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Indian Market Outlook for the week - 23 to 27.01.2017

Indian Market Outlook for the week - 23 to 27.01.2017


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Indian Market Outlook for the week - 23 to 27.01.2017
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Domestic equities are likely to witness volatility next week, as expectations from the Union Budget for 2017-18 (Apr-Mar), US President-elect Donald Trump's inauguration speech, Oct-Dec corporate earnings, and expiry of the January derivatives contracts will keep the market on its toes. A pre-budget rally could lead to an upside of 100-150 points in the Nifty 50, but that will happen only later in the week. Traders are likely to avoid taking too many fresh positions as trading next week will be truncated and due to uncertainty regarding the Union Budget. Markets will be shut on Jan 26 for Republic Day, while the Budget will be presented on Feb 1. Volatility on the indices is also seen augmented by the expiry of the January derivatives contracts, due on Wednesday. While there is no major downside seen, profit booking at higher levels will keep a cap on gains. This will continue to be a buy-on-dips market for a while. If Trump gives any further statements signalling a more inward-looking US economy, emerging markets such as India might react negatively. Stocks of information technology companies and pharmaceutical companies will especially be in focus after Trump's speech, as his recent comments have signalled unfavourable policies regarding these sectors. Oct-Dec earnings of several index majors, due next week, will also keep market participants cautious. On Saturday, Ultratech Cement will detail its earnings, while Bharti Infratel, Asian Paints, and Hindustan Unilever will do so on Monday. December quarter results from Bharti Airtel, HCL Technologies, Zee Entertainment Enterprises, Maruti Suzuki, Wipro, and ITC are also due next week. December quarter earnings are likely to put the focus on fast moving consumer companies as performance of sector heavy weights--HUL and ITC--will be watched. FMCG stocks are likely to hold on to their current levels and they would not react significantly unless the results from ITC and HUL are way off expectations. While a decline in margin and sales volume are expected across the sector, most market participants believe these negatives have been factored in the stock prices. We expect the FMCG-pack to gain as we believe that the sector could throw positive surprises in the earnings. Yesterday, the 51- stock Nifty 50 index ended down 85.75 points, or 1.0% at 8349.35 points, while the BSE Sensex closed at 27034.5 points, down 274.1 points or 1.0%. On a week-to-week basis, the Nifty 50 ended down 0.6%, snapping a run of three weeks of gains.

Telecom Stocks Outlook for the week – 23 to 27.01.2017

Telecom Stocks Outlook for the week – 23 to 27.01.2017


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Telecom Stocks Outlook for the week – 23 to 27.01.2017
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Stocks of most telecommunication companies are seen subdued next week as concerns over intense competition have hit the pricing mechanism and profit margins of operators. Reliance Jio Infocomm Ltd, the telecom arm of Reliance Industries Ltd, shook the industry by offering multiple free data services as part of its inaugural offer in September, leading to worries over erosion in market share of incumbent operators and fall in average revenue per user, both for data services and voice calls. The near term outlook for the sector looks quite painful. But news on consolidation seems to be coming faster than expected. We expect that there will be four-five serious operators instead of seven-eight at present. After Reliance Jio extended its inaugural free offer until Mar 31, telecom operators such as Bharti Airtel Ltd, Vodafone India Ltd, and Idea Cellular Ltd also announced free data offers for fourth-generation subscribers in order to retain their user base. We do not expect any meaningful improvement in revenue and margins at least until the middle of financial year 2017-18. The price war many continue for much longer. Competition in the sector, triggered by Reliance Jio, is also likely to weigh on the Oct-Dec financial results of telecom companies. The revenue for operators in Oct-Dec is expected to be down 5-6% on quarter. Stocks of Idea Cellular are under pressure and will trade with a negative bias. Stocks of Bharti Airtel will trade in a thin range and no major activity is expected. Reliance Communications, which has fallen 34% in the past three months, is expected to further weaken. The stock is trading at an alltime low price.

Cement Stocks Outlook for the week – 23 to 27.01.2017

Cement Stocks Outlook for the week – 23 to 27.01.2017


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Cement Stocks Outlook for the week – 23 to 27.01.2017
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Stocks of cement companies are likely to be range-bound next week as investors await their earnings for Oct-Dec, and the Union Budget on Feb 1. Cement stocks are seen sideways to positive with no major movements expected. Sales of cement companies suffered a blow after the government's decision to withdraw high value currency notes of 500- and 1,000-rupees on Nov 8. Dealers across the country were forced to undertake a price cut of 10-15% to clear their inventories. Although demand for cement has improved slightly in some parts of the country in January, there are concerns about rising prices of coal and petroleum coke, which are used to produce cement. There is uncertainty about how cement companies absorb the increase in prices. Though some of the estimates of hit on cement demand were overstretched, the market will wait for the cement companies to come out with their earnings for Oct-Dec and it will prove to be the next trigger. UltraTech Cement Ltd will be the first major cement company to detail its earnings for the quarter ended December on Saturday. Analysts also believe that the market will have an eye on the upcoming Budget and it will decide the future trend for the cement stocks. The Competition Commission of India's order on Thursday to impose a total fine of 2.06 bln rupees on seven cement companies--ACC Ltd, Ambuja Cements Ltd, UltraTech Cement, Jaiprakash Associates Ltd, JK Cement Ltd, JK Lakshmi Cement Ltd and Shree Cement Ltd--is not seen having any major impact on cement stocks next week. The market has discounted the effect of the order and it wouldn't cause any major changes in the stock.

