Market broken losing streak after consecutive 3weeks; Nifty (+0.6%), Sensex (+0.5%).Mid Cap & Small Cap index raised +1.40% and +1.10% respectively in the week. Banking stocks recovered this week and Bank Nifty raised +1.60% this week. FIIs bought equities worth 2000 crore and DIIs bought equities worth 3600 crore, now market will watch whether FIIs & DIIs will be net buyers or sellers in July especially after Union Budget as it will give clear direction to market. As it will be first budget by new FM Nirmala Sitharaman, investors are hopeful of some kind of fiscal stimulus and expecting reforms in sectors like auto, agriculture, infrastructure, housing from the government to bring slowing economy back on track. Progress of monsoon has been improved so we may see its positive impact on market. Monday market may react to decision by US President Donald Trump and Chinese President Xi Jinping in G20 Summit that both sides would continue negotiations for trade tariffs and will not levy any new tariffs against each other’s products for the time being, market were expecting such action on US-China trade war since long time. Both HDFC twins gained in last week after the news that HDFC Bank’s subsidiary HDB Financial coming out with IPO worth 10,000 crore, we are positive on HDFC and HDFC Bank. Rites approved bonus shares of one free share for four shares held.
Auto companies will release their monthly June sales data on Monday June 1, Monthly sales data has been weakened for nearly 1 year and the trend is expected to be same for June as well as lack of demand due to liquidity crisis and new insurance norms. Nikkei Manufacturing PMI data for June will be released on July 1 and Nikkei Services PMI data will be announced on July 3.Brent crude closed marginally lower to $64.74/bbl during the week, OPEC’s two-day meeting scheduled to be held on June 1 & 2 and likely to continue production cut of 1.2 million barrels per day. Rupee appreciated 55 paisa in this week and USDINR closed to INR69.02, there could be volatility in rupee in the Budget week.
Monday market may open on flat note as SGX Nifty at 11854 (+16). Nifty sustained above 11704 which is 50 DMA which has given some relief to bulls; Nifty has to go above 11,900 for further upside this would lead Nifty to 12,000.India VIX moved to 14.95 from 14.61, for a time being Volatility is under very much control. On the options front, maximum Call open interest (OI) is at 12,000 followed by 11,900 strike while maximum Put OI is at 11,700 followed by 11,800 strike. Current option data shows a broad trading range between 11,600 to 12,000 levels on the Nifty. On lower side if Nifty crucial support at 11,700 levels, on the higher side immediate hurdle is at 11,900. Nifty has to sustain above 11,900 for upside and below 11,700 we may see downside to 11,600 then 11,550.
Data shows we may see upside above 11,900 in coming week. So traders are advised to take fresh buy position above 11,900 then we may see nifty rally till 12,000.
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:
Axis Bank (+4.86%)
Sun Pharma (+4.74%)
Top Losers of the Week:
Tech Mahindra (-4.57%)
Bharti Infratel (-3.01%)
Eicher Motors (-2.94%)
IndusInd Bank (-2.63%)