Page 3 - 1797_Value Plus Aug 2016

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