Market Fundamentals
Global Equity Review
Asian markets were trading on a mixed note on Friday morning ahead of the US jobs report later today. The Japanese stock market is notably lower on Friday as exporters' stocks were dragged lower by a stronger yen.
Overnight, the US Stocks swung in and out of the negative territory to finally close higher. The US jobless claims rose 8,000 to 285,000 last week, while economists were expecting a total of 280,000. Factory orders for December fell 2.9%.
The recent weakening of dollar index (DXY), where the dollar is weighted against a basket of currencies has investors concerned over the health of US economy.
The European markets finished mixed on Thursday in what has been a volatile session, with a rally in mining stocks trying to offset concerns surrounding oil, global growth and earnings.
Oil prices remained volatile overnight, after see-sawing between declines and gains of 5-8% percent this week. US crude futures were down 56 cents, or 1.7%, at USD 31.7 a barrel in the US session, while globally traded Brent slipped 58 cents, or 1.65, to USD 34.5 a barrel.
India Market News
In India, Tata Steel Ltd shares will be under pressure as it posted a loss of INR 21.3bn in Q3 FY2016, far wider than consensus estimates as it took one-time charges, mostly related to its European assets, and cheaper imports from China weighed on profits.
Reliance Infrastructure Ltd shares will be in limelight as it has agreed to sell its cement assets to Birla Corp. Ltd for INR 48.0bn to pare debt and expand its new defence manufacturing business.
Software industry body Nasscom estimates exports of Indian information technology services will grow at 12.3% in constant currency terms in the current fiscal year, as against its earlier guidance of 12-14%. The industry body blamed the uncertain macro-economic environment marked by volatility in equity and investment markets, currency fluctuations and political instability in global markets as well as higher visa fee in the US and the UK for lower growth estimates.
Hero MotoCorp Ltd is likely to cut its projections for exports as the firm's entry into Brazil, where it expected to sell up to 300,000 units a year, has got delayed. Other factors that have hurt Hero's prospects include the bankruptcy of its technology partner Erik Buell Racing and stagnant global economy.
Foreign direct investment (FDI) in the country more than doubled to about USD 4.5bn in December 2015. FDI inflow to India recorded a whopping 114% growth for December 2015 vs. December 2014. In December 2014, India had received USD 2.16bn of FDI.
India Market Outlook
Markets expected to open on a flat note with positive bias. The US equities closing slightly higher in choppy trade as investors digested weaker-than-expected economic data. Technically intraday supports are placed at 7360 and 7310 and resistances are 7480 and 7550.
Kindly find attached India Morning Memo & Derivative Watch for 05 February 2016
Investment Strategy
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