India’s macroeconomic environment has shown gradual improvement over the past two years and there are a whole host of indicators suggesting a favorable outlook for the Indian economy. The interest rates have declined with the central bank getting the leeway to do so on the back of slowing consumer inflation and declining fiscal deficit. The current account deficit has narrowed, forex reserves have been at their highest levels and FDI inflows have picked up. However, despite these improvements over the past two years, Nifty and Sensex earnings have been anemic. The earnings of high growth companies in spaces like IT, FMCG, pharma etc, which account for ~73% of the Sensex have grown by 26% over FY2014-16E. However, this is not reflected in the overall Sensex earnings as they have been overshadowed by the balance 27% of the index composed of commodity and power stocks that have witnessed a de-growth in earnings by 39% yoy over the same period. In our view, there are pockets in the market where growth trends are picking up. We believe there are stock picking opportunities in the space outside of Sensex/Nifty and also in many of the newer listings in the upcoming sectors of the economy.
Indian market Outlook:
FII have sold 82968 contracts in the futures markets and 270253 contracts in the Options market in the last six days of the May Expiry. Nifty is expected to open gap up at 7784 as per SGX at 8:30 am IST. Small cap trend change confirmation level is 5089 and Nifty recent low was 7700. If markets trade below these levels we might experience sharp selloff.
International Market Outlook
International markets have seen a pull back, specially the American S&P which has pulled back making a high of 2060 yesterday. If S&P trades below 2038, its recent low, there might be a further selloff in the markets.
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In last 2-3 years, the Indian Economy has delivered better performance than expected. This is mainly due to improved awareness in people for investment especially the number of different tools that have been structured for the investors with attractive schemes generating minimum risk returns. Last few years have witnessed nearly 30% rise in investment which ultimately helping the economy to grow faster. Industry leaders like FMCG, Pharma and especially IT has outperformed. Production and manufacturing has been on growing side the companies. Going global, FIIs investment has been growing exponentially. The Union Budget has given some relief to the inflation with the recent rate cut. Overall the performance is on the right track and need to maintain same momentum. Recently IPO market has widen scope. IPOs like Equitas Holdings, Thyrocare Technologies have outperformed on the debut.
Good Morning everybody,
Nifty is near a strong monthly resistance..
Indian market Outlook:
Yesterday’s level of 7912 proved to be a major resistance for Nifty as Nifty is expected to plunge by 100 points in today’s opening. This is due to the revised tax treaty with Mauritius wherein only genuine Mauritius based companies will be exempted from capital gain tax in India.All money routed through Mauritius will be liable to fall under the purview of this tax.
FII have sold 97258 contracts in the futures markets and 282930 contracts in the Options market in the current expiry. Nifty is expected to open gap down at 7795 as per SGX at 8:30 am IST. Small Cap trend change confirmation level is 5089 and Nifty recent low was 7700. We might see continued selling in the market today.
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