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MARKET OUTLOOK FOR THE WEEK: 06-02-2017

MARKET OUTLOOK FOR THE WEEK: 06-02-2017
February 05
15:54 2017

On 1st February Nifty gained nearly 1.81% after the budget presentation.  Domestic and foreign investors supported the market and finally on Friday Nifty closed above 8759.25.  The outlook of the market is turned to be positive and it is likely to test 8825 and 8930 in the short term and 9071 in the medium term.  Nifty has support at 8697 and 8636.  India VIX moved down below 15 and on Friday closed at 13.1275, indicating strong undercurrent of the markets.  As expected Nifty bank also outperformed the general market and it closed at 20196 and it is likely to move up further 20396 and it has support at 19900 and 19714.  RBI interest rate decision will give further direction to the banking nifty.  As the bank are flooded with deposits there are possibilities of a rate cut in the next week during the RBI policy meeting which can further boost the sentiments towards the banking stocks.  We can expect fresh buying in infrastructure, housing, housing finance, tea manufactures, automobile, FMCG, cement, banking, telecom and steel sectors.  Caution should be taken while selecting the stocks, do not compromise the quality of the companies while investing in these sector stocks.

Nifty IT index is showing minor recoveries but yet to enter into the bullish orbit, but having resistance at 3215 and support at 3043. So it is prudent to stay sidelines in this sector till further getting cues on US HBN1 visa policy initiatives.  The Nifty metal index is currently placed in the overbought territory which can cause partial profit booking.

Next week a lot of companies will to come out with its quarterly earnings like BHEL, Blue dart, CEAT, EID-PARRY, GATI, GILLETTE, Hexaware, MRPL, PNB, Tata Steel, titan, Bharat Forge, CIPLA, Hero Motor, IGL, NTPC, Siemens, Tata Chem, UBL, ABB, Aurobindo Pharma, BPCL, Cairn, Escorts, ICRA, LUPIN, SAIL, BEML, GAIL, M&M, SBIN and Tata Power.

On the macro front US Balance of Trade, Continuing Jobless Claim and initial jobless claims data’s are due from US.  Industrial Production, Manufacturing Production, Cash Reserve Ratio and RBI interest rate decision will give further direction to our markets.  From EURO zone inflation, factory orders, retail sales, balance of trade and industrial production data are from Euro Zone will come out.

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ALEX MATHEWS

ALEX MATHEWS

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