Indian Markets Outlook for the week – 14.Dec.2015 to 18.Dec.2015
(US FOMC eyed next week; strong IIP to support)
Robust
industrial growth data for October is seen supporting market sentiment
on
Monday but equity markets are still likely to be weak next week as investors
await
the outcome of the US Federal Open Market Committee's two-day
meeting
that ends Wednesday.
Industrial
growth for October was 9.8% as against 8.0% estimated by most
market
participants. Growth in the capital goods sector was 16.1% as against a
decline
of 3.2% last year.
While
many market participants point to the low base last year, when Industrial
growth
declined 2.7%, and due to spending ahead of festival season, some
believe
the better-than-expected growth is showing signs of recovery in the
economy.
Selling by foreign institutional investors in December in anticipation
of a
rate hike by the US Federal Reserve is likely to keep any recovery in
equities
under check.
Until
Thursday, foreign institutional investors and foreign portfolio investors
had
net sold shares worth $534.28 mln so far this month on the BSE, National
Stock
Exchange, and the Metropolitan Stock Exchange combined. It is
expected
that the Nifty 50 will trade with negative bias for the week, however,
the
reaction to FOMC meeting outcome could change the course of the market
mid
week.
We
expect volatility in the market, which he believes is a signal of indices
bottoming
out. We advised traders to stay cautious prior to the announcement.
The
expectation of volatility over the next week has made some market
participants
bullish about equities.
Among
sectors, the imposition of a 5-57% anti-dumping duty on cold rolled
steel
products from China, South Korea, European Union, South Africa,
Taiwan,
Thailand, and US will have a bearing on steel stocks, which could see
investors
favouring them but could result in a weak outlook for automobile
stocks.