FMCG Stocks Outlook for the week – 23 to 27.01.2017

FMCG Stocks Outlook for the week – 23 to 27.01.2017


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FMCG Stocks Outlook for the week – 23 to 27.01.2017
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Stocks of fast moving consumer goods companies are seen under pressure next week, with markets cautious ahead of the announcement of earnings for Oct-Dec by companies in this sector. Though most companies had expected demand to improve on account of a good monsoon and the implementation of the Seventh Pay Commission's recommendations, demonetisation played a spoiler. This has impacted sales, interruption in distribution channels (small and medium channels affected), blockage in capital (cash crunch), margin pressure due to rise in input price (raw material). Prices of primary raw materials for biscuits and soaps have been on the rise for the past few weeks, and this would exert pressure on margins. While prices of wheat, a key ingredient in biscuits and cakes, have risen by nearly 200 rupees to 2,200 rupees per 100 kg in the last fortnight, those of sugar, another key ingredient, have also been on the rise. In the last 15 days, sugar prices have risen by as much as 300-350 rupees per 100 kg across key wholesales markets due to concern about lower output in 2016-17 (Oct-Sep). The price of palm oil fatty acid distillate, a key raw material for soaps and detergents, rose 60% on year in Oct-Dec. Hindustan Unilever Ltd is scheduled to announce its results for Oct-Dec on Monday. The 85-year old Indian subsidiary of Anglo-Dutch consumer major Unilever Plc is seen reporting sales of 75.3 bln rupees for Oct-Dec, down 11.2% on quarter. HUL is likely to remain range-bound next week. In a conference call on Nov 28, HUL had cautioned that demonetization could hit the company's performance in the near term. To mitigate the impact of the cash crunch, HUL was enhancing direct coverage and assortments and would maintain advertisement spend to drive offtake, the company had said in a statement. Sales volumes of some insect-repellent products, for which Godrej Consumer had raised prices in November, could take a mild hit. The company had raised the prices of some of its home insecticide products by up to 5%.

Bank Stocks Outlook for the week – 23 to 27.01.2017

Bank Stocks Outlook for the week – 23 to 27.01.2017


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Bank Stocks Outlook for the week – 23 to 27.01.2017
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Bank stocks are seen trading in range next week due to lack of sector-specific triggers unless HDFC Bank springs any surprises in its Oct-Dec earnings. Investors are expected to factor in the volatility expected in the bank stocks next week on account of rollovers of the January contracts on Wednesday. The rollovers will take place on Wednesday instead of the usual Thursday, when markets will be closed on account of Republic Day. As the index has closed below the important level of 19000, it is likely to remain volatile, going ahead. However, banks are likely to gain, hence it makes sense utilizing dips to Accumulate better placed stocks. Axis Bank, which fell 6% yesterday on account of poor asset quality numbers for Oct-Dec, will remain in focus next week. Other than HDFC Bank, Kotak Mahindra Bank and Indian Overseas Bank are likely to set the market trend as they will disclose their earnings for Oct-Dec in the coming week. HDFC Bank, which will detail its earnings on Tuesday, is likely to report a 13.2% onyear rise in net profit for Oct-Dec to 37.99 bln rupees, backed by healthy loan growth and stable asset quality.

IT Stocks Outlook for the week – 23 to 27.01.2017

IT Stocks Outlook for the week – 23 to 27.01.2017


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IT Stocks Outlook for the week – 23 to 27.01.2017
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Stocks of information technology companies are seen trading in a narrow range with a negative bias in the week ahead, as market participants will take cues from US President-elect Donald Trump's speech later yesterday. Trump will be sworn in as the 45th US President later in the evening yesterday and is likely to speak on his path ahead. Trump in his addresses earlier has indicated protectionist policies to control immigration and employment laws. With his swearing-in as president, the possibility of adverse changes in US' working visa norms has heightened. Indian IT companies are highly dependent on US work visas as a large number of employees are hired to work on US-based projects. The main proposal for changes in H-1B visa norms is an increase in minimum wages to be $100,000 annually, up from $60,000 currently. Though IT stocks are expected to be under pressure, depreciation in the Indian currency has lent some support, and is likely to arrest any major fall in the stocks. Next week, investors would also focus on the results of two major IT companies, HCL Technologies and Wipro, scheduled during the week. Robust earnings of the companies are likely to lift sentiment for the sector. We are expecting HCL Technologies and Wipro to follow the same path of Infosys and TCS (Tata Consultancy Services) to cut their guidance. While analysts' worries were eased with the Oct-Dec performance of TCS, Infosys' move to trim its dollar sales guidance for current financial year to 7.2-7.6% led to increased uncertainty in the sector.

