US-China Trade War: The Perfect Opportunity To Enter The Market

Share Market Weekly

Share/Stock Market News & Analysis for Week Ending 6th-Apr-2018

1. The benchmark indices opened the FY19 on a positive note
2. Sensex rallied nearly 300 points while Nifty closed above 10,200
3. Strong buying in Auto, Pharma, IT & Infra stocks
4. On Tuesday - Sensex was up over 100 points & Nifty back above 10,250, led by some intense buying in Banking & Financial, Auto stocks while midcap was up nearly 1%
5. On Wednesday - Sensex fell over 350 points while Nifty closed below 10,150 levels, weighed by US-China trade war concerns. All sectoral indices closed in red barring Auto while midcap also fell over 1%.
6. On Thursday - Sensex surged 600 points while Nifty closed above 10,300 after RBI raised growth outlook and kept rates unchanged. All sectoral indices closed in green while Nifty midcap was up 2%.
7. On Friday- market traded flat or lower amid consolidation followed tepid Asian cues as US president said that he will impose extra tariffs on Chinese products

This Week's Market Overview:

  • This week broader market witnessed strong buying in Auto & ancillary, Pharma, Bank & Financials, IT & Metal stocks
  • The outlook for these sectors remained strong for buying
  • Nifty midcap and smallcap also surged 4-5% throughout the week
  • RBI raised the growth outlook for FY18-19 while keeping rates unchanged and inflation on the lower side.
  • Global markets also felt the pressure of the trade war, despite that worry US market traded in positive while Asian market remained mix.

Our Analysis

The Market is dipping on every US-China trade-war related news. However, investors and mutual funds are seeing this as a buying opportunity and heavily investing in equities. Recently Skymet has predicted a good monsoon which is good for long-term investments. Long-term investors are cashing-in on every dip to enter in parts. The market is about to pick up soon. Time to look for quality fundamental stocks with a good vision.

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Movers & Shakers

Shares of Tata Motors surged over 12% from last weeks low as the company reported strong domestic & global March 2018 sales number. On domestic front company registered 35% growth due to strong sales of CV & PV while JLR in India also reported a strong 83% rise in FY18 sales while in the US Tata Motors owned JLR March US sales increased 10.2% compared to last year. The company is in line to launch new models in India as well as in the global market, this will lead to a strong volume growth.

Shares of midcap IT firm Persistent Systems Ltd dropped over 10% this week after the company said its revenues from its internet protocol (IP)-based services may drop by $8 million. Analysts were expecting a $3-4 million fall in IP-based revenues on account of seasonal weakness. The additional hit will take a toll on our estimates for the company. We believe overall revenues may now decline by 3% QoQ and Ebitda margin may fall by over 350 bps on a sequential basis.

Key Market Drivers

As expected, the Reserve Bank of India kept the repo rate unchanged at 6% but cut inflation forecast. Below are few major highlights of the policy:

  • The Reserve Bank of India maintains repo rate at 6%, Reverse Repo Rate under LAF remains at 5.75% and the MSF rate and the Bank Rate at 6.25%.
  • RBI says monetary policy stance 'neutral'.
  • Inflation expected at 5.1% in Q1 FY19, moderating to 4.7% in Q2 and 4.4% in Q3 & Q4 including the HRA impact, with risks tilted to the upside.
  • GDP growth is projected to strengthen from 6.6% in 2017-18 to 7.4% in 2018-19 with risk evenly balanced.
  • Crude oil price was seen at $68 per barrel in FY19.

Skymet has released its Monsoon forecast for 2018 and expects the upcoming monsoon to be normal and has forecast 100% (with an error margin of +/- 5%) of the long period average (LPA) of 887 mm for the four-month period from June to September.

The Nikkei India Manufacturing Purchasing Managers Index rose to 51.0 in March compared to 52.1 in February, according to a statement by IHS Markit, which compiles the index. Indias Core sector output grew 5.3% year on year in February on the back of steep rise in cement and fertilisers production, but could not match the previous month's growth rate of 6.1%. The seasonally adjusted Nikkei India Services Business Activity Index rose from 47.8 in February to 50.3 in March. Subsequently, output charge inflation eased to the weakest in 2018 so far, Nikkei IHS Markit said.

China has announced new tariffs on 106 US products, which include soybeans, cars and whisky. The world's second-largest economy has set net tariff rate of additional 25% on US products, which include soybeans, corn, auto, chemical products. While last week the US imposed 25% tariffs on Chinese products. On Thursday US president again said that they will impose an extra tariff on Chinese products.

