Stock Market Weekly Outlook- Mr. Gaurav Bora

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Market fell down consecutive second week, market shown heavy sell off in last hour due to India seeks to impose tariff on 29 US products with effect from June 16. Nifty (-0.4%), Sensex (-0.4%).Mid Cap & Small Cap index fell -1.2% and -2% respectively in the week and Bank Nifty fell -1.50% this week. IT & Metal shown some strength whileBanking & NBFC, Pharma, Cement and Auto stocks were shown deep correction. FIIs sold equities worth 238 crore and DIIs bought equities worth 376 crore. The market is expected to continue consolidation in the coming week as well, but the focus would be on progress of monsoon, GST Council meet and pre-budget announcements. Markets are currently reacting on the global cues and we do not see this changing any time soon as there is no any major domestic trigger. Last week sentiments were hit after speculation of DHFL’s debt repayment default but somehow DHFL managed to repay. Yes Bank as well as IndusInd Bank were under pressure due to their exposure in DHFL and RBI taken some regulatory measures for NBFC sector hampered the sentiment. Rites gained 6% on Friday as company is having board meeting on June 24 to consider bonus. Morgan Stanley has upgraded the one year target of ICICI Bank & Axis Bank the revised target are Rs 625 and Rs 1100 respectively, we have buy call on both stocks.   

Now key event street will watch is GST council meeting on June 20. The Union Budget FY20 is expected to remain most important event for the coming weeks as market seems to be hopeful that new FM will announce strong measures that will boost economic growth and revive consumption story of India along with that market will look for govt’s target for fiscal deficit. WPI for the month of June is nearly 2 years low at 2.45% vs 3.07% previous month, figures are positive for market. The decent IIP growth, stable inflation and falling crude oil prices limited downside in market. US Federal Reserve meeting scheduled to be held on June 18-19, Market expects FOMC to keep interest rates unchanged in its policy. Crude price increased by a percent on June 14 on concerns over potential supply disruptions after attacks on oil tankers in the Gulf last week, Brent crude closed at $62.01/bbl on June 14. Butvolatility is expected in crude oil ahead of OPEC’s meet in Vienna in the last week of this month. The fiscal deficit of the country will be controlled and companies which are dependent oil prices may react positively as earnings will improve. Rupee appreciated 18 paisa USDINR closed to INR69.80,currency is expected to be volatile in the coming week as Federal Reserve Policy meeting in coming week.

Monday market may open on flat note as SGX Nifty at 11797 (-33). Nifty could see further fall if it fails to hold 11,800 and the next crucial support will be at 11,650. In last three-four weeks index is consolidating within broad range of 12,050-11,800 levels representing short term sideways trend, indicating a lack of strength on either side. Any breakout or breakdown will decide further direction of market. India VIX fell to 13.89 from 14.89. On the options front, maximum Call open interest (OI) is at 11900 followed by 12,000 strike while maximum Put OI is at 11,800 followed by 11,700 strike. Current option data shows it’s difficult for market to cross 11,900, If crosses 11,900 then we may see 12,100 but if nifty fails to sustain above 11,800 then selling pressure may emerge in the market, which will drag index towards 11,650. On lower side Nifty crucial support at 11800 levels, on the higher side immediate hurdle is at 11,900. Nifty has to sustain above 11900 for pullback rally else some correction is on the cards.

Data shows market may correct below 11800 in coming week. So traders are advised to take fresh sell position below 11800 then we may see nifty heading towards 11650 keep stop loss of 11900.

FOR INVESTORS THIS IS BUYING OPPORTUNITY ACCOUMLATE QUALITY STOCKS ON EVERY DIP.

VOLATILITY IS FRIEND OF INVESTOR.

Top Gainers of the Week:

Tata Steel (+4.09%)

JSW Steel (+3.37%)

TCS (+3.33%)

Vedanta (+3.26%)

Grasim (+3.16%)

Top Losers of the Week:

Yes Bank (-17.76%)

IndusInd Bank (-8.08%)

Indiabulls Housing (-8.05%)

BPCL (-4.09%)

Coal India (-3.92%)