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Full fletch earning season will start from coming week.
On the hope of US China trade deal market regained momentum; Nifty (+1.2%), Sensex (+1%). Mid Cap & Small Cap index lost -1.10% and -2% respectively in this week. FIIs sold equities worth 493 crore while DIIs bought equities worth 1660 crore. Banking and financials, infrastructure and metals stocks led the market higher during the later part of the week. In the coming week the market will react to Infosys earnings which were in line, and weak August industrial output data. But the rising hope for US-China trade deal on US President Donald Trump comments after two-day trade talks meeting could lift sentiment and global markets will take it in positive way. Overall coming week will start with a positive bias and all eyes are on corporate earnings as 96 companies will announce their Q2 corporate earnings. Much awaited Indian Railway Catering and Tourism Corporation (IRCTC) IPO will list on exchanges on Monday, October 14 after the bumper over subscription of more than 112 times, our view is IRCTC could list with more than 50% premium and stock could be double in coming few months.
IIP shrinks to 1.1% in August after 26 months, reinforcing fears of a slowing economy and deteriorating consumer sentiments. September Consumer Price Index (CPI) inflation will be announced on October 14 as it helps RBI decide interest rate decision in forthcoming policy meetings, CPI inflation rate in August grew 3.21%, remaining within RBI’s target level of 4%. September Wholesale Price Index (WPI) inflation will also be announced on October 14. Market is expected to react positively to the partial trade deal between world’s largest economies but will remain watchful for further developments over final deal. US President said that US and China had come to a substantial phase-1 trade deal, reaching agreement on intellectual property, financial services and big agricultural purchases, partial deal is the biggest step toward resolving a 15-month tariff war. The year being an election year in the US and GDP fallen from 3.1% to 2% and US failed to resolve trade war US may enter into severe recession, which would reduce President Trump’s chances of reelection so US President will any how resolve trade war. Oil prices gained 4% during the week and closed to $60.66/bbl. Indian rupee closed at 70.92 against the US dollar. 96 companies will announce their Q2 results including heavy weights like Hindustan Unilever, SBI Life, Wipro, ACC, Mindtree, Zee Entertainment, Reliance Industries, HDFC Bank, Ambuja Cements, ICICI Lombard, Shree Cements, etc.
Monday market may open on flat note as SGX Nifty at 11,287 (-22). Nifty sustained above 200DMA 11,268 and closed above 11,300 levels, momentum to continue in the coming week but if index fails to hold 200 DMA the index may correct up to 11,100-11,150 levels. On upper side 150 DMA 11,417 will act as a stiff resistance for the market. India VIX fell by 2.5% from 17.58 to 17.14 levels. On the options front, maximum Call open interest (OI) is at 11,400 followed by 11,500 strike while maximum Put OI is at 11,000 followed by 11,200 strike. Current option data shows a broad trading range between 11,000 to 11,600 levels on the Nifty. On lower side Nifty’s crucial support at 11,268 levels, on the higher side immediate hurdle is at 11,417.
Data shows we may see upside above 11,417 in coming week. So traders are advised to take fresh buy position above 11,417 we may see nifty rally to 11,600.
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:
Bharti Airtel (+11.02%)
Britannia (+6.17%)
Cipla (+5.56%)
Bharti Infratel (+3.99%)
Infosys (+3.72%)
Top Losers of the Week:
Indiabulls Housing (-21.13)
BPCL (-8.20%)
Yes Bank (-6.82%)
ITC (-6.76%)
IOC (-5.50%)
Gaurav Bora
(Market Expert)