Market This Week

Indias CPI data (Consumer Price Index) & IIP data (Index of Industrial Index) will be presented on Thursday, 12 April 2018. The CPI measures the change in the prices of goods and services from the perspective of the consumer while Industrial Production gauges the change in the total inflation-adjusted value of output manufacturers, quarries, and utilities produced.

On global front US CPI data of MoM & YoY will be presented on Tuesday, 11 April 2018.

The Q4FY18 result will be presented by major IT giant Infosys, Bhansali Engineering on Friday, 13 April 2018.

Stocks To Watch

Lupin Ltd. is on the upside while Magma Fincorp Ltd. is on the downside.

Share Market News 05-April-2018

Nifty Post Best One-Day Gains In Two Years On RBI Outlook

The Benchmark indices bounced back sharply on Thursday with Sensex rose over 350 points & Nifty started above 10,250, amid positive global lead & ahead of RBI monetary policy outcome. The equity market rallied further as Sensex surged over 450 points while Nifty traded above 10,250, on positive global cues. All sectoral indices traded in green led by Metal, Bank & Financials, Auto & Realty, was up by 1-3% while Nifty midcap index also rallied 1.5%.

In afternoon session bulls took charge in D-Street as Sensex was up more than 450 points & Nifty inched towards 10,300 levels, followed positive lead from global stocks on ease of trade war. All sectoral indices were in the green ahead of the outcome of RBI MPC. meeting while Nifty midcap also rallied over 1.5%.

In last hour of trade market rallied further as Sensex surged 600 points while Nifty rose nearly 2% to trade over 10,300 levels. The market closed sharply higher after RBI raised growth outlook for 2018-19 while keeping rates unchanged and maintaining a neutral stance. All sectoral indices ended in the green, with PSU Bank index rose 5%, Metal 4% while Nifty Bank, Realty and Financial Services indices rallied over 2%. Nifty midcap index was up 2%. Sensex closed 577.73 points up at 33,596.80, Nifty up by 196.75 points at 10,325.15.

Top Gainers

Hindalco by 6.52% to Rs.213.90, VEDL by 5.56% to Rs.289.55, SBIN by 5.46% to Rs.260.80, Bajaj Finserv by 5.19% to Rs.5,500, IBULHSGFIN by 4.50% to Rs.1,349.90.

Top Losers

Cipla by -1.72% to Rs.560.00, Bharti Airtel by -0.27% to Rs.394.00.

Analysis Of Top Gainer And Loser

Hindalco is the top gainer in today's market as aluminium prices are likely near a floor as low margins/losses at Chinese smelters should re-balance supply, Novelis should be unaffected by US tariffs, and strong free cash flow offers option to pursue growth opportunities & many covering stock with a buy call.

Cipla is the top loser in today's market after Media reports suggest that Ciplas Indore facility is being audited by USFDA.

Key Market News

The Reserve Bank of India expectedly kept repo rate unchanged at 6% but cut inflation forecast. Some of major highlights of policy:-

The Reserve Bank of India maintains repo rate at 6%, Reverse Repo Rate under LAF remains at 5.75% and the MSF rate and the Bank Rate at 6.25%.

RBI says monetary policy stance 'neutral'.

Inflation expected at 5.1% in Q1 FY19, moderating to 4.7% in Q2 and 4.4% in Q3 & Q4 including the HRA impact, with risks tilted to the upside.

GDP growth is projected to strengthen from 6.6% in 2017-18 to 7.4% in 2018-19 with risk evenly balanced.

Crude oil price seen at $68 per barrel in FY19.

Following a modest contraction in February, Indian service activity stabilised in March, underpinned by greater inflows of new work. The seasonally adjusted Nikkei India Services Business Activity Index rose from 47.8 in February to 50.3. Subsequently, output charge inflation eased to the weakest in 2018 so far, Nikkei IHS Markit said.

Stocks To Watch

VIP Industries Ltd. is on the upside while Graphite India Ltd. is on the downside.

VIP Industries is currently trading at Rs.369.80, up by Rs.51.90 or 16.33% from its previous closing of Rs.317.90 on the NSE. The scrip opened at Rs.320 & has touched a high & low of Rs.381.45 and Rs.320 respectively. So far 12,09,540 (NSE) shares were traded on the counter. The current market cap of the company is Rs.5,250.64 Crore. The NSE/BSE group stock has touched a 52 week high of Rs.393.95 on 12-January-2018 & a 52 week low of Rs.171.05 on 31-July-2017.

