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MARKET OUTLOOK FOR THE WEEK: 29-08-2016

MARKET OUTLOOK FOR THE WEEK: 29-08-2016
August 28
16:26 2016

Market remained in a tight range last week with amid volatility.  Market participants are keen on the outcome of US Federal Reserve’s commentary on how aggressively it plans to hike interest rates.  Market may recover on Monday or Tuesday according to technical. Interestingly India VIX and S&P 500 VIX both are still at below the 14% mark, which is an early indication that market could scale up the markets to further highs.  It is prudent to stay long if you are an investor with long term view.  Short sellers may get trapped if Nifty moves above 8745. It is prudent to close the shorts at the earliest.   The short term resistance for Nifty is at 8712.  Support for the Nifty lies at 8511 and 8470.  Chances for Nifty to move down below 8511 are a remote possibility.

In a latest development RBI allowed banks to issue rupee bonds (Masala Bonds) for their capital requirements and for infrastructure and affordable housing sector.  Banking sector stocks are likely to recover early next week, because most of them are in the over sold region.  Banking Nifty has strong support at 18992 and 18815.  If the markets are strong then banking nifty can move above 19865 levels without many problems.

Japan’s GPIG pension fund posted a loss of $ 52 billion loss last quarter due to weak stock markets and strong rally in Yen.  Earlier the pension fund reduced its bond holding and invested heavily in the equity markets.

Lots of macroeconomic data’s are expected to come out from US next week; among them CB consumer Confidence, ADP employment change, initial jobless claims, balance of trade, Non-farm payroll and factory order.  From the EURO Zone GDP growth rate, business confidence, retail sales, industrial production data’s are expected.  In the case of India the upcoming data’s are related to infrastructure output, GDP Growth rate, Nikkei Manufacturing PMI and Foreign Reserves.  The lone data which is expected from China is Manufacturing PMI.

Two major companies DLF and MOIL will announce its results next week, which may not influence the overall market trends.  On the other hand Oil Marketing Companies stocks will be in focus as these companies will review fuel price at the end of the month.

 Monthly Auto Sales numbers for August will come out on Thursday week, if there is a price correction due to lower sales numbers, one can utilize that as an opportunity to enter into this sector, because auto sector is the major beneficiary after the implementation of GST.

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ALEX MATHEWS

ALEX MATHEWS

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