Indian Market Outlook for the week – 22 to 26.05.2017

Indian Market Outlook for the week – 22 to 26.05.2017

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Indian Market Outlook for the week – 15 to 19.05.2017 )

The benchmark indices are likely to trade in a narrow range next week, with global markets and quarterly corporate results likely to lend Direction. Also, investors would study the impact of the goods and services tax and buy stocks in segments for which rates are largely favourable. We feel the stock markets will be steady ahead of the expiry of the May futures and options series on Thursday, and investors won't be building fresh aggressive positions. Next week, the Nifty 50 is seen between its crucial support levels of 9370 and 9500. The initial jump in the S&P BSE Sensex today to a lifetime high was due to a rise in the fast moving consumer goods sector on broadly lower rates in the new tax regime. These stocks closed off the day's highs, an indication that investors would not aggressively buy at higher rates. The S&P BSE Sensex ended up 30.13 points, or 0.1% higher at 30464.92 points today, after having hit a lifetime high of 30712.35 points. The Nifty 50 ended down 1.55 points at 9427.90 points, while the Nifty FMCG hit a lifetime high of 24922.50 points and ended up over 2% at 24352.90 points, following the announcement of the rates under the tax regime. The new tax rates under the goods and services tax for most of the fast moving consumer goods are near their existing indirect tax rates. However, for toothpaste, hair oil and soaps, the tax will come down from the current 23% to 18%. With sector leaders like Hindustan Unilever and ITC moving to lifetime high levels, the brokerage now expects Britannia Industries to move higher. Stocks of cigarette major ITC closed up 3% at 286.20 rupees, while Hindustan Unilever ended up 1.8% at 1,008 rupees, and Britannia Industries closed up 0.8% at 3,582.70 rupees. Next week, investors are likely to focus on shares in the automobile, telecom, information technology, metals, textiles, and hotels segments, following the announcement of the goods and services tax rates. Stocks of healthcare and education may attract some buying as they are exempt from the tax regime. Next week, Adani Ports and Special Economic Zone, Cipla, GAIL India, ITC, Lupin, Sun Pharmaceutical, Tata Motors, Bosch, Indian Oil Corp and Tech Mahindra are likely to be in focus as they are the Nifty 50 companies that will announce their Jan-Mar earnings.

Source : Cogencis Information Services Ltd.