Markets snap 8-session rally; Nifty settles below 10,150 ahead of Fed meet

All that happened in Tuesday's trade

9:05 AM

DSP Blackrock on interest rate outlook

 

Slow / sluggish growth calls for a case for reduction in rates whilst rise in core inflation doesn’t bode well for interest rates. The key drivers from the recent rise in inflation are primarily from supply side; ie, fuel prices and statistical impact of rise in HRA due to the central pay commission recommendations pushing up housing inflation coupled with GST implementation. Demand side inflation remains contained. Prospects of slow growth curtails rise in inflation as it curtails demand.

 

The pretext of slow / sluggish growth will keep the room open for rate cut. Limited availability of fiscal space (government spending) and lack / absence of private investment should aid to curb inflationary pressures keeping the room open for a rate cut.

9:04 AM

Preview: US Fed meet

 

Nearly nine years since it began purchasing assets to stimulate the struggling US economy, the Fed appears ready to start shrinking the size of its balance sheet, with Goldman Sachs Research economists expecting an announcement of balance sheet "normalization" at this week's FOMC meeting. What this means for the economy and markets is Top of Mind. 

 

Senior Strategist Allison Nathan explains that the uncharted process should be manageable even for sensitive assets like mortgage-backed securities, given the Fed's plans to shrink its balance sheet gradually by letting maturing assets "run off" from its portfolio rather than actively selling them. There are, of course, factors that could raise the risk of a more disruptive normalization process. Nathan points to changes in Fed leadership, inflation and rate expectations as key areas to watch.

 

(Source: Goldman Sachs)

9:04 AM

Today's picks

 

Devangshu Datta on Nifty, Bank Nifty, Tata Steel, Vedanta and Hindustan Unilever. CLICK HERE FOR DETAILS 

9:02 AM

Option strategy on Coal India by MOSL

 

COAL INDIA - BULL CALL SPREAD

 

Bull Call Spread is recommended to trade the positive to range bound move. CLICK HERE FOR DETAILS 

9:02 AM

IPO watch: SBI Life

 

At the higher end of the price band of Rs700, the issue is priced at 4.2x its FY17 embedded value of Rs165/share (vs. closest peer ICICI Pru trading at 3.8x its FY17 EV). At this valuation the issue seems fairly priced considering SBI Life is a market leader in most of the parameters.

 

Going ahead, the company is expected to benefit further from the vast bancassurance and private agent network along with its extensive reach and market share. We believe the company will be able to attract adequate investor interest on the basis of its leadership position and expected healthy growth compared to peers. 

 

Given that the current valuations are mature, investors can subscribe to the issue from a long term perspective. However, it must be noted that, insurance being a steady business, it may not attract major listing gains.

 

(Source: Centrum Broking)

9:00 AM

Market outlook from SMC Global

 

Today the markets are likely to open on flat note. All emerging markets are trading mixed. The coming session is likely to witness a range of 10100 on declines and 10250 on advances.

9:00 AM

Nifty outlook and technical calls 

 

With trend of all the periodicities being positive and Nifty closing at all time high levels; the bias is positive for the next projected target of 10,200-10,250. CLICK HERE FOR MORE 

8:59 AM

Centrum Broking on Sundaram Finance

 

We retain Buy on Sundaram Finance (SUF) with sum-of-the-parts based target price revised upwards to Rs2,000 (Rs1,740 earlier). The increase in our target price follows: a) revision in earnings estimates for the core - asset financing business and b) higher contribution from the subsidiaries following improved profitability and outlook therein. 

 

Strong capital position, best-in-class asset quality and superior returns profile continue to remain key strengths. Value un-locking through demerger of non-financial investments into a separate entity could lead to further upside in the stock. Prefer Sundaram Finance in the NBFC space

8:58 AM

Wall Street update

The S&P 500 ended slightly higher on Monday as financial stocks rose ahead of a Federal Reserve meeting, but the Nasdaq pared gains sharply as technology stocks lost ground late in the session.

 

The Dow Jones Industrial Average index rose 63.01 points, or 0.28% to 22,331, the S&P 500 gained 3.64 points, or 0.15% to 2,503.87 and the Nasdaq Composite index added 6.17 points, or 0.1% to 6,454.64. 

8:58 AM

COMMENT:

 

The jubilant mood on the Street could ebb away as investors tune in to global developments. US President Donald Trump may take on North Korea and Iran in his first address to the United Nations today. Chinese President Xi Jinping and Trump spoke about keeping pressure on North Korea with economic sanctions imposed through the United Nations. 

 

The US Federal Reserve’s two-day policy review commences today. While rates may remain unchanged, the Fed stand on policy normalisation is what investors would watch out for. The outlook is a flat start. Indices could swing as profit booking could set in later in the day. SEBI has allowed real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) to raise capital by issuing debt securities

 

(Source: Amar Ambani, head of research, IIFL)

8:53 AM

Asian markets 

Asian shares wavered on Tuesday. MSCI’s broadest index of Asia-Pacific shares outside Japan turned slightly higher after dipping into negative territory. Japan's Nikkei stock index surged 1.2% in early trade, catching up to global equities gains and responding to a weaker yen as Tokyo markets reopened after a public holiday on Monday. China's Shanghai Composite, meanwhile, dipped 0.3%, while Hong Kong's Hang Seng index remained little changed. 

8:51 AM

Singapore Nifty

 

At 8:50 am, SGX Nifty, Nifty futures being traded on Singapore Stock Exchange, was trading at 10,166, up 13 points or 0.13%. 

8:50 AM

Good Morning!

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