Indian Markets Outlook for the week – 09 to 13.Jun.2014
(For Sectorwise Weekly Outlook Watch: www.rupeedesk.in)
After the dream run this week that saw benchmark indices rise 5% and scale record highs,
more gains are on the cards for equities next week. All indicators are in favour of the
sustainable rise to continue but with intermediate corrective moves. This time, it's
important that retail investors maintain a balance in their trading and investment activities
as both are equally important.
Today, the National Stock Exchange Nifty and the S&P BSE Sensex rose 1.5% each and
touched lifetime highs on the back of strong buying by foreign institutional investors.
FIIs hope that India's new government will effect key economic reforms. The Nifty ended
at a record closing high of 7583.40, up 109.30 points or 1.5%. Intraday, it traded between
7497.65 and a lifetime high of 7592.70.
The Sensex ended at its highest closing level of 25396.46, up 376.95 points or 1.5%. En
route, it touched a lifetime intraday high of 25419.14 from a low of 25129.76. With
indices breaching key resistance levels and entering bull territory, market participants
said it is difficult to predict an upside level for indices.
However, some said the Nifty may cross 7600 levels next week. The options data too
indicates more upside for the index. Call options across 7600 strike to 7800 strike have
seen addition in open interest today. Also, significant addition in open interest was seen
in 7500 and 7600 put options, indicating the underlying positive sentiment. This buying
lifted the volatility index by 3.5% to 15.9825. In case of any correction, market
participants do not see sharp downside in indices and pegged 7400 as a support for the
Nifty.
Apart from keeping an eye on the ongoing Parliament session, investors will look at
overseas markets as the key US jobs data for May.
On the domestic front, India's industrial production data or the Index of Industrial
Production for April, and inflation level based on the Consumer Price Index for May, will
be detailed on Thursday.
Realty and capital goods stocks will continue to head north, but activity will be seen more
in mid-cap stocks in these segments.
The rally in mid-cap and small-cap stocks is expected to continue but market participants
recommend selective buying in these spaces. Investors should pick stocks of companies
with strong earnings visibility, leadership position and sound balance sheet.
(For Sectorwise Weekly Outlook Watch: www.rupeedesk.in)
