Indian Markets Outlook for the week – 14.07.2014 to 18.07.2014

Indian Markets Outlook for the week – 14.07.2014 to 18.07.2014

(For Sectorwise Weekly Outlook Watch: www.rupeedesk.in)

Next week, the benchmark indices will take cues from economic data and earnings of

companies for the quarter ended June. The trend in global markets will also be watched.

Later today, the Central Statistics Office will release the Index of Industrial Production

data for May. India's industrial production is likely to have expanded to a 19-month high

of 3.8%, mainly on account of an improvement in exports and a low base effect. On

Monday, inflation rate for June, based on both the Consumer Price Index and Wholesale

Price Index, will be released.

These indicators are important, as they will give an insight into the Reserve Bank of

India's likely action on interest rates in its monetary policy in August. Among earnings,

Nifty constituents Kotak Mahindra Bank, Bajaj Auto, and Tata Consultancy Services will

detail their earnings next week.

Others that will announce their results include Bajaj Finserv, Federal Bank, South Indian

Bank, CRISIL, Reliance Infrastructure, Reliance Power, and Zee Entertainment

Enterprises.

Market sentiment is seen cautious next week, after the correction this week. Today, the

indices fell for the fourth consecutive session to a five-week low, as shares of ratesensitive

companies took a major beating.

On a week-on-week basis, the Nifty and Sensex ended 3.8% and 3.6% lower

respectively. Nifty ended below 7500 points at 7459.60, down 108.15 points from the

previous close. Intraday, it tested a low of 7447.20, while the high for the day was

7625.85. The Sensex closed at 25024.35, down 348.40 points. Intraday, it moved

between a low of 24978.33 and a high of 2548.33.

Market participants expect Nifty to find support at 7300. Although the short-term trend

has turned down, the medium-term trend continues to remain positive.

(For Sectorwise Weekly Outlook Watch: www.rupeedesk.in)

Indian Markets Outlook for the week – 07 to 11.Jul.2014

Indian Markets Outlook for the week – 07 to 11.Jul.2014

For Sectorwise Outlook Watch: www.rupeedesk.in

Next week promises to be an action-packed one for local equities, with the new government facing its first litmus test--the Union Budget for 2014-15 (Apr-Mar)--that will be presented by Finance Minister Arun Jaitley on Thursday. Railway-related shares will be closely watched as well, as the government will present the Railway Budget on Tuesday. Talk of a cut in import duty on gold to 6% from 10% currently in the Budget is likely to push jewellery stocks higher, while public sector banks may rise on hope government will announce capital infusion.

The week will also see the earnings season kicking off, with information technology major Infosys reporting results for Apr-Jun on Jul 11. On the same day, the Central Statistics Office will release Index of Industrial Production data for May. Expectations from the budget are high, with reforms being expected on almost every front, be it easing of foreign investment norms in textiles, capital infusion in public sector banks, divestment in public sector entities, reduction in fuel subsidies, or gold import duty cut.

Overall, the new government faces a tough task between going all-out on reforms front and managing the tricky trio of inflation, fiscal deficit and economic growth. Indices have risen over 8% since May 16, when the Bharatiya Janata Party-led National Democratic Alliance government won the general elections with a strong majority. We expect the National Stock Exchange's Nifty to test the 8000-mark in the run up to the Budget.

Any major negative surprise that dents the Street's Budget wish-list may see indices witnessing some downward correction. However, they do not see a steep fall or expect the indices to top out after the Budget. With the amount of money flowing in, we do not expect the market run to

halt anytime soon. A slight correction is possible somewhat if some negative surprises are announced, but the long-term trend remains intact.

Foreign portfolio investors have pumped in $10.3 bln in Indian equities so far this year. Yesterday, the Nifty ended at a record high of 7751.60, up 36.80 points or 0.5% from close Thursday. Intraday, it touched a lifetime high of 7758.00 and a low of 7661.30. The S&P BSE Sensex came close to touching a lifetime high, but failed to do so. It had touched a lifetime high of 25999.08 in the previous session. After moving between a low of 25659.33 and high of 25981.51, the 30-share index ended at a record closing level of 25962.06, up 138.31 points or 0.5%.

