Latest Indian Share Market Updates & News in Apr 2018

Will markets continue to withstand the onslaught of oil, rupee and yields?
 
Markets during the week have marched higher and higher with low volatility in a show of strength despite fears of higher interest rates, rising crude prices and inflationary tendencies, with the bulls marching fearlessly ahead. Also, FIIs seem to have given up and changed their stance by turning bullish which is clearly depicted in their rollover statistics. There are instances in history wherein negative correlations have happened in the past wherein Nifty had risen and Rupee weakened, but that did not last long and therefore sooner or later either the rupee will give in or the Nifty.
 
Axis bank reported a surprise Q4 loss of Rs.2189 Crs and had the worst performance amongst the private sector banks, however, surprisingly the prices moved ahead and reacted positively which is a signal in itself that the bulls are in full control of the market. Numbers in general were good and as per expectations with Ultratech, Indiabulls and other NBFCs reporting encouraging set of numbers keeping the spirit of the market high.
 
Events of the Week:
 
The 10-year US Treasury yields touching 4-year highs of 3% - This supposedly was the main concern of the market. But based on the past track records, interest rates nearing around 4% is a cause of worry for the equities, therefore the current panic is premature and unfounded more so when the inflation in the US is still around 2% which is a good sign that interest rates will not rise too fast too soon.
 
Technical Outlook:
 
Nifty 50 has broken out from a strong resistance level of 10650 which should ideally lead to further rally till 11000. But sometimes such breakout also turns out to be a failure and reversal can also occur. Traders can take long positions with a tight stop at 10500 and in case stops are hit, short sell could be initiated with high recorded as stops for the trade. There are divergences between sectoral indices and therefore the rally to 11000 will not be easy and straight.
 
Nifty Today
 
Expectations for the Week
 
Given that markets have risen by 6% from its bottom inspite of negative global onslaughts indicates that they have truly discounted good set of corporate numbers. Going ahead the main trigger for the market would be mid-May election results which could swing the mood either ways for our indices and therefore it is expected that the markets will oscillate in a range-bound manner till clarity emerges in the political conundrum. Investors should stay on the sidelines and wait for the market to correct before taking long positions. Nifty50 ended higher this week by 1.21 % to close at 10692.30.

Is the momentary Up-Swing here to stay?
 
Markets are experiencing a tug of war between the micro and macro-economic factors. Despite the global tensions of US initiating aerial strikes on Syria and domestic worries of depreciating rupee, limited fiscal flexibility and events in the run-up to the elections, still the market surprisingly remained resilient and maintained a range-bound movement during the week. This indicates that the benchmark indices are likely to be in a narrow-trading range for want of a definitive directional trigger. Currently the lack of momentum points to a possibility of a looming correction. Weaker rupee is applying breaks to the rally which is further supported by the selling spree witnessed by the FIIs.
 
Indian IT giants posted some mixed Q4 results with companies like Infosys reporting inline numbers as per the estimates however the market didn't react favourably and the stock price declined immediately after the announcement whereas TCS and Mindtree had stellar numbers which caused the price to shoot-up. Inspite of strong results, the market is in no mood to start its upward journey. Such behavior of the market is a warning bell for the bulls.
 
Events of the Week:
 
Crude prices touched its 3-year highs of $74/barrel and long positions are rising in crude option futures in the range of $75-80/barrel; these factors will be the reason for an upside resistance in the market causing sharp depreciation in the rupee and bond yields to soar. This rising pressure on the macros will eventually trickle down to the markets.
 
Technical Outlook:
 
The market seems to be nearing a new resistance level. Nifty 50 is resting at a 50% rise of the entire fall since last three months. 50% retracement levels often act as strong starting points for reversals. Therefore, the odds are against the bulls from a short-term point of view. A downfall in prices looks more likely in the long-term given the kind of rally we have seen. Wait for a fall before initiating a long trade.
 
Nifty Today
 
Expectations for the Week
 
The market is in no hurry to move either ways. Every time the reaction of the market to negative news was mature without creating panic-like situations. It is therefore sensible to look out for bargains and sectoral trends for trading purposes. However, a fall before and after Karnataka polls is not ruled out but this will create an ideal opportunity for fence-sitters to begin buying long-term quality picks. The current rally is an indication that the long-term trend is intact but for short-term, the odds of a fall in the market are high; being just a corrective fall, investors should accumulate good quality stocks on the decline. Nifty50 ended lower this week by 0.012% to 10,564.05.

Where are the markets headed after slow motion week?
 
The markets during the week crawled up slowly inspite of war-like threats between US its allies and Russia. Certain stocks remained muted with virtually no strength to inch higher and maintained a rangebound stance throughout the week in spite of bullish global cues. When global cues were positive, Indian markets were lethargic which indicate that markets have reached a status quo and are in a wait and watch mode. All fears have been discounted now and have taken a backseat, hence, the direction for the market swing for the upcoming few weeks will be something to look out for. The trigger for the rally or the fall could be either by the strong Q4 numbers or the "Missile mania" by the US and Syria.
 
