Day Trading India's Stock Market - A Guide for Success

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1 PhillipCapital Currency Report Open High Low Close % Cng OI USDINR Dec Jan Feb Mar Apr EURINR Dec Jan GBPINR Jan JPYINR Dec Jan International Currencies EURUSD GBPUSD USDJPY CANADIAN HK $ DANISH RMB ROUBLE THAI BAHT DIRHAM Global Market Indices Close % Cng Indices Close % Cng BSE Dow Jones Nifty Nasdaq Nikkei S&P HangSeng Bovespa Straits CAC Shanghai DAX Jakarta FTSE Feb-15 FII's DII's Source - NSE Trading activity on NSE and BSE in Capital Market Segment (In Rs. Crores) Buy Value Sell Value Net Value 3, , , , RBI Reference Rate USDINR EURINR GBPINR JPYINR Page 1 of 6

2 PhillipCapital - Currency - USDINR Rupee snapped a two day winning streak against the dollar Wednesday ahead of the release of the non-farm payroll data from the US on Friday amid weak local stocks. NSE-CUR USDINR Dec 2015 Open High Low Close Re Cng % Cng Volume OI Res 3 Res 2 Res 1 P. Point Sup 1 Sup 2 Sup 3 Trend Trading Levels Positive Outlook Rupee snapped a two day winning streak against the dollar Wednesday ahead of the release of the non-farm payroll data from the US on Friday amid weak local stocks. The Reserve Bank of India governor said he is focusing on transmission of rate cuts passed earlier this year but added that the central bank remains open to easing rates further. The RBI kept its key repo lending rate unchanged at 6.75 percent, as widely expected. The RBI has lowered the rate by 125 basis points this year, including a larger-than-expected 50 bps cut at its last policy review in late September. Governor Raghuram Rajan also said the U.S. Fed's expected rate increase later this month is no longer a central factor in the RBI's deliberations. "The Reserve Bank will use the space for further accommodation, when available, while keeping the economy anchored to the projected disinflation path that should take inflation down to 5 per cent by March 2017," Rajan said in a statement. The bank expects inflation to rise further until December before plateauing. Inflation is projected to reach 6 percent in January India's manufacturing activity expanded at the weakest pace in twenty five months in November, as output and new orders grew at slower rates, survey data from Markit Economics showed. The Nikkei Manufacturing Purchasing Managers' Index dropped to 50.3 in November from 50.7 in October. New orders climbed for the twenty-fifth successive month in November, though the rate of increase was the weakest over this period. Technically now USDINR is getting support at and below same could see a test of level, And resistance is now likely to be seen at 67.09, a move above could see prices testing Chart for the Day Daily Market Synopsis USDINR trading range for the day is Rupee snapped a two day winning streak ahead of the release of the non-farm payroll data from the US on Friday amid weak local stocks. The Reserve Bank of India governor said he is focusing on transmission of rate cuts passed earlier this year. Governor Raghuram Rajan also said the U.S. Fed's expected rate increase later this month is no longer a central factor in the RBI's deliberations. BUY USDINR ABV SL TGT Page 2 of 6

3 PhillipCapital - Currency - EURINR Euro gained as currency traders await a pivotal ECB meeting for further signals of divergence between central banks in the U.S. and the euro zone. NSE-CUR EURINR Dec 2015 Open High Low Close Re Cng % Cng Volume OI Res 3 Res 2 Res 1 P. Point Sup 1 Sup 2 Sup 3 Trend Trading Levels Positive Outlook Euro gained as currency traders await a pivotal European Central Bank meeting for further signals of divergence between central banks in the U.S. and the euro zone. Euro had found support after positive economic reports boosted optimism over the strength of the economy in the euro area. Eurostat reported that the euro zone s unemployment rate fell to 10.7% in October from 10.8% a month earlier. This is the lowest rate recorded in the euro area since January In addition, research group Markit said its German manufacturing purchasing managers' index rose to 52.9 in November from 52.6 the previous month. Sentiment on the euro remained vulnerable however, as the European Central Bank has been signaling over the past weeks that it is ready to implement additional easing measures in order to boost inflation in the euro zone and support growth. Tempering dollar sentiment, Chicago Fed President Charles Evans emphasized the need for the U.S. central bank to spell out a gradual pace of rate hikes, and reminded investors not to forget the timing of future increases. Comments from various Federal Reserve (Fed) speakers over the next few days are likely to be scrutinized closely, with Fed Chair Janet Yellen due to speak later today, after remarks overnight from permanent member Lael Brainard in which she expressed concern about the current strength of the US dollar, and implied that she might favor delaying lift off given the recent strength. Technically now EURINR is getting support at and below same could see a test of level, And resistance is now likely to be seen at , a move above could see prices testing Chart for the Day Daily Market Synopsis EURINR trading range for the day is Euro gained as currency traders await a pivotal ECB meeting for further signals of divergence between central banks in the U.S. and the euro zone. Euro had found support after positive economic reports boosted optimism over the strength of the economy in the euro area. Eurostat reported that the euro zone s unemployment rate fell to 10.7% in October from 10.8% a month earlier. SELL SL TGT Page 3 of 6

