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As of December 8, the Nifty Metal index was up 66 per cent for the year,
followed by the Nifty Energy index, which gained 26 per cent, while Bank Nifty
and Nifty Auto Index trailed with 10 per cent and 12 per cent rise,
respectively. The Nifty IT Index was the biggest laggard of the year 2016,
down over 10 per cent, followed by the Nifty Pharma Index which plunged
approximately 6 per cent.
Experts view:
Most analysts have already pushed the deadline for revitalization in corporate
earnings growth by a minimum of six months after the Modi government
demonetized high-value currency notes on November 8. After demonetization,
some of the economy and consumption-led sectors saw noteworthy
correction, which is expected to stabilize as the world enters Calendar 2017.
But recovery in corporate earnings is still a bit away.
Experts say that they have seen a sudden fall in realty and FMCG stocks due to
the demonetization drive, which has created short-term liquidity troubles in
the system, leading to a strong impact on demand in these sectors. They are
not expecting sales growth in the second half of FY2017, but thinks some
recovery can be seen after the first half of FY2018. They also believe that the
market has already factored in the real impact of demonetization and there is
less likelihood of a correction in these sectors due to the demonetization
drive.
fact that Trump has declared plans to rebuild the infrastructure in the US has
led to cheerfulness that an increased demand for metals could be on the way.
On March 31st the finance ministry extended the safeguard duty on steel
imports until March 2018 to protect domestic manufacturers from cheap
Chinese imports. In February, it also set a minimum floor price for steel
imports for six months to guard domestic producers hurt by cheaper Chinese
imports. As a result Indias iron and steel product imports during the first six
months of the current financial year 2016-17 stood at 3.598 million tonne
(MT), as per the provisional data compiled by the Joint Plant Committee of
Indian Bureau of Mines. In comparison, total imports during financial year
2015-16 was 11.753 MT valued at Rs.45,157.12 crore.
Another important point factoring the gains in the sector is that the Indian
Steel Association (ISA) has urged the government to extend the current
Minimum Import Price (MIP) regime, due to end on December 4, 2016. The
ISA said with material benefit of MIP yet to boost domestic demand, this is
necessary since the recent currency demonetization and imposition of anti
dumping duty on met coke is expected to dent demand and production.
Realty sector had been hit hard due to demonetization and have lost a good
chunk in the market. While Nifty share price had gained 5.20%, it had lost
1.14% in the year so far and still counting. It will be worth watching at what
level each index enters into the new calendar year and what the New Year has
in cards for them.
Disclaimer
The investment advice or guidance provided by way of recommendations, reports or other ways are solely the personal views of
the research team. Users are advised to use the data for the purpose of information and rely on their own judgment while making
investment decision.
Dynamic Equities Pvt. Ltd - SEBI Investment Advisory Reg. No.: INA300002022
Disclosure
Dynamic Equities Pvt. Ltd. is a member of NSE, BSE, MCX SX and a DP with NSDL & CDSL. It is also engaged in Investment
Advisory Services and Portfolio Management Services. Dynamic Commodities Pvt. Ltd., associate company, is a member of
MCX & NCDEX. We declare that our activities were neither suspended nor we have defaulted with any stock exchange authority
with whom we are registered. SEBI, Exchanges and Depositories have conducted the routine inspection and based on their
observations have issued advise letters or levied minor penalty on for certain operational deviations.
Answers to the Best of our knowledge and belief of Dynamic/ its Associates/ Research Analyst: DYNAMIC/its Associates/
Research Analyst/ his Relative:
Do not have any financial interest / any actual/beneficial ownership in the subject company.
Do not have any other material conflict of interest at the time of publication of the research report
Have not received any compensation from the subject company in the past twelve months
Have not managed or co-managed public offering of securities for the subject company.
Have not received any compensation for brokerage services or any products / services or any compensation or other
benefits from the subject company, nor engaged in market making activity for the subject company
Have not served as an officer, director or employee of the subject company
Article Written by
Tanaya Nath