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Market continued weakness for consecutive 3rd week; Nifty (-0.8%), Sensex (-0.7%). Mid Cap & Small Cap index fell -0.90% and -2.00% respectively in the week. Banking stocks corrected this week and Bank Nifty fell -0.60% this week. FIIs sold equities worth 1566 crore and DIIs bought equities worth 3021 crore, FIIs are net sellers since last three weeks but FIIs participation played a major role in the market since last few months. Market is expected to remain range bound ahead of Union Budget FY20 but we may expect stock specific movement on pre budget speculations. This range bound movement is consolidation after one way 9% rally during Loksabha elections but this makes market healthier and we may see good upside in coming time. Progress of monsoon slow so far and overall rain deficit at 43% but as per IMD monsoon has been picked up pace and cover other parts of the country in few days, progress of monsoon will improve market sentiments. RBI increased Cash Reserve Ratio CRR for NBFCs from 12% to 15% which will increase problems of NBFCs in this liquidity crunch. Indiabulls Housing got CCI approval for to merge with Lakshmi Vilas Bank, positive for Indiabulls Housing Finance. UPL fell more than 11% after HSBC raised concerns of lower soyabean demand and pricing pressure due to the trade tensions between US and China about 35% revenue of UPL comes from Latin America region, this is buying opportunity for investor.
Current Account Deficit and External Debt for the quarter ended March 2019 will also be announced on June 28. The key event to watch out for would be meeting between US President Donald Trump and China’s President Xi Jinping over the ongoing trade war, in the two-day G-20 Summit scheduled for June 28-29 in Japan, meeting between this two biggest leader hopes that the trade dispute between the US and China will be resolved. Brent crude rallied 5% to $65/bbl during the week on fears that any US military attack on Iran would disrupt supply from the Middle East, geopolitical tensions in the Middle East will be negative for crude. Rupee appreciated 23 paisa in this week and USDINR closed to INR69.57 mark, downside in oil prices is likely to help rupee appreciate against USD.
Monday market may open on flat note as SGX Nifty at 11757 (+3). Nifty broken crucial support levels of 11800 levels in last trading sessions but relief is index sustained above 11700 levels after touching 50 DMA 11650; Nifty has to go above 11850 for upside. India VIX moved to 14.61 from 13.89, India VIX moved up by 5.11% in the last week and moved higher after the decline of last four weeks. On the options front, maximum Call open interest (OI) is at 12000 followed by 11800 strike while maximum Put OI is at 11,700 followed by 11,600 strike. Current option data shows a broad trading range between 11,600 to 11,900 levels on the Nifty. On lower side if Nifty crucial support at 11,700 levels, on the higher side immediate hurdle is at 11,800. Nifty has to sustain above 11,800 for upside and below 11,700 we may see downside to 11,600 then 11,500.
Data shows we may see rally above 11,800 in coming week. So traders are advised to take fresh buy position above 11,800 then we may see nifty rally till 11,950.
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:
ICICI Bank (+3.12%)
Power Grid (+2.72%)
Zee Entertainment (+2.72%)
Ultratech Cement (+2.07%)
Bajaj Finserv (+1.91%)
Top Losers of the Week:
UPL (-11.52%)
Indiabulls Housing (-8.96%)
Adani Port (-5.72%)
Maruti Suzuki (-4.89%)
Yes Bank (-4.74%)