Greetings!
Market Fundamentals
o Global Equity Review
o Asian shares skidded on Thursday, taking their cue from steep losses on Wall Street as an overnight rout in oil prices heightened worries about the global economy. The Japanese stock market is sharply lower on Thursday, following the overnight sell-off on Wall Street. Investor sentiment was also dented by weak Japanese core machinery order data.
o The European markets finish mixed after early strength fades. The European markets began to pare their gains shortly before the open of the US markets and continued to retreat until the close. The reversal in crude oil prices contributed to the late weakness. The European markets ended the session with mixed results.
o After a brief respite earlier this week, US stocks resumed their recent sell-off over the course of the trading session on Wednesday. With the steep drop on the day, the major averages plunged to their worst closing levels in well over three months.
o Crude oil futures were flat Wednesday, pausing after a collapse below USD 30 to the lowest in 12 years. Crude oil inventories in the US rose only 234,000 barrels last week, but there were builds of 8.4 million barrels in gasoline and over 6 million in distillates.
o India Market Review
o The Indian markets showed some bounce back and ended with decent gains in last session, though trade remained choppy but sentiments across the region were supported by better-than-expected China trade data.
o Gains in index heavyweights Infosys, Reliance Industries (RIL) and private sector banks offset losses for metal, telecom sector stocks, public sector banks and index heavyweight L&T, with the two key benchmark indices registering modest gains.
o Market News
o French telecom major Orange has signed a deal with Bharti Airtel International (Netherlands) BV for acquiring its operations in two African countries, Burkina Faso and Sierra Leone. The companies did not reveal the size of the deal but analysts said it could be worth $800-900mn. After striking Wednesday's deal for two countries, Airtel has now operations in 15 countries in Africa.
o Rating agency Standard & Poor's downgraded Tata Steel by a notch to 'BB-' from 'BB', citing weak financial performance and high debt leverage, and expects the company's operating performance to improve gradually beginning next financial year. The rating agency also lowered its UK's business rating to 'B+' from 'BB-' as pick-up in demand in Europe has been sluggish, imports in Europe have increased and remain competitively priced, and fixed costs at some of its facilities remain high.
Market Outlook
Markets expected to open on a negative note; tracking a sell-off overnight on Wall Street and Asia this morning, after crude oil fell to a fresh low below USD 30 per barrel. Technically intraday supports are placed at 7500 and 7440 and resistances are 7600 and 7650.
Kindly find attached India Morning Memo & Derivative Watch for 14 January 2016
Investment Strategy
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