Coming week to remain majorly driven by the corporate earnings of big corporate as well as IIP & manufacturing data : Aadya Trading & Investments

Mr. Abnish Kumar Sudhanshu, Research Head, Aadya Trading & Investments Pvt. Ltd. - coming week to remain majorly driven by the corporate earnings of big corporate as well as IIP & manufacturing data.

Week began with speculation of more than 50 basis points of rate cut in the current monetary policy. Also, street remained excited after most of the frontline companies reporting better than expected corporate earnings for the first quarter. Despite of contraction in India's manufacturing activity in the month of July; benchmark indices were resilient to lose its winning streak. Finally the policy day arrived and after assessing the current and evolving macroeconomic situation, RBI decided to cut rate by 25 basis points, first rate cut since October 2016. Consequently, the reverse repo rate under the LAF stands adjusted to 5.75 per cent, and the marginal standing facility rate and the Bank Rate to 6.25 per cent. RBI policy got taken negatively on the street, spooking the indices to fall badly in two days. Most of the indices like financial, metal and reality got hammered badly after the outcome. Adding to it, market remained under pressure for the three consecutive session, however some rescue came in the last leg of trading session, which led again the market to flag its winning momentum. Overall, we could say market is in completely jubilant mood and not at all ready to allow even single negative news for long. Overall, on the weekly basis, indices closed on the flattish note.

We believe again, coming week to remain majorly driven by the corporate earnings of big corporate as well as IIP & manufacturing data schedule in the week. We are expecting results of Tata Steel, BOI, Century Textile & Prism Cement. Apart from that, we are expecting improvement in IIP data, which could further bring cheers to the market. We advise investors to look for the investment in NBFCs, metal and infrastructure stocks like DHFL, Hindalco, Voltas, Havells and Century Textile.

Bulls remained in action for Monday and Tuesday while some profit taking witnessed during middle of the week as bourses hit life time high of 10375.85 on Wednesday after which market fell and we saw some profit taking for Wednesday and Thursday. Again Friday was in favor of bulls and market recovered 52.75 points for the day, along with that Nifty ended with 51.9 points for the week making it a fifth weekly gain in a row. On the last trading session of the week, market opened in the red with some negative bias persisted from an earlier session and traded sideways until the beginning of second half but during the lateral part of second half session, bulls came into action and took the market to its highest level of the day.

Market is taking strong support of 20 days moving average at the present levels along with that momentum indicators are also supporting the market where immediate resistance can be seen at 10150 levels. On the flip side, 9940 could be the stronger support over short term where a close below could be the only signal that might bring some selling pressure over near future.

Gold prices witnessed its fourth weekly gain and reached to a seven week's higher level in the international market as dollar index slipped to a 15 months lower level recently. Prices awaited one of the very important U.S. data releases of Non-farm Payroll on the last trading session of the week and recovered during the day on expectation of not so good numbers. Gold traded higher in the recent weeks as investors remained uncertain over the pace of U.S. interest rates increase.

This week the counter failed to cross above its previous week's high of 28859 and touched the high of 28849 after that bears turned into action until Thursday but on Friday some short covering pulled the metal higher to some extent. For the coming week 28900 would remain strong immediate resistance level on the higher side where only a close above could bring more upside over short term. Momentum indicators are still positive at this moment suggesting slightly more upside in the coming week, so traders should be very cautious while going short at these levels.

Source : Equity Bulls

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