Saturday, May 27, 2017

Indian Market Outlook for the week – 29.05.2017 to 02.06.2017

Indian Market Outlook for the week – 29.05.2017 to 02.06.2017

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Indian Market Outlook for the week – 29.05.2017 to 02.06.2017
  ( www.rupeedesk.in )

 May rise next week; Jan-Mar earnings in focus Local share indices are expected to rise next week, and we expect the Nifty 50 to test 9800-point mark in the nearto-medium term given the strong momentum in the market. Yesterday's strong movement reiterated our belief that the Nifty 50 might test 9800-point much faster than anticipated earlier. However, global cues and Jan-Mar earnings remain a key factor. Benchmark indices yesterday extended their gains, with the Nifty 50 briefly touching the psychologically important 9600-mark to end at a record closing level of 9595.10 points, up 85.35 points or 1% from its previous close. The S&P BSE Sensex index ended at 31028.21 points, up 278.18 points or 1%, the second straight record closing for the 30-stock index. The index also hit a lifetime high intraday. Cues from global markets will also affect the movement in the broader market. Market participants will keep an eye on the declining crude oil prices, after energy stocks dropped following the decision of the Organization of Petroleum Exporting Countries not to make deeper cuts in production. The OPEC and some non-OPEC producers, on Thursday, agreed to extend oil production cut for nine months more, but the 1.8-mln-barrel-per-day output cut disappointed the market. Crude oil prices plummeted the most in three weeks. Markets will also eye the Bank of Japan governor Haruhiko Kuroda's speech scheduled over the weekend. European Central Bank's President Mario Draghi is set to appear at the Committee on Economic and Affairs on Monday. Apart from global cues, robust Jan-Mar earnings are also going to bolster sentiment. With many companies yet to detail their Jan-Mar earnings, action is likely to remain stockspecific.

Source : Cogencis Information Services Ltd.
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Auto Stocks Outlook for the week – 29.05.2017 to 02.06.2017

Auto Stocks Outlook for the week – 29.05.2017 to 02.06.2017

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Auto Stocks Outlook for the week – 29.05.2017 to 02.06.2017
  ( www.rupeedesk.in )

Seen rising next week, Maruti Suzuki in focus Stocks of most automobile companies are seen rising next week on the back of a strong general market sentiment and continuous uptick in Maruti Suzuki India Ltd, the heavyweight in the automobile index. Yesterday, share indices rose nearly 1% each and helped the Nifty 50 breach the 9600-point mark to test a fresh lifetime high of 9604.90 points. We remain positive on Maruti Suzuki's growth story on the back of strong volume growth led by consistent volume uptick of Ciaz sedan, Vitara Brezza compact sports utility vehicle and Baleno premium hatchback. The company has also been a top pick by most brokerage houses due to increasing average selling price led by an expanding portfolio in the premium segment and fresh capacity addition from the Gujarat facility. Uptick in rural demand, supporting macro tailwinds like seventh pay commission payout, falling interest rates, urbanisation and growing middle class also aid a strong outlook on the company. Mumbai-based Tata Motors Ltd has also gained from the strong performance of the company's arm Jaguar Land Rover during Jan-Mar. Jaguar Land Rover sales rose 13% on year in the March quarter to 179,509 units. With relatively lower margin volatility expectations and strong model cycle on the back of ramp-up of Discovery sports utility vehicle, Velar sports utility vehicle, new Range Rover Sport sports utility vehicle, and E-Pace compact sports utility vehicle (over next 12-15 months). Ashok Leyland, the third largest commercial vehicle manufacturer, has also retained a positive outlook from market participants as the company beat estimates of Jan-Mar earnings and posted a net profit of 4.8 bln rupees. Company maintains its positive outlook for 2017-18 (Apr-Mar) and is optimistic that the industry will grow at nearly 10-15% in the current financial year led by strong economic growth, mining and infrastructure activities.

