Dalal Street Week Ahead | Stocks and Commodities

Sponsored by

January 26, 2014
Time: 10.30 am

Dalal Street Week Ahead:

1. Last Friday markets fell due to emerging markets currency depreciation.
2. Argentina currency depreciated by 15% and Turkish lira touched the lifetime low.
3. China Manufacturing PMI came below 50, the news that FOMC meeting next week may decide ti scale down the bond purchase by another 10 billion have added fuel to the fire.
4. Indian rupee also depreciated on Friday, more importantly it fell after the stock markets closed.
5. US markets fell drastically, DOW fell for the fourth day in a row.
6. Tomorrow Nifty is expected to open gap down by 100 points. 
7. We have to see how badly Asian markets open tomorrow.
8. Rupee is expected to breach 63 next week.
9. It is not likely to fall much from the level of 63 as RBI is expected to intervene around that level.
10. General expectation is that the markets will continue to fall amid volatility.
11. On Monday, our markets will react to the global sell off and there are no markets moving news here. HUL will declare the results and in US Apple will declare results. Also new home sales data is due from US. German IFO Business climate index data is due from German.
12. On Tuesday, RBI policy decision will affect the market movements. Maruti will declare results. UK GDP data is due. US consumer confidence data is due from US. Yahoo, AT&T, Ford will declare results in US.
13. On Wednesday, ICICI Bank will declare results. In US, Facebook will declare results. More importantly the decision by FOMC regarding reduction in bond purchase will be out around midnight.
14. On Thursday, Hero Motocorp will declare results. Amazon and Google will declare results in US.Before our markets open, Chinese HSBC Manufacturing PMI is due. In US, Q4 GDP data and pending home sales data are due.
15. On Friday, PNB will declare results. There are no market moving news either from India or abroad.
16. Our opinion: 

• Though there is global sell off due to emerging market currency turmoil, China Economic Data, Fear of Fed Tapering and so on, the downside for our markets is limited. Nifty is not likely to fall below 6000. One of the reasons for our markets fall is that due to the rise of AAP, there may not be political stability after the elections. But three independent opinion polls reveal that BJP is likely to secure over 200 seats on its own and around 220 with Shiv Sena. If the opinion polls go the right way it is a huge positive for Indian stock markets as BJP would be able to form a stable govt. with two or three regional allies. AIADMK is likely to secure more than 25 seats which is closer the Narendra Modi.
• In addition both IMF and World Bank increased the forecast of Global growth and Indian economic growth.
• So, for long term investors, Nifty falling closer to 6000 is a buying opportunity. Heavily beaten down Infra stocks will do well if BJP comes to power.