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Indian Market Outlook for the week – 13 to 17.02.2017

Indian Market Outlook for the week – 13 to 17.02.2017


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Indian Market Outlook for the week – 13 to 17.02.2017
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Domestic stock indices are likely to remain positive next week, though in a range, as corporate earnings for Oct-Dec and the release of economic data would be in focus. Throughout this week, the Nifty 50 was in a narrow range of 8715.00-8822.10 points, and this trend would continue, as there were no major market-moving triggers in sight. Market remain bullish on near-term prospects and expect a significant rally in the markets sooner rather than later. There will be a smart rally over the next three-six months and it is going to be liquidity-driven. In the coming week, traders will also react to the industrial production data for December, due later today, as well as data on Consumer Price Index-based inflation for January, to be released on Monday. Industrial growth in India is likely to have slowed sharply in December, primarily due to the impact of demonetisation on economic activity. Industrial output is likely to have increased 1.2% on year in December, sharply lower than 5.7% the previous month. India's CPI-based inflation is seen moderating to 3.2% in January, mainly on account of a fall in food prices and the statistical effect of a higher base. However, do not see a major reaction to these numbers, as they say these have been priced into the indices. Stock-specific action is likely due to the ongoing announcement of earnings for Oct-Dec. On Saturday, Coal India and Idea Cellular will detail their December quarter earnings, while next week, Tata Motors, Sun Pharmaceutical Industries, Hindalco Industries, and Adani Ports and Special Economic Zone will do so next week. India's largest coal producer, Coal India, is seen posting a consolidated net profit of 32 bln rupees for Oct-Dec, with net sales seen at 201.45 bln rupees. On the other hand, Idea Cellular is seen reporting a consolidated net loss of 3.7 bln rupees on net sales of 89.07 bln rupees. On Monday, shares of Techno Electric, Berger Paints, SRF, Sun TV Network, Radico Khaitan, Praj Industries, Corporation Bank, GAIL India and Bank of Baroda will also be in focus, as these companies detailed their earnings for Oct-Dec. In the coming week, stocks in the mid-cap space are seen outperforming their large-cap peers, as the impact of demonetisation on earnings has been less severe than expected. These stocks were severely hit in the market-wide panic post demonetisation and that had made their valuations attractive. Looking at current trends, the outlook on the Nifty 50 was still bullish and the index was likely to range between 8900 and 9000 by next week. However, if the 51-stock benchmark index doesn't breach the 8870-point mark, it could drift back to 8700. Yesterday, the Nifty 50 ended at 8793.55 points, up 15.15 points, or 0.2% from the previous close, while the Sensex closed up 28334.25, up 4.55 points. On a weekly basis, it gained 0.6%, while the Sensex was up 0.3%.