Week ahead: RBI policy, LTCG & auto sales, among 10 things to be on market’s radar

The market closed the last day of financial year 2017-18 on a weak note Wednesday after gains seen in previous two consecutive sessions, tracking global weakness. All sectoral indices ended in the red barring IT.

The 50-share NSE Nifty breached 10,100-mark intraday, before closing down 70.50 points at 10,113.70. The 30-share BSE Sensex closed below psychological 33,000 levels, falling 205.71 points to 32,968.68.

"We expect the Indian equities to remain range bound in the coming sessions. Domestic macro data and global developments will dictate the further course of the market in the near term," Jayant Manglik, President, Religare Broking, had said in a statement on Wednesday.

For the financial year 2017-18, the Sensex rallied 11.3 percent and the Nifty surged 10 percent while the Nifty Realty was the biggest gainer with nearly 38 percent upside.

Both benchmark indices ended the truncated week up by 1.1 percent each while both lost more than 2.5 percent in March series.

For the upcoming week, auto sales are likely to be in focus along with key economic events such as RBI monetary policy meeting as well as rejig of the Nifty index.

The upcoming week will see automobile majors declaring their sales data for March. February had seen some uptick.

The Street will be looking for cues from the sales and any uptick in those numbers could push scrips higher.

Continuing the growth momentum, auto majors Maruti Suzuki India (MSI), Mahindra & Mahindra (M&M) and Tata Motors posted robust double-digit growth in their domestic sales for February. In two-wheeler segment, Bajaj Auto reported 31 percent jump in total sales at 3,57,883 units in February against 2,73,513 units in the same month last year.

The Street could react to a new reality that will hit investors starting next week. A tax on long term capital gains(LTCG) exceeding Rs 1 lakh from sale of shares will kick in from April 1, the beginning of 2018-19 financial year.

The 2018-19 Budget had after a gap of 14 years reintroduced 10 per cent tax on LTCG exceeding Rs 1 lakh from sale of shares.

Currently, 15 per cent tax is levied on capital gains made on share sale within a year of purchase. However, it is nil for shares sold after a year of purchase.

However, indexation benefit for computing tax liability on sale of shares listed after January 31 will be available, which will come as a relief to investors. In July 2004, the government had abolished LTCG tax on shares and replaced it with the securities transaction tax (STT) - a same-day tax credit system that continues.

The market will keep a close eye on the first bi-monthly monetary policy committee (MPC) meeting by the Reserve Bank of India (RBI) on April 4. The outcome will be known on April 5.

According to a Reuters poll, the central bank could keep monetary policy steady at its April meeting but shift to a hawkish stance by the end of this year and raise interest rates early in 2019 as inflation pressures build, according to a Reuters poll of economists.

All 61 economists polled between March 23-28 expected the RBI to hold the repo rate at 6.00 percent and the reverse repo rate at 5.75 percent at its April 4-5 policy meeting.

The RBI is expected to keep rates steady for the rest of this year.

Sandhar Technologies and Karda Construction will debut on exchanges on Monday, April 2, 2018 after closing their public issues last week.

Sandhar Technologies has fixed the final issue price at Rs 332 per share and Karda at Rs 180 per share.

The initial public offer of auto component maker Sandhar was subscribed 6.19 times during March 19-21, 2018.

Meanwhile, the Rs 77.40-crore Karda Construction's public offer was subscribed 2.54 times during March 16-21.

Ashoka Buildcon: Its arm has won an award from NHAI for a stretch on Vadodara-Mumbai Expressway.

UltraTech: It has received CCI Nod w.r.t its bid for Binani Cement.

Cadila Health: US FDA issues zero observations for its Changodar unit in Ahmedabad.

PNB: The bank said it will Honour LoUs Worth Rs 6,500 crore on basis of undertaking by claimant bank.

ICICI Bank: RBI Imposes Monetary Penalty Of Rs 58.9 crore.

Karnataka Bank: Reported Fraud Worth Rs 86.5 crore To RBI

Tata Power to sell defence business to Tata Advanced Systems for Rs2,230 crore

Videocon has approached NCLT against SBI move to change bankruptcy plea, according to a Mint report.

Tata Motors: The company has tied up with BCCI for upcoming IPL

Dr Reddy’s: It has appointed Erez Israeli as COO, according to a report on Hindu Business Line.