Graphite India is currently trading at Rs.699, down by Rs.22.75 or 3.15% from its previous closing of Rs.721.75 on the NSE. The scrip opened at Rs.700 & has touched a high and low of Rs.720 & Rs.686.10 respectively. So far 41,89,200 (NSE) shares were traded on the counter. The current market cap of the company is Rs.13,648.94 Crore. The BSE/NSE group stock has touched a 52 week high of Rs.906 on 04-January-2018 and a 52 week low of Rs.102.50 on 19-May-2017.

Share Market News 04-April-2018

Sensex & Nifty Cracked Over 1% Amid US-China Tariff War

The Benchmark indices opened mildly higher on Wednesday with Sensex was up over 50 points & Nifty above 10,250 levels. The equity market gained strength amid volatility as Sensex gained over 100 points while Nifty inched towards 10,300. The broader markets extended gains, with Nifty Midcap index rose 0.8%. Auto, realty index led the rally, was up almost 2% while IT index traded in the red.

In the afternoon session, the market fell sharply as Sensex lost over 300 points while Nifty traded below 10,150 levels after China unveiled new retaliation plan for US tariffs. Barring Nifty Auto all sectoral indices turned negative led by Nifty Bank, Metal, IT & Financials while Nifty midcap & smallcap also fell over 1%.

In last hour of trade, equity benchmark extended loses as Sensex fell nearly 400 points while Nifty traded below 10,150. The market closed sharply lower, weighed by US-China trade war concerns. Barring Nifty Auto all sectoral indices traded in red led by Metal, Bank & financials, IT. The nifty midcap index also fell over 1%. Sensex closed 351.56 points down at 33,019.07, Nifty up by 116.60 points at 10,128.40.

Top Gainers

Tata Motors by 3.41% to Rs.354.80, Eicher Motors by 3.25% to Rs.28,900, HUL by 0.71% to Rs.1,358, Bajaj Finance by 0.70% to Rs.1,847, Adani Ports by 0.44% to Rs.368.00.

Top Losers

UPL by -4.13% to Rs.734.00, VEDL by -3.99% to Rs.271.90, Tata Steel by -3.55% to Rs.559.10, Hindalco by -3.44% to Rs.200.80, Titan by -3.17% to Rs.902.45.

Analysis Of Top Gainer And Loser

Tata Motors is the top gainer in today's market after JLR (Jaguar Land Rovers) March US sales increased 10.2% to 14,232 units compared to 12,918 units sold last year.

UPL is the top loser in today's market as selling pressure was seen in the stock.

Key Market News

Skymet has released its Monsoon forecast for 2018 and expects the upcoming monsoon to be normal and has forecast 100 percent (with an error margin of +/- 5%) of the long period average (LPA) of 887 mm for the four-month period from June to September. In terms of geographical risk, Skymet expects that Peninsular India along with a major portion of Northeast India is likely to be at a higher risk of being rain deficient throughout the season (JJAS).

China has announced new tariffs on 106 US products, which include soybeans, cars and whisky. The world's second-largest economy has set net tariff rate of additional 25% on US products, which include soybeans, corn, auto, chemical products. China will announce the effective date for new US tariffs at a later time. New tariffs on US products include corn, other agri products, plastic products, cotton, orange juice, wheat, sorghum products, tobacco etc.

The RBI is unlikely to yield to the India Inc's pressure for a benign monetary policy stance by keeping policy rates unchanged in its first monetary policy review of 2018-19 to be announced on Thursday against the backdrop of hardening global crude oil prices, PTI reported. The two-day meet has started today.

Stocks To Watch

Reliance Power Ltd. is on the upside while HEG Ltd. is on the downside.

Reliance Power is currently trading at Rs.42.10, up by Rs.4.05 or 10.64% from its previous closing of Rs.38.05 on the NSE. The scrip opened at Rs.38.15 & has touched a high & low of Rs.43.90 and Rs.38.10 respectively. So far 4,19,38,075 (NSE) shares were traded on the counter. The current market cap of the company is Rs.11,893.74 Crore. The NSE/BSE group stock has touched a 52 week high of Rs.65.20 on 02-January-2018 & a 52 week low of Rs.34.60 on 15-November-2017.

