Trading Tips.
Buy Bajaj Hindustan with target of Rs 250 and stop loss of Rs 230. The stock is currently trading at Rs 236.50, up 1.7% on the BSE.
Hold GAIL with long-term target of Rs 450-500. The stock is currently trading at Rs 357.15, down 1.6% on the BSE
Buy ITC with target of Rs 280 and stop loss of Rs 240. The stock is currently trading at Rs 262.25, up 0.9% on the BSE.
Sell Zee Entertainment with intra-day target of Rs 215 and stop loss of Rs 232. The stock 229.10, up 1% on the BSE.
Buy PNB with target of Rs 890 and stop loss of Rs 850. The stock is currently trading at Rs 864.50, up 0.03% on the BSE.
Buy MIC Electronics with intra-day target of Rs 55 and stop loss of Rs 47. The stock is currently trading at Rs 49.50, up 2.2% on the BSE
An hour into opening, the market is trading in the red and looking a bit weak having come under selling pressure. Sensex is trading at 16743, down 67 points from its previous close, and Nifty is at 4973, down 23 points. CNX Midcap index is down 1% and BSE Smallcapindex is down 0.7%. The market breadth is negative with advances at 408 against declines of 789 on the NSE.
Monday, October 26, 2009
INR Weekly
Fundamental Analysis
Dollar registered a smart recovery this week after three consecutive weeks fall amid short covering as well as buyingof dollars by oil marketing companies. The USDINR which touched 45.82 levels the previous week jumped by almosta full rupee as it made a high of 46.80 levels. Although a relief rally was expected in the pair, the fact that dollar index did not support the rise of USDINR was one the key features of the week. Better than expected American results did not act as a deterrent for the equity markets to fall as correction was witnessed in major equity indices, which also helped the pair to rise.
Dollar Index
The dollar index continued to show weakness,
touched a 14 month low at 75.05. Although 75.00
levels seem to be a crucial psychological support,
a breach of this level would lead to further
weakness and is a major concern for other
currencies which are appreciating. Uneasiness
was seen among euro zone countries, as ECB
officials claimed that weaker dollar is bound to
affect exports.
Pound sterling and Euro were the major gainers
in the dollar index, where as the Japanese yen
rise is halted.
Higher Crude Oil Prices – A Concern for Central Bankers
Crude oil prices breached the $80 mark this
week leading to concerns of higher inflation
for economies worldwide. A combination of
weakness in dollar along with lower
inventories was a critical reason for rise of
crude oil. However the percentage rise of
Crude Oil was more in US Dollar rather than
other currencies. In Euro terms Crude oil was
quoting at 53 Euros which was near to its
august highs while in Rupee Terms crude
was at Rs.3711/barrel which was marginally
up from August high of Rs.3700/barrel. Thus
in actual terms higher crude prices may not
affect other economies so soon because the
fair price still remains at August levels.
However Talking specifically about the Indian
economy the food based inflation is on rise
and if crude oil continues to rise at this pace the fuel inflation will also start its upward trend which is expected tocreate further problems for the economy. Bond yieldshave also risen with 10 year benchmark yield touching 7.47%in anticipation of interest rate rise in near future.
Credit Growth – A Concern For Indian economy
In another development Low demand for loans pushed credit growth to a 12-year low of 10.75% during the year up to October 9. The previous low of 9.78 % was during the fortnight ended November 11, 1997. According to the latest data released by the Reserve Bank of India (RBI), for the fortnight ended October 9, 2009, bank credit grew Rs 17,160 crore. In contrast, after the credit crisis intensified in September last year, banks lent Rs 64,937 crore during the fortnight ended October 9, 2008. Lower demand of funds from the credit sector was one of the main reasons forthe fall of credit demand
Conclusion
This week it will be the credit policy of RBI which will be the main focus of currency traders. Although we do not expect any change in REPO and Reverse REPO rates this time but the statement of RBI Governor will assume its significance. Looking at RBI’s governor statement a few weeks back that India might have to take lead over developing world in increasing interest rates we expect a hawkish statement from the governor. This might lead to Rupee Strengthening over the dollar in short term and might touch 47 levels in coming days. Apart from this a potential correction in Indian equity markets will lead to strengthening of the currency pair.