Metal Stocks Outlook for the week – 23 to 27.01.2017

Metal Stocks Outlook for the week – 23 to 27.01.2017


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Metal Stocks Outlook for the week – 23 to 27.01.2017
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Major mining and metals stocks are likely to trade with a positive bias next week, after this week's lackluster performance, as demand is seen robust in the near-to-medium term. Prices of base metals like copper, aluminium, nickel, lead and zinc are seen largely firm over the next one month as the members of Organisation of Petroleum Exporting Countries cut production by 1.2 mln barrels per day. Since crude oil is a crucial component of input cost for metals, the upside in oil prices will reflect in metals as well. The global manufacturing activity also looks optimistic and is likely to aid metal prices. Hindalco and Vedanta will benefit due to the supply shortage in aluminium. Hindustan Zinc Ltd, which was a top performer in the Nifty Metal index this week and gained 3.8%. Rising demand and a fall in global mine output will help companies which trade in zinc. The technical analyst has, however, cautioned against steel stocks that have had a good run on the exchanges over the last two weeks. The stock looks weak and is likely to come down to 56.50 rupees from yesterday's close of 58.15 rupees.

Oil Stocks Outlook for the week – 23 to 27.01.2017

Oil Stocks Outlook for the week – 23 to 27.01.2017


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Oil Stocks Outlook for the week – 23 to 27.01.2017

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Stocks of public sector oil refiners--Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum Corp--are expected to trade in a band next week, even as sentiment for this stock is likely to remain positive over the next few sessions. These stocks are backed by strong fundamentals, including robust domestic demand for fuel, strong refining and marketing margins, and expectations of inventory gains due to a spike in crude oil and petroleum product prices over the past couple of months. A rise prices of crude oil in the recent past has helped stocks of upstream companies like Oil and Natural Gas Corp Ltd, Cairn India Ltd, and Oil India Ltd. The outlook for upstream stocks is positive for the next few sessions. In the absence of any major triggers, movement in stocks of oil companies is likely to depend on crude oil prices, news flow, and the broader market. The rise in prices of crude oil comes in the wake of the decision of the Organization of the Petroleum Exporting Countries to cut output by 1.2 mln barrels per day. It was further helped by major non-OPEC producers agreeing to cut output by 558,000 bpd to help trim the global glut. Though the rise in crude oil prices will increase input costs for refiners, they are set to benefit from inventory gains due to the spike. Also, given that prices of most fuels are now market-linked, the downside of higher crude oil prices for these companies seems limited for the time being. Gross refining margins of state-owned oil marketing companies are expected in the healthy $6.8-$7.4 per barrel range, driven by strong product cracks and inventory gains. Tracking crude oil, futures contracts of the commodity are seen swinging between losses and gains in a narrow range next week due to mixed cues. While the commodity is expected to continue being supported by indications that oil producers may have started cutting output in full swing this month, a projected rise in production in the US may pull prices down. Early indications suggest a deeper OPEC reduction maybe under way for January, as Saudi Arabia and its neighbors enforce supply cuts. Investors will also eye rig count data from the US, to be released by oilfield services provider Baker Hughes later yesterday, for cues on the country's shale production. Any major fluctuation in the dollar-rupee exchange rates could also affect shares of oil companies. A weaker rupee will benefit upstream companies, as they sell oil and gas in dollars. But refiners will lose if the dollar strengthens, as their outgo on buying oil and gas will increase. On technical charts, stocks of both upstream and downstream companies look good for the immediate-to-near term.

Auto Stocks Outlook for the week – 23 to 27.01.2017

Auto Stocks Outlook for the week – 23 to 27.01.2017


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Auto Stocks Outlook for the week – 23 to 27.01.2017

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Stocks of most automobile companies are likely to trade with a negative bias next week as traders continue to book profits. While all stocks in the Nifty Auto index are expected to fall more, Hero MotoCorp Ltd is seen declining the most. The correction in the shares is likely to stay for a short term. In the long term, analysts are bearish on two-wheeler companies and commercial vehicle manufacturers. The resulting cash crunch from the government's Nov 8 decision to demonetize high-denomination currency notes is likely to have had a sharp negative impact on these companies, especially Hero MotoCorp and Bajaj Auto Ltd. Hero MotoCorp has lot more rural penetration as compared to its peers and as far as Bajaj Auto is concerned, in addition to domestic weak demand, 40% of its volume comes from exports, which are not doing well due to problems in Nigeria and other overseas markets. However, valuation of Tata Motors Ltd and Maruti Suzuki India Ltd has risen in the long run. While lot of fund investors are bullish on Tata Motors as its arm Jaguar Land Rover is doing well overseas, Maruti Suzuki India has seen very little impact of currency curbs. Stocks of Tata Motors are also seen under pressure and are likely to correct. Bajaj Auto is the only heavyweight that is seen rising next week on the Nifty Auto index. The stock of the Pune-based company is likely to move up. Amid most of the market leaders expected to remain weak next week, Nifty Auto index is also likely to trade with a bearish outlook.