HEG Ltd. is currently trading at Rs.2,883, down by Rs.308.45 or 9.66% from its previous closing of Rs.3,191.45 on the NSE. The scrip opened at Rs.3,214 & has touched a high and low of Rs.3,240 & Rs.2,753 respectively. So far 18,41,209 (NSE) shares were traded on the counter. The current market cap of the company is Rs.11,603.34 Crore. The BSE/NSE group stock has touched a 52 week high of Rs.3,515 on 19-March-2018 and a 52 week low of Rs.220.10 on 03-April-2017.

Share Market News 03-April-2018

Sensex Up 115 Points, Nifty Near 10,250; Banks Lead The Way

The Benchmark indices began the day on a flat note as Sensex was up 20 points & Nifty was trading above 10,200. The equity market turned negative to trade lower with Sensex was down over 50 points while Nifty traded below 10,200 levels. Banking, financial stocks were trading in green while IT, metal stocks remained under pressure. Nifty midcap also traded.

In the afternoon session, the market continued to trade mildly lower as Sensex was down by 30 points while Nifty traded just below 10,200, amid weak global cues. Banking & financials, Auto stocks held the market while IT & FMCG stocks were in under pressure. Nifty midcap outperformed the market, was up around half a percent.

In last hour of trade, equity benchmark traded in a positive zone as Sensex was up nearly 100 points while Nifty traded well above 10,200. The market ended on higher note as intense buying was seen in the market. Banking & Financial, Auto stocks led the rally but IT & FMCG stocks remained under pressure while Nifty midcap was up nearly 1%. Sensex closed 115.27 points up at 33,370.63, Nifty up by 33.20 points at 10,211.00.

Top Gainers

IBULHSGFIN by 4.59% to Rs.1,301, ICICI Bank by 3.19% to Rs.270.20, M&M by 2.93% to Rs.770.00, Bajaj Finserv by 2.78% to Rs.5,414, HindPetro by 2.53% to Rs.353.20.

Top Losers

Tech Mahindra by -3.80% to Rs.615.95, Wipro by -1.86% to Rs.284.25, Hindalco by -1.61% to Rs.207.85, TITAN by -1.57% to Rs.929.25, ONGC by -1.47% to Rs.177.30.

Analysis Of Top Gainer And Loser

Indiabulls Housing Finance is the top gainer in today's market as good buying was seen in the stock.

Tech Mahindra is the top loser in today's market as selling pressure was seen in the stock due to fresh rise on account of Rupee against Dollar.

Key Market News

The Nikkei India Manufacturing Purchasing Managers Index rose to 51.0 in March compared to 52.1 in February, according to a statement by IHS Markit, which compiles the index. A reading below 50 indicates contraction and a number above it signals expansion. Growth was reported across all three broad market groups, led by consumption goods.

Indias Core sector output grew 5.3% year on year in February on the back of steep rise in cement and fertilisers production, but could not match the previous months growth rate of 6.1%. Official data released by the commerce and industry ministry on Monday showed a 22.9% rise in cement output and 5.3% increase in fertiliser production in February compared with a 19.6% rise and 1.6% decline, respectively, in January.

According to the RBI circular on Monday, banks can spread provisioning for mark-to-market (MTM) losses incurred during December 2017 and March 2018 equally over up to four quarters.

Stocks To Watch

Delta Corp Ltd. is on the upside while Tech Mahindra Ltd. is on the downside.

Delta Corp is currently trading at Rs.276.35, up by Rs.33.40 or 13.75% from its previous closing of Rs.242.95 on the NSE. The scrip opened at Rs.239.90 & has touched a high & low of Rs.279.50 and Rs.239 respectively. So far 1,80,98,947 (NSE) shares were traded on the counter. The current market cap of the company is Rs.7,389.51 Crore. The NSE/BSE group stock has touched a 52 week high of Rs.401.60 on 23-January-2018 & a 52 week low of Rs.139 on 23-May-2017.

Tech Mahindra is currently trading at Rs.615.95, down by Rs.24.35 or 3.80% from its previous closing of Rs.640.30 on the NSE. The scrip opened at Rs.636.50 & has touched a high and low of Rs.638 & Rs.613.50 respectively. So far 38,51,192 (NSE) shares were traded on the counter. The current market cap of the company is Rs.60,400.59 Crore. The BSE/NSE group stock has touched a 52 week high of Rs.651.95 on 15-March-2018 and a 52 week low of Rs.356.65 on 29-May-2017.

