The market is expected to consolidate for next few sessions before resuming its northward journey, but the long term trend remains positive.
Bulls continued to dominate Dalal Street for the third consecutive week as the Nifty and Sensex hit fresh intraday record highs of 11,495.20 and 38,076.23, respectively, in the week-ended August 10.
Inflow from foreign institutional investors, continued buying in banking and financials and in-line better-than-expected Q1 earnings boosted investor sentiment, though there is a caution in global peers due to trade tensions.
The Sensex gained 0.83 percent to close the week at 37,869.23. The Nifty rose 0.60 percent to end Friday at 11,429.50. Both benchmark indices have rallied 3.8 percent in the last three weeks.
The broader market underperformed frontliners with the BSE Midcap and Smallcap indices gaining 0.02 percent and 0.29 percent, respectively, in the passing week but outperformed in three consecutive weeks, rising 6.7 percent each.
After such an upmove and given that we are at the fag end of the June quarter earnings season, which seems to have been priced in, and continued uncertainty over US-China trade war, experts expect the market to consolidate for the next few sessions before resuming its northward journey. However, they were quick to add that the long term trend remains intact.
Experts don't see any major risk on the domestic front, adding that any sharp correction if it occurs will only be because of global reasons.
"With the index trading at a record high, some consolidation cannot be ruled out. We expect stock-specific volatility to continue with more corporate earnings scheduled in the next few sessions.
Experts said market participants would keep an eye on global developments especially the US-China trade war, progress of the monsoon, macroeconomic data, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), movement of the rupee against the dollar and crude oil price trajectory.
"We continue to remain positive on market. We feel a sufficient monsoon, hike in the minimum support price and government infrastructure spending will be positive for the consumption theme," Hemang Jani, Head - Advisory, Sharekhan by BNP Paribas said.
Indian stock market will remain shut on Wednesday, August 15, on account of Independence Day.
Here are 10 key factors that will keep traders busy next week:
Earnings
As we enter the final week of June quarter earnings season, nearly 1,800 companies will declare their quarterly earnings. Most of these will be out in the first two sessions of the week itself.
Tata Steel, Tata Chemicals, Cadila Healthcare, CARE Ratings, Godrej Industries, DHFL, Oil India, Ashoka Buildcon and Hotel Leela Venture will announce their numbers on Monday, while Sun Pharmaceutical Industries, IDBI Bank, Allahabad Bank, Grasim Industries, Indiabulls Real Estate, HDIL and Dilip Buildcon will declare results on Tuesday.
Trade war
Globally investors will continue to closely watch trade tensions between the world's largest economies: US and China. In the week gone by, both governments announced the possibility of imposing tit-for-tat tariffs on an additional $16 billion worth of goods.
Dollar-rupee and crude movements
The rupee ended the week at 68.83 against the dollar, falling 22 paise compared to closing value of 68.61 a dollar on August 3 due to appreciation in the American currency. On Friday, it did hit 69 a dollar intraday.
The fall in currency was after upside seen in previous two consecutive weeks, as renewed global currency turmoil (hit by the sudden wave of risk-off on mounting fears over a political crisis in Turkey) and worsening trade war fears worldwide rattled the forex market in a big way.
Further depreciation in the rupee may act as a dampener in the near term for equities.
Crude oil prices corrected for the week-ended August 10 as investors worried that global trade disputes could slowdown economic growth and hurt demand for energy.
US crude futures fell more than a percent during the week, posting its sixth straight weekly loss for its worst losing streak since August 2015. Brent was down around half a percent.
Macro data
Consumer price index (CPI) inflation will be released on Monday while Wholesale price index (WPI) Inflation and trade data for July will be announced on Tuesday.
India's Foreign Exchange Reserves for the week ended August 10 and deposit & bank loan growth for the week ended August 3 will be declared on Friday.
Money flow
Foreign institutional investors and domestic institutional investors' flow will be closely watch in the coming week after they were net buyers in the passing week.
FIIs inflow remained supportive factor during the week ended August 10 as they were net buyers to the tune of around Rs 1,300 crore while DIIs (as per provisional data) were also net buyers to the tune of Rs 301 crore.
