Equity Research Report Ways2Capital 6 Febuarry 2017

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Indian Bench Mark Index Nifty has given breakout of its weekly target 8598 and made a high of 8672 Last week Nifty closed at 8641 after making a low of 8327. The Nifty Index rallied by 3.5% in last week. Bull has shown strong control on Indian Market on Friday, where Nifty rallied 0.45% the equity benchmark Nifty opened at 8611 and made a low of 8607, the index rallied to make high of 8673 and closed at 8641. Nifty open flat note on Monday down by 6 points at 8635. Speculative movement is expected on UP election. First phase of election will start from 11th Feb and results will be declared on 15th of March. RBI to announce its Monetary Policy on 8th Feb, expectation of which will also have a major impact on the markets. Federal Reserve to announce its Monetary policy, This may also affect the market movement. Market is still in Positive zone and traders should go long at every dip in the market. Some profit booking can’t be ruled out but every downfall would be temporary and an opportunity for traders to go long in the market. Nifty is now headed towards 8900-9000 levels. Market would enter into negative zone, if it closes below 8627 levels. For now, Market has taken monthly reversal and 9000 levels would achieve in upcoming days for Nifty irrespective of any temporary downfall. The Significance levels of Nifty is 8628-8565 is Down side and 8825-8962 is Up side.

BANK NIFTY : – Bank Nifty outperformed the Nifty and rallied 4.72% to make a high of 19795 and closed at 19708, the Index low was 18722 and opening was at 18762. Bank Nifty also participated in the rally on Friday and made a high of 19795 and closed at 19708, 235 points up from its previous day’s close of 19473. ICICI Bank has risen by 4.64%, which has 19% weight-age in the Banking Index. Bank’s credit growth is likely to remain subdued at 5-6 per cent in the current financial year on weak loan demand and as debt market continues to offer better priced. Although, Bank Nifty is in Positive momentum and would drive market towards specified targets. Traders can hold long positions with stoploss of 19726 for Bank Nifty spot levels on closing basis. The Resistance to the up move is at 20180-20270-20380-20576 levels and Support for Bank Nifty is at 19890-19760-19650 for next week


Indian economy to grow 7-7.5 per cent in FY’18: Arvind Panagariya – Niti Aayog vice-chairman Arvind Panagariya today expressed hope that the economic growth in the next fiscal year would be in the range of 7-7.5 per cent. He said. By nature, I am an optimist, so I would remain on the higher side of it. So, if you feel that this range is too wide, personally, I would narrow it down to 7-7.5 per cent and maybe on the higher side of it with higher probability,” Panagariya said. Niti Aayog vice chairman’s statement assumes significance as it comes after the Economic Survey today. The pre-budget document pegged India’s economic growth for 2017-18 in the range of 6.75-7.5 per cent.

India one of world’s largest recipients of FDI: Economic Survey – India has become one of the largest recipients of foreign direct investment on account of reform measures taken by the government, the Economic Survey for 2016-17 said today. FDI reform measures were implemented, allowing India to become one of the world’s largest recipients of foreign direct investment … India’s FDI has risen sharply over time,” the document, which was tabled in Parliament, said. In the most recent year, it said FDI is running at an annual rate of USD 75 billion, which is not far short of the amounts that China was receiving at the height of its growth boom in the mid-2000s.

Black money: It could be Rs 3 lakh crore or Rs 7.3 lakh crore, says Economic Survey – The amount of potential black money in the system could be Rs. 3 lakh crore or Rs 7.3 lakh crore, says the Economic Survey. To estimate amount of black money, the Survey has used assumptions of soil rates – rate at which notes are considered to be too damaged to use and have been returned to the central bank – of other countries. The survey has used assumptions of soil notes of other countries to arrive at the number. “Using relative soil rates for the $50 and $20 notes and applying them to comparable Indian high denomination notes, yields an estimate of the amount not used for transactions, and hence potentially black, of about Rs 3 lakh crore,” said the Economic Survey in Demonitisation: to Defy or Demonitise. Rs 3 lakh crore represents 2% of the GDP.

India’s fiscal deficit reaches 94% of the budget estimate in December – Fiscal deficit in the first nine months of 2016-17 touched 93.9 per cent of the Budget target against 87.9 per cent for the same period a year ago. In value terms, the April-December fiscal deficit stood at Rs 5.01 lakh crore, or 93.9 per cent, of 2016-17 Budget estimates. The fiscal deficit stood at 87.9 per cent in the corresponding nine months a year ago, as per 2015-16 BE. Fiscal deficit, the gap between expenditure and revenue for the entire fiscal, has been pegged at Rs 5.33 lakh crore, or 3.5 per cent of the GDP, for the fiscal 2016-17.

Economic Survey calls for need to set up government owned ARC to revive economy – The Economic Survey has called for a need to set up government owned asset reconstruction company in an attempt resolve the problems of mounting bad debts and revive the economy. This move, the Survey hints, could also ring fence PSU bankers from being questioned by investigative agencies on resolution of bad loans. The Economic Survey for 2016-17 has proposed setting up of Public Sector Asset Rehabilitation Agency which would “take charge of the largest, most difficult cases, and make politically tough decisions to reduce debt.” The share of bad loans have touched 11.4% of total loans as on March 2016. “If PSU banks grant large debt reductions, this could attract the attention of the investigative agencies. But taking over large companies will be politically difficult, as well,” said the survey.

Budget 2017: Tax incentives to corporates to cost Rs 83,492 cr in FY1 – The government’s revenue foregone in the form of incentives to corporates in the current fiscal is estimated to grow nearly 8.63 per cent to over Rs 83,492 crore. As per the Budget document 2017-18, the revenue foregone stood at Rs 76,857.70 crore in the 2015-16 fiscal. Revenue foregone on account of deduction of export profits of units located in SEZs (section 10A and 10AA) is estimated at Rs 20,492 crore in the current fiscal year. Companies take advantage of various concessions to reduce tax liability, while individuals park their funds in tax savings scheme to reduce tax burden. Revenue foregone on deduction of profits of undertakings engaged in generation, transmission and distribution of power would be Rs 12,401.04 crore in 2016-17 compared to Rs 11,416 crore in the last fiscal year, the document said.

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