Market managed to close flat to positive in this week despite of Budget day correction; Nifty (+0.2%), Sensex (+0.3%). Mid Cap & Small Cap index lost -0.70% in the week. Banking stocks recovered this week and Bank Nifty raised +1.20% this week. FIIs sold equities worth 3000 crore and DIIs bought equities worth 700 crore. In Union Budget FM failed to impress street as street was expecting some short term relief but FM presented budget with long term agenda. On fiscal deficit front target of FY20 reduced from 3.4% to 3.3%, this provided a prudent plan for the next five years. FM proposed min public holding from 25% to 35% and that was disappointing for market, but this is just a proposal to SEBI and SEBI can give several recommendations to Finance Ministry. But if that happens it will give short term pain but in a longer term market participation will increase and that is the main motive of FM. Market reacted negatively on budget but this reaction will be limited to Fridays trading session only as market have seen interim budget just 3 months back so street was not having much expectations from budget. But govt now opened gates for foreign funds through various corrective measures market will look after it as an opportunity. Q1 earnings season will start with Infosys (July 12), TCS (July 9) and IndusInd Bank (July 12) declaring their results in coming week.
The data for IIP for May and CPI inflation for June will be released on July 12, which will be closely watched by the street. CPI inflation for May increased to 3.05 percent but it still remained comfortably within the Reserve Bank of India’s target level of 4 percent. Industrial output grew 3.4 percent in April, the highest in last six months.Brent crude closed half percent to $64.23/bbl during the week, volatility will remain in crude oil prices is likely to continue for the coming week as well especially after OPEC’s decision to extend production cuts and geopolitical tensions. Rupee appreciated 60 paisa in this week and USDINR closed to INR68.42, after appreciation in last three weeks currency could see some range-bound moves with minor correction in the coming week, given depreciation in other emerging markets currencies.
Monday market may open on flat note as SGX Nifty at 11791 (-26). Nifty failed to touch 12,000 mark on budget day but somehow managed to sustain 11,800 levels. India VIX fell to 13.06 from 14.95. 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 11,700 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 strong hurdle of 11,900 for upside and below 11,700 we may see downside to 11,600.
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:
Indiabulls Housing (+19.69%)
IndusInd Bank (+8.65%)
Bharti Airtel (+5.24%)
Top Losers of the Week:
Yes Bank (-18.94%)
Sun Pharma (-6.41%)
Tata Steel (-5.16%)