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MARKET OUTLOOK FOR THE WEEK: 17-07-2017

MARKET OUTLOOK FOR THE WEEK: 17-07-2017
July 17
05:29 2017

Last week Nifty tested a new 52 week high above 9900 and finally closed at 9886.  Going forward markets are likely to scale up due to strong economic data’s from US.  US industrial production rises more than expected in June.  Chinese improved economic data’s should shore up confidence among investors and this will help further fund flows towards currencies and equities.  Domestic companies are started to announce their quarterly earnings.  Nifty has immediate resistances at 9916 and 10009.  Minor profit booking is expected when Nifty comes closer to 10000 mark.  So investors should take utmost caution, while initiating long positions.   Companies with strong earnings growth can be bought especially large cap stock when indices face resistance at 10000.  Nifty has strong support at 9538 and 9441.  Movement below these levels in the near term is ruled out, because of high put-call ratio.  Which suggests most of the investors are accumulated put options of Nifty, therefore the markets are strong at around 9800-9700 levels.  India VIX and S&P 500 VIX are also suggesting firm outlook for the markets in general.

Bank Nifty started giving buying indication and it is likely to move towards 24000 to 24554 in the short term despite worries over non-performing assets.   Banking Nifty has support at 23770 and 23536.  Like Banking Nifty Pharma sector is also looks very strong after prolonged technical correction.  Pharma index is likely to move up towards 10307 and it has strong support at 10330 in NSE. The other sector which can lend support to the Nifty is Metal stocks, the outlook turnaround and it is likely to test 3197.  Nifty IT index is the lone weak sector, especially after the quarterly earnings of TCS and INFOSYS.

Jubilant Foods, CRISIL, HT Media, ULTRACEMCO, Bajaj Finserv, CANBK, HAVELLS, MASTEK, Mind Tree, ABB, Hind Zinc, Kotak Bank, RBL Bank, WIPRO, Ashok Ley, and Tata Sponge are the prominent companies which will announce their quarterly earnings next week.  The earning season also will give direction to the market in the coming days.

India’s WPI inflation eases to 0.9% in June.  The retail inflation in June was found at a record low of 1.54 per cent.  According to the street expectation RBI may reduce interest rate by at least 25basis points in the near term after the drop of inflation.  The factory out- put data which came last week was below market expectation but market discounted the number.

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ALEX MATHEWS

ALEX MATHEWS

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