Technical outlook
The Nifty opened the week above 11,400 levels and managed to hold the same level at close on Friday. It remained rangebound for major part of the week, though it touched intraday record high of 11,495.20 amid stable to better-than-expected earnings.
The index formed Spinning Top candle on the weekly candlestick charts. Spinning Top is often regarded as a neutral pattern which suggests indecisiveness on the part of both bulls as well as bears. It can be formed in an uptrend as well as in a downtrend.
After positive close for five consecutive sessions, the Nifty ended Friday on a negative note, which indicated that there could be consolidation before moving northward.
The Nifty ended the week with a spinning top candle while negative divergence in daily RSI is clearly visible. It broke out the higher end of the range 11,180-11,440 and touched the high of 11,495. However, sell-off on the last session of the week led the benchmark index back below 11,440.
Hence, staying cautious on rise is advised and the Nifty getting into a sideways movement with negative bias in coming few sessions is likely, it feels. "A short-term retracement against the broader uptrend is likely. Hence, intraday bulls may find difficulty breaking out 11,500 as of now. However, breaking out 11,500 may again initiate a rise up to 11,550 and 11,650. But, that looks unlikely at this juncture analyzing the overall chart pattern."
The research house said further, thorough technical study of the weekly as well as the daily chart patterns suggests, Nifty broader trading range for the coming week is expected to be 11,320-11,550.
Futures & Options
Maximum call open interest (OI) of 41.51 lakh contracts was seen at the 11,500 strike price. This will act as a crucial resistance level for August series. This was followed by the 11,600 strike price, which now holds 27.57 lakh contracts in open interest, and 11,700, which has accumulated 24.34 lakh contracts in open interest.
Maximum put open interest of 50.70 lakh contracts was seen at the 11,000 strike price. This will act as a crucial support level for August series. This was followed by the 11,200 strike price, which now holds 43.32 lakh contracts in open interest, and the 11,300 strike price, which has now accumulated 41.12 lakh contracts in open interest.
The Call base of 11,500 remained almost unchanged despite the Nifty testing these levels. At the same time, significant additions were seen at Put strikes of 11,200 and 11,300 during the week.
It believes 11,300 is likely to act as immediate support for the Nifty in the ongoing momentum. "Any extended profit booking should be seen only if the Nifty moves below 11,300."
The PCR OI for the Nifty continued to rise in the current uptrend where no major profit booking took place as traders are getting more comfortable in writing Put options. At the same time, current Nifty futures open interest is highest since January 2018.
With high PCR OI and high Nifty open interest, we believe consolidation is more likely than continued momentum. However, positive bias should be maintained till we see some sharp closure of positions.
Stocks in Focus
Coal India: Q1 consolidated profit up 61.1 percent at Rs 3,786.4 crore versus Rs 2,350.8 crore; revenue up 26.6 percent at Rs 24,260.9 crore versus Rs 19,161.7 crore (YoY)
Power Mech: Q1 profit up 42.5 percent at Rs 30.5 crore versus Rs 21.4 crore; revenue up 28.9 percent at Rs 461.9 crore versus Rs 358.4 crore (YoY).
NBCC: Q1 consolidated profit up 23.9 percent at Rs 73.2 crore versus Rs 59.1 crore; revenue up 19.1 percent at Rs 1,844 crore versus Rs 1,548.9 crore (YoY).
VRL Logistics: Q1 profit down 28.3 percent at Rs 24.2 crore versus Rs 33.7 crore; revenue up 7.4 percent at Rs 528.5 crore versus Rs 491.9 crore (YoY).
Rushil Decor: Q1 profit down 19.5 percent at Rs 5.2 crore versus Rs 6.4 crore; revenue up 9.8 percent at Rs 86.6 crore versus Rs 78.9 crore (YoY).
India Cements: Q1 profit down 20.6 percent at Rs 21 crore versus Rs 26.4 crore; revenue down 6.9 percent at Rs 1,360.7 crore versus Rs 1,461.6 crore (YoY).
Glenmark Pharma: Q1 profit down 30 percent at Rs 233 crore versus Rs 333.4 crore; revenue down 8.4 percent at Rs 2,165.6 crore versus Rs 2,363 crore (YoY).
