Page 3 - 1411_Value Plus May 2016
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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
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