Source : Cogencis Information Services Ltd.
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Bank Stocks Outlook for the Outlook – 29.05.2017 to 02.06.2017

Bank Stocks Outlook for the Outlook – 29.05.2017 to 02.06.2017

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Bank Stocks Outlook for the Outlook – 29.05.2017 to 02.06.2017
  ( www.rupeedesk.in )

Private Banks to have upward bias, PSU banks seen down Trade in bank stocks is expected to be a mixed bag in the coming week, with private banks seen extending this week's gains, whereas public sector banks are seen down, continued to be weighed down by concerns of capital constraint and weak asset quality. The largest hit this week was taken by IDBI Bank, stocks of which fell 8.87% during the week. The bank's debt papers were downgraded by several rating agencies such as CRISIL and ICRA. On Thursday, Moody's Investors Service also downgraded the bank's rating to Ba2 from Baa3, minutes after which the lender announced a 'turnaround plan' to control and manage the bad loan book, and measures to improve the capital adequacy. The bank was one of the 10 public sector lenders asked by the government to submit a turnaround plan, before further capital infusion into them. On May 9, the RBI had initiated prompt corrective action on IDBI Bank, citing a high net non-performing asset ratio and negative return on assets, subsequent to which the bank reported that its net loss for 2016-17 (Apr-Mar) widened to 51.58 bln rupees from 36.65 bln rupees the previous year. However, analysts remain positive on the overall sector, especially private sector banks, given the strong rollover demand at the time of expiry of the May derivative contracts. The Nifty Bank ended the May series on an optimistic note. The move was largely supported by private sector leaders whereas follow-up buying was also seen in the June series. Rollover spreads continued to remain muted which will support the broader move going forward as short traders will cover their positions in case of selling.

Source : Cogencis Information Services Ltd.
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Metal Stocks Outlook for the week – 29.05.2017 to 02.06.2017

Metal Stocks Outlook for the week – 29.05.2017 to 02.06.2017

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Metal Stocks Outlook for the week – 29.05.2017 to 02.06.2017
  ( www.rupeedesk.in )

Stocks of metal and mining companies are seen positive next week as they track movement of the broader market, sentiment for which remains upbeat. Nifty 50 and Sensex hit their lifetime highs this week, gaining close to 2% each during the week. This is the third consecutive week for which share indices have ended higher. If the positive run in the market continues, the metal space is likely to outperform benchmark indices given its hi-beta nature, and the recent correction in these shares. Analysts are particularly positive on companies in the non-ferrous space, as they reap the benefit of robust year-on-year production growth in April. Hindustan Zinc, Hindalco Industries and Vedanta have all seen strong production volumes in April. Overall, we expect non-ferrous companies to sustain earnings momentum on higher base metal prices and operating leverage benefits. In the earnings space, Hindalco Industries, which is scheduled to detail its Jan-Mar numbers on Tuesday, will be watched. Aditya Birla group owned-Hindalco Industries is seen posting a 53% sequential rise in its net profit for Jan-Mar, led by higher prices of copper and aluminium even as its volumes remain stable sequentially. Market participants sees the Mumbai-based company's net profit at 4.91 bln rupees, while net sales are seen at 103.50 bln rupees, up 4.4% on quarter and 19.4% on year. Other companies in the metal space announcing their earnings include Bhushan Steel and Sarda Energy and Minerals.

Source : Cogencis Information Services Ltd.
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FMCG Stocks Outlook for the week – 29.05.2017 to 02.06.2017

FMCG Stocks Outlook for the week – 29.05.2017 to 02.06.2017


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FMCG Stocks Outlook for the week – 29.05.2017 to 02.06.2017
  ( www.rupeedesk.in )

Prospects of a good monsoon, recovery in sales growth from the demonetisation-led slump for most companies, and underlying bullish sentiment in the market are likely to push stocks of fast moving consumer goods companies higher next week. Pre-monsoon showers accompanied by thunderstorms are likely to cover most parts of the country by Sunday, private weather forecaster Skymet said yesterday. Next week, shares of ITC are likely to rise further, aided by strong cigarette sales in Jan-Mar. Yesterday, the company's stock surged to a fresh lifetime high after the company reported a 6.2% on-year rise in net sales to 150.1 bln rupees due to a near 5% growth in cigarette revenue, its main business, to 89.5 bln rupees. Yesterday, the scrip ended 3% higher at 309.10 rupees and is likely to test 352 rupees in the near term. Stocks of Hindustan Unilever, which gained 3.3% this week, are likely to inch higher as the company has hiked product prices by 2-7% in May. HUL's stock is moving in an uncharted territory with ample volumes. We expects shares of Britannia Industries to plunge further as the stock is trading below the 21-day moving average amid high volumes. The company's failure to improve its operating margin during the quarter ended March--earnings before interest, taxes, depreciation and amortization margin was flat on year at 13.30%--weighed on its stock yesterday and the scrip ended 2.9% lower from the previous close. Through this week, the Nifty FMCG index gained 4.7%, aided by favorable rates under goods and services tax. Yesterday, the index scaled to a lifetime high of 25711.15 points. Next week, stocks of United Spirits, Godfrey Phillips India, Ruchi Soya Industries, Parag Milk Foods, and Manpasand Beverages will be on investors' radar as these companies are set to detail their earnings for the Jan-Mar.

