Saturday, December 19, 2015

Weekly Review - 21.12.2015

Dear All,

The government on Friday lowered its forecast for gross domestic product (GDP) growth to 7-7.5 per cent in this fiscal year, down from an earlier forecast of 8.1-8.5 per cent. Though it stuck to the fiscal deficit target of 3.9 per cent of the GDP for the year, Chief Economic Advisor Arvind Subramanian said at a press conference that the target of 3.5 per cent looks challenging for next year.

The mid-year review raised a red flag for fiscal year 2016-17, saying that the economy was giving off mixed signals and it was riding on just private consumption and public spending, with private investment yet to gather momentum. Declining nominal GDP (gross domestic product) growth could dent government revenue, it said.

In such a situation, "if the government sticks to the path of fiscal consolidation, that would further detract from demand", said the document that was introduced in Parliament on Friday. "The fiscal outlook for the next year (is) looking challenging... It is in this context that the government's commitment to further fiscal consolidation of 0.4% of GDP needs to be reassessed."

The analysis said weak exports and low private sector investment were among the reasons for lowering the GDP growth forecast.

The report said, “Both direct and indirect tax collections have registered a dramatic increase in buoyancy in the first half of 2015-16 compared to the average of the previous three years.”

The higher outlay on the Seventh Central Pay Commission's award and defence pensions while trying to maintain fiscal discipline could impact capital spending, undermining growth. The lower nominal GDP growth, pegged at 8.2% this year as opposed to 11.15% forecast earlier, would make meeting the fiscal target even more difficult.

RBI has set a target for consumer inflation of 5% by January 2017 and 4% by January 2018. "If private sector indebtedness and the attendant financial stability concerns are important, and there is scope for flexibly interpreting inflation targets and the glide path, the scope for easing remains," it said. Stretching the timeline for achieving the inflation target of 4% could create room for further monetary easing.

“As long as oil prices do not decline further and remain around $50 per barrel, the additional boost to consumption that the economy received this year – of about 1-1.5 percentage points – is likely to recede,” the report stated.

It, however, forecast a pickup in exports and said there was a need to continue boosting public sector investment in infrastructure, something that was done this year. Subramanian added in the press conference that the current account deficit would be in the range of 1-1.2 per cent next fiscal year.

The report said retail inflation was likely to remain within the RBI's target of about 6 per cent. Subramanian later said inflation had moderated significantly. Underlying determinants like rural wages and farm support prices were also moderating and foreign exchange reserves had risen to about $352 billion.

"The rupee has been very stable. The focus on the rupee-dollar rate conveys a misleading impression about the stability of the rupee. If you measure it against a basket of currencies, it has actually been quite stable," he said.

Subramanian sees exports and the farm sector doing better in the next financial year though he expects support from low commodity prices to weaken.

"The economy is recovering but it's hard to be very definitive about the strength and breadth of the recovery for two reasons — the economy is sending mixed signals and... there is some uncertainty (on) how to interpret GDP data," he said.

About these signals, he said that while personal consumer loans are growing rapidly at 15%, credit to industry is growing slowly. Also, while indirect tax collection is high, direct taxes aren't buoyant.

Lets See Technical's also..

>>> Nifty Daily Chart <<<

>>> click the chart to see on full screen <<<

As given on chart - Have covered our Long with good Profit, though expecting more rally soon.

>>> Nifty Hourly Chart <<<

>>> click the chart to see on full screen <<<

Hourly Chart - Says support @ 7738 & 7704. With 100 and 50 Hour Moving Average, if holds, May again get strength for an upmove.

>>> Bank Nifty Daily Chart - Posted Last Weekly Review <<<

>>> click the chart to see on full screen <<<

Last Weekly Review - Have mentioned that - 16190 as a good support, As expected Nifty made a low @ 16188 and bounced back, So whats next ???

>>> Bank Nifty Daily Chart - What's Next <<<

>>> click the chart to see on full screen <<<

As expected price started moving up after getting support form 16188. For a healthy rally 16725 must cross and hold.

>>> Bank Nifty Hourly Chart <<<

>>> click the chart to see on full screen <<<

Price got support from the middle line of Pitchfork and started moving up, If breaks above, more rally. After friday's consolidation, it looks like 16550 and 16480 may support bulls for a healthy rally.

>>> AdaniPort - As Posted on 14th Dec, 2015 <<<

>>> click the chart to see on full screen <<<

AdaniPort posted on 14th Dec, 2015 - Mentioned we are long as per falling wedge break out. See what happened.

>>> AdaniPort - Profit Booked @ First Target <<<

>>> click the chart to see on full screen <<<

Booked on first Target with Rs.16K. Possible rally for second target also.

>>> DLF - Profit Booked <<<

>>> click the chart to see on full screen <<<

Profit booked on DLF, More rally possible till 120.

>>> IDFC - Holding Long <<<

>>> Performance till 18th Dec, 2015 <<<

>>> Click the image to see on full screen <<<

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