Indian Markets Outlook for the week – 6.Sep.2016 to 9.Sep.2016
(Positive next week; infra companies may sustain gain)
( www.rupeedesk.in )
========================================================================
Capital Goods Stocks Outlook – 06 to 09.09.2016 Seen range bound, bias negative
========================================================================
Benchmark indices are seen positive next week because
sentiment remains buoyant after
announcement of new policy initiatives for the construction
sector and robust sales numbers reported
by most automobile companies in August. The US non-farm
payrolls data for August, released post
market hours yesterday, was weaker than expected but its impact
on the Indian equities could be
diluted as Indian stock exchanges are closed Monday for
Ganesh Chaturthi.
US non-farm payrolls rose by 151,000 last month, against The
Wall Street Journal poll that had
projected a rise of 180,000 jobs. A strong growth in the
world's largest economy would have
increased chances of interest rates being raised by the US
Federal Reserve in September. Swiss
investment advisor Marc Faber told Cogencis that the US Fed
is unlikely to raise rates, when it meets
later this month, as it comes ahead of Presidential
elections in the country in November.
Next week, investors will eye earnings of Nifty 50
constituents Oil and Natural Gas Corp, GAIL India, Coal India and Bharat Heavy Electricals. Yesterday, the
index gained 0.4% to end at 8809.65 points, while the Sensex ended 0.4% higher at 28532.11.
Infrastructure companies are likely to extend gains next week, as the Union Cabinet cleared a proposal to
release 75% of all dues stuck in appeals after arbitration award to construction companies in government
contracts.
This move will help restart stalled projects and clear bank
loans, which will ensure fresh lending for
the completion of projects. As a result, sentiment for
banks, public-sector banks in particular, also
remains buoyant. We look at this as a positive development
for the banking sector, as the delay in
payment has resulted in significant working capital
shortfall that has been funded by banks. We
believes ICICI Bank and public-sector banks would be the
biggest beneficiaries. Telecom companies--
Bharti Airtel and Idea Cellular--are seen resuming their
weak trend next week even after a rebound
yesterday, as the entry of Reliance Jio Infocomm will put
pressure on their tariffs and profitability.
Year-to-date, Bharti Airtel has lost 6.3% while Idea
Cellular has fallen 41.2%.
( www.rupeedesk.in )
