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Stock Market Weekly Outlook- Gaurav Bora, Market Expert

Gaurav Bora , Market Expert

Bears taken control of markets and driven in swing, Nifty continued its weakness for the eighth consecutive trading session. Nifty (-3.7%), Sensex (-3.9%). Mid Cap & Small Cap index fell -2.50% and -3.00% respectively in the week. Banking stocks seen major profit booking and Bank Nifty fell -3.10% this week. As compared to FIIs buying of 62000 crore in past few weeks this week FIIs sold equities worth 3880 crore and again DIIs were net sellers as sold equities worth 2877 crore, FIIs done buying of 62000 crore on the hope of improving fundamentals of Indian market and stable government in centre. 

Phase 6 of voting in the Lok Sabha election is set to take place across 59 parliamentary constituencies in six states and one union territory on today, 12 May.  ThyssenKrupp expects JV with Tata Steel to fall as ThyssenKrupp to abandon separation of its industrial and material units, Tata Steel slipped 5% on this news. SBI failed to impress markets with Q4 results as missed streets estimation but surprisingly asset quality improved as NPA fallen down to 3% and provisions reduced by 41% positive for SBI in long term. Neogen chemicals IPO listed on exchange and given listing gain of 22.58% on very first day, we were expecting the same more than 20% listing gain on listing.

India’s April month Nikkei Service PMI dropped to 51 in April from 52 in the previous month at 7 months low, March month industrial and disappointing March IIP figures -0.1% street estimate was 1.82%. Consumer Price Index (CPI) on YoY basis is scheduled to be released on May 13, while inflation data for the month of April is slated to be released May 14, 2019. Foreign exchange reserves data for week that ended on May 10 will be released on May 17 and Trade Balance is scheduled for May 15, 2019. Crude traded in narrow range this week and closed at $70.80/bbl, growing production in US and key OPEC countries will ensure that global supplies continue to meet demand moving forward so prices may remain in range. Rupee appreciated 70 paisa in this week and USDINR closed to INR69.91 mark as US China trade war is hitting all emerging market currencies. Key companies will announce earnings include HDFC, ITC, SRF, Nestle, Pidilite, Jubliant Foodworks, Lupin, Bajaj Finance, Bajaj Auto, IOC, UPL, Dr Reddys.

Monday market may open on flat note as SGX Nifty at 11301 (+17.5). Nifty broken consolidation levels and tanked more than 400 points in last couple of trading sessions, Nifty has to go above 50 DMA 11425 for pullback else market me go to 11033 which is 200 DMA. India VIX moved up to 26.33 from 24.03, which shows volatility swing could be seen in coming weeks due to general elections 2019. On the options front, maximum Call open interest (OI) is at 11500 followed by 11400 strike while maximum Put OI is at 11,200 followed by 11,000 strike. Current option data shows a broad trading range between 11,000 to 11,500 levels on the Nifty. On lower side if Nifty crucial support at 11250 levels, on the higher side immediate hurdle is at 11,425. Nifty has to sustain above 11425 for pullback and below 11250 we may see downside till 11020.

Data shows we may see pullback above 11425 in coming week. So traders are advised to take fresh buy position above 11425 then we may see nifty rally till 11600. This week market may remain volatile so traders are advised to be cautious and follow levels and strict stoploss and stay light as we are going ahead towards major event.


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