Pharma Stocks Outlook for the week – 23 to 27.01.2017

Pharma Stocks Outlook for the week – 23 to 27.01.2017


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Pharma Stocks Outlook for the week – 23 to 27.01.2017

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As Donald Trump takes over yesterday as the 45th US President, investors in the Indian market will remain wary about domestic pharmaceutical companies, keeping their stocks under pressure next week. There may be pressure on prices and margins for the sector in the US market, considering Trump's comments earlier. Although, we have to wait for more cues from his speech at his swearing-in yesterday, and his actions in the coming days. Analysts suggest investors should adopt a 'wait-and-watch' approach before taking aggressive bets on the stocks. Last week, Trump had voiced concerns over high prices of drugs in the world's largest market for medicines. One of the issues that would be watched by market participants would be the Republican Party's 'Border Adjustment Tax', which seeks to subsidies exports and tax imports, thus cajoling manufacturers to produce domestically. We believe that the proposed 'Border Adjustment Tax', which is a component of the Republican plan to revamp the corporate tax code, will be detrimental to the Indian pharma sector if passed in the current format. However, the analyst is skeptical about its passage as Trump himself is against the plan, which is one of the key aspects of House Speaker Paul Ryan's tax reform blueprint. On technical charts, Sun Pharmaceutical Industries Ltd, which gets nearly half of its revenue through exports to the US, is expected to be weak in the medium term. Lupin is expected to breakout on either side could lead to a sharp move. Other factors the market will keep an eye on next week will be corporate earnings for the December quarter. Wockhardt is scheduled to report its earnings next week. Market participants remain concerned about the Mumbai-based drug maker’s manufacturing facilities at Ankleshwar in Gujarat, and Waluj and Chikalthana in Maharashtra, which are under US Food and Drug Administration's import alert.

Indian Market Outlook for the week – 09 to 13.01.2017

Indian Market Outlook for the week – 09 to 13.01.2017


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Indian Market Outlook for the week – 09 to 13.01.2017
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Domestic stocks are seen trading with a positive bias, but will be volatile in an event-heavy week. Investors now await key domestic and global economic data, and the first leg of Oct-Dec earnings. While the Central Statistics Office will detail the first advance estimate of GDP for 2016-17 (Apr-Mar) later today, the data on consumer price index-based inflation and index for industrial production will be released on Thursday. The IIP and CPI data are crucial, as they will help gauge the impact of demonetisation. Investors will also monitor the US monthly non-farm payroll data for December, due later today, which is expected to confirm a sixth straight year of over 2-mln-job addition. Global markets will also lend cues to domestic equities next week. The Nifty 50 is seen taking strong support at 8200 points. For the week, the index is likely to move in the range of 8200-8400 points. Benchmark indices yesterday ended the week with gains for the second time in a row. The Nifty 50 closed at 8243.80, down 30.00 points or 0.4% from previous close, while Sensex closed at 26759.23, down 119.01 points or 0.4%. Once the 8300-level breaks, Nifty50 will see a rally till at least 8400 points. Besides economic data, investors will monitor the earnings of information technology majors Tata Consultancy Services and Infosys, which will detail their Oct-Dec numbers on Thursday and Friday, respectively. 

Oil Stocks Outlook for the week – 09 to 13.01.2017

Oil Stocks Outlook for the week – 09 to 13.01.2017


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Oil Stocks Outlook for the week – 09 to 13.01.2017
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Stocks of public sector oil marketing companies--Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd—are expected to continue ticking higher next week, outperforming the broader Market. These stocks are backed by strong fundamentals, including robust domestic demand for fuel and strong refining and marketing margins and expectations of inventory gains due to a spike in crude oil and petroleum product prices. For upstream companies like Oil and Natural Gas Corp Ltd, Cairn India Ltd, and Oil India Ltd, the rise in prices of crude oil over the past few weeks has lent some strength for the immediate-to-near term. In the absence of any major triggers, movement in stocks of oil companies is likely to depend on crude oil prices, news flow, and the broader market. The recent spurt in prices followed the Organization of the Petroleum Exporting Countries' decision to cut output by 1.2 mln barrels per day. It was further helped by major non-OPEC producers joining the production management arrangement by agreeing to cut their output by 558,000 bpd. Though the rise in prices of crude oil will increase input costs for refiners, they are set to benefit from inventory gains due to the spike. Also, given that prices of most fuels are now market-linked, the downside of higher crude oil prices for these companies seems limited for the time being. State-owned oil marketing companies' Oct-Dec gross refining margins are expected in the healthy $6.8-$7.4 per barrel range, driven by strong product cracks and inventory gains. According to tracking crude oil, futures contracts of the commodity on both local and global exchanges are seen declining in the initial sessions next week as the ongoing rally could lose steam. Prices of crude oil rose to an 18-month high of $55.24 a bbl on Tuesday after reports said the Organization of the Petroleum Exporting Countries would adhere to output cut proposals, which come into effect this month. Crude will take a breather and some profit booking can be seen next Week. However, record high production from Russia, and rising output from Libya and Nigeria has raised doubts over the deal. However, the expected weakening of the dollar could lend some support to crude oil prices.  

