Indian Market Outlook for the week – 15 to 18.11.2016
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Indian Market Outlook for the week – 15 to 18.11.2016
Domestic share indices are seen weak because of uncertainty in the global markets, impact of
currency curb move and Jul-Sep corporate earnings. Stock indices ended the week at their lowest
closing levels since the end of June. On Monday, local share markets will be closed on account of
Guru Nanak Jayanti.
Release of inflation data for October next week, and industrial production data for September,
released today, will also lend cues to investor sentiment. Industrial production in September grew
only 0.7% as against 3.7% growth a year ago. It, though, managed to beat the estimate of 0.5%.
Inflation based on the Consumer Price Index (Combined) and that based on the Wholesale Price
Index will be released on Tuesday after market hours. The CPI inflation rate is seen falling to a 14-
month low of 4.1% in October from 4.31% in September, according to the median of a poll of 22
economists. The WPI inflation rate is seen at 3.7% in October compared with 3.57% a month ago,
according to a median of a poll of 14 economists.
Stocks of consumption related companies such as fast moving consumer good companies and
automobile companies will continue to be under pressure, as the Government’s decision to
demonetize high denomination currency notes is likely to negatively impact their sales in Oct-Dec.
Right now people are wary of buying anything...they are trying to retain cash. However, these stocks
may see a consolidation next week, after the recent fall, as the likelihood of a decline in demand is
mostly priced in now.
Yesterday, the Nifty 50 ended at 8296.30, down 229.45 points or 2.7% from the Previous close, and
the Sensex closed down 698.86 points or 2.5% at 26818.82. Next week, Nifty 50 is seen moving in
the range of 8200-8500 points on only technical based. We do not see any relief amid looming
uncertainty on the global front and not so encouraging domestic cues. So, we are suggest restricting
leveraged positions and wait for the markets to stabilise first.
Interest rate-sensitive stocks such as banks will also remain in focus as prospects of an interest rate
hike in the US increased after the election of Donald Trump as the US president. Trump's policies
are seen stoking inflation in the US, which may lead the US Federal Reserve to raise rates.
Stocks of Nifty 50 companies detailing their earnings later yesterday, on Saturday and next week
will also take centre stage next week. Tata Motors, Aurobindo Pharma and GAIL (India) will detail
their earnings next week, while Hindalco Industries, Tata Steel and Bharat Petroleum Corp has
report their earnings yesterday and on Saturday.
Stocks of Bank of Baroda eyed on Tuesday as the company detailed its Jul-Sep earnings yesterday.
The lender's net profit rose to 5.5 bln from 1.2 bln rupees a year ago and its provisioning for nonperforming
assets went down 11.6% on year to 16.3 bln rupees. Stocks of IL&FS Engineering and
Construction Co are likely to gain as the company secured 1.49-bln-rupee order from the Uttar
Pradesh government.