Adani Green: Q1 consolidated loss at Rs 74.3 crore versus loss of Rs 17 crore; revenue jumps to Rs 472.2 crore versus Rs 190 crore (YoY).
Corporation Bank: Q1 profit up 41.1 percent at Rs 85 crore versus Rs 60.1 crore; NII up 51.1 percent at Rs 1,564.2 crore versus Rs 1,035 crore (YoY).
Finolex Industries: Q1 net profit up 29.5 percent at Rs 103.3 crore versus Rs 79.8 crore; revenue up 13.3 percent at Rs 827.8 crore versus Rs 730.7 crore (YoY).
Advanced Enzyme: Q1 consolidated net profit up 92 percent at Rs 31.2 crore versus 16.3 crore; revenue up 38.2 percent at Rs 104.3 crore versus Rs 75.5 crore (YoY).
DLF: Q1 profit up 58.2 percent at Rs 172.4 crore versus Rs 109 crore; revenue down 26.4 percent at Rs 1507.4 crore versus Rs 2047.7 crore (YoY).
Union Bank of India: Q1 profit up 11.2 percent at Rs 129.5 crore versus Rs 116.5 crore; NII rises to Rs 2,626.2 crore versus Rs 2,242.6 crore (YoY).
NHPC: Q1 profit down 14.5 percent at Rs 737.6 crore versus Rs 862.7 crore; revenue down 8.5 percent at Rs 2,129 crore versus Rs 2,327.5 crore (YoY).
Sun TV Network: Q1 profit up 62.6 percent at Rs 409.1 crore versus Rs 251.6 crore; revenue up 42.5 percent at Rs 1,120.4 crore versus Rs 786.3 crore (YoY).
Godfrey Phillips: Q1 profit at Rs 56.7 crore versus loss of Rs 3.1 crore; revenue up 6.6 percent at Rs 574.9 crore versus Rs 539.4 crore (YoY).
MRPL: Q1 profit down 33.2 percent at Rs 362 crore versus Rs 542.1 crore; revenue down 9.6 percent at Rs 13,557.8 crore versus Rs 14,990.7 crore (QoQ).
Nile: Q1 profit down 45.2 percent at Rs 2.9 crore versus Rs 5.3 crore; revenue up 6.1 percent at Rs 153 crore versus Rs 144.2 crore (YoY).
Rajshree Sugars: Q1 loss at Rs 25.3 crore versus profit of Rs 18.2 crore; revenue down 53.7 percent at Rs 93.4 crore versus Rs 201.6 crore (YoY).
TVS Srichakra: Q1 profit up 95.6 percent at Rs 48.5 crore versus Rs 24.8 crore; revenue up 9 percent at Rs 587.8 crore versus Rs 539.3 crore (YoY).
Thyrocare: Q1 profit up 6.4 percent at Rs 23.4 crore versus Rs 22 crore; revenue up 10.7 percent at Rs 97.2 crore versus Rs 87.8 crore (YoY).
Timken India: Q1 profit up 44.3 percent at Rs 31.6 crore versus Rs 21.9 crore; revenue up 27.9 percent at Rs 383.4 crore versus Rs 299.8 crore (YoY).
Vakrangee: Q1 profit down 92.2 percent at Rs 13.1 crore versus Rs 168 crore; revenue down 22.6 percent at Rs 1,011.5 crore versus Rs 1,301.8 crore (YoY).
Sheela Foam: Q1 profit up 23.7 percent at Rs 33.4 crore versus Rs 27 crore; revenue up 22.5 percent at Rs 425.6 crore versus Rs 347.3 crore (YoY).
Indian Hotels: Q1 loss at Rs 16.7 crore versus profit of Rs 7.7 crore; revenue up 7 percent at Rs 564.6 crore versus Rs 527.7 crore (YoY).
PC Jeweller: Q1 profit up 4.5 percent at Rs 141.9 crore versus Rs 135.8 crore; revenue up 14.6 percent at Rs 2423.2 crore versus Rs 2115 crore (YoY).
