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Monthly Market Roundup Market Outlook: December

The month of November move, however medium to long Going ahead, Indian equity markets will continue
witnessed tumultuous sessions term impact is seen to be positive. to remain volatile this month due to major events
on Dalal Street that was hit by The month finally ended with i.e. Italy referendum on December 4, RBI monetary
double Ds- Donald Trump’s downward bias as S&P BSE policy review on December 7, ECB monetary
victory and Demonetization, thus, Sensex delivering negative return policy on December 8, US Fed meeting outcome
wiping out all the earlier gains of 4.57% to settle at 26652.81 and on December 14 and the development in ongoing
made this year. This surprise Nifty50 lost 4.65% ending the winter session that will be keenly watched
verdict of US elections had month at 8224.50. for market direction. Further, the dollar-rupee
sparked fear in equity markets Realty (-17.63%) and Consumer movement, macroeconomic events, movement
with the 10-year benchmark Durables (-12.75) were the worst in crude oil prices, foreign fund inflows, and
yield soaring to 7.79% from hit sectors during the month. upcoming Q3FY17 corporate earnings are also likely
7.63% m-o-m. FIIs seem to Large chunk of non-banking to affect equity markets. The liquidity concerns
have contributed to this rise, as transactions take place in realty arise from the demonitisation is likely to slow
they sold more than Rs 3,600 sector and real estate prices demand in short term and impact equity markets.
crore in the debt market - their are expected to fall in near We recommend investors that don’t change
biggest outflow since May, on term. Consumer Durables also perception by these short term fluctuations and see
expectations of a possible rate faced negative impact as there market corrections as an opportunity to invest in
hike by the US Fed in December. was a slowdown in spending. fundamentally sound companies.
Modi government’s biggest Meanwhile, the Organization of
crackdown against black money Petroleum Exporting Countries Nifty Technical Outlook: December
revoking legal tender of Rs 500 (OPEC) reached a deal to cut oil
and Rs 1000 notes overnight on production that is expected to Nifty
November 8 left the country in fetch gains to upstream oil, and
jeopardy. With excessive liquidity gas companies. On the monthly chart we are observing
in the banking system post On the institutional side, foreign a bear candle which suggests that the
demonetization, RBI’s decision institutional investors (FIIs) undertone is bearish. In the coming month
to hike Cash Reserve Ratio (CRR) sold Rs 18,244.25 crore worth of if Nifty trades and closes above 8366 level
to 100% for incremental deposits equities during the month while then it is likely to test 8586 – 8806 – 9062
between Sep 16 to Nov 11 was domestic mutual fund houses levels. However, if Nifty trades and closes
taken negatively on the Street. bought Rs 13,610.40 crore in below 8082 level then it can test 7863 – 7643
The corporate earnings are seen November 2016. – 7387 levels.
to be majorly effected in next few Broadly, we are of the opinion that the
quarters post this unprecedented monthly trend remains down and any
breach of 8082 on closing basis would
Economic Data Wrap Up – November signal weakness. In such scenario, Nifty
may breach the prior bottom of 7916 or
¡ India's Oct Nikkei ¡ India’s Oct WPI inflation fell even extent its losses to 7643 – 7387 levels.

manufacturing PMI rose to 54.4 to 3.39% from 3.57% in Sep. 3 ARIHANT CAPITAL ¡ DECEMBER 2016

from 52.1 in Sep. ¡ India’s Oct trade deficit rose

¡ India’s Oct Nikkei Services to $10.16 bln from $9.69 bln

PMI rose to 54.5 from 52 in Sep. YoY.

¡ India’s Sep IIP growth rose to ¡ India’s Oct core sector growth

0.7% from -0.7% in Aug. rose to 6.6% from 5% in Sep.

¡ India’s Oct CPI inflation fell to • India’s Jul-Sep GDP growth

4.20% from 4.39% in Sep. rate at 7.3% from 7.6% YoY.