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Market Outlook for the Week: 20-06-2016

Market Outlook for the Week: 20-06-2016
June 21
09:21 2016

Last week market remained subdued with mixed domestic and global cues.  Nifty closed at 8170.20 on Friday.  S&P 500 VIX and India VIX closed higher at 19.64 and 17.35 respectively, indicating highly volatile days to come because of “BREXIT”. Nifty has resistances are 8269 and 8400 and having support at 8070 and 7945,  chances of Nifty moving below these levels are very remote and these corrections can be utilized to buy front line stocks for medium term.

Nifty Bank is showing sideways trends and it has support at 17500 and 17323 and facing resistances at 18038 and 18377.Nifty PSU Bank Index is still positive and it has resistance at 2698 and 2742.  Supports are at 2594 and 2588 levels.  As long as the index if stays above 2650 level then there are possibilities to move above 2742 mark without much support from the Bank Nifty.

On Friday reality stocks were in good demand on reports that the regulator may bring various proposals to make Real Estate Investment Trusts more attractive to invest a large portion of funds in under-construction assets.  The latest proposal would allow REITS under construction projects investments limit up from 10% to 20%. The other notable sector was sugar; the stocks under this sector rallied quite a lot in the past few months due to shortage of  global output and higher demand. The domestic sugar prices went up to the roof top.  On Friday sugar stocks tanked after government imposed 20% custom duty on sugar exports to boost domestic demand and curb inflation.  Government announced aviation policy , it is a real booster for private players.  On the PSU banking front merging decision of SBI with its associate banks helped to gain market interest at this sector.  The associate banks of SBI rallied more than 35%to 40% last week.

There were concerns of inclusion of Chinese A Class stocks in the MSCI index, but that move was not materialized, and it was a positive news for the emerging markets. The latest declining Industrial production and rising food inflation are really a cause of worry, but on the other hand the Current Account Deficit declined sharply to $0.3 billion or 0.1% of its GDP in the fourth quarter ended March for financial year 2015-16.  High food inflation drives WPI inflation which rose to 0.8% in May from a year ago.

Next week would be eventful due to “BREXIT” on 23 June and Yellen’s statements.  Investors are cautiously optimistic over monsoon government’s move to table the GST bill during the monsoon session of Parliament.  May be this is the key reasons why FII are accumulating Indian equities, they are buyers in 60% of times in the June in last 10 years

http://gujarati.economictimes.indiatimes.com/sharebazar/news/-/articleshow/52830394.cms.

http://www.mid-day.com/articles/really-subdued-dude/17352197

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ALEX MATHEWS

ALEX MATHEWS

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