Bank Stocks Outlook for the week – 09 to 13.01.2017

Bank Stocks Outlook for the week – 09 to 13.01.2017


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Bank Stocks Outlook for the week – 09 to 13.01.2017
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Bank stocks are likely to rise next week, on expectations that the retail inflation data for December will undershoot the Reserve Bank of India's near-term 5% forecast, creating space for a repo rate cut at the February policy review. Oct-Dec earnings of banks will also be eyed for cues on the sectoral trend. Low levels of inflation will provide room for the RBI to ease its inflation focus and support growth with a reduction in repo rate, which will spur lending to productive sectors of the economy. Banks stocks will also take cues from updated data on post-demonetisation deposits and any moves on liquidity tightening by the RBI, which has so far resorted to reverse repo windows and cash management bills issued under the Market Stabilisation Scheme. Banks, led by State Bank of India, have already cut their lending rates by as much as 90 basis points as they passed on the benefits of the enhanced liquidity. However, pointed out that unless the cuts in loan rates lead to a rise in credit growth, there would be a negative impact on net interest margins and thus, on profitability. Activity in banking stocks is likely to revive next week after a period of sparse trade, as the market will start factoring in earnings for the quarter ended December. Upside for the Nifty Bank index is seen capped at 18500-levels. Among individual stocks, IndusInd Bank, which rose over the week, is likely to extend its gains on Monday before it announces positive Oct-Dec earnings on Tuesday, backed by strong loan growth and non-interest income projections. 

Auto Stocks Outlook for the week – 09 to 13.01.2017

Auto Stocks Outlook for the week – 09 to 13.01.2017


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Auto Stocks Outlook for the week – 09 to 13.01.2017
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Stocks of automobile companies are likely to continue positive momentum next week after Nifty Auto index touched its one-month high of 9589.80 points yesterday. The gap that was created after the government withdrew old 500- rupee and 1,000-rupee currency notes from circulation is likely to get filled now and all the stocks in the index are looking good next week. The government's decision on Nov 8 led to a situation of cash crunch among consumers and the subsequent cut in discretionary spending caused a fall in demand for automobiles. Two-wheeler companies are expected to report a weak December quarter as they were the worst hit in the automobile industry on account of currency curbs. However, are bullish on Eicher Motors Ltd, Maruti Suzuki India Ltd and Ashok Leyland Ltd over long-term. This week, bullish on most stocks in Nifty Auto index including Maruti Suzuki India, Hero MotoCorp Ltd, Bajaj Auto Ltd, and Ashok Leyland. 

Metal Stocks Outlook for the week – 09 to 13.01.2017

Metal Stocks Outlook for the week – 09 to 13.01.2017


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Metal Stocks Outlook for the week – 09 to 13.01.2017
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Major mining and metals stocks are seen trading with a positive bias next week as overall demand for metals is likely to improve in the near term. Bullish on non-ferrous metal stocks and said the picture also looks good for overall metal stocks, which are likely to carry forward their 52-week gains, in near future. Metal stocks have performed well in 2016, out-performing the broader market and have given better returns than defensive stocks like IT, pharma and consumer goods. Over the last 52 weeks, the gains for the Nifty metal index have been over 50%, while consumer goods stocks have gained over 4%. Nifty-IT and Nifty-pharma lost over 7% and 10% during the period. Top picks are Hindalco, Vedanta and MOIL, and he expects demand for aluminium to rise due to shortage in supply, which would benefit Hindalco and Vedanta and also expects ferrous metal stocks to continue their positive bias next week. Stocks of major steel companies like Tata Steel, SAIL and JSW Steel have performed well over this week. gaining over 5%. We expect most metal stocks to do well next week, continuing their good run of this week. 

