Monday, 2 January 2017

Sensex, Nifty may see weak start; auto, banks in focus

Auto sales for the month of December was a mixed bag. Maruti reported lowest sales since June 2016 while Royal Enfield continues to show strength in sales. Weakness in commercial vehicle sales continued. 

SGX Nifty indicates a weak start for the market today after the market ended 2016 on a positive note. Banks will be in focus as the markets wake up to giant rate cuts by two biggest public sector banks after the influx of low cost deposits since the demonetisation announcement. SBI slashed rate by 90 basis points and PNB by 70 basis points. STOCK TRADING TIPS

Auto sales for the month of December was a mixed bag. Maruti reported lowest sales since June 2016 while Royal Enfield continues to show strength in sales. Weakness in commercial vehicle sales continued.

Petrol price was hiked by Rs 1.29 a litre -- the third increase in a month, and diesel rate was raised by 97 paise a litre - the second hike in a fortnight. The increase in rates announced by oil firms is excluding state levies and the actual hike will be higher.

The year 2017 is likely to be positive for the market with analysts expecting double digit returns, especially after a 3 percent rally that took place in 2016 despite unexpected events such as Brexit, Donald Trump's win, demonetisation and OPEC & non-OPEC countries' agreement for oil production cut.

In 2016, the NSE benchmark surged 3 percent, underperforming the Midcap that gained 8 percent. The Metal index was the biggest gainer, up 45 percent followed by Bank (up 7.4 percent) and Auto (up 11 percent) whereas IT lost 7 percent and Pharma shed 14 percent.

Meanwhile, US stocks slumped on the last trading day of the year on Friday, led down by Apple and other big tech stocks, but major indexes still posted solid gains in 2016. Investors are wary that the market could be primed for a spill to start 2017, after the S&P 500 posted a surprisingly strong gain in 2016.
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