Rupeedesk Consultancy

Weekly Outlook for Indian Market and Sectorwise Stocks Outlook for the Week - 2.Nov.2015 to 6.Nov.2015

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IT Stocks Outlook for the week – 02 to 06.11.2015 Range-bound next week; Tech Mahindra may lend cues


Earnings of major companies for the quarter ended September will set the trend for
equities next week, with investors also keeping an eye on the exit polls for the Bihar
election on Thursday. The bias for the broad market is likely to be weak, especially after
the National Stock Exchange's Nifty erased gains in the second half of the session
yesterday to end down 0.6% at 8065.80 points. The S&P BSE Sensex ended down 0.7%
at 26656.83 points. The way markets closed on Friday, we expect decline to continue on
Monday as well, mainly in midcap and small cap space. So, traders should better trade
with strict stop losses or hedge the positions otherwise damage could be severe.

However, if earnings of major companies are good, the rebound in the index may take the
Nifty towards 8180-8200 points. With polling in the Bihar Assembly elections ending on
Thursday, exit polls will be a key indicator of the next ruling party in the state. A win for
the Bharatiya Janata Party will boost sentiment as it will mean higher representation for
the party in the Rajya Sabha, where key bills such as the constitutional amendment to
introduce the Goods and Services Tax are stuck.

Earnings of Nifty constituents--Cipla, Oil & Natural Gas Corp, GAIL India, State Bank
of India, Bank of Baroda, Punjab National Bank, Tech Mahindra, Bharat Heavy
Electricals, Adani Ports and Special Economic Zone, Bosch, and Power Grid Corp of
India--will also be in focus next week. Public sector banks and oil and gas companies'
will be the major earnings to watch out for next week. With some major public sector
banks reporting their Jul-Sep earnings, the Bank Nifty is seen finding support at 16600
points and facing resistance at 18000 points. The analyst expects the bias for the index to
be negative.

Yesterday, the Bank Nifty ended up 0.8% at 17354.50 points aided by gains in ICICI
Bank and Kotak Mahindra Bank due to robust Jul-Sep earnings. Among stocks that were
in focus yesterday, Larsen & Toubro is seen extending its decline next week after it fell
over 4% to 1,410.75 rupees as the engineering major sharply cut its order inflow growth
guidance for the current financial year to 5-7% from 15% earlier. After falling 4.4% to
334.65 rupees, ITC is seen weak after it reported a flat net profit growth for Jul-Sep at
24.31 bln rupees, lower than analysts' estimate of 26.15 bln rupees. ) 


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FMCG Stocks Outlook for the week – 26 to 30.10.2015 Positive next week; ITC, Dabur earnings in focus


Corporate earnings and outcome of the US Federal Open Market Committee's monetary
policy meeting will lend direction to domestic share indices next week, but on Monday
indices are set to witness a gap-up opening as China announced a cut in interest rates.
After Indian market hours, China announced that it had cut its one-year lending rate and
one-year deposit rate by 25 basis points, and reduced its reserve requirement ratio by 50
basis points to boost the economy.

Major European indices extended their intraday gains on the news and were up over 1-
3%. A near 1% rise in Dow futures indicates that the US market will also open on a
strong note later yesterday. Apart from these markets, prices of base metals on the
London Metal Exchange also advanced following China's move, which may boost stocks
of domestic metal and mining companies on Monday.

Yesterday, the Bank Nifty ended up 1.3% at 17934.05 points. Whether the gains in
indices sustain over the week will depend on corporate earnings and outcome of US
FOMC's monetary policy meeting on Wednesday. Given the earnings-heavy week and
expiry of the October derivatives series, also expect some volatility in the domestic

Rollovers will be closely watched this time around as the lot size for the Nifty is higher in
the November derivatives series. In August, the NSE had announced a revision of the lot
size of the CNX Nifty to 75 from 25 starting from the November contract.

Broadly, Nifty is seen moving in the 8200-8400 point range next week. Expect the index
to face stiff resistance between 8350 and 8400 points. Yesterday, share indices ended up
but off the two-month high it hit intraday on weakness in some telecommunication
companies' shares and select index heavyweights. The Nifty closed up 43.75 points or
0.5% at 8295.45 points and the Sensex ended up 183.15 points or 0.7% at 27470.81

In the coming week, Bharti Airtel, Housing Development Finance Corp, Lupin, Maruti
Suzuki India, Ambuja Cements, Dr Reddy's Laboratories, YES Bank, ICICI Bank, ITC,
Kotak Mahindra Bank and ICICI Bank will detail Jul-Sep earnings. On Monday, Asian
Paints may open down 2-3% as the company's Jul-Sep earnings, released after market
hours yesterday, fell short of analysts' estimates.