I.T Stocks Outlook for the week – 09 to 13.01.2017

I.T Stocks Outlook for the week – 09 to 13.01.2017


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I.T Stocks Outlook for the week – 09 to 13.01.2017
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In the upcoming week, the focus in the information technology space will remain on Oct-Dec earnings of Infosys and Tata Consultancy Services. Stocks of information technology companies are expected to trade with a negative bias initially next week due to uncertainties around US work visa norms. Today, shares of information technology companies ended down 2-4% on reports a bill seeking stringent visa norms was reintroduced in US Congress. However, stocks are likely to recover in the latter half as investors will take positions in futures and options segment ahead of Oct-Dec earnings. Sector heavy-weight Tata Consultancy Services will detail its earnings on Thursday, while Infosys will detail its earnings on Friday. The earnings of these two majors are expected to set the trend for investment in the sector for the remaining month. Poor performance may drag the sector stocks by 2-4%. Midcap companies 8K Miles Software Services and Cyient will also detail their earnings next week. These companies are likely to post better earnings as they are likely to be insulated from macro-economic challenges due to their smaller size.

Pharma Stocks Outlook for the week – 09 to 13.01.2017

Pharma Stocks Outlook for the week – 09 to 13.01.2017


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Pharma Stocks Outlook for the week – 09 to 13.01.2017
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Pharmaceutical stocks are likely to stabilise next week as most of the negative issues around the sector like regulatory concerns and pricing pressure in the US have been factored in the prices. Some stocks, which are trading near their support, may even rebound. Over the last three months, the Nifty Pharma index has corrected by nearly 10%, almost double the quantum of fall in Nifty 50, as regulatory concerns continued to weigh. Return on pharma stocks may not be much but now the downside is Limited. Cipla is the preferred pick in the sector over the long term due to its low exposure to the US market, and growth in the domestic market is expected to be robust in the long term. The downside in stock of Sun Pharmaceutical Industries, which is India's largest pharmaceutical company and the world's fifth largest speciality generics player, is expected to be limited after having slumped by nearly 16% in the last three months. The stock is down by nearly a fifth on year on regulatory concerns surrounding the company's facility at Halol. On technical charts, Sun Pharmaceutical Industries is expected to rise towards 670 rupees in the near term. Wockhardt is likely to rise further after it gained 5.6% yesterday. The company late Thursday said it has received a European Union good manufacturing for its facility at Ankleshwar. Next week, the stock is likely to face resistance around 727 rupees. While the view on the stock over the short term is positive, in the long term, market participants advise investors to avoid the stock as three of its units--Ankleshwar in Gujarat, and Waluj and Chikalthana in Maharashtra--continue to be under US Food and Drug Administration's import alert. Over the short term, Aurobindo Pharma is likely to be the top performer in the pharmaceutical sector. 

Capital Goods Stocks Outlook for the week – 09 to 13.01.2017

Capital Goods Stocks Outlook for the week – 09 to 13.01.2017


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Capital Goods Stocks Outlook for the week – 09 to 13.01.2017
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Stocks of capital goods companies are likely to move in a narrow range next week, in the absence of significant triggers. This week, while stock of major capital goods companies rose 3-8%, the BSE Capital Goods Index gained 3.1%. Sector bellwether Larsen & Toubro is expected to remain within range next week, as some of its recent order wins may carry low valuations. Stock of state-owned Bharat Heavy Electricals is likely to see an upside in the short term on the back of a positive outlook for the company, due to robust order inflows. The company received orders worth about 41.30 bln rupees during Oct-Dec, worth nearly 51.30 bln rupees in the first half of 2016-17 (Apr-Mar). Another Bullish stock on Cummins India in anticipation of good business prospects in the near term. On technical charts, the stock has shown signs of a breakout from a declining trend in the last three months.  

India Market Outlook for the week – 02 to 06.01.2017

India Market Outlook for the week – 02 to 06.01.2017


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India Market Outlook for the week – 02 to 06.01.2017
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The Domestic shares are likely to trade on a cautious note in the first week of the New Year, as traders expect profit booking to resume on the back of this week's 2.5% gain. A slew of macroeconomic data and Prime Minister Narendra Modi's speech on Saturday will also be in focus. In his speech, Modi is expected to detail the roadmap to deal with the impact of demonetization as well as announce some relief measures will also determine the direction equities take. The "mood is still pessimistic" after the government  demonetization move announced on Nov 8 stole the lustre in the share market. The benchmark Nifty 50 has lost 4.2% between Nov 8 and yesterday, the last day of curbs on cash withdrawal. Unless a major announcement is made, profit taking by investors and traders is likely. We are expecting a lot of selling pressure in the market as the market has run-up a lot this week. It (Nifty 50) could fall back to 8000-level next week. The rise in the share market followed buying by domestic institutional investors who bought shares worth 43.5 bln rupees till Thursday, according to provisional data available with the exchanges. This was despite institutional investors being net sellers of Indian shares this week. The only way the market is going to go up now is if the FIIs turn around their view and say they are going to buy the value story emerging in the market. A slew of data points will also be eyed, starting with the December HIS Market Purchasing Managers' Index which will be detailed on Monday. Traders will be looking at the data to gauge the impact of cash curbs on the informal economy. After a tumultuous, shaky and sometimes shocking year for the share market, indices ended 2016 on a resilient note. Heading in to the New Year, the picture, though, still remain foggy as multiple events that transpired in 2016 play out on the ground next year. From the actual impact of demonetization to the beginning of Donald Trump's presidency in the US, the first half of 2017 offers a lot of nervousness for the market. We expect weakness in the market to continue till at least March. As for the remaining part, we expect the market to enter into a strong bull run. We could see a turnaround in earnings from June quarter onwards due to lower base effect from Q1 of 2016. The Budget is expected to be a game changer in the New Year with market participants anticipating a slew of cuts in direct taxes and other stimulus for the rural economy. The roll out of the goods and services tax and an accommodating Reserve Bank of India are other major factors which the markets will be pining their hopes on for a revival in sentiment. In the short term, market is expected to remain volatile, but as the long-term growth story of the Indian economy is intact, it is expected that market would see 10-12% upside from here on in the New Year. Not all are that optimistic though. Given the uncertainties unleashed in 2016, it will be too far-fetched to make comments on the market's performance in 2017 beyond March.

