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Local indices are likely to trade with a negative bias next week after the National Stock Exchange's 50-share Nifty ended below the psychologically crucial 5700-mark yesterday, with movement of the rupee and in the overseas markets being key factors. The rupee will be in focus next week. Prices of crude oil may go up further and demand for dollar will also rise on positive US data. The rupee yesterday ended at an all-time closing low of 61.10 against the dollar. Market participants expect gains from rupee's depreciation and improving US economy to augur well for the information technology stocks next week. The CNX IT index was the only gainer among sectors yesterday, ending up 1% at 7858.35 points.
Currently markets seem reluctant to allow any reversal or bounce back. It is advisable to go with the trend and utilise any technical bounce to create shorts till Nifty sustains below 5880 on spot basis and keep trailing this stop loss with every decline. Traders should avoid high beta stocks and maintain a hedge for leveraged positions. Stocks of capital goods companies are seen recovering on view that some of them have bottomed out, while infrastructure and real estate shares are seen under pressure. Banking stocks continuing their weak run next week, particularly public sector banks on concerns over the quality of their loan assets. Canara Bank may see a minor technical bounce back next week as it is in an extremely oversold zone presently. Stocks of Hindustan Construction Co, which were locked in at 20% upper circuit at 9.60 rupees yesterday on its better-than-expected Apr-Jun earnings, may rise further.
Power Grid Corp of India, which was the worst performer among Nifty stocks yesterday after plunging to a record low of 86.55 rupees after its board approved a follow-on public offer of 694.4 mln shares, is unlikely to see a significant selling in next week. Most market players expect stocks of Financial Technologies India to extend their losses. The stock will remain in focus as finance ministry sources indicated that the Securities and Exchange Board of India is looking into the steep fall in the company's as well as group company Multi Commodity Exchange of India's share prices. We expects Financial Technologies to fall below 100 rupees. Bharat Heavy Electricals, Canara Bank, Coal India and Godrej Consumer Products will detail their Apr-Jun results over the weekend. Next week, Apr-Jun earnings from Rashtriya Chemicals & Fertilisers, New Delhi Television, Spice jet, Tata Chemicals, Puravankara Projects, Tata Power Co, Unitech, Lanco Infratech, Tata Motors, NMDC, Aurobindo Pharma, Sun Pharmaceutical Industries, and TVS Motor Co, among others, are due.
Local indices are likely to trade with a negative bias next week after the National Stock Exchange's 50-share Nifty ended below the psychologically crucial 5700-mark yesterday, with movement of the rupee and in the overseas markets being key factors. The rupee will be in focus next week. Prices of crude oil may go up further and demand for dollar will also rise on positive US data. The rupee yesterday ended at an all-time closing low of 61.10 against the dollar. Market participants expect gains from rupee's depreciation and improving US economy to augur well for the information technology stocks next week. The CNX IT index was the only gainer among sectors yesterday, ending up 1% at 7858.35 points.
Currently markets seem reluctant to allow any reversal or bounce back. It is advisable to go with the trend and utilise any technical bounce to create shorts till Nifty sustains below 5880 on spot basis and keep trailing this stop loss with every decline. Traders should avoid high beta stocks and maintain a hedge for leveraged positions. Stocks of capital goods companies are seen recovering on view that some of them have bottomed out, while infrastructure and real estate shares are seen under pressure. Banking stocks continuing their weak run next week, particularly public sector banks on concerns over the quality of their loan assets. Canara Bank may see a minor technical bounce back next week as it is in an extremely oversold zone presently. Stocks of Hindustan Construction Co, which were locked in at 20% upper circuit at 9.60 rupees yesterday on its better-than-expected Apr-Jun earnings, may rise further.
Power Grid Corp of India, which was the worst performer among Nifty stocks yesterday after plunging to a record low of 86.55 rupees after its board approved a follow-on public offer of 694.4 mln shares, is unlikely to see a significant selling in next week. Most market players expect stocks of Financial Technologies India to extend their losses. The stock will remain in focus as finance ministry sources indicated that the Securities and Exchange Board of India is looking into the steep fall in the company's as well as group company Multi Commodity Exchange of India's share prices. We expects Financial Technologies to fall below 100 rupees. Bharat Heavy Electricals, Canara Bank, Coal India and Godrej Consumer Products will detail their Apr-Jun results over the weekend. Next week, Apr-Jun earnings from Rashtriya Chemicals & Fertilisers, New Delhi Television, Spice jet, Tata Chemicals, Puravankara Projects, Tata Power Co, Unitech, Lanco Infratech, Tata Motors, NMDC, Aurobindo Pharma, Sun Pharmaceutical Industries, and TVS Motor Co, among others, are due.
