INDIAN EQUITY MARKET OUTLOOK - 19 AUG 2016

Bulls-Bears may play hide and seek

Indian Indices:

Indian equity benchmarks are likely to witness a gap down opening on Friday tracking a negative trend across markets in Asia as renewed fears over a US interest rate hike in the near-term after comments from a top Fed official who backed the case for a rate hike soon, curbed risk taking appetite.

Tightening of US monetary policy may result in volatility in capital flows to emerging markets such as Asia’s third biggest economy. Losses in the CNX Nifty Index Futures for August delivery which was trading at 8,668, down by 0.17 per cent or 15 points at 10:38 AM Singapore time, signal that the Sensex may open lower today.

Finance Minister Arun Jaitley said that a decision on who will fill Rajan’s shoes is yet to be taken. Snapping a two-day losing streak, the 30-share Sensex on Thursday advanced 118.07 points or by 0.42 per cent to 28,123.44 tracking firm global cues as Fed minutes showed that officials were split on the need to raise borrowing costs in the near-term.

Global Market:

Asian stocks fell today even as crude oil entered a bull market, holding above USD 48 per barrel, driving a rally in raw material producers.

Shanghai Composite and Hang Seng fell, Japan’s Nikkei 225 was trading lower despite yen weakness.

US stocks advanced on Thursday as energy stocks were boosted by an oil rally while a drop in jobless claims and acceleration in US leading index signaled a pickup in the country’s economic growth.

Major Headlines of the day:

·       State Bank of India announces merger ratio with subsidiary banks.

·       Apollo Tyres in talks with two-wheeler OEM’s for direct supply.

·       UltraTech Cement to issue NCDs worth Rs500 crore.

 Trend in FII flows: The FIIs were net buyers of Rs 162.17 Cr in the cash segment on Thursday while the DIIs were net sellers of Rs –14.42 Cr, as per the provisional figures.

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