Market Fundamentals
Global Equity Review
Asian shares, except Japan, are trading in green on Thursday morning, with the overnight gains in crude oil and other commodity prices lifting resources stocks. Commodities gained on the back of a weak USD. Japanese stocks are trading in negative as the exporters face losses in case of appreciating JPY against USD.
The USD fell sharply against major currencies on Wednesday. The weakness in USD is being associated with Federal Reserve Bank of New York President William Dudley's comment that the deteriorating outlook about the global growth and the dollar strength would hurt the U.S. economy.
Earlier the European markets had ended Wednesday's session in negative territory. The weak performance of the Asian markets had a negative impact on sentiment amid disappointing corporate earnings.
US stocks ended mixed after a volatile session. Payroll processor ADP released a report showing stronger than expected private sector job growth in the month of January. However, the Institute for Supply Management (ISM) released a separate report showing a slowdown in U.S. service sector growth.
Crude oil prices rallied Wednesday, taking back steep losses from the previous two sessions as the dollar weakened, ignoring Energy Department data showing a record US crude oil stockpiles. US oil for March was up USD 2.4, or 8.0%, at USD 32.3 a barrel, one of the biggest one-day gains in recent memory.
India Market News
Moody's Investors Service today said it has retained Bharti Airtel's Baa3 rating and kept its outlook as stable adding that the rating affirmation is underpinned by strong cash flow generation of Bharti's Indian operations, particularly in wireless voice and data, where it enjoys a well-established and leading market position under the Airtel brand.
The Baltic Dry Index, the benchmark for dry bulk shipping freight, has fallen to as low as 300 points, sparking fears of vessels being laid off, if trade deteriorates further. In 2008, the index had crossed the 11,000-mark. It started falling because of China's significantly reduced presence in the international dry bulk segment.
Growth in India's services activity rose at its fastest pace in 19 months in January as demand picked up, a business survey showed today. The Nikkei/Markit Services Purchasing Managers' Index (PMI) surged to 54.3 in January from December's 53.6, marking a seventh month above the 50-level that separates growth from contraction.
Private sector industries such as cement, steel and aluminum will be able participate in coal block auction. They were not able to get any linkage or letter of assurance (LoAs) for coal to meet their fuel needs since after the New Coal Distribution Policy (NCDP) was framed by the coal ministry in 2007. They bought coal in open market.
India Market Outlook
Markets expected to open on a positive note. A sudden weakness in USD caused commodities to rise sharply leading to a bounce in resource stocks globally. Technically intraday supports are placed at 7400 and 7350 and resistances are 7480 and 7550.
Kindly find attached India Morning Memo & Derivative Watch for 04 February 2016
Investment Strategy
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