Weekly Outlook (March 21, 2016 – March 23, 2016)
Nifty weekly performance (March 14, 2016 – March 18, 2016):
Indian markets ended the week on a positive note. For the week, the BSE Sensex rose 0.9% and the NSE Nifty climbed 1.2%.
The most buying interest was seen in the banking and IT sectors.
Pharma, on the other hand, tanked 5% on downgrades and USFDA concerns.
Nifty Prediction for Week (March 21, 2016 – March 23, 2016):
Support for the index lies in the zone of 7500 from where the index has broken down after making the double bottom pattern. If the index manages to close below this levels then the index can drift to the levels of 7400 where the index has opened with the gap up on 03/03/2016 and short term moving averages are lying.
Resistance for the index lies in the zone of 7900 where 200 & 500 Daily SMA is lying. If the index manages to close above this levels then the index can move to the levels of 8100 where trend-line joining earlier highs is lying.
Broad range for the week is seen from 7400 on downside to 7800 on upside.
Three day week as markets will be shut on Thursday and Friday in the coming week.
Weekly News and Highlights:
1) The Federal Reserve left the US interest rate unchanged. While this move was widely anticipated, what took the market by surprise were the forward looking statements and the cautious approach of Janet Yellen.
The US Fed not only left the rates untouched but also signalled that it would expect to raise its benchmark rate just twice this year. This was as against the four interest rate hikes this year predicted earlier.
Fed Chair Janet Yellen noted that the fate of the US economy is now deeply intertwined with what happens in the rest of the world. Further, she stated that labour market indicator suggests that the economy had yet to absorb the surplus of workers. Also, it was reported that slow growth overseas has hurt US exports.
The above announcements echoed a recovery in US stock markets. The S&P 500 Index gained 0.66% to close at its highest since December 31.
2) Bank of Japan (BoJ) maintained its commitment to raise its monetary base by 80 trillion yen annually. Further, it kept its benchmark rate at minus 0.1%. However, BoJ Governor Haruhiko Kuroda stated that the bank would tweak the negative rate policy to ease the burden on some commercial banks.
Some relief was found as the BoJ exempted money reserve funds (MRFs) from the negative rate. This was seen as the bank seeks to placate some institutional investors who are unhappy with the measure.
3) Bank of England (BoE) in its monetary policy meeting agreed to maintain the benchmark rate at 0.5%. The policy committee also voted unanimously to maintain the stock of purchased assets financed by the issuance of central bank reserves at 375 billion pounds.
India:
4) During the week it was reported that GSM mobile operators added 72.5 lakh subscribers in February. Post this, the overall user base in telecom space now stands at 768 million.
After been badly hit in 2012, the telecom sector has bounced back with a revival in subscriber additions.
5) In another development, the government in its effort to improve the ease of doing business in the country, has introduced a bill in the Lok Sabha to further amend the Companies Act.
Arun Jaitley, while presenting the Union Budget 2016-17, said the proposed bill to amend the Companies Act 2013 will remove the difficulties and impediments to ease of doing business.
He added that the bill would also improve the enabling environment for start-ups and the registration of companies will also be done in one day.
The most buying interest was seen in the banking and IT sectors.
Pharma, on the other hand, tanked 5% on downgrades and USFDA concerns.
Nifty Prediction for Week (March 21, 2016 – March 23, 2016):
Support for the index lies in the zone of 7500 from where the index has broken down after making the double bottom pattern. If the index manages to close below this levels then the index can drift to the levels of 7400 where the index has opened with the gap up on 03/03/2016 and short term moving averages are lying.
Resistance for the index lies in the zone of 7900 where 200 & 500 Daily SMA is lying. If the index manages to close above this levels then the index can move to the levels of 8100 where trend-line joining earlier highs is lying.
Broad range for the week is seen from 7400 on downside to 7800 on upside.
Three day week as markets will be shut on Thursday and Friday in the coming week.
Weekly News and Highlights:
1) The Federal Reserve left the US interest rate unchanged. While this move was widely anticipated, what took the market by surprise were the forward looking statements and the cautious approach of Janet Yellen.
The US Fed not only left the rates untouched but also signalled that it would expect to raise its benchmark rate just twice this year. This was as against the four interest rate hikes this year predicted earlier.
Fed Chair Janet Yellen noted that the fate of the US economy is now deeply intertwined with what happens in the rest of the world. Further, she stated that labour market indicator suggests that the economy had yet to absorb the surplus of workers. Also, it was reported that slow growth overseas has hurt US exports.
The above announcements echoed a recovery in US stock markets. The S&P 500 Index gained 0.66% to close at its highest since December 31.
2) Bank of Japan (BoJ) maintained its commitment to raise its monetary base by 80 trillion yen annually. Further, it kept its benchmark rate at minus 0.1%. However, BoJ Governor Haruhiko Kuroda stated that the bank would tweak the negative rate policy to ease the burden on some commercial banks.
Some relief was found as the BoJ exempted money reserve funds (MRFs) from the negative rate. This was seen as the bank seeks to placate some institutional investors who are unhappy with the measure.
3) Bank of England (BoE) in its monetary policy meeting agreed to maintain the benchmark rate at 0.5%. The policy committee also voted unanimously to maintain the stock of purchased assets financed by the issuance of central bank reserves at 375 billion pounds.
India:
4) During the week it was reported that GSM mobile operators added 72.5 lakh subscribers in February. Post this, the overall user base in telecom space now stands at 768 million.
After been badly hit in 2012, the telecom sector has bounced back with a revival in subscriber additions.
5) In another development, the government in its effort to improve the ease of doing business in the country, has introduced a bill in the Lok Sabha to further amend the Companies Act.
Arun Jaitley, while presenting the Union Budget 2016-17, said the proposed bill to amend the Companies Act 2013 will remove the difficulties and impediments to ease of doing business.
He added that the bill would also improve the enabling environment for start-ups and the registration of companies will also be done in one day.
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