India Stocks Outlook: To take cues from overseas markets next week

[B. Karthick]

India Stocks Outlook: To take cues from overseas markets next week
Saturday, Aug 2

Key share indices are likely to remain volatile next week and take
cues from the movement in overseas markets.
Investors U.S. jobs data relesed from the Labor Department showed
that the US economy shed jobs for a seventh successive month in July,
although the decline was slightly smaller than expected. The
unemployment rate rose from 5.5 per cent in June to 5.7 per cent – the
highest level since March 2004.
The above important data in the U.S. would set the tone for next
week. There is no great news from the U.S., where GDP (gross domestic
product growth) has already come in lower than expected. So, trade
here is likely to remain volatile.
Sensex ended at 14656.69, up 300.94 points or 2.1% from Thursday.
Nifty closed at 4413.55, up 80.60 points or 1.9%.
India VIX or volatility index fell 1.6%.
However, most market participants said the bias is positive with
Nifty closing above the psychological 4400-mark today amid good
volumes.
Any fall in global crude oil prices is also likely to be taken
positively by the market, particularly as concerns over high inflation
persist.
Market could challenge the level of 4550 on Nifty and 15100 on
Sensex next week. If Nifty sustains above 4550, then the next level is
4700-4725.
The derivatives segment also points to a positive bias, adding
that most rollovers Thursday to the August futures series were long
positions.
If Nifty fails to sustain above 4550, we could see a sharp sell-
off to 4350. For Sensex, the support would be around 14500.
Shares of HCL Technologies are likely to fall after it yesterday
reported Apr-Jun net loss of 135.4 mln rupees.
Consolidated net profit for the quarter declined 71% year-on-year
to 1.41 bln rupees because of a foreign exchange loss of 3 bln rupees.
Shares of Reliance Communications are also likely to remain weak
after posting dismal earnings for the quarter ended June, but the
downside is seen restricted to the level of 380-400 rupees.
Capital goods shares are seen doing well in the backdrop of the
International Atomic Energy Agency approved an agreement to bring
India's civilian nuclear facilities under the nuclear safeguards
agreement. Especially BHEL, L&T, and Punj Lloyd shares also look
strong on the technical charts. End.


B.Karthick
Research Analyst.