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Market Fundamentals
Global Equity Review
o Asian shares rose on Friday after oil prices snapped their eight-day rout, helping to lift battered energy shares even as investors remained on edge as they looked for signs of stability in China's economy and its volatile markets. The Japanese stock market rose tracking the overnight gains on Wall Street and higher crude oil prices. In addition, a weaker yen aided exporters' stocks.
o The European markets were firmly in negative territory in early trade Thursday, following weak cues from Asia and Wall Street overnight. However, the markets pared their losses in late trade, after the U.S. markets bounce back from early weakness. European markets still finished in the red on Thursday, but well off their session lows.
o On Wall Street, stocks moved sharply higher on Thursday, partly due to an increase in the price of crude oil, which bounced further off the twelve-year closing low set on Tuesday. Traders also reacted positively to quarterly results from financial giant JP Morgan.
o Crude oil prices turned higher on Thursday as US stocks steadied and downbeat US economic data raised hopes the Federal Reserve will keep interest rates ultra-low for the time being. Concerns about surging global supplies prevented a bigger rebound.
India Market Review
o Indian shares pared early losses to end off their day's lows on Thursday after IT heavyweight Infosys beat consensus estimates for the third straight quarter and revised dollar revenue growth guidance upwards. Losses for banking and metal sector stocks along with index heavyweights L&T and Reliance Industries (RIL) pushed key benchmark indices lower.
o India's wholesale inflation remained in negative territory for a 14th straight month in December, helping cap losses. The Wholesale Price Index (WPI)-based inflation moved up to a 12-month high of (-) 0.7 percent in December from (-) 1.99 percent in the preceding month.
Market News
o Infosys on consolidated basis has reported 6.62% rise in its net profit at INR 34.65bn for the quarter as compared to INR 32.50bn for the same quarter in the previous year. Total income of the company has increased by 14.13% at INR 167.04bn for quarter under review as compared to INR 146.36bn for the quarter ended December 31, 2014.
o Foreign Investment Promotion Board (FIPB) has approved a total investment proposal of INR 60.5bn, with the largest chunk coming from Cadila Healthcare and Nitin Lifesciences. Ahmedabad-based drug maker Cadila Healthcare has secured nod to raise upto INR 50.0bn of fresh equity from foreign investors through qualified institutional placement (QIP) route. The company proposes to use the funds for business expansion and acquisitions.
Market Outlook
Markets expected to open in the positive territory, tracking broad strength in Asian markets, and as Wall Street pulled off a sizzling come back overnight after a weak start, pushed by a reversal in oil prices, with Brent crude rising back above USD 31 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 15 January 2016
Investment Strategy
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