Indian markets had a streak of positive news this week like favorable IIP and CPI numbers for the month of March and companies like Goa Carbon reporting double profits this year, however, there wasn't any drastic move in its stock price. There is a chance that the commodity cycle has peaked and this can threaten the bull market in some of the cyclical stocks in the long run. Analysts estimate the earnings growth to lose steam in their Q4 results and expect Nifty50 firms' combined net profit to grow at 10.9% yoy.
 
Events of the Week:
 
A sharp $5/ barrel increase in crude prices over the past few days with brent crude prices touching 3 year high of $72/barrel, this has caused fear among the consumers. The trigger for the significant rise was the worsening of tensions in Middle East with Saudi Arabia having intercepted missiles over Riyadh. In the midst of this uncertainty, Government had asked the OMCs to absorb the Re 1/litre price hike although this was denied later by the OMCs but market seems to have got a whiff of early elections and therefore started to punish public sector undertakings on the fears that their profits will be impacted in the election year.
 
Technical Outlook:
 
Market has lost the momentum on the upside. Indicators like MACD are indicating a possibility of a correction. Open interests and volumes are low which is positive in the medium term. Low volume and low open interest means that down side is capped and upside is open till 11100 Nifty50 in the medium term and 10600 in the near term. Buy on dips should be the strategy for the traders.
 
Nifty Today
 
Expectations for the Week
 
The market is waiting for a trigger and quarterly results could play a significant role in providing a jumpstart to our indices. The key events to watch out for during the week are the private banks' results which are expected to be healthier. Also, the latest twist on the Fortis deal with Munjals and Burmans joining the race along with IHH and Manipal hospital should benefit minority shareholders this will be like IPL match for stock market audience. Be cautious on cyclicals but positive on Pvt sector banks, HFCs, NBFCs, fertilizers and consumer durables. Investors should continue to look for quality stocks and buy on dips should be the strategy for them. Nifty50 ended up for the week by 1.44% to10480.60.
 

Sentiments has shifted from bearish to bullish -markets too will follow
 
Bulls seem to have found a bottom in an otherwise volatile market. Every effort of bears has been neutralized by the bulls on the strength of attractive valuation of stocks. Negative global clues too haven't scared the bulls and they have finally arrived with vengeance.
 
Auto numbers have kept the pace of growth inspite of higher base giving an indication that all is well at the ground level. Two wheelers have posted on an average 25% growth, while passenger vehicles have registered 15% whereas commercial vehicles have registered growth in the range of 20%-30%.
 
US market was down heavily during the week on fears of trade war getting escalated but still Nifty was able to hold the water tight. This indicates that the bottom is in place for the medium term play. If fear of trade wars couldn't scare the bulls what else would? ICICI Bank episode also indicate that inspite of all the negative news flow stock has refused to go down. Market is ripe for a rally with the onset of results season.
 
Events of the Week:
 
RBI MPC's assessment about inflation expectations and growth projections were a positive surprise to the market. Receding inflationary expectations and pick up in capital goods production is a healthy sign that the growth is healthy and sustainable. However contracting liquidity, risks of higher crude oil prices, escalation of trade wars, higher MSP being an election year can actually derail the bull party. In general Dovish stance of RBI is a sign of big relief, but if US Fed aggressively increases interest rate than that would lead to a change in stance of MPC which otherwise in all likely hood is not in a mood to increase interest rate in the medium term.
 
Technical Outlook:
 
Nifty 50 after testing 200DMA has swiftly bounced back. It has also penetrated downward sloping trend line indicating that market is rally ready. It is likely that Nifty50 may slightly dip before moving upwards. On the higher side Nifty50 can touch 10600 in the short time wherein some amount of profit booking can be expected. On a worst case scenario prices can touch 10000 which should act as stop loss for positional traders. Buy on dips should be the strategy for traders.
 
Nifty Today
 
Expectations for the Week
 
The market has found the bottom at least in the medium term. Annual results still have one more week to go, in the mean time Sino - US response to tariffs will be keenly observed, if the threat subsides, which in all probability will, market will stage a smart recovery. Indian market was subdued because of global factors, the moment stability sets in global market, Indian market will race ahead.
 
RBI has set the stage for PSU banks to write off bond losses in four quarters which will help them to post better quarterly numbers. Some early results show fantastic earning season is ahead. Stock like Sobha developers had gone up by 10% intraday post announcements of good set of numbers, this kind of trend is likely to continue in weeks to come. Investors should invest aggressively in quality stocks for long term. Nifty50 closed at 10331.60 up by 2.15% from the previous week.