CG Power: Q1 profit up 18.7 percent at Rs 36.8 crore versus Rs 31 crore; revenue up 0.1 percent at Rs 1,179.8 crore versus Rs 1,178.5 crore (YoY).
Andhra Bank: Q1 loss at Rs 539.8 crore versus profit of Rs 40.4 crore; NII up 1.3 percent at Rs 1,460 crore versus Rs 1,441 crore (YoY).
JB Chemicals: Q1 profit at Rs 42 crore versus Rs 20.36 crore; revenue up 28.9 percent at Rs 366 crore versus Rs 283.2 crore (YoY).
Puravankara: Q1 profit up 29.7 percent at Rs 27 crore versus Rs 20.7 crore; revenue up 12.9 percent at Rs 382 crore versus Rs 338.5 crore (YoY).
Gujarat Mineral: Q1 profit up 30.7 percent at Rs 187 crore versus Rs 143 crore; revenue up 10.5 percent at Rs 672 crore versus Rs 608.4 crore (YoY).
Aditya Birla Capital: Q1 profit increases at Rs 216 crore versus Rs 172 crore; revenue rises to Rs 2,978 crore versus Rs 2,253 crore (YoY).
Surya Roshni: Q1 profit up 24.2 percent at Rs 20.5 crore versus Rs 16.5 crore; revenue up 11.8 percent at Rs 1270.5 crore versus Rs 1136.9 crore (YoY).
Uflex: Q1 profit up 0.6 percent at Rs 94.4 crore versus Rs 93.8 crore; revenue up 11.2 percent at Rs 1,904.8 crore versus Rs 1,713.3 crore (YoY).
TNPL: Q1 profit down 32.6 percent at Rs 38.8 crore versus Rs 57.6 crore; revenue down 11.9 percent at Rs 925.3 crore versus Rs 1,050 crore (YoY).
Rupa: Q1 profit up 10.8 percent at Rs 10.3 crore versus Rs 9.3 crore; revenue up 12.2 percent at Rs 183.5 crore versus Rs 163.5 crore (YoY).
Alkem Labs: US FDA issues no Form 483 to company's manufacturing unit in California.
XPro India: Board gets shareholder nod for reappointment of C Bhaskar as MD & CEO.
APT Packaging: Board approves re-appointment of Arvind Machhar as MD.
Jindal Poly Films: Jindal Poly Films: Board approved expansion plans for company's India operation by way of investment of approximately Rs 400 crore in 2nd Nonwoven Spunmelt Fabric line; also approved expansion plans for India operation by way of investment of Rs 350 crore in Biaxially-Oriented Poly Propylene (BOPP)-Line No.8 and Cast Poly Propylene (C PP) Line No. 2.
Jet Airways: S Vishwanathan did not quit the audit committee; his term came to an end.
7NR Retail: Board approved issue of bonus shares in the ratio 1:2.
Arihant Superstructures: Board has constituted a committee on insider trading and board was informed of non-compliance of SEBI provisions by independent director, Dinesh Babel.
HDFC Bank: Deputy MD Paresh Sukthankar resigns.
Tata Motors: July total group global wholesales down 5 percent at 92,639 units (YoY).
Adani Gas: Wins 7 more geographical areas, Bharat Gas wins 5 geographical areas and Torrent Gas wins 3 geographical areas under 9th round of City Gas Distribution bid - Reports CNBC-TV18.
Global cues
US consumer inflation expectations for July, and China's FDI year-to-date and outstanding loan growth for July will be released on Monday.
China's Industrial Production and Retail Sales for July; Japan's capacity utilisation and Industrial Production for June; and Euro Area's GDP growth for Q2CY18 and Industrial production for June will be announced on Tuesday.
China's House Price Index for July; and US' Retail Sales & Industrial Production for July, MBA Mortgage Application for the week ended August 10 and API & EIA Crude Oil Stocks Change for the week ended August 10 will be declared on Wednesday.
Japan's Balance of Trade for July; Euro Area's Balance of Trade for June; US' Initial Jobless Claims for the week ended August 11 and Housing Starts for July will be released on Thursday.
Euro Area's Inflation for July, Current Account Balance for June and Core inflation rate for July will be announced on Friday.
MORE WILL UPDATE SOON!!
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