India Market Outlook for the week - 28.11.2016 to 02.12.2016
After ending the week with a rise for the first time in five weeks, domestic share indices are likely to extend gains next week as technical charts and derivatives trade indicate a trend reversal. Technically, shares have been oversold for the last few weeks due to the impact of currency curbs, indicating an extended bounce back may be very much on the cards. A further rise is seen in the Nifty 50, with a strong support seen at the 8000-point mark because the put option at that strike price holds the maximum open interest. Gains may also be aided by the expectation that the Reserve Bank of India would cut interest rates in its Fifth Bi-Monthly Policy Statement, due on Dec 7. With the withdrawal of old currency notes leading to surging bank deposits and slowdown in consumption, the RBI might cut rates by 25-50 basis points. The Market participants will also keep an eye on global equities amid a strengthening dollar and heightened chances of a rate hike in the US. In the week ahead, the Nifty 50 is likely to test 8250, while a fall could drag it to 7900. The Banking stocks are seen taking the forefront in case of broad market gains. Swelling deposits due to the currency withdrawal and chances of a rate move, both in US and India, have boosted the outlook for the banking sector. Sustained rally in broad markets could also lift Mid-Cap and small cap stocks after they saw sharp declines on fears of a fall in consumption. Shares of metal companies are seen consolidating after witnessing sharp gains over the last few sessions. Profit-booking and sector churning is very much likely in the sector soon.
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After ending the week with a rise for the first time in five weeks, domestic share indices are likely to extend gains next week as technical charts and derivatives trade indicate a trend reversal. Technically, shares have been oversold for the last few weeks due to the impact of currency curbs, indicating an extended bounce back may be very much on the cards. A further rise is seen in the Nifty 50, with a strong support seen at the 8000-point mark because the put option at that strike price holds the maximum open interest. Gains may also be aided by the expectation that the Reserve Bank of India would cut interest rates in its Fifth Bi-Monthly Policy Statement, due on Dec 7. With the withdrawal of old currency notes leading to surging bank deposits and slowdown in consumption, the RBI might cut rates by 25-50 basis points. The Market participants will also keep an eye on global equities amid a strengthening dollar and heightened chances of a rate hike in the US. In the week ahead, the Nifty 50 is likely to test 8250, while a fall could drag it to 7900. The Banking stocks are seen taking the forefront in case of broad market gains. Swelling deposits due to the currency withdrawal and chances of a rate move, both in US and India, have boosted the outlook for the banking sector. Sustained rally in broad markets could also lift Mid-Cap and small cap stocks after they saw sharp declines on fears of a fall in consumption. Shares of metal companies are seen consolidating after witnessing sharp gains over the last few sessions. Profit-booking and sector churning is very much likely in the sector soon.
