It was a volatile Friday for Indian markets, but the Nifty bounced back after breaching 10,900 levels on intraday basis to close above 11K levels.
Hopes of fresh stimulus measure rekindled animal spirits on D-Street and helped the index to reclaim 11000 levels for the Nifty and Sensex closed above 37000
Nirmala Sitharaman unveiled a plan to make India a $5 trn economy and this can be done by consolidating PSU Banks.
The government announced four major mergers of public sector banks, bringing down their total number to 12 from 27 in 2017, a move aimed at making state-owned lenders global sized banks.
United Bank of India and Oriental Bank of Commerce will be merged with Punjab National Bank, making the proposed entity the second largest public sector bank (PSB).
The government's decision to consolidate 10 public sector banks (PSB) into four mega state-owned lenders will act as a building block for achieving $5 trillion economy target
The country will now have six mega banks with enhanced capital base, size, scale and efficiency to support high growth that the country requires to break into club of middle income nations
On the macro front, the government's fiscal deficit touched Rs 5.47 lakh crore in the June quarter, which is 77.8 per cent of the budget estimate for 2019-20.
The rupee appreciated by 38 paise to close at a two-week high of 71.42 against the US dollar on Friday led by a rally in domestic equities and renewed hopes of the US-China trade talks.
On the institutional front, FPIs were net buyers in Indian markets for Rs 1,162 cr while on the other hand DIIs were also net buyers to the tune of Rs 1502 cr, provisional data showed.
Foreign investors pulled out a net amount of Rs 5,920 crore from the Indian capital markets in August even as the government rolled back enhanced surcharge on FPIs last week.
Big News:
India's gross domestic product (GDP) grew 5 percent in April-June 2019, official data released on August 30 showed, and confirming fears of a slowdown
GDP growth was 8 percent in the same quarter of 2018-19.
Gross value added (GVA), which is GDP minus taxes, and, therefore, a more realistic proxy to measure economic activity, grew 4.9 percent in April-June 2019, compared to 7.7 percent in the same period last year and 5.7 percent in January-March this year.
India's economic growth dropping to an over six-year low of 5 per cent in April-June 2019 is indicating a "significant deceleration" in both investment and consumer demand, industry body Ficci said on August 31.
Technical View:
Nifty formed a high wave or a spinning top kind of pattern on daily charts
The index closed above the psychological 11,000-mark and formed a hammer pattern on the daily chart.
It also snapped a two-week losing streak and gained 1.8 percent to form a spinning-top pattern on the weekly scale.
Experts feel the index needs a strong follow-up buying which could take the index to 11,180 in the coming sessions, otherwise the rangebound movement is likely to continue.
For the time being, positional traders should go long in the index, with a stop below 10,870 levels on closing basis and look for an initial target of 11,250.
Three levels: 10874, 11042, 11200
Max Call OI: 11700, 11200
Max Put OI: 10800, 11000
Stocks in news:
Mahindra and Mahindra (M&M) sold 36,085 units (domestic + export) in the month of August 2019, a drop of 25 percent from August 2018 sale of 48,324 units.
Maruti Suzuki India has sold a total of 1,06,413 units in August 2019, a drop of 32.7 percent from August 2018 sale of 1,58,189 units.
CG Power and Industrial Solutions, the beleaguered power systems maker, had fired its Chief Financial Officer VR Venkatesh citing misconduct and breach of trust.
Technical Recommendations:
We spoke to Angel Broking and here’s what they have to recommend:
Escorts: Buy| Target: Rs 543| LTP: Rs. 510.20| Stop Loss: Rs 486| Upside 6%
Siemens: Buy| LTP: Rs 1,202| Target: Rs 1,308| Stop Loss: Rs 1,154| Upside 8%
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