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Monthly Market equity markets overlooked Market Outlook: July
Roundup Brexit event and recouped
all losses as macroeconomic Going ahead, the equity markets have already
Indian equity markets and fundamentals of the discounted the ‘Rexit’ and ‘Brexit’ issue. The US
witnessed a roller coaster country overpowered the Federal Reserve said that there is no probability of
ride throughout the month sentiments. Further, the interest rate hike this year and the Cabinet’s approval
of June despite starting on a government approval of of the Seventh Pay Commission will work like “Icing
subdued note. The Reserve Seventh Pay Commission’s on the cake” for further upward movement in the
Bank of India kept the key recommendations on pay markets. Focus will now shift to Q1FY17 corporate
policy rates unchanged in its and pensions of central earnings season starting from second week of July
second bimonthly monetary government staff was and the monsoon session of parliament to be held
policy review owing to considered as a boost to from July 18 to Aug 12 that will be looked upon for
concern of rising inflation. consumption thus supporting important announcement by government about
Rexit and Brexit were the two market sentiments. economic reforms. Further, macroeconomic events,
major events that gripped monsoon progress, movement of rupee against dollar,
markets in extreme bouts of The month finally ended crude oil price movement and US FOMC meeting
volatility. The announcement with upward bias as S&P BSE scheduled for Jul 27, 2016 will be closely watched.
by RBI governor Raghuram Sensex delivering positive As a rule “Panic always creates buying opportunity
Rajan that he will not return of 1.24% to settle at in stocks”. We recommend investors to adopt buy
continue at RBI for second 26999.72 and Nifty 50 gaining on dips strategy and invest in good quality stocks at
term left the market with 1.56% ending the month at reasonable valuations.
negative sentiments. Further, 8287.75.
Britain’s decision to leave Nifty Technical Outlook: July
the European Union was On the institutional side,
nightmarish for global equity foreign institutional investors
markets that were expecting (FIIs) bought Rs 3,712.88 crore
Britain to remain in European worth of equities during the The current price action on the monthly chart
Union. However, Indian month while domestic mutual suggests that the undertone in the market is
fund houses sold Rs 85.90 positive and momentum on the upside is likely
crore in June 2016. to continue. In coming month, if Nifty trades
and close above 8362 level then it is likely to test
Economic Data Wrap Up – June 8473 – 8585 – 8714 levels. However, if Nifty
trades and close below 8213 level then it can test
¡ India's May Nikkei ¡ India’s May WPI inflation 8101 – 7990 – 7861 levels.
Broadly, we are of the opinion that immediate
manufacturing PMI rose to rose to 0.79% from 0.34% in resistance is at 8362 level. Any close above the
mentioned level would propel Nifty to 8600 to
50.7 from 50.5 in Apr. Apr. 8700 levels. We maintain our stance that stock
specific activity is likely to continue.
¡ India’s May Nikkei Services ¡ India’s Jan-Mar FDI inflows
3 ARIHANT CAPITAL ¡ JULY 2016
PMI fell to 51 from 53.7 in fell to $8.8 bln from $9.3 bln

Apr. YoY.

¡ India’s Apr IIP growth fell to ¡ India’s May trade deficit rose

(-) 0.8% from 0.3% in Mar. to $6.27 bln from $4.84 bln in

¡ India’s May CPI inflation Apr.

rose to 5.76% from 5.39% in ¡ India’s May core sector

Apr. growth fell to 2.8% from

8.5% in Apr.