
Nifty Today
 
Expectations for the Week:
 
Markets are expected to be directionless but volatile which is a difficult scenario for traders to make profits. Hence, traders must be cautious as the indecisiveness of Mr. Market can result in whipsaw losses. With the results season almost over, markets will keep an eye on the CP rollovers by non-banking finance companies. Although a good part is rolled over or redeemed but a significant part is still remaining which needs to be seen. The current phase of hibernation and consolidation could last for a couple of weeks but hopefully the election results will wake up markets for new a direction. Investors and traders are therefore advised to stay away, investors should hold on to their core investment portfolios, while traders should be light on their trading bets. Nifty50 ended this week at 10,682.20, up by 0.91%.
 

Receding Fears may not spark further rally
The week was submerged in festive mood and so was market. Everyone seems to be suggesting that the worst is over, and this is golden time to invest. Majority are confident that Nifty will not fall below 10000. Such commentary comes from the fact that crude oil is down by 20%, Rupee too is strengthening and corporate numbers are as per expectations. Still Mr. Market is reluctant to move up, especially after a massive pull back of 6% since last two weeks. We indeed saw the bounce coming "now the October omen is behind us and November Diwali could bring back some cheer to the market" - October 26th, 2018 . Now when the street is turning optimistic we are little cautious about the continuation of the rally in the near term.
In our market outlook of October 5 th 2018 we observed "...engulfing bear pattern amidst $100/barrel calls, which mean that there is a high probability of reversal" since that date crude oil prices has relentlessly fallen and currently is down by 20% prompting a consensus call now that crude oil has entered into a bear market. We again disagree, Crude oil has corrected sharply but nonetheless the supply side disruptions caused due to Iran sanction might not take the prices any lower soon and therefore prices are likely to stabilize at these levels, giving the much-needed relief to the Indian economy, especially to industries like aviation, oil marketing companies and ancillary industries.
Events of the Week:
In a dramatic turn of events a surprising defeat in the House of Representatives to the Republican Party, is a sign of big relief for global equities. The defeat is a subtle message to the US President that authoritarian rule will not be tolerated, polarizing politics and protectionist stance will not be welcomed by the Americans. This should mend the ways of the current administration which should bring cheers to the market as the fear of escalated trade wars seems less likely. This is long term positive for global markets.
Technical Outlook:
Nifty 50 had a swift upward rally of 6% after a deep sell. Such rally has taken the market to short term over bough levels necessitating a corrective phase for the market. Market seems to be readying to retest the 10000 levels in Nifty50 as there are ample signs that current rally has run its course and cracks are emerging on the higher side. Traders are advised to book profits on long positions and shorts can be initiated at higher levels, however if Nifty50 moves above 10750 it will signal the resumption of uptrend.
Nifty Today
Expectations for the Week:
The result season has almost come to an end which brought some cheers to the market, but the short lived euphoria seems to be over as now the domestic issues of state elections will shift the focus back to Indian politics. Just like the recent US elections was a referendum on Trump policies, PM Modi too would face such tests this month end when three key states will go for elections. NBFCs CP (Commercial Papers) are up for redemption, the industry's liquidity litmus test results will be out by month end till that time market will stay side ways in profit booking mood. Investors stay away for the time being and fresh funds should be invested in Liquid funds in the mean time. Nifty ended the week at 10585.20 down marginally by 0.12%

Diwali To Add Fireworks to Current Rally
 
The week began with a bang and on a positive notewith Nifty showing signs of hope after the massive carnage in the previous week. Everyone had a consensus view that markets will break 10,000 levels on the back of continued FII selling and short rollovers in new series. But markets are unpredictable and seldom follow consensus. When everything turns negative is exactly when market reverses. The mid-week rift between the RBI and Government had also created extremely bearish narratives but if Mr. Marketwants to rise nothing can stop it. Indian indices were so deeply oversold that it had to rise. The rally should continue for some more time, however, it could prove to be a dead cat bounce, but lets wait for further evidences.
 
One of the barometers to measure the health of an economy is auto sales. Since the past few months, numbers have not been encouraging which shows feeble health of the economy.Such muted growth could have been due to increasing fuel prices, inflationary tendencies or decreasing purchasing power. Whatever may be the reason, this is not good for the stock markets.
 
Events of the Week:
 
With the Q2FY19 result season almost in its last leg, some companies have done extremely well this week- Century Textiles reported a 114% increase in its bottom-line and Tata Power delivered 85% increase in PAT growth whereas certain companies have faced a hard time due to the macros casting a shadow over their margins. BPCL is one of them - it delivered a 48% degrowth in its PAT compared to the previous year. At the same time, Dabur reported flattish growth of only 4% in its PAT. Overall, the results have been quite a mix set this week.
 
Technical Outlook:
 
Market indeed took support at 10000 and swiftly bounced back from deep oversold levels. Such sharp up moves will be followed by intermittent pull backs. Market is reasonably expected to touch around 10650 at 38% retracement levels and 10850 at 50% retracement levels. For Traders buy on dips should be the strategy but at the same time they should avoid stocks that have sharply run up due to quarterly results.
 
Nifty Today
 
Expectations for the Week:
 
The euphoria of the festivity could keep markets elevated but there are fewer confirmations as of now thatmarkets will touch new highs before the end of the calendar year. Nonetheless, there is good correction among the indices and many stocks are available at cheaper valuations. It seems to be the right time to cherry-pick the market leaders across various sectors as they will glide through the political tide with fewer headwinds. HDFC Bank, Bajaj Finance and HDFC Life are 3 names in the financial services space whereas momentum bets would be TCS and Biocon. A boost in infrastructure by the Government will bode well for Asian Paints. Moreover, consumer durables and FMCG players such as Hindustan Unilever and Avenue Supermarts would be safer bets to maintain sufficient diversification in the portfolio. Auto and chemical leaders - Maruti and Pidilite are also good picks from a 1-year perspective. We recommend a part of liquid assets should be invested in these 10 stocks atleast with one-year perspective till next Diwali. Nifty50 ended this week at 10,553, up by 5.21%. Wishing everyone Happy Diwali and a Prosperous New Year.