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Monthly Market Market Outlook: August
Roundup
Going ahead, the equity markets are expected remain
Indian equity markets key rates unchanged and volatile this month due to ongoing monsoon session
witnessed a jubilant rally hinted possibility of rate of parliament and quarterly results season as well
in the month of July hike later this year was as global economic factors. The passage of GST will
and benchmark indices also the positive outcome be closely watched as to how the government will
touched their highest for global equity markets. set a consensus with opposition for passage of key
levels so far in 2016. Indian legislation. The government is keen to get the GST Bill
equity markets remained The month finally ended approved during the monsoon session of parliament
positive throughout the with upward bias as S&P ending on August 12. Passage of the long delayed
month on the expectation BSE Sensex delivering GST bill will push broader equity markets. Further,
of GST bill getting passed positive return of 3.90% to RBI monetary policy for August 9, GDP data, other
in the monsoon session settle at 28051.86 and Nifty macroeconomic events, monsoon progress, movement
of parliament. Improved 50 gaining 4.23% ending of rupee against dollar and crude oil price movement
prospects of the passage the month at 8638.50. will be closely watched for further market direction.
of the Constitution We recommend investors to invest in good quality
amendment bill on the On the institutional side, stocks at lower levels.
Good and Services Tax and foreign institutional
robust Apr-Jun earnings of investors (FIIs) bought Nifty Technical Outlook: August
some corporate big-wigs Rs 12,611.82 crore worth of
led to gains in domestic equities during the month The current price action on the monthly chart
equity markets. Further, while domestic mutual suggests that the undertone in the market still
US Federal Reserve’s left fund houses sold Rs 33.80 remains positive and momentum on the upside
crore in July 2016. is likely to continue. In coming month, if Nifty
trades and close above 8714 level then it is likely
Economic Data Wrap Up – July to test 8827 – 8940 – 9072 levels. However, if Nifty
trades and close below 8562 level then it can test
¡ India's Jun Nikkei rose to 1.62% from 0.79% in 8449 – 8336 – 8205 levels.
manufacturing PMI rose to May. Broadly, the monthly trends remains upside,
51.7 from 50.7 in May. ¡ India’s May FDI inflows fell however once Nifty trades and close above 8714
to $2.93 bln from $5.39 bln the upside momentum is likely to intensify. In
¡ India’s Jun Nikkei Services YoY. such scenario Nifty may test 8800 - 9000 levels.
PMI fell to 50.3 from 51 in ¡ India’s Jun trade deficit fell We maintain our stance that stock specific
May. to $8.12 bln from $10.83 bln activity is likely to continue.
YoY.
¡ India’s May IIP growth rose ¡ India’s Jun core sector 3 ARIHANT CAPITAL ¡ AUGUST 2016
to 1.2% from (-) 1.3% in Apr. growth fell to 5.2% from
2.8% in May.
¡ India’s Jun CPI inflation rose
to 5.77% from 5.76% in May.
¡ India’s Jun WPI inflation