For Sectorwise Outlook Watch: www.rupeedesk.in

Indian Markets Outlook for the week – 30.06.2014 to 04.07.2014

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)

Indian Markets Outlook for the week – 23 to 27.Jun.2014

Indian Markets Outlook for the week – 23 to 27.Jun.2014

(For Sectorwise Weekly Outlook Watch: www.rupeedesk.in)

     Trade in equities is expected to be volatile next week as rollover of positions to the July

series will begin with the current month derivatives series expiring on Thursday. On

Monday, the market will react to the hike in freight rates and passenger fares announced

by the government after market hours yesterday. Effective Jun 25, the government has

increased passenger rail fares by 14.2% and freight rates by 6.4%.

     Although the hike in fares and freight rates will impact inflation, market participants view this move as a positive because it will help improve the financial situation of Indian

Railways. WPI inflation is likely to see a marginally larger impact (the railway accounts

for around 35% of freight traffic in India) as the cost of transporting goods such as coal,

cement, oil, steel and food grains will rise.

     However, the hikes will improve the profitability of the railways, and hence they are a

move in the right direction. However, a few see the contract expiring closer to 7600

levels provided. National Stock Exchange's Nifty sustains above 7500. "7500 is a very

strong support for Nifty and if this is broken then a sell-off is likely," Traders may not

aggressively roll over their positions as the (Union) Budget is due next month and they

would want to see what the government does. If the index manages to sustain above

7500, then a short covering rally can be seen which will help the index futures expire

close to 7600 levels,

     Yesterday, the Nifty ended at 7511.45, down 29.25 points or 0.4% from Thursday.

Intraday, the index briefly slipped below the 7500-mark to touch a low of 7497.30. The

high for the day was 7560.55. S&P BSE's Sensex closed at 25105.51, down 96.29 points

or 0.4%. The 30-stock index hit a low of 25056.18 and high of 25276.31 intraday.

The hike in freight rates is expected to drag down shares of cement, mining and metal, oil

and gas, fertiliser, and logistics companies. Market participants expect the stocks to

witness a knee-jerk reaction as companies may not be able to pass on the hike to

consumers immediately. For cement companies especially, it will be difficult given the

weak demand, but market participants expect the impact to get neutralised over the next

few months as demand picks up.

     Banks are expected to trade with a positive bias next week and buying may emerge in

private sector banks. But Kotak Mahindra Bank may take a hit on Monday as MSCI will

exclude it from the Global Standard Index from Jul 8.

(For Sectorwise Weekly Outlook Watch: www.rupeedesk.in)

Indian Markets Outlook for the week – 16 to 20.Jun.2014

Indian Markets Outlook for the week – 16 to 20.Jun.2014

(For Sectorwise Weekly Outlook Watch: www.rupeedesk.in)

     Global developments will be key for Indian share indices next Week as geopolitical

tensions in Iraq triggered a selloff across global equities yesterday. We will also take

cues from the outcome of US Federal Open Market Committee's two-day policy meeting

on Tuesday and Wednesday. The week will begin with the release of Wholesale Price

Index-based inflation data for May on Monday.

     According to a Cogencis poll, the WPI inflation rate is likely to rise to 5.3% from 5.2% in

April, due to statistical impact of a low base and lingering effects of high food prices.

The 1.09-rupee-per-ltr increase in diesel prices during May will also intensify upward

pressure on inflation. Yesterday 'Friday the 13th', equities witnessed across-the-board

selloff, bogged down by the rupee, which hit a one-month low and global crude oil

prices, which rose to a nine-month high amid the civil war in Iraq. If the tensions in Iraq

show no signs of abating, indices may see some more selling. Indices are likely to

remain under pressure depending on how long the Iraq crisis lasts. The market has run

up ahead of fundamentals in the last few months and so, such corrections happen.

That's when the convictions surrounding expectations get challenged.

     Indices had run up over 20% since March on India election-related euphoria and hopes

that the new government will push economic reforms. With the markets having

witnessed sharp gains, the scope for compression in multiples is very large. For further

gains, it is very important for the index to cross the 7700 mark decisively. Yesterday, the

Nifty ended at 7542.10, down 107.80 points or 1.4%. Intraday, the index fell 1.6% to

touch a low of 7525.35 and rose substantially to touch a high of 7678.50. The S&P BSE

Sensex closed at 25228.17, down 348.04 points or 1.4%, after hitting intraday low of

25171.61 and a high of 25688.31.

     Rate-sensitive stocks may witness further profit-booking next week while defensive

stocks may gain if the rupee weakens further. Monday, stocks of Idea Cellular may rise

as the Reserve Bank of India has said that foreign institutional investors can now buy up

to 49% in the telecom company.

(For Sectorwise Weekly Outlook Watch: www.rupeedesk.in)