Market Next


October 16
17:37 2016

Last week market closed down by around 1.31% due to global cues, especially Chinese economic data. Chinese quarterly data on export was much below street expectation, export lowered by around 10% kept the global market under jittery. Nifty closed below8600 at 8583 and is having support 8536 and 8500. If Nifty moves down below decisively then we can expect further down trend in the market. Resistances for Nifty are at 8670 and 8721. A long strangle is advisable, it can be created by buying 8500 put options of Nifty along with 8600 Nifty call options.

It is prudent to have small open positions due to global volatility, US Presidential election, tensions between India and Pakistan, tensions between North Korea and US, and top of all weakening of pound against dollar is also a cause of concern ahead of BREXIT. Market may move on stock specific mode due to quarterly earnings season. IT sector stocks may remain sideways to positive, Pharma sector will continue to remain lackluster. ULTRATECH Cement and ACC quarterly earnings will give direction to the cement stocks. Metal and FMCG stocks may remain weak after Unilever Plc disappointing quarterly earnings. Automobile, Oil producers and consumer durable stocks may gain further momentum next week. Banking Nifty is looking weak and it is having support at 18800, if there is a major sell-off then it may even test 18500 levels. Banking Nifty has resistances at 19280 and 19571. Major rally is expected only after the Q3 earning season.

Last week WPI inflation number came out which was in line with market expectation, WPI inflation declined to 3.57% to 3.74%. India’s trade deficit narrows by 18% year on year basis in September. India’s export grew by 4.62% and imports declined marginally down by around2.54%. Continuous decline in WPI inflation is good for the economy, which may prompt RBI to reduce interest rates in its policy meet. DHFC, Biocon, V Guard, KPIT, Lakshmi Vilas Bank, Orient Paper, ULTRATECH CEM, Zanzar Tek, Canfin Homes, Havells, Mastek, Bayer Crop, NIIT LTD, Tata Coffee, LIC Housing, Praj Industries, ACC, ATUL, CAIRN, GHCL, Mind Tree and Wipro are scheduled to announce their quarterly earnings next week.
TCS and Infosys came out with numbers, TCS numbers were at par with the analyst’s expectation. Infosys on the other hand came out with moderately good set of numbers. Many large clients are reducing their spending on technology due to fear of BREXIT and its repercussions. We saw profit booking in HUL, Unilever the parent company of HUL’s performance affected sentiments. Unilever Plc reported a disappointing revenue growth in Q3.

US Industrial production, Manufacturing Production, Inflation Rate, Continuing Jobless claims and Initial Jobless claims are expected next week from US.
Inflation rate, Balance of Trade, GDP Growth and unemployment rates will come out next week from EURO Zone, Industrial Production and Bank of Japan’s quarterly reports are due next week.

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