Rupeedesk Consultancy

Indian Markets Outlook for the week – 06 to 09.09.2016 Positive next week; infra companies may sustain gain

Indian Markets Outlook for the week – 6.Sep.2016 to 9.Sep.2016
(Positive next week; infra companies may sustain gain)

Capital Goods Stocks Outlook – 06 to 09.09.2016 Seen range bound, bias negative

Benchmark indices are seen positive next week because sentiment remains buoyant after
announcement of new policy initiatives for the construction sector and robust sales numbers reported
by most automobile companies in August. The US non-farm payrolls data for August, released post
market hours yesterday, was weaker than expected but its impact on the Indian equities could be
diluted as Indian stock exchanges are closed Monday for Ganesh Chaturthi.

US non-farm payrolls rose by 151,000 last month, against The Wall Street Journal poll that had
projected a rise of 180,000 jobs. A strong growth in the world's largest economy would have
increased chances of interest rates being raised by the US Federal Reserve in September. Swiss
investment advisor Marc Faber told Cogencis that the US Fed is unlikely to raise rates, when it meets
later this month, as it comes ahead of Presidential elections in the country in November.

Next week, investors will eye earnings of Nifty 50 constituents Oil and Natural Gas Corp, GAIL India, Coal India and Bharat Heavy Electricals. Yesterday, the index gained 0.4% to end at 8809.65 points, while the Sensex ended 0.4% higher at 28532.11. Infrastructure companies are likely to extend gains next week, as the Union Cabinet cleared a proposal to release 75% of all dues stuck in appeals after arbitration award to construction companies in government contracts.

This move will help restart stalled projects and clear bank loans, which will ensure fresh lending for
the completion of projects. As a result, sentiment for banks, public-sector banks in particular, also
remains buoyant. We look at this as a positive development for the banking sector, as the delay in
payment has resulted in significant working capital shortfall that has been funded by banks. We
believes ICICI Bank and public-sector banks would be the biggest beneficiaries. Telecom companies--
Bharti Airtel and Idea Cellular--are seen resuming their weak trend next week even after a rebound
yesterday, as the entry of Reliance Jio Infocomm will put pressure on their tariffs and profitability.

Year-to-date, Bharti Airtel has lost 6.3% while Idea Cellular has fallen 41.2%.