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Monthly Market of the US Fed to keep the Market Outlook: May
Roundup rates unchanged took a
hit with Bank of Japan’s Going ahead, Indian equity markets are likely to
Indian equity markets decision. Bank of Japan left its be swayed by global factors as well as ongoing
started the month of April policy rates unchanged and result session. The next batch of Q4FY16 corporate
on a somber note ahead of disappointed market players earnings, GDP data, macroeconomic data, trend
the RBI’s monetary policy. who expected that the bank in global markets, FII’s and DII’s inflows, the
The rate cut of 25 bps would take further steps to movement of rupee against dollar and crude oil
announced by RBI failed stimulate Japan’s economy. price movement will dictate the trend of markets
to meet expectations and in the near term. Further, developments in budget
dragged markets lower. The month finally ended session of Parliament will be keenly watched,
Domestic data, mixed with upward bias as S&P BSE during which government hopes to receive support
Q4FY16 corporate earnings Sensex delivered positive of opposition parties in passage of key legislations
along with supportive global return of 1.04% to settle at including the Goods & Services Tax (GST) Bill. We
cues helped the market to 25606.62 and Nifty 50 gained recommend investors to focus on the long term and
gain in the second week of 1.44% ending the month at invest only in fundamentally strong companies
the month. The major boost 7849.80. trading at attractive valuations.
came with forecast of good
monsoon raising expectations On the institutional side, Nifty Technical Outlook: May
of a cut in the Reserve Bank foreign institutional investors
of India policy rates. Indian (FIIs) bought Rs 8,415.73 crore The current price action on the monthly chart
equity markets went through worth of equities during the has formed a candlestick pattern that resembles
a disappointing trade during month while domestic mutual a “Spinning top”. The said pattern is facing
the last week as the decision fund houses sold Rs 575.50 resistance at the downward sloping trendline
crore in April 2016. (shown above in the graph) and gives small clue
that prior up move is losing breath. In coming
Economic Data Wrap Up – April month, if Nifty trades and close above 7941 level
then it is likely to test 8080 – 8218 – 8380 levels.
¡ India's Mar Nikkei ¡ India’s Mar CPI inflation However, if Nifty trades and close below 7758
manufacturing PMI rose fell to 4.83% from 5.26% level then it can test 7619 – 7418 – 7319 levels.
to 52.4 from 51.1 in Feb. in Feb. Broadly, we are of the opinion that the monthly
trend is still down, however if Nifty trades and
¡ India’s Mar Nikkei ¡ India’s Mar WPI closes above 8218 level then monthly down
Services PMI rose to 54.3 inflation at (-) 0.85% vs trend would reverse and uptrend would be
from 51.4 in Feb. (-) 0.91% in Feb. confirmed. Hence, 8218 level on closing basis
remains make or break level going forward.
¡ India’s Feb IIP growth at ¡ India’s Mar trade deficit Stock specific activity is however likely to
2% from (-) 1.5% in Jan. fell to $5.07 bln vs $6.54 continue in the markets.
bln in Feb.
3 ARIHANT CAPITAL ¡ MAY 2016
