Indian Markets Outlook for the week – 8.Aug.2016 to 12.Aug.2016
( www.rupeedesk.in )
(Positive; RBI policy, earnings key next week)
( www.rupeedesk.in )
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Auto Stocks Outlook for the week – 08 to 12.08.2016 To take cues from Jul sales data, companies' earnings
Capital Goods Stocks Outlook for the week – 08 to 12.08.2016 In a range with negative bias next week
Cement Stocks Outlook for the week – 08 to 12.08.2016 Seen up on positive momentum in broader market
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Indian Market Outlook for the week – 08 to 12.08.2016 Positive; RBI policy, earnings key next week
( www.rupeedesk.in )
With the Reserve Bank of India's monetary policy scheduled
for Tuesday and a bunch of Nifty 50
companies detailing their Apr-Jun earnings next week, action
in equities will be largely stock-centric.
The underlying bias remains positive as indices are likely
to test new highs, but gains will be followed by bouts of profit booking. Views on the monetary policy
action of RBI are mixed. Some see scope for a 25 basis point cut in repo rate in view of the good
progress in monsoon rains and passage of the crucial Constitution Amendment Bill for goods and
services tax by the Rajya Sabha.
Cumulative rainfall in the country during Jun 1-Aug 4 was
499.1 mm, 2% above normal, and barring
east and northeast India, all the other subdivisions
received above normal rainfall. Besides, the government has set the inflation target for the next five
years at 4% in a band of 2-6%. The fiveyear
target is unchanged from the oneset for March 2018. This is
also one of the reasons why some see room for a rate cut next week. A few others, though,
expect a 25 basis points cut in repo rate only in the coming months.
The passage of GST bill has certainly paved way for a rate
cut, but not necessarily in the short-term.
Given the accommodative monetary policy stance of other
central banks, and expectations that
softening of commodity prices will keep food inflation
moderate, a 25 basis points rate cut is likely by October. If RBI surprises the market with a 50-basis-point
repo rate cut, it will result in a sharp jump in share prices, with the possibility of Nifty 50 testing
9000 points. Now, if RBI cuts interest rates, it will lead to a sharp rally, while a status quo may lead to a
short-term correction.
Yesterday, the index ended at 8683.15, up 132.05 points or
1.5% from the previous close, while
Sensex closed at 28078.35, 363.98 points or 1.3%. Nifty 50
companies detailing their Apr-Jun
earnings next week include Hindalco Industries, Adani Ports
and Special Economic Zone, Hero
MotoCorp, Cipla, Lupin, Mahindra & Mahindra, State Bank
of India, Sun Pharmaceutical Industries,
Bank of Baroda, Bosch, Grasim Industries, and Idea Cellular.
Next week, stocks of information
technology companies may extend losses as investors move out
of 'defensive' companies, and as
Cognizant Technology Solutions Corp has cut its sales
guidance for 2016.( www.rupeedesk.in )