Source : Cogencis Information Services Ltd.
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Cement Stocks Outlook for the week – 29.05.2017 to 02.06.2017

Cement Stocks Outlook for the week – 29.05.2017 to 02.06.2017


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Cement Stocks Outlook for the week – 29.05.2017 to 02.06.2017
  ( www.rupeedesk.in )

Stocks of cement companies are seen range-bound next week as recent price cuts by these companies are seen weighing on sentiment. Cement companies, which had hiked prices in March and April due to a recovery in demand after demonetisation, cut prices in May as the recovery in demand has been slower than expected. Cogencis had reported last week that ACC Ltd, Ambuja Cements Ltd, and UltraTech Cement Ltd cut prices by 10-20 rupees per 50-kg bag in the Delhi-National Capital Region in May. Demand had slowed in May, which led companies to undertake price cuts. Demand for cement had been hit by the government's decision to withdraw old 500- and 1,000-rupee currency notes from circulation from Nov 9. However, as the availability of currency notes in circulation improved, cement companies started hiking prices across India. In April, ratings agency ICRA said in a report that cement prices had reached pre-demonetisation levels. However, the recent price cuts have raised doubts on the pace of recovery in the sector. Analysts, however, are positive about the cement sector, as they see higher spending by central and state governments on infrastructure. The government's decision to give infrastructure status to affordable housing in the Union Budget for 2016-17 (Apr-Mar) is also likely to boost demand. The cement industry is also seen gaining from the implementation of the goods and services tax, which is likely to come into effect from Jul 1. While the 28% tax rate under the goods and services tax regime is seen as neutral for the cement sector, lowering of tax on coal to 5% from around 11% is seen positive, as it would reduce input costs for cement companies.

Source : Cogencis Information Services Ltd.
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Telecom Stocks Outlook for the week – 29.05.2017 to 02.06.2017

Telecom Stocks Outlook for the week – 29.05.2017 to 02.06.2017


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Telecom Stocks Outlook for the week – 29.05.2017 to 02.06.2017
  ( www.rupeedesk.in )

Stocks of most telecommunication companies are likely to recover next week as investors may buy the stocks that have witnessed a weak spell over the past month. Fundamental analysts remain negative on the sector and expect Reliance Jio Infocomm Ltd's aggressive tariff plans to continue to put pressure on margins and revenue of other operators. Bharti Airtel Ltd's consolidated net profit for the March quarter fell 25.9% on quarter to 3.7 bln rupees, while Idea Cellular Ltd's consolidated revenue, including other operating income, fell 6.2% on quarter to 81.26 bln rupees. Expecting intense tariff competition over the next several quarters among operators, Moody's Investors Service on Tuesday cut Bharti Airtel's rating outlook to negative from stable. It affirmed the company's rating at Baa3. Taking cognizance of the pressure on the sector, an inter-ministerial panel has been set up by the government to study the financial health of the sector and recommend steps for resolution. It has met once so far. To ease pressure on companies, the Cellular Operators Association of India has sought from the panel reduction of spectrum usage charge to 1% of adjusted gross revenue, and reduction in licence fee to 3% of adjusted gross revenue from 8%. Analysts believe a goods and services tax rate of 18% is likely to bleed companies further. Rising competition after the entry of Reliance Jio has also led to consolidation. Bharti Airtel has announced two separate acquisitions of Tikona Digital Networks Pvt Ltd and the Indian arm of Norway's Telenor ASA. Vodafone India and Idea Cellular have also announced a merger, which is pending regulatory approvals. Stocks of Reliance Communication could recover.