4 PhillipCapital - Currency - GBPINR GBP dropped after data showing that output in the U.K. construction sector expanded at the slowest rate in seven months in November. Open High Low Close Re Cng % Cng Volume OI Res 3 Res 2 Res 1 P. Point Sup 1 Sup 2 Sup 3 Trend NSE-CUR GBPINR Trading Levels Positive Outlook GBP dropped after data showing that output in the U.K. construction sector expanded at the slowest rate in seven months in November. U.K. construction sector activity expanded at the slowest pace in seven months in November, underlining concerns over the health of the economy, industry data showed. In a report, market research firm Markit and the Chartered Institute of Purchasing & Supply said that their U.K. construction purchasing managers' index declined to a seasonally adjusted 55.3 last month from a reading of 58.8 in October. Growth momentum softened across the U.K. construction sector in November, with output, new business and employment all rising at slower rates than in the previous month. The PMI survey showed manufacturing growth above lacklustre rates seen earlier in the year as export orders overall picked up, but it slowed last month from the rapid pace recorded in October. UK manufacturing PMI slipped and the trade balance deficit has almost doubled in the last quarter, with the main culprit being the fact that exports are increasing at a far slower pace compared to imports. Investors are currently betting that the BoE will not start to raise rates until late The Bank of England is set to demand banks to set aside capital as buffer as soon as in March, in order to absorb losses in case of stress and support the real economy. Technically now GBPINR is getting support at and below same could see a test of level, And resistance is now likely to be seen at , a move above could see prices testing Chart for the Day Daily Market Synopsis GBPINR trading range for the day is GBP dropped after data showing that output in the U.K. construction sector expanded at the slowest rate in seven months in November. U.K. construction sector activity expanded at the slowest pace in seven months in November, underlining concerns over the health of the economy. The PMI survey showed manufacturing growth above lacklustre rates seen earlier in the year as export orders overall picked up. BUY GBPINR ABV SL BELOW TGT (BTST) Page 4 of 6

5 PhillipCapital - Economical Data ECONOMICAL DATA DAY TIME CURRENCY DATA Forecast Previous 1:45pm EUR Spanish Services PMI :15pm EUR Italian Services PMI :20pm EUR French Final Services PMI :25pm EUR German Final Services PMI :30pm EUR Retail Sales m/m :00pm USD Challenger Job Cuts y/y Wed 6:15pm EUR Minimum Bid Rate :00pm EUR ECB Press Conference 0 0 7:00pm USD Unemployment Claims 269K 260K 8:15pm USD Final Services PMI :30pm USD Fed Chair Yellen Testifies 0 0 8:30pm USD ISM Non-Manufacturing PMI :30pm USD Factory Orders m/m NEWS YOU CAN USE India's central bank held its key interest rates steady, as inflation and growth remain in the path projected earlier, and signaled willingness to use the scope for further easing when available. The Reserve Bank of India left the repo rate at 6.75 percent and the reverse repo rate unchanged at 5.75 percent, in line with economists' expectations. The cash reserve ratio for banks were also kept unchanged at 4 percent. Previously, the bank cut interest rates by a bigger-than-expected 50 basis points in September. The RBI, headed by Governor Raghuram Rajan, had reduced interest rates four times this year, lowering it by 125 points in total. "The Reserve Bank will use the space for further accommodation, when available, while keeping the economy anchored to the projected disinflation path that should take inflation down to 5 per cent by March 2017," Rajan said in a statement. The bank expects inflation to rise further until December before plateauing. Inflation is projected to reach 6 percent in January Reserve Bank of India Governor Raghuram Rajan said he expects bad debt-burdened banks to clean up their balance sheets by March 2017, warning the central bank would monitor whether concessions made to lenders were being misused. India's banks are struggling under $100 billion of stressed loans, choking the financial system at a time when the economy needs fresh investment to galvanise growth. Bank loans are a key source of financing for the bulk of Indian firms. Despite a string of central bank initiatives to help banks grapple with the bad debts, lenders have yet to make a dent on the pile, a burden shouldered mostly by India's state-owned lenders, which account for just over 70 percent of Indian banking assets. Most saw bad debts continue to rise in the last quarter. "I want to put something like March 2017 on the table as when we hope that a full clean-up will have been done," Rajan told reporters following the RBI's December monetary policy statement. Rajan warned on Tuesday that banks should take advantage of concessions like 5/25, a provision which allows banks to refinance loans for infrastructure for up to 25 years, and the strategic debt restructuring scheme, which allows debt-for-equity swaps. But they should correctly classify debt - rather than delay recognising a stressed loan - and not abuse the system. Global manufacturing growth remained tepid in November as new orders came in at a slower pace, surveys showed on Tuesday. Europe saw steady growth in factory activity but reports from the Americas and Asia cast doubt on the strength of global economic growth. JPMorgan's Global Manufacturing Purchasing Managers' Index (PMI), produced with Markit, slipped to 51.2 in November, just below October's five-month high of "The rate of expansion signalled by the headline PMI remained relatively lacklustre nonetheless, meaning that November continued the subdued run of data for the global manufacturing sector through 2015 so far," JPMorgan said. The global index has now been above the 50 mark that separates growth from contraction for three years. The global PMI combines survey data from countries including the United States, Japan, Germany, France, Britain, China and Russia. Euro zone manufacturing growth picked up to a 19-month high in November, but the pace was still relatively modest. Markit's manufacturing PMI for the euro zone rose to 52.8 in November from 52.3 in the prior month. Page 5 of 6

6 PhillipCapital - Contact Us Disclosures and Disclaimers This is a technical / derivatives / alternative research report prepared by our analysts based on their study of certain charts, statistical data and their interpretation of the same. Accordingly, the views and opinions expressed in this document may or may not match or may be contrary at times with the views, estimates, rating, target price of the other research reports / materials issued by PhillipCapital (India) Pvt. Ltd. This report is issued by PhillipCapital (India) Pvt. Ltd. which is regulated by SEBI. PhillipCapital (India) Pvt. Ltd. is a subsidiary of Phillip (Mauritius) Pvt. Ltd. References to "PCIPL" in this report shall mean PhillipCapital (India) Pvt. Ltd unless otherwise stated. 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