Indian Market Outlook for the week – 21 to 25.11.2016
With equities posting their longest losing streak since August, 2015, the underlying sentiment remains weak as foreign fund outflows continue due to the expected negative implication of currency curbs, and US interest rate hike fears. Yesterday, benchmark indices marked the fourth straight week of declines to end at their lowest levels in six months. The 50-share Nifty 50 closed down 5.85 points, or 0.1% at 8074.10 and the 30- share BSE Sensex closed down by 77.38 points, or 0.3% at 26150.24, marking its fifth consecutive session of losses. Despite the losses that equities registered since the government's decision on Nov 8 to withdraw and replace highdenomination currency notes, Nifty 50 has managed to trade above the 8000- mark. 8000 was a very strong support level for Nifty 50 and it has managed not to break it. So, we see expiry at 8200-8250 levels. The November futures and options series will expire on Thursday. Although recovery is expected, they do not see any major gains for stocks. Prospects of earnings downgrade for Oct-Mar due to the impact of currency curbs on domestic consumption and consequently on corporate profits and a near certainty of the US Fed raising interest rates in December has triggered capital outflows from Indian equities. Economists have sharply cut their GDP growth estimates for the current and the next financial year to factor in the hit from currency curbs.
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With equities posting their longest losing streak since August, 2015, the underlying sentiment remains weak as foreign fund outflows continue due to the expected negative implication of currency curbs, and US interest rate hike fears. Yesterday, benchmark indices marked the fourth straight week of declines to end at their lowest levels in six months. The 50-share Nifty 50 closed down 5.85 points, or 0.1% at 8074.10 and the 30- share BSE Sensex closed down by 77.38 points, or 0.3% at 26150.24, marking its fifth consecutive session of losses. Despite the losses that equities registered since the government's decision on Nov 8 to withdraw and replace highdenomination currency notes, Nifty 50 has managed to trade above the 8000- mark. 8000 was a very strong support level for Nifty 50 and it has managed not to break it. So, we see expiry at 8200-8250 levels. The November futures and options series will expire on Thursday. Although recovery is expected, they do not see any major gains for stocks. Prospects of earnings downgrade for Oct-Mar due to the impact of currency curbs on domestic consumption and consequently on corporate profits and a near certainty of the US Fed raising interest rates in December has triggered capital outflows from Indian equities. Economists have sharply cut their GDP growth estimates for the current and the next financial year to factor in the hit from currency curbs.
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