FMCG Stocks Outlook the week – 02 to 06.01.2017

FMCG Stocks Outlook the week – 02 to 06.01.2017



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FMCG Stocks Outlook the week – 02 to 06.01.2017
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The shares of fast moving consumer goods companies are likely to bounce back after weeks of correction, as companies have slowly begun recovering from the impact of demonetization. The way ITC Ltd and Hindustan Unilever Ltd has recovered last week after falling for most of last month is promising. FMCG companies had been hit by the withdrawal of high-value currency notes, as sales had slowed in most parts of
the country. Companies such as HUL have issued statements saying that the cash curbs could hit their performance in the near term. With the cash curbs expected to be eased, the situation had improved in many areas, as companies have made efforts to normalize sales, and this was being reflected on the ground. The cigarette price hike undertaken by ITC had also helped the case. ITC Ltd, India's largest cigarette maker, raised the prices of packs of ten 74-mm Navy Cut cigarettes, as well as similar packs of 69-mm Gold Flake (regular) by 14.1% to 89 rupees. The shares of ITC gained following the news, hitting their highest levels in a month earlier. This week, the stock has gained 7.5%. Earlier in the week, the stock had rallied on market speculation that the tobacco industry might not see a steep increase in excise duty in the coming Union Budget. The two news reports have supported bullish sentiment for all cigarette companies and ITC is
sure to gain more in the coming days.

Pharma Stocks Outlook for the week – 02 to 06.01.2017

Pharma Stocks Outlook for the week – 02 to 06.01.2017



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Pharma Stocks Outlook for the week – 02 to 06.01.2017
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The shares of pharmaceutical companies are likely to continue their rebound next week, but investors are likely to remain cautious as they await clarity from the government on cash withdrawal limits. In today's session, the last this year, the Nifty pharma index ended 14% lower owing to regulatory issues, pricing pressure in both the US and India, and the Indian government's ban on fixed dose combination of drugs.
Market participants expect regulatory pressure to continue in the coming year, as the US Food and Drug
Administration, the regulator in one of the world's most lucrative markets, continues its stringent checks. The
Regulatory issues will also be the key issue for India's largest drugmaker, Sun Pharmaceutical Industries, whose facility at Halol, along with Ranbaxy Laboratories' four units, are due for inspection by US FDA.
Four of Ranbaxy's units have been under an import alert for as much as a decade on account of data integrity issues. Sun Pharma acquired Ranbaxy last year. The stock is expected to remain negative in the medium term, but is likely to rise next week and may test the resistance level of 660 rupees. The stock is seen finding support at 610 rupees. The general trend in pharmaceutical stocks is likely to be positive in the coming week, as the Nifty pharma index has fallen over 7%. Also, gains in the broad market are likely to buoy sentiment.

IT Stocks Outlook for the week – 02 to 06.01.2017

IT Stocks Outlook for the week – 02 to 06.01.2017



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IT Stocks Outlook for the week – 02 to 06.01.2017
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The shares of information technology companies are seen rising as market participants choose to invest in stocks that are insulated from demonetization. Prime Minister Narendra Modi is scheduled to give a speech on Saturday. In his speech, Modi is expected to detail the roadmap to deal with the impact of cash curbs as well as announce some relief measures. The broader market is likely to trade on a cautious note next week. The Indian currency, which closed at 67.92 rupees to a dollar yesterday, is likely to remain steady majority of next week. However, investors will continue to hold a cautious view on the sector ahead of Oct-Dec earnings and US president-elect Donald Trump's announcement of policies. Trump, who will take office on Jan 20, is expected to set the tone for his governance during his inaugural speech. Information technology companies' earnings for the December quarter would be crucial as it would determine if they would be able to achieve double-digit growth for the financial year that ends March. Infosys will kick off the earnings season for the sector on Jan 13. Shares of information technology giant Infosys and HCL Technologies are expected to benefit the most from this uptrend. On the other hand, Tata Consultancy Services and Wipro will see the least gains. We expect trend in midcap companies to remain positive and have also recommended certain midcap companies such as Mindtree, Ramco Systems and Hexaware Technologies.