Technical Analysis Looking at USDINR spot charts, one can see the currency pair in a pullback mode with 46.81 levels acting at a crucial resistance. This levels is also 23.6% retracement of the fall from 49.20 to 45.82. The pair has been consolidating at those levels for 3-4 days now. A decisive breach of 46.81 will take pair towards 47.11 levels.
Dollar registered a smart recovery this week after three consecutive weeks fall amid short covering as well as buyingof dollars by oil marketing companies. The USDINR which touched 45.82 levels the previous week jumped by almosta full rupee as it made a high of 46.80 levels. Although a relief rally was expected in the pair, the fact that dollar index did not support the rise of USDINR was one the key features of the week. Better than expected American results did not act as a deterrent for the equity markets to fall as correction was witnessed in major equity indices, which also helped the pair to rise.
Dollar Index
The dollar index continued to show weakness,
touched a 14 month low at 75.05. Although 75.00
levels seem to be a crucial psychological support,
a breach of this level would lead to further
weakness and is a major concern for other
currencies which are appreciating. Uneasiness
was seen among euro zone countries, as ECB
officials claimed that weaker dollar is bound to
affect exports.
Pound sterling and Euro were the major gainers
in the dollar index, where as the Japanese yen
rise is halted.
Higher Crude Oil Prices – A Concern for Central Bankers
Crude oil prices breached the $80 mark this
week leading to concerns of higher inflation
for economies worldwide. A combination of
weakness in dollar along with lower
inventories was a critical reason for rise of
crude oil. However the percentage rise of
Crude Oil was more in US Dollar rather than
other currencies. In Euro terms Crude oil was
quoting at 53 Euros which was near to its
august highs while in Rupee Terms crude
was at Rs.3711/barrel which was marginally
up from August high of Rs.3700/barrel. Thus
in actual terms higher crude prices may not
affect other economies so soon because the
fair price still remains at August levels.
However Talking specifically about the Indian
economy the food based inflation is on rise
and if crude oil continues to rise at this pace the fuel inflation will also start its upward trend which is expected tocreate further problems for the economy. Bond yieldshave also risen with 10 year benchmark yield touching 7.47%in anticipation of interest rate rise in near future.
Credit Growth – A Concern For Indian economy
In another development Low demand for loans pushed credit growth to a 12-year low of 10.75% during the year up to October 9. The previous low of 9.78 % was during the fortnight ended November 11, 1997. According to the latest data released by the Reserve Bank of India (RBI), for the fortnight ended October 9, 2009, bank credit grew Rs 17,160 crore. In contrast, after the credit crisis intensified in September last year, banks lent Rs 64,937 crore during the fortnight ended October 9, 2008. Lower demand of funds from the credit sector was one of the main reasons forthe fall of credit demand
Conclusion
This week it will be the credit policy of RBI which will be the main focus of currency traders. Although we do not expect any change in REPO and Reverse REPO rates this time but the statement of RBI Governor will assume its significance. Looking at RBI’s governor statement a few weeks back that India might have to take lead over developing world in increasing interest rates we expect a hawkish statement from the governor. This might lead to Rupee Strengthening over the dollar in short term and might touch 47 levels in coming days. Apart from this a potential correction in Indian equity markets will lead to strengthening of the currency pair.
Technical Analysis Looking at USDINR spot charts, one can see the currency pair in a pullback mode with 46.81 levels acting at a crucial resistance. This levels is also 23.6% retracement of the fall from 49.20 to 45.82. The pair has been consolidating at those levels for 3-4 days now. A decisive breach of 46.81 will take pair towards 47.11 levels.
Currency Market
Forex USD/INR DAILY
A 30 paisa gap down opening was the main feature of the day as bulls tried hard to regain its lost territory and were successful to a certain
extent. Dollar November contract opened gap down at 46.55 paisa losing 30 paisa from previous close of 46.85 and eventually closing the
day at 46.65. Nifty opened the day 55 points up and touched 5054 but gave up its gains and closed the day at 4997 just 8 points positive
from previous close. The dollar index continued to trade sideways between 75.38 and 75.06.