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Oil Stocks Outlook for the week – 19 to 23.10.2015 (RIL seen up on buoyant Jul-Sep GRM, PAT)

Index heavyweight Reliance Industries' robust Jul-Sep earnings are set to further lift the mood in the equity markets on Monday, but action in the latter part of the week will be stock-specific, taking direction from earnings of other key companies. Post market hours yesterday, Reliance Industries reported robust earnings—a net profit of 65.6 bln rupees, beating analysts' estimate of 58.39 bln rupees.

The company reported gross refining margin of $10.6 a barrel, up from $10.4 a quarter ago. Besides Reliance Industries, the Jul-Sep earnings of other Nifty constituents such as HCL Technologies, UltraTech Cement, ACC, Hero MotoCorp, Bajaj Auto, Cairn India, HDFC Bank, Wipro, Idea Cellular, and Asian Paints will be in focus next week.

Earnings are important, vital. If earnings are not good, then I think we will see disappointment post that. Some market participants advise caution, even if indices gain. Traders should continue with positive yet cautious approach and prefer only quality stocks even for the day trade. The global markets will also be watched for cues. Technical analysts see the National Stock Exchange's Nifty gaining next week and could test 8300 points after breaking the crucial support level of 8200 points.

The 50-stock index is seen finding support at 8100 points. Yesterday, the Nifty ended at a near two-month of 8238.15 points, up 0.7%, and the S&P BSE Sensex gained 0.8% to end at 27214.60 points. Gains in the broad market were led by banks, with the Bank Nifty ending as the top gainer among sectoral indices, up 1.3% at 17912.85 points.

Next week, the index is seen extending gains and could test 18200 points. Among other sectors, cement companies are also likely to be in focus next week, with ACC and UltraTech Cement reporting their Jul-Sep earnings. ) 


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Metal Stocks Outlook for the week – 12 to 16.10.2015 (Narrow range with negative bias)

After gaining over 3% this week, the bias for benchmark indices is expected to remain positive next week, while Jul-Sep earnings of key index constituents and data on consumer price index-based inflation and industrial growth will be in focus.

Among index-constituents, Infosys, Tata Consultancy Services, Hindustan Unilever, Zee Entertainment Enterprises, and Reliance Industries will report Jul-Sep earnings next week. Market sentiment will also depend on data on CPI and index of industrial production.

The National Stock Exchange's Nifty is seen consolidating between the levels of 8000 and 8300 points next week. The 50-share benchmark index ended at 8189.70 points, up 60.35 points or 0.7% and S&P BSE Sensex closed at 27079.51 points, up 233.70 points or 0.9%.

Stocks of information technology companies will be in focus next week as the earnings for the sector are kicked off by Infosys and Tata Consultancy Services, the two index and sector majors.

Investors will also closely track Bihar assembly elections, which will begin next week. Voting for 49 seats in the first phase of polls will happen on Monday.

Among sectors, housing finance companies and select banks are seen outperforming as the Reserve Bank of India has cut risk weight requirements on certain home loans. This is also seen positive for stocks for real estate companies in the affordable housing segment over the long term.

Stocks of State Bank of India, IDBI Bank, and Bank of Baroda are seen outperforming the sector. The Bank Nifty is seen taking support at 17,170 points and facing resistance at 17,800 points. The banking gauge has ended its volatile week with modest gains of 2.5%. ) 


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Metal Stocks Outlook for the week – 05 to 09.Oct.2015 (Selling pressure to continue next week)


Traders are likely to watch the movement in global equity market next week due to lack of significant triggers in domestic equities. With no major domestic event in near future, we believe global cues would largely dictate our market trend in coming days.

Markets will be closed on Friday for Gandhi Jayanti. Market participants expect a positive bias but gains are likely to be capped as traders will be on the sideline ahead of corporate earnings for Jul-Sep on Oct 9, a market participant said. IndusInd Bank's results will kick start the earnings season.

The National Stock Exchange's Nifty is seen facing stiff resistance at 8050 points, although 8000 points is a key psychological level. Due to selling at higher levels the index has failed to close over 8000 points over the last one month, despite rising above that level intraday in four sessions during the period. )