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MARKET OUTLOOK FOR THE WEEK: 10-07-2017

MARKET OUTLOOK FOR THE WEEK: 10-07-2017
July 09
18:32 2017

Nifty during the last week Nifty made a low at 9485 and later in the week it recovered and finally closed on Friday at 9665.  The intense selling was partly due to June expiry and recovery happened due to the GST roll-out.  India VIX declined to 10.8% during the week and S&P 500 VIX also dropped towards 11.19% suggesting strong outlook for the market.  On Saturday SEBI proposed to ban P.Notes on derivatives.  There are 40,000 crores  rupees position belongs to FPI.  The news could have short term impact on markets.  If Nifty opens with a downward bias on Monday, one can create long positions for a long term perspective.  One can create long strangles on Nifty options segment.  Nifty has short term resistances at 9713 and 9720.   If Nifty moves above decisively above 9720 then we can expect a level of 9840.  Support for the Nifty lies at 9602 and 9485.

Banking Nifty recovered in the second part of the last week, is likely to move up from the current level towards 23668 and 23851.  Support for the banking Nifty lies at 23087 (50 DMA) and 23322.  Like Banking Nifty Metal Index is also likely to gain in the next week.  Metal Index has resistances at 2105 and 3208 and support at 3010.  The other sector which is also likely to support the market is the Energy sector.  Energy Index is likely to test 12334 and support at 11765.  Last week Morgan Stanly downgrades its view on Power Utility sector.

Sectors like FMCG, Pharma and IT are still under correction, especially Nifty IT and Nifty Pharma indices.  Investors have to wait some more time to enter into these sectors, many frontline companies are expected to come out with its quarterly earnings from next week and we will get conclusive investment ideas after their results.

Amtek Auto, Indusind Bank, South Bank, Bajaj Crop, MCX, RIIL, TCS, INFY, DCB, Gruh Finance and KTK Bank are coming out with its quarterly earnings.  Both TCS and INFY results are likely to impact the overall the performance of the IT sector.

Other than quarterly earnings, Monsoon, North Korea’s standoff with US, Domestic geopolitical tensions and Gulf crisis are the key factors which can affect the market sentiments along with the proposed ban of P Notes on derivative segment.

On the macro front Inflation, Industrial Production, Manufacturing Production, WPI Inflation YOY, WPI Fuel and WPI Food data’s are expected next week from India, Labour market condition, Crude oil stock change, US Fed Yellen’s testimony before congress, Core-inflation, Retail sales, Industrial Production and Manufacturing production data’s are due to US.  From Euro zone Industrial Production, Balance of Trade, Unemployment rate and Inflation rate data’s are the most important.

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ALEX MATHEWS

ALEX MATHEWS

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