The highlight of the day was the 10 year benchmark bond yield of India which rose from 7.35% to 7.45% on Friday. The reason attributed to
this rise was the bond auction which was conducted by the RBI on Friday. RBI sold bond’s worth Rs. 100 billion (Rs.10000 Cr.) of different
maturities with yields ranging from 7.48% to 8.43%.
Looking at the trend of USDINR we fell bullishness to sustain in the currency pair in coming days. For intraday we expect 46.45 to be very
crucial level for November futures.
A 30 paisa gap down opening was the main feature of the day as bulls tried hard to regain its lost territory and were successful to a certain
extent. Dollar November contract opened gap down at 46.55 paisa losing 30 paisa from previous close of 46.85 and eventually closing the
day at 46.65. Nifty opened the day 55 points up and touched 5054 but gave up its gains and closed the day at 4997 just 8 points positive
from previous close. The dollar index continued to trade sideways between 75.38 and 75.06.
The highlight of the day was the 10 year benchmark bond yield of India which rose from 7.35% to 7.45% on Friday. The reason attributed to
this rise was the bond auction which was conducted by the RBI on Friday. RBI sold bond’s worth Rs. 100 billion (Rs.10000 Cr.) of different
maturities with yields ranging from 7.48% to 8.43%.
Looking at the trend of USDINR we fell bullishness to sustain in the currency pair in coming days. For intraday we expect 46.45 to be very
crucial level for November futures.
Weekly Market Summary
The Securities and Exchange Board of India has allowed stock exchanges to extend the trade timing from the present 10 am to 3.30 pm to 9am to 5 pm, reports NDTV Profit. The reason: the market regulator believes it is important to align Indian markets as far as possible with international markets, as it would attract international trading. Details on implementation are awaited.
Market Summary
It was a volatile week for our market that continued to be under pressure. Experts feel if there is a correction in the market it would be healthy. Next week is F&O expiry so expect some volatility and interest rates are unlikely to be changed. Earnings too have been in line with expectations, so by month end the market will get a clearer direction. This week's figures were: Sensex and Nifty both down almost 3%. BSE Midcap index was down 2.1%, BSE Smallcap index down 1.3% over the week.BSE Oil & Gas index was down 6.5%, BSE Consumer Goods index down 6%, BSE Realty index down 3.5%,BSE Metal index down 2.2%. BSE IT index was up 3.25% and BSE FMCG index up 1.25 3%.
It was a flat close for our market on last day with a late selloff wiping out all the early morning gains. Our market underperformed in the global space. Sensex shut shop at 16810, up 21 points and Nifty at 4997, up 8 points from the previous close. CNX Midcap index was up 1.07% and BSE Smallcap index was up 0.34%. The market breadth was positive with advances at 668 against declines of 598 on the NSE. Top Nifty gainers includedITC, Hindalco and IDFC while losers were GAIL, RIL &L&T.
Market Summary
It was a volatile week for our market that continued to be under pressure. Experts feel if there is a correction in the market it would be healthy. Next week is F&O expiry so expect some volatility and interest rates are unlikely to be changed. Earnings too have been in line with expectations, so by month end the market will get a clearer direction. This week's figures were: Sensex and Nifty both down almost 3%. BSE Midcap index was down 2.1%, BSE Smallcap index down 1.3% over the week.BSE Oil & Gas index was down 6.5%, BSE Consumer Goods index down 6%, BSE Realty index down 3.5%,BSE Metal index down 2.2%. BSE IT index was up 3.25% and BSE FMCG index up 1.25 3%.
It was a flat close for our market on last day with a late selloff wiping out all the early morning gains. Our market underperformed in the global space. Sensex shut shop at 16810, up 21 points and Nifty at 4997, up 8 points from the previous close. CNX Midcap index was up 1.07% and BSE Smallcap index was up 0.34%. The market breadth was positive with advances at 668 against declines of 598 on the NSE. Top Nifty gainers includedITC, Hindalco and IDFC while losers were GAIL, RIL &L&T.
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