India Stocks Outlook: Volatile next week ahead of UPA trust vote
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B. Karthick
Jul 19, 2008, 1:23:07 AM7/19/08
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India Stocks Outlook: Volatile next week ahead of UPA trust vote
Saturday, Jul 19
Key share indices are seen volatile next week until clarity
emerges on the political front. The ruling Congress-led United
Progressive Alliance government will seek a vote of confidence in the
Lok Sabha Tuesday.
There is speculation that the UPA will win the vote of confidence
(Tuesday) and stay in power.
Sensex closed at 13635.40, up 523.55 points or 4%, from Thursday,
amid short covering and speculation the UPA will survive the trust
vote.
Nifty ended at 4092.25, up 145.05 points or 3.7%.
India VIX or volatility index rose 2.6% from the previous session.
However, contrary to the consensus vote in the market, if the UPA
loses the confidence vote, we could see approximately a 5% fall in
shares. But that would be utilised for buying.
We expects Nifty to "peak at 4200-4300" ahead of the Reserve Bank
of India's monetary policy review Jul 29.
We are optimistic about next week also due to falling crude oil
prices, headline inflation rate below 12%, and as Finance Minister P.
Chidambaram said he expects 2008-09 (Apr-Mar) gross domestic product
to top 8%.
Another positive is that foreign institutional investors have
turned net
buyers in the past two sessions.
FIIs have net bought shares worth 7.18 bln rupees in the past two
sessions, provisional data on the NSE Web site showed.
We can see 4200 on Nifty next week. The question is can Nifty
break that level. If it does, then a higher bottom is likely to be
formed at 3920-3950, and we could see 4450 in the next 15-20 days.
Mostly we expect Monday to be a lacklustre day.
We feel Cipla is likely to be weak as it reported a lower-than-
expected Apr-Jun net profit at 1.40 bln rupees, up 17% year on year.
Bank shares may rise some more next week, but Chouhan recommends
selling mid-cap bank shares on rise, and picking up stocks such as
State Bank of India, Axis Bank, Bank of India, and ICICI Bank on dips.
Technology shares have also broken their support levels on long-
term charts. But Infosys (Technologies) may bounce back from 1,450-
rupee-levels.
Market will also eye Apr-Jun earnings from Nifty majors Bharat
Heavy Electricals, Dr. Reddy's Laboratories, Maruti Suzuki India,
Steel Authority of India, Siemens, Zee Entertainment Enterprises, ACC,
Bharti Airtel, Idea Cellular, Reliance Industries, ABB, and Ambuja
Cements. End
B.Karthick,
Research Analyst.
Saturday, Jul 19
Key share indices are seen volatile next week until clarity
emerges on the political front. The ruling Congress-led United
Progressive Alliance government will seek a vote of confidence in the
Lok Sabha Tuesday.
There is speculation that the UPA will win the vote of confidence
(Tuesday) and stay in power.
Sensex closed at 13635.40, up 523.55 points or 4%, from Thursday,
amid short covering and speculation the UPA will survive the trust
vote.
Nifty ended at 4092.25, up 145.05 points or 3.7%.
India VIX or volatility index rose 2.6% from the previous session.
However, contrary to the consensus vote in the market, if the UPA
loses the confidence vote, we could see approximately a 5% fall in
shares. But that would be utilised for buying.
We expects Nifty to "peak at 4200-4300" ahead of the Reserve Bank
of India's monetary policy review Jul 29.
We are optimistic about next week also due to falling crude oil
prices, headline inflation rate below 12%, and as Finance Minister P.
Chidambaram said he expects 2008-09 (Apr-Mar) gross domestic product
to top 8%.
Another positive is that foreign institutional investors have
turned net
buyers in the past two sessions.
FIIs have net bought shares worth 7.18 bln rupees in the past two
sessions, provisional data on the NSE Web site showed.
We can see 4200 on Nifty next week. The question is can Nifty
break that level. If it does, then a higher bottom is likely to be
formed at 3920-3950, and we could see 4450 in the next 15-20 days.
Mostly we expect Monday to be a lacklustre day.
We feel Cipla is likely to be weak as it reported a lower-than-
expected Apr-Jun net profit at 1.40 bln rupees, up 17% year on year.
Bank shares may rise some more next week, but Chouhan recommends
selling mid-cap bank shares on rise, and picking up stocks such as
State Bank of India, Axis Bank, Bank of India, and ICICI Bank on dips.
Technology shares have also broken their support levels on long-
term charts. But Infosys (Technologies) may bounce back from 1,450-
rupee-levels.
Market will also eye Apr-Jun earnings from Nifty majors Bharat
Heavy Electricals, Dr. Reddy's Laboratories, Maruti Suzuki India,
Steel Authority of India, Siemens, Zee Entertainment Enterprises, ACC,
Bharti Airtel, Idea Cellular, Reliance Industries, ABB, and Ambuja
Cements. End
B.Karthick,
Research Analyst.
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