Apr 12, 2017

What To Watch Out Today12 April 2017 For Possible Market Action

The Nifty is likely to start on a flat on Wednesday tracking muted handover from Wall Street. The index closed above its crucial resistance level of 9,200 and its 13-days exponential moving average placed at 9,175.
Here are top cues from domestic as well as international markets which could have a bearing on D-Street:
Wall Street ends slightly down 
US stocks ended down on Tuesday amid concern over geopolitical risks weighing on the sentiment of investors. Traders remain cautious ahead of corporate earnings reports as well.
Worries over rising tensions between the United States and Russia, Syria and North Korea drove investors into gold and other safe-haven assets and pushed up the CBOE Volatility index. VIX, above 15 for the first time since Election Day, said a report.
The Dow Jones Industrial Average ended down 6.72 points, or 0.03 percent, to 20,651.3, the S&P 500 lost 3.38 points, or 0.14 percent, to 2,353.78 and the Nasdaq Composite dropped 14.15 points, or 0.24 percent, to 5,866.77.
3-4 interest rate hikes by US 
San Francisco Federal Reserve Bank President John Williams said on Tuesday that the US central bank should raise interest rates three or four times this year, and begin to trim the Fed's multitrillion-dollar balance sheet in late 2017, said a report. The Fed raised rates last month for the second time in three months. Most Fed officials say they think three rate increases this year will likely be appropriate.
SGX Nifty 
The Nifty futures on the Singapore Stock Exchange were trading flat at 9,250 indicating a flat-to-positive opening for the domestic market.
Donald Trump raises geopolitical concerns 
North Korea is looking for trouble, US President Donald Trump said, asserting that America will solve the North Korean "problem" unilaterally even if China does not help.
"North Korea is looking for trouble. If China decides to help, that would be great. If not, we will solve the problem without them! USA," Trump tweeted, toughening his stance on North Korea. In another tweet, Trump also gave an insight into his talks with his Chinese counterpart Xi Jinping, whom he met last week at his Mar-a-Lago resort in Florida.
Reliance Jio announces new offer
Telecom stocks will be in focus after Reliance Jio announced its Dhan Dhana Dhan offer under which it will offer customers three months of unlimited data and free calls for a one-time recharge of Rs 309.
The details of the plan listed on Jio's website state that Jio Prime subscribers will get 84GB for 84 days on the first recharge of Rs 309, while those who recharge for Rs 509 will get 168 GB for 84 days.
Vedanta completes buyout of Cairn India: 
The merger of cash-rich oil producer Cairn India into its debt-ridden parent Vedanta Ltd is operational starting Tuesday.
"This merger consolidates Vedanta's position as one of the world's largest diversified natural resources companies, with world-class, low-cost assets in metals and mining and oil and gas," a statement by the two firms said.
After absorbing its cash-rich subsidiary, Vedanta will have a larger pro forma market cap of USD 15.6 billion and a higher free float of 49.9 percent.
India offers $10 billion investment to Bangladesh
India will invest up to $10 billion in Bangladeshi sectors including infrastructure and medicine and will provide $5 billion in loans, including $500 million in military assistance, Prime Minister Sheikh Hasina said on Tuesday.
Rupee closes marginally higher
The Indian rupee on Tuesday closed marginally higher against the US dollar, ahead of the key macroeconomic data. The rupee closed at 64.50, up 0.09 percent from its Monday?s close of 64.56. The rupee opened at 64.65 a dollar and touched a high and a low of 64.43 and 64.69, respectively.
Dollar near five-month low vs Yen
The dollar ends lower nearly touching a five-month low against the Japanese yen, as geopolitical risk and declining US Treasury yields pushed traders out of the greenback. The dollar index, which gauges the U.S. currency against a basket of six major peers, was off 0.3 percent on the day at 100.71.
Inflation, IIP Data eyed
The government will announce monthly inflation data based on consumer price index (CPI) for March 2017 on Wednesday. The all-India general CPI inflation increased to 3.65 percent in February 2017, compared with 3.17 per cent in January 2017.
Besides inflation, the government would also release index of industrial production (IIP) data for February 2017, which will be released after market hours on Wednesday.
India's industrial production improved 2.7 percent in January 2017 over January 2016, snapping 0.1 percent decline recorded in December 2016.
Nifty forms Bullish Engulfing pattern 
Bulls managed to push the index beyond its crucial resistance level of 9,200. It also formed a two-candlestick pattern, popularly known as a bullish engulfing pattern on the daily charts.
The Nifty appears to have once again taken support on its 13 Day Exponential Moving Average before strongly bouncing back to register Bullish Engulfing formation on the charts. Sustaining above the said average one can expect Nifty to retest its previous peak of 9,274 levels, said experts.
Crude oil prices rise
Crude oil prices turned positive amid reports that Saudi Arabia wants to continue output cuts for an additional six months. Oil futures have been trading in a range, supported by production cuts from the Organization of Petroleum Exporting Countries cartel.

Brent crude, the international benchmark for oil, settled up 25 cents at $56.23 a barrel on Tuesday, its highest since March 7. Brent has risen in each of the previous seven sessions.
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