Market Weekly View- 25 August 2014

The markets witnessed fresh high last week on the back of positive global cues, decline in crude oil prices, better FIIs inflows and speculation of an upward revision of India's sovereign rating outlook by global rating agency S&P. The market logged gains in four out of five trading sessions in the week just gone by. The Bank Nifty ended at a record high of 15,819. Public sector banks were among the top gainers during the wee k.

In the week ended Friday, 22 August 2014, BSE Sensex gained 316.32 points or 1.2% to 26,419.55 and Nifty rose 121.50 points or 1.55% to 7,913.20 , a record closing high for the index. The S&P BSE Mid‐Cap index and BSE Small‐Cap index both these indices outperformed the Sensex.

Keeping in mind current index combinations and sectors, we feel that index top 10 high weitage companies are showing strong patterns. T op ten stocks basically belong to oil & Gas, Banking and Technology shares thus we could see buying in top three sectors. Now next target for Nifty seems around 8250 and for Bank nifty next target could be 17000 but stop loss for this rally should be 7840 for Nifty and 15550 for Bank Nifty. This time PSU banks are making good patterns and we could see better participation from PSU banks especially from SBI, BoB, PN B and Bank of India.

Going forward we expects market to remain volatile due to F&O August contract’s expiry on 28th August. Trend in investment by FIIs, trend in global markets, the movement of rupee against the dollar, crude oil price movement and monsoon will be also closely tracked by the investors. 

Crude oil view: Brent crude is trading near to its 18 months low but now it has strong support between $100‐$98 zones so we may see some bounce from current levels in short term . But in long run Brent crude is trading in a range of $120 to $98.

Key data to watch (Domestic):

•Q1 GDP & CPI data on 29th August 14

•HSBC PMI Manufacturing for August on 1st September

•HSBC PMI Services for August on 3rd September

•IIP (July) & CPI (Aug) on 12t h September

•WPI for August on 15th September 14

Key data to watch (World):

•New Home Sale s on 25th Aug’14

•Durable Goods order on 26th Aug’14

•GDP & Jobless Claims on 28th Aug’14

•Personal Income and Outlays on 29th Aug’14