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Equity Research Report Ways2Capital 12 December 2016

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TECHNICAL TREND ( NIFTY – BANK NIFTY FUTURES )
NIFTY FIFTY : -The week ending 2nd Dec saw Nifty Open at 8088 and continue its buying momentum from the previous week. Nifty 50 made new highs for consecutively four day’s from Monday through Thursday. Indian benchmark Index Nifty opened gap down at 8165 on Friday. It made a high of 8190 and saw a sharp selloff of 95 points to make a low of 8095 in the last hour of Friday trading Session. The Nifty opened gap Up at 8088 on Monday. It made a high of 8141 and saw a sharp selloff of 85 points to make a low of 8056 in the last hour of trading Session. Domestic capital markets are under pressure in near term out of ongoing cash crunch. FIIs have been relentless sellers in the Indian Equity markets with a total selling worth Rs. 20574 Crore since Nov 1st, the largest selling spree for the year. Near term risks from cash crunch may tinker domestic demands well for running and next quarter as already start reflecting through several macro or micro factors. The rally may be primarily fuelled by short covering after gap up opening today following Positive Global cues and hopes of extension of ECB stimulus beyond March’17 till March’18 without any tapering. Reserve Bank of India stance of holding rate may have helped the domestic market quite significantly today. Indian market was expecting at least 0.25% rate cut by RBI. Technically Nifty sustaining below 8220-8155 zone, Nifty may further fall towards 8090-8040 & 7980-7900 area in the near term and up side The Nifty has to sustain over 8285-8335 area for further rally towards 8385-8425 & 8485-8545 Zone. The Significance levels for Nifty is 8155-8090 is down side and 8285-8340 is Up side.

BANK NIFTY : – The Bank Nifty opened in a flat note on Monday trading Session down by 2 points at 18245. The decision of the RBI governor, Urjit Patel and Monetary Policy Committee not to change the repo rate is welcomed, under the present circumstances when banks are flushed with gigantic amount of deposits to the extent of 11.40 lakh crore. Reducing repo rate now were have been counter- productive. The Reserve Bank of India to withdraw its guidelines with respect to maintaining 100% CRR on new deposits after demonetisation. The banks will have now access to these funds without maintaining CRR of 100%. Bank Nifty has to sustain over 18700-18775 area for further rally towards 18900-19050 & 19100-19300 zone. On the down side, Sustaining below 18600-18550 area, Bank Nifty may further fall towards 18400-18350 & 18200-18100 zone for the day.

NSE – WEEKLY NEWS LETTERS
✍ TOP NEWS OF THE WEEK

Income Disclosure Scheme bags Rs 67,382 crore unaccounted money – The government on Sunday revised upwards the amount of black money disclosed under Income Declaration Scheme to Rs. 67,382 crore, even as it did not take into account two high-value disclosures. “After final reconciliation, the revised figure of actual declarations received and taken on record was Rs. 67,382 crore which had been made by 71,726 declarants,” the Finance Ministry said in a statement here on IDS 2016. “On Oct 1, 2016, it was announced that declarations totalling Rs. 65,250 crore were received from 64,275 declarants, subject to reconciliation,” it said. The Income Tax Department did not take into consideration the Rs. 13,860 crore declaration made by Ahemdabad-based Maheshkumar Champaklal Shah, which was reported prominently, as well as another made from Mumbai. “Among the declarations received, there were two sets of declarations of high value which were not taken on record in the above figure because they were found to be suspicious in nature being filed by persons of small means,” the statement said.

India takes pride of place, crosses $ 300 billion FDI milestone – India crossed the $300 billion foreign direct investment milestone between April 2000 and September 2016, firmly establishing its credentials as a safe investment destination in the world. Thirty three per cent of the FDI came through the Mauritius route, apparently because the investors wanted to take advantage of India’s double taxation avoidance treaty with the island nation. India received $ 101.76 billion from Mauritius between April 2000 and September 2016. The cumulative FDI inflows during the period amounted to $ 310.26 billion. The inflows in the first half of the current financial year was $ 21.62 billion, according to data compiled by the Department of Industrial Policy and Promotion. The other big investors have been from Singapore, the US, UK and the Netherlands. Commenting on the $ 300 billion mark, industry bodies Ficci and CII have said that India is perceived as a safe and dynamic destination by global investors. Ficci said that the liberalisation of the FDI policy framework, major national development programmes such as Make in India, Digital India and Skill India, besides increasing competitiveness, have made India the preferred choice for investors globally.

Gold imports to dictate size of current account deficit in H2 of FY2017: ICRA – ICRABSE 2.41 % expects India’s current account deficit to be curtailed under US$20 billion in FY2017, lower than the US$ 22 billion in FY2016. With the gold import bill in October-November 2016 estimated to be nearly as high as the previous six months, the current account deficit in H2 FY2017 would significantly exceed the level for H1 FY2017. Moreover, the demand for gold in the remainder of this year would influence the size of the deficit in H2 FY2017. Principal Economist, ICRA Limited, said: “If the recent amendments to the Income Tax Act dispel demand for holding of gold as well as jewellery, the gold import volumes may decline significantly in the coming months. Assuming that the volume of gold imports during December 2016-March 2017 reverts to the average of around 45 tonnes per month seen in April-November 2016, India’s current account deficit would be curtailed at around US$ 15 billion in FY2017.” However, if the volume of gold imports in the last four months of FY2017 is elevated at an average of 70 tonnes per month, driven by continued wedding demand, India’s current account deficit could be as high as nearly US$ 20 billion in FY2017,” she added.

Nikkei services index slumps to 46.7; biggest monthly fall since November 2008 – India’s services sector contracted sharply in November as lack of cash following the shock demonetisation of Rs 500 and Rs. 1,000 notes disrupted demand, ending 16 months of expansion. The Nikkei India Services Business Activity Index slumped to 46.7 in November from 54.5 in October, falling below the crucial 50 mark that separates expansion from contraction, providing the first evidence of economic dislocation due to the currency switch. It’s the first time since June 2015 that the index has gone below 50. But sentiment is buoyant — business confidence is at a three-month high — with the survey’s respondents expecting a rebound once cash supplies stabilise and the government achieves its aim of tackling black money. The latest set of gloomy PMI figures for the Indian service sector shows that companies were heavily impacted by Rs. 500 and Rs. 1,000 notes ban,” said Pollyanna De Lima, economist at Markit and author of the report.

RBI lowers growth forecast to 7.1% – The Reserve Bank today cut the economy’s expansion forecast for current fiscal to 7.1 per cent, from 7.6 per cent earlier, saying that short-term disruption in economic

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