Share Market News 02-April-2018

FY18-19 Started On Positive Note; Nifty Above 10,200

The Benchmark indices opened the FY19 on a positive note as Sensex was up over 100 points & Nifty opened above 10,150 levels. The equity market extended morning gains as Sensex rose over 150 points while Nifty traded above 10,150, backed by Nifty Auto, Pharma, IT & Infra stocks. Nifty midcap outperformed frontliners as it was up over half a percent.

In the afternoon session, a pullback in financials pushed market higher as Sensex surged over 200 points & Nifty traded well above 10,150 levels. Among sectors, pharma, auto, IT and infra led the gains on D-Street, while Nifty PSU bank was the only index in the red zone. The Nifty midcap index was up by 1%.

In last hour of trade, equity benchmark extended gain as Sensex surged nearly 300 points while Nifty crossed 10,200 levels. The market ended the first session of FY19 on a strong note. All sectoral indices closed in green barring PSU bank. Nifty Auto, Pharma, IT & Infra pushed the rally while Nifty midcap surged 1..40%. Sensex closed 286.68 points up at 33,255.36, Nifty up by 98.10 points at 10,211.80.

Top Gainers

Cipla by 5.97% to Rs.578, Lupin by 5.86% to Rs.779, Kotak Bank by 4.50% to Rs.1,092, Adani Ports by 4.49% to Rs.370, Tata Motors by 4.15% to Rs.340.40.

Top Losers

ICICI Bank by -5.73% to Rs.262.40, IOC by -3.48% to Rs.170.45, Axis Bank by -2.19% to Rs.499.30, SBIN by -1.56% to Rs.246.00, Coal India by -1.31% to Rs.279.60.

Analysis Of Top Gainer And Loser

Cipla is the top gainer in today's market as strong buying was seen in the stock as most of the research firm are positive about the future prospect of pharma companies.

ICICI Bank is the top loser in today's market as CBI has registered a preliminary enquiry against Deepak Kochhar, husband of ICICI Bank managing director and chief executive officer Chanda Kochhar and Venugopal Dhoot, chairman of Videocon group, to verify the Rs.40,000 crore loan to the company, Mint reported on Saturday.

Key Market News

Nationwide e-way bill system for inter-state movement of goods has been rolled out on Sunday, with GSTN officials saying that the platform is working smoothly. From Sunday, businesses and transporters have to produce e-way bill before a GST(Goods & Service Tax) inspector for moving goods worth over Rs.50,000 from one state to another. Over 1.71 lakh inter-state e-way bill were generated on the day of nationwide launch.

In other news, more Indian companies are likely to default on their borrowings in the fiscal year that started in April compared with the previous year on higher interest costs and a deterioration in business conditions, according to rating agency ICRA. The default rate for Indian companies rose to 3.4 percent in the fiscal year ended March from 2.6 percent in the previous year, ICRA, the subsidiary of global rating agency Moody's Investors Service, said in a report published on Monday.

Stocks To Watch

Navkar Corporation Ltd. is on the upside while Can Fin Homes Ltd. is on the downside.

Navkar Corp is currently trading at Rs.170.30, up by Rs.19.50 or 12.93% from its previous closing of Rs.150.80 on the NSE. The scrip opened at Rs.162.25 & has touched a high & low of Rs.177 and Rs.156.55 respectively. So far 38,76,034 (NSE) shares were traded on the counter. The current market cap of the company is Rs.2,573.88 Crore. The NSE/BSE group stock has touched a 52 week high of Rs.247 on 12-May-2017 & a 52 week low of Rs.146.70 on 23-March-2018.

CanFin Home is currently trading at Rs.428.95, down by Rs.55.55 or 11.47% from its previous closing of Rs.484.50 on the NSE. The scrip opened at Rs.462 & has touched a high and low of Rs.464 & Rs.421.25 respectively. So far 71,94,670 (NSE) shares were traded on the counter. The current market cap of the company is Rs.5,741.61 Crore. The BSE/NSE group stock has touched a 52 week high of Rs.666 on 22-June-2017 and a 52 week low of Rs.402.50 on 05-February-2018.

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ABOUT AUTHOR

Niveza Editorial Desk : We are a team of stock market nerds trying to stay ahead of the herd. We spend our grey cells everyday to a pave a smooth road for our clients in the shaky world of stock market. While tracking the mood swings of the market we bring our clients the most rewarding deals.

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