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Market Outlook for the Week: 13-06-2016

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Market Outlook for the Week: 13-06-2016
June 14
07:08 2016

After a sharp uptrend Nifty started showing weakness due to overbought situation and weak global cues and finally Nifty closed at 8170.  Profit booking started Thursday onward and continued on Friday also.  Europe and US markets were also witnessed profit booking and Euro zone markets closed at two weeks lows.

Going forward markets is likely to witness profit booking and it may test key support levels. Nifty has support at 8150 and 8100, if Nifty moves down below these two levels then it may test 8049.  Resistance for the Nifty lies at 8250 and 8400.

On Friday after hours IIP came out, which was below street expectation at -0.8% vs 0.1% in March.  Nine out of the twenty two industry groups in the manufacturing sector have shown negative growth during the month of April 2016 vs same period in the previous month.  The electricity and machinery & apparatus showed the steepest decline.

According to Moody’s Investor Service, public sector bank’s asset quality would likely to remain under pressure over next 12 months.  Last week we saw good amount of buying in the PSU banking stocks, but marginal decline witnessed on Friday.  The sector is likely to remain sideways due to positive news on monsoon and negative news on NPAs.

Net direct tax collection showed a sharp jump to Rs 43,391 crore during the first two months of the current fiscal by around 18%. The latest reports from MF in India shown a sharp withdrawal of Rs.Rs.58000 crore from various mutual funds schemes in May.

If Britain vote to leave European Union could have significant economic repercussions on the world economy, according to Jannet Yellen Federal Reserve Chair.  She also mentioned about the latest job data which was far below expert’s expectations but she is still optimistic about US economy.  The recent job data may prompt Federal Reserve to postpone the rate hike in June, but there are chances the Fed may increase the rate in the next session.

PSU Banking Index has yet to give a sell signal but it is having support at 2400 and 2358 and has resistance at 2645 in the short term. As expected gold recovered from the lower levels and it is likely to move up further towards $1287 and $1300 and the yellow metal commodity has support at $1257 per troy ounce.

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