Source : Cogencis Information Services Ltd.
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Capital Goods Stocks Outlook for the week – 29.05.2017 to 02.06.2017

Capital Goods Stocks Outlook for the week – 29.05.2017 to 02.06.2017


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Capital Goods Stocks Outlook for the week – 29.05.2017 to 02.06.2017
  ( www.rupeedesk.in )

 Stocks of capital goods companies are likely to rise next week, taking cues from Larsen and Toubro and Bharat Heavy Electricals, as both the sector majors are projected to report positive Jan-Mar earnings. L&T should lead the pack in the upcoming week on the back of expected decent Q4 (Jan-Mar) numbers. The engineering behemoth will detail its earnings for the March quarter on Monday, along with Bharat Heavy Electricals. L&T's consolidated net sales are expected to rise nearly 15% on year to 376.47 bln rupees in the reporting quarter, while consolidated net profit is likely to see a growth of 7% at 26.29 bln rupees. State-owned Bharat Heavy Electricals should see an upside to 175 rupees in the next few trading sessions. The company's net profit for Jan-Mar is estimated to grow 53.3% on year to 5.5 bln rupees. Net sales are seen at 110.1 bln rupees, up 10.0% year-on-year. Stocks of CG Power & Industrial Solutions, however, are likely to fall next week after the company's net loss widened to 4.4 bln rupees in Jan-Mar from 929 mln rupees a year ago. Income from operations, too, fell 7.6% on year to 17.1 bln rupees during the quarter. Market participants would also keep an eye on Thermax as it details its fourth quarter earnings on Tuesday

Source : Cogencis Information Services Ltd.
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Pharma Stocks Outlook for the week – 29.05.2017 to 02.06.2017

Pharma Stocks Outlook for the week – 29.05.2017 to 02.06.2017


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Pharma Stocks Outlook for the week – 29.05.2017 to 02.06.2017
  ( www.rupeedesk.in )

Pharmaceutical companies will continue to be under pressure next week due to weak earnings for the March quarter and uncertainties in both domestic and the US markets. This week, the Nifty Pharma index slumped nearly 11% as investors sold shares on account of worry over the US Food and Drug Administration's observations, delay in product approvals, and a slowdown in growth prospects for Indian drug companies in the US. In the domestic market, there are uncertainties over the Goods and Services Tax, pricing regulations and the government's emphasis on generic drugs as against branded ones. Sun Pharmaceutical is likely to continue falling next week after it reported, post market hours yesterday, its lowest consolidated net profit in the last seven quarters and worst net sales in five quarters as the company grappled with challenges in its US operations. Stocks of India's largest
pharmaceutical company may fall. This week, the stock has slumped 13.5% on account of the company's weak Jan-Mar earnings and bleak business outlook for the current financial year. Glenmark Pharmaceuticals is also expected to continue its decline next week. The stock has slumped by nearly a third after giving a weak guidance for sales from its generic of anti-cholesterol drug Zetia, on which it as a six-month exclusivity. In a post earnings conference call, the company said its generics business in the US was under severe stress and that revenue may grow in a single digit in 2017-18 (Apr-Mar) due to price erosion in the US, increased competition, and supply channel consolidation.

Source : Cogencis Information Services Ltd.
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IT Stocks Outlook for the week – 29.05.2017 to 02.06.2017

IT Stocks Outlook for the week – 29.05.2017 to 02.06.2017


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IT Stocks Outlook for the week – 29.05.2017 to 02.06.2017
  ( www.rupeedesk.in )

Stocks of information technology companies are seen trading sideways with a negative bias in the week ahead asinvestors would stay cautious. The Nifty IT index is seen in the range of 10600-10900 points next week. Significantgain in Sensex and Nifty 50 might also reflect on Nifty IT index next week. Strong rupee coupled with persistentworries over US visa norms has been keeping the stocks under pressure. Companies in the sector largely exportsoftware to the US. The rupee, which had appreciated nearly 5% during Jan-Mar, has been volatile over the lastfew weeks.Companies are planning to increase their onsite headcount after coming under pressure due to tightened H-1B
norms by the US, but this would weigh on their margins. Recently Infosys had announced its plan to hire 10,000workers in the US over the next two years. IT Stocks has been bouncing back after ottoming out, but is still underpressure and only stock-specific movement will be seen in the next week.Tech Mahindra, which reported a lower-than-expected result for Jan-Mar yesterday, is seen opening lower on Monday. Tech Mahindra, the last among the Nifty IT constituents to announce its Jan-Mar results, posted a 30.2% on-quarter fall in its consolidated net profit to 5.9 bln rupees. The company's consolidated income from operations stood at 74.95 bln rupees during the quarter, down nearly 1% on quarter.

Source : Cogencis Information Services Ltd.
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