Nitin Fire: IFCI invokes pledge on 6.76 lakh shares held by the firm's promoter

McNally Bharat: Promoter Acquires Additional 40 Lakh Shares

LT Foods: The Board has approved increasing stake in its arm, Raghunath Agro Industries

Adani Ports: Promoters Create Pledge On 2.14 Cr Shares From March 23-28

Adani Trans: Promoters Create Pledge On 76.5 Lakh Shares From March 23-28

Fiem Ind: The company has entered into JV with Japanese firm Aisan Ind For manufacturing Of 2 & 3-wheeler Parts

A few stocks could also be in focus on the back of corporate board room-related developments. The Boards of AIA Engineering, SBI Life, GOCL Corp will be meeting to discuss an interim dividend. Additionally, companies such as Bigbloc and Tata Steel will be meeting to discuss fundraising issues. The stock of Marathon could in focus on the back of a stock split in the ratio of 1:2 as well.

Adani, Sequent and Star could be in focus on the back of scheme of arrangement.

Domestic data for the month of March will be released in the upcoming week. There could be cues on the basis of these for the Street to move ahead or take a pause. The Nikkei Manufacturing PMI will be out on Monday, while the Nikkei Services PMI will be out on April 4, 2018.

The Street will also be on its feet for some global data as well.  China and US manufacturing PMI will be out on Monday.  Data for Germany and UK manufacturing PMI will be out on

Tuesday. US non-manufacturing PMI data will be unveiled on Wednesday. US ADP nonfarm employment change data for March will be unveiled on Wednesday .

The Nifty ended the March series on a weak note, down 2.6 percent on the last trading day on the week. The index closed below its crucial 200-days exponential moving average (DEMA) and formed a small bearish candle on the daily candlestick charts.

The Nifty future closed the March series with the loss of 2.6 percent. It closed lower by 200 points from its VWAP. The Nifty Future has seen rollover of around 66% on provisional basis compare to 62.34 percent rollover seen in the last series.

In terms of technicals, the index formed a bearish candle after a Doji pattern which does not auger good news for the bulls in April series. For the bulls to gain upper hand, Nifty has to surpass its crucial resistance level placed at 10,200, followed by 10,400 and 10,500. On the downside, strong support is placed near 10,000 levels. As long as index trades below 200-DEMA, and 10,000 levels the trend is likely to favour bears, suggest experts.

"The near term trend of Nifty is positive. The pattern formation of daily and weekly timeframe is hinting at the possibility of larger upside bounce in Nifty, in the next couple of weeks. Hence, the downside from here is limited to 9950 levels, but a sustainable move above 10,150 levels could possibly result in an acceleration of upside momentum. On the happening such action, the Nifty could even race towards the upside of 10450-500 levels in the next 2-3 weeks," HDFC Securities said in a report.

Meanwhile, Gaurav Jain at Hem Securities said that he expects consolidation in the coming week within the broader range of 9900-10400 on the Nifty. "Traders should prefer hedged positions instead of outright and wait for further clarity. Barring IT, almost all the sectors are showing the mixed trend and thus require extra caution in stock selection."

The upcoming week will also see a rejig in the Nifty index of National Stock Exchange (NSE).

The scam-hit Punjab National Bank (PNB) will move out of the NSE's Nifty Midcap 100 index from April.

Besides, Ambuja Cements, Aurobindo Pharma and Bosch Ltd will be excluded from the Nifty 50 index, while Bajaj Finserv, Grasim Industries and Titan Company will find a place in the index.

The changes were announced by India Index Services and Products Ltd (IISL), an arm of the National Stock Exchange (NSE) as part of its periodic review.

That apart, Seven companies- Bajaj Finserv, Tata Power, Titan Company, GlaxoSmithkline Consumer Healthcare, Glaxosmithkline Pharmaceuticals, Glenmark Pharmaceuticals and

Torrent Pharmaceuticals would be excluded from Nifty Next 50 index. These firms would be replaced by Aditya Birla Capital, Ambuja Cements, Aurobindo Pharma, Bosch, General

Insurance Corporation of India, L&T Finance Holdings and SBI Life Insurance Company.Further, changes have been announced in Nifty 500, Nifty 200, Nifty 100, Nifty Midcap 150 and Nifty Smallcap 250 among others.