Indian Markets Outlook for the week – 30.06.2014 to 04.07.2014
(For Sectorwise Weekly Outlook Watch: www.rupeedesk.in)
In anticipation of tough but much-needed reforms in the final budget on Jul 10,
benchmark indices are seen trading with a continued positive bias next week. Gains are
also likely to be supported by the fact that most market participants believe that
consolidation in the indices is drawing to a close. We believe, this time-wise corrective
phase will get over in the coming week and the index will resume its broader uptrend.
However, these gains are likely to be capped as the recent rally in equities has partly
factored in some likely positives from the budget. We feel that a progressive budget as
well as other reform initiatives will likely lead to continued outperformance of Indian
indices versus emerging market peers.
While speculation about the likely content of budget may influence stock prices, market
participants will continue to maintain a hawk's eye on the progress of the monsoon.
According to latest updates, 14 days after hitting the Kerala coast, the southwest
monsoon has now covered half of the Indian mainland. However, it still remains five
days behind the normal date of covering the entire central India.
The India Meteorological Department has also lowered its forecast for Jun-Sep rainfall to
93% of the long-period average from 95% predicted in April. Among sectors, automobile
stocks will grab the limelight as companies detail their monthly sales numbers for June.
For the week ahead, the National Stock Exchange's 50-share Nifty is seen moving in a
range of 7400-7700 points. A few on the Street have not ruled out the possibility of a
lifetime high being tested either. Both the Nifty and the S&P BSE's Sensex tested their
lifetime highs of 7508.80 points and 25099.92 points respectively on Jun 11.
Yesterday's movement saw market participants preferring to lie low ahead of the
weekend, as a result of which benchmark indices ended with marginal gains, after
moving in a thin range through the day.
Nifty reclaimed the 7500-points mark, ending at 7508.80, up 15.60 points or 0.2% from
close Thursday. Intraday, the index touched a low of 7482.30 and a high of 7538.75.The
S&P BSE Sensex ended the day at 25099.92, up 37.25 points or 0.1%, after moving between 25032.94 and 25209.61 intraday.
(For Sectorwise Weekly Outlook Watch: www.rupeedesk.in)
