Foreign investors are turning their back on Indian shares as they pulled out over Rs 11,000 crore from stocks in September due to geopolitical concerns, a slowdown in corporate earnings and higher valuations.
The net outflow by foreign portfolio investors (FPIs) follows the withdrawal of Rs 12,770 crore from equities in August. Prior to that, they had pumped in over Rs 62,000 crore in the past six months (February to July).
According to the latest depository data, the FPIs withdrew a net Rs 11,392 crore (USD 1.75 billion) in September. However, they pumped in Rs 4,430 crore in debt markets during this period.
After taking into account the latest outflow, the total investment by the FPIs in equity markets stood at Rs 34,350 crore (about USD 5.2 billion) so far this year.
Slowing growth in corporate earnings coupled with high valuations and strength in the US Dollar leading to weakness in the rupee might have led to selling by FPIs.
Besides, India's GDP growth slowed to 5.7 per cent in the first quarter of 2017-18 amid concerns over disruption in business activity due to issues in GST implementation.
Further, corporate earnings registered a negative growth in the same quarter, pushing back recovery and heightening concerns on expensive valuation.
RBI policy review: Will it surprise :-
The fourth bimonthly rate-setting meeting of the financial year of RBI’s Monetary Policy Committee (MPC) is scheduled for October 3-4. With inflation firming up and the rupee coming under pressure, many economists feel the central bank will vote to keep the repo rate unchanged at 6 per cent.
Auto stocks await festive sales report :-
Shares of auto companies are likely to stay in focus in the coming week as they will start releasing their monthly sales numbers for September starting October 1, 2017. Automakers put up a stellar show in August. With festive fervour all around, the figures for September are likely to be robust too.
Macro data may spoil the mood :-
A slew of economic data due next week will play a crucial role in market’s movement. Reeling under the pathetic GDP growth rate of 5.7 per cent and huge selloff by foreign investors, the market really needs some major positive news and trigger to get back to its rhythm.
However, at this point of time, it looks like a far-fetched thing as the fiscal deficit touched 96.1% of the Budget estimate for FY18 at the end of August as the government kept its foot on the spending pedal to support the economy while revenues came in at their usual modest pace in the opening months of the financial year.
Nikkei India PMI Manufacturing and Nikkei India PMI Services data for September are slated to release on Oct 3 and Oct 5, respectively. Geopolitical tensions, rupee movement and crude prices will also play a key role in determining market’s course during the next week.
>>> Nifty Daily Chart <<<
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Break below 9685 or 9650 may trigger more fall. Else Rally to resume again.
>>> Nifty Hourly Chart <<<
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Support 9775 - 9760 if holds - May test Resistance @ 9880 & 9940.
>>> Bank Nifty Daily Chart <<<
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Price Need to hold the channel for Rally - Else Fall to continue.
>>> Bank Nifty Hourly Chart <<<
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Break below 23375 - Fall to continue. Above 24240 - Rally to continue.
>>> CNX - PSUBANK - Daily Chart <<<
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PSU BANK Index may bounce back if holds the support. Watch all PSU Bank Stocks.
>>> SBIN - Hourly Chart <<<
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We are Long and Hoping for a Recovery.
>>> CNXPHARMA - Hourly Chart <<<
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9000 Support if Holds - More Rally Again.
>>> DRREDDY's Lab - Hourly Chart <<<
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Trend Line support - If holds - Expect More Rally.
>>> CNXMetal Index Chart - Hourly Chart <<<
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Metal looks for rally above 3570 to fill the gap left above till 3640. Watch All Metal Stocks.
>>> CNXIT Index - Daily Chart <<<
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Price broken down shows - Correction possible.
>>> Performance for the month end of Sep 2017 <<<
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Above performance is not a Promise or guarantee for the given Profits or Loss.Performance given based on 1 lot at a time and clients Profit differ as per the margin availability and Number of Lots taken by them. We may or may not re-enter the Calls given here hit Stop Loss, as per market movement. The charts given above are just for educational purpose only and we don't recommend any Entry / Buy or Exit / Sell. Reader must taken their own decision or consult their qualified Analyst before making any decision.
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