Bears taken complete control of market in last week; Nifty (-1.2%), Sensex (-1.0%). Mid Cap & Small Cap index lost -4.20% and -3.40% respectively in this week. Banking stocks also didn’t spear in this week and Bank Nifty lost -2.70% this week. FIIs sold equities worth 3000 crore and DIIs bought equities worth 6500 crore, FIIs sold nearly 8000 crore in July after FM putting surcharge on super rich in budget. Consumption slowdown and poor asset quality is major concern for market but FM is not serious on it and corrective majors are not been taken yet. Hence going forward, key thing to watch out for would be any revival in FII flow which could be possible only if Federal Reserve cut interest rate in coming policy meetings to support US economic growth. Wipro & Infosys impressed market with Q1 results and IT sector was the only gainer in last week and gained 1% in last week. Sixth tranche of CPSE ETF has been received overwhelmed response from investors and issue has been subscribed more than 2 times, with institution and retail investors together putting in bids worth about 25,000 crore.
In the coming week 250 companies will announce their Q4 earnings including frontline companies like Kotak Mahindra Bank, Hindustan Unilever, Asian Paints, L&T, Zee Entertainment, Bharti Infratel, Tata Motors, Bajaj Finance, Maruti Suzuki, Bajaj Auto and ICICI Bank. Brent crude closed half percent to $62.78/bbl during the week.Rupee slipped 7 paisa and USDINR closed to INR68.88. The markets are expected to be volatile in the near term on account of events like US Fed policy meeting scheduled on July 30/31, the progress of monsoon and results of various companies. Though the slowdown issues could drag the markets in the medium term, it offers an opportunity for long term investors who have an investment horizon of more than 3 years. Going forward, Fed’s policy holds key to revive the market sentiment if they cut rates with 50 bps.
Monday market may open on negative note as SGX Nifty at 11380 (-49). The Nifty has broken crucial support levels of 11,500 on closing basis but Nifty has to sustain above 150 days moving avg of 11318. After losing around 4 percent in last 2 weeks, the market looks oversold so there could be some short covering-led rebound initially but overall there could be more volatility amid cautious trend and F&O expiry week, along with more stock-specific action due to earnings in the coming week. India VIX moved up by 4.29 percent from 12 to 12.51 levels in the last week. Volatility index is at the lowest levels of the last 15 months even after a sharp cut of 300 points. On the options front, maximum Call open interest (OI) is at 11,600 followed by 11,500 strike while maximum Put OI is at 11,300 followed by 11,400 strike. Current option data shows a broad trading range between 11,300 to 11,600 levels on the Nifty. On lower side if Nifty crucial support at 11,400 levels, on the higher side immediate hurdle is at 11,500. Nifty has to sustain above strong hurdle of 11,400 for upside and we may see 11,600.
Data shows we may see upside above 11,400 in coming week. So traders are advised to take fresh buy position above 11,400 then we may see nifty rally till 11,600.
FOR INVESTORS THIS IS BUYING OPPORTUNITY ACCOUMLATE QUALITY STOCKS ON EVERY DIP, AS THIS VOLATILITY IS BECAUSE OF MAJOR EVENT BUT FUNDAMENTALS ARE VERY MUCH INTACT.VOLATILITY IS FRIEND OF INVESTOR.
Top Gainers of the Week:
Sun Pharma (+3.35%)
Top Losers of the Week:
Yes Bank (-11.62%)
Hero Motocorp (-7.10%)
Eicher Motors (-6.81%)
Gail India (-6.17%)