Telecom Stocks Outlook for the week – 02 to 06.01.2017

Telecom Stocks Outlook for the week – 02 to 06.01.2017



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Telecom Stocks Outlook for the week – 02 to 06.01.2017
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The shares of major telecommunication companies are likely to see a negative trend next week due to concern about intense competition hitting pricing power and margins. Traders are likely to view any rise in stock prices as an opportunity to sell. A slew of macroeconomic data, as well as Prime Minister Narendra Modi's speech on Saturday will also be in focus. Free data services by Reliance Industries Ltd's subsidiary Reliance Jio Infocomm, as part of its welcome offer, have led to concern among peers about erosion in market share and a fall in average revenue per user, both for data services and voice calls. Following Reliance Jio extending its free offer till Mar 31, most telecom operators have cut tariffs steeply. Competition in the telecom industry, triggered by the new entrant, continues to put pressure on the margins of operators such as Bharti Airtel and Idea Cellular. For Bharti Airtel, a fall in the company's average revenue per user in the September quarter has weighed on sentiment. Shares of Bharti Airtel may face resistance at 312 rupees and get support at 295 rupees, a Mumbai-based. Tata Communications, which has so far outperformed the sector, is in a consolidation mode, the analyst said. Resistance for the stock is expected at 650 rupees, while support is seen at 612 rupees. The Idea Cellular stock is seen facing resistance at 78 rupees and getting support at 70 rupees. In the past three months, the stock has fallen 7.1%, and lost nearly half its value this year. The Reliance Communications stock, which has been under pressure for some time, is seen continuing with the downtrend. It may get support at 31 rupees, while resistance level is expected at 36 rupees. The stock has also fallen almost 20% in the last three months, while more than half its value has been eroded in the past year.

Oil Stocks Outlook for the week – 02 to 06.01.2017

Oil Stocks Outlook for the week – 02 to 06.01.2017



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Oil Stocks Outlook for the week – 02 to 06.01.2017
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The trend for shares of public sector oil marketing companies Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd is positive for next week and they are expected to outperform the broad market. These stocks are backed by strong fundamentals, including robust domestic demand for fuel and strong refining and marketing margins. For stocks of upstream companies such as Oil and Natural Gas Corp Ltd, Cairn India Ltd, and Oil India Ltd, the rise in prices of crude oil over the past few weeks has lent some strength for the immediate-to-near term. The recent spurt in prices followed the Organization of the Petroleum Exporting Countries' decision to cut output by 1.2 mln barrels per day from January. It was further helped by major non-OPEC producers joining the production management arrangement by agreeing to cut their output by 558,000 bpd. Given that the production cut is scheduled to come into effect from Sunday, crude oil prices may rise next week, which could further help stocks of upstream oil companies. Though the rise in prices of crude oil will increase input costs for refiners, they are set to benefit from inventory gains due to the spike. Also, given that prices of most fuels are now market-linked, the downside of higher crude oil prices for these companies seems limited for the time being. According to analysts tracking crude oil, futures contracts of the black liquid are likely to extend gains on both domestic as well as global markets next week, with the production curbs kicking in. However, only mid way through January will investors have an idea about how much production is being cut by the producers. Next week, the January contract of crude oil on the Multi Commodity Exchange of India may find support at 3,600 rupees a bbl and face resistance at 3,850 rupees. The February-delivery contract on the New York Mercantile Exchange is seen trading in the range of $52.5-$56.5 a bbl. Fluctuation in the dollar-rupee exchange rates is also likely to affect shares of oil companies. A weaker rupee will benefit upstream companies as they sell oil and gas in dollars. Refiners, however, will lose if the dollar strengthens, as their outgo on buying oil and gas will
increase.

Cement Stocks Outlook for the week – 02 to 06.01.2017

Cement Stocks Outlook for the week – 02 to 06.01.2017



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Cement Stocks Outlook for the week – 02 to 06.01.2017
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Prime Minister Narendra Modi's speech on Saturday is expected to set the trend for shares of cement manufacturing companies in the coming week, as demand for the commodity took a beating post the demonetization of 500-and 1,000-rupee notes on Nov 8. Though cement stocks ended higher this week, this is believed to be a short-term year-end rally led by foreign funds, and is unlikely to sustain in January. Large-cap cement stocks such as UltraTech Cement, ACC Ltd, and Ambuja Cements closed 2-5% higher, while mid-cap stocks Jaiprakash Associates, India Cements, and Shree Cement closed up 4-9% this week. Next week, cement stocks are seen tracking any specific announcement by the government on measures to revive demand in the economy, as well as spends on rural and urban infrastructure. Dealers across the country were forced to undertake a 10-15% price cut to clear inventories after the government demonetized high-value currency notes.