Market View: 2-6 JAN 2017

Filed in Market Update by on January 2, 2017
Week Market View: 2-6 JAN 2017
View Last week the markets closed at 8185.80 registering a gain of 2.5% over previous week. The whole of last year especially the last quarter, the markets have been volatile and dancing to the tune of lot of surprising events. However, they have maintained the support levels of 7950-8000 which gives us confidence that they have absorbed the negativity and have created space for an upward movement. A good rally could be seen once the resistance of 8600 is taken off which will happen gradually. For this to happen, the NIFTY would also need the support of the banking index. Given the fact that post-demonetisation approximately 15 lakh crore has come into the banking system, we would definitely start seeing the benefits of it this year. We have already seen a small flash of it when the government announced sops for agriculture and housing sectors which was followed by SBI(other banks will follow) cutting lending rates. This will surely boost the economy. The only missing link we’ve seen last quarter was the sell-offs from FII’s. This could be attributed to Donald Trump winning the elections and a strong dollar. However considering the phase Indian is in today, the FII’s cannot shy away for a long time and will have to come back. The big events to watch for this quarter would be the budget and quarter earnings. Quarter earnings will be poor (seems the markets has already factored in for it) and should not take us by surprise. A lot of economical boosts are expected from the budget and we could see a pre-budget rally soon. This year overall is likely to be good for the Indian markets. The demonetisation pain is over and we should be in the hunt for opportunities. This week the markets are likely to continue with the consolidation with resistance coming in at 8300. 7900-8000 will be a strong support. All the best!

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