Weekly Outlook (April 25, 2016 – April 29, 2016)
Nifty weekly performance (April 18, 2016 – April 22, 2016):
Indian indices clocked marginal gains during the week. For the week, the BSE Sensex was up by 0.82% and the NSE Nifty was up by 0.62%. During the week, India's third-largest software services exporter, Wipro Ltd, announced its results for the fourth quarter and the full fiscal year 2015-16.The index opened the week with a gap but has failed to make any headwind after that. It ended the session on a very flattish note every day this week.
This indicates that the index may be losing out on momentum as the resistance at 8,000 kicks in.
3 Day SMA : 7908 & 15 Day SMA 7742 .
Nifty Prediction for Week (April 25, 2016 – April 29, 2016):
Support for the index lies in the zone of 7850 where 200 Daily SMA is lying. Minor support for the index lies in the zone of 7700 to 7750 where the index has opened gap up on 13/04/2016. If the index manages to close below these levels then the index can drift to the levels of 7500 to 7550 from where the index has broken down after making the double bottom pattern and 100 Daily SMA is lying.
The index has closed around the strong resistance zone of 7950 to 8000 where 500 Daily SMA is lying. If the index manages to close above these levels then the index can move to the levels of 8100 where trend-line joining earlier highs is lying.
As we have mentioned in our weekly report on 15/02/2016 to 19/02/2016, the index has achieved our target of around 8000.
Now it seems that we can witness some sharp correction or consolidation in the market, so it is wise to remain cautious and wait for the further direction.
Broad range for the week is seen from 7700 on downside to 8100 on upside.
Weekly News and Highlights:
1) The summit in Doha among the world's largest oil producing countries turned out to be a complete wash. This came as oil producers failed to agree on a production cap that could have tightened supply.
Until a few years ago, US$100 per barrel was the new 'normal' for oil price. And then this capricious commodity proved everyone wrong. Early this year, crude oil prices hit US$30 per barrel for the first time in 12 years. The root of his turmoil has been the global supply glut. To get out of this oversupply, major oil producers held talks on 17 April in Doha, Qatar, over a plan to freeze output. As per the proposed freeze, crude oil producers were going to cap production at January levels up through October this year. However, the summit finished with no final accord.
It was noted that Saudi Arabia, the world's largest exporter of crude oil, refused to go along with the plan. The nation said that it would not limit its own output unless all OPEC (Organisation of the Petroleum Exporting Countries) nations, including Iran, do the same.
2) China's economy grew at an annual rate of 6.7% in the first quarter of 2016. This was slightly below the 6.8% growth in the final quarter of last year. While the growth was in line with government's expectations, it was the slowest quarterly growth in the Chinese economy in seven years.
3) In another news update it was noted that the Bank of Japan (BOJ) is considering applying negative rates to its lending program for financial institutions. The BOJ may consider the new step if policymakers decide to lower further the negative 0.1% interest rate applied to some bank reserves parked with the central bank. All eyes are now on the BOJ policy meeting scheduled for April 27-28.
One of the factors to weigh on the BOJ's stimulus decision will be signals coming out of the Federal Reserve meeting the day before. The upcoming federal policy meeting is scheduled for April 26-27.
The US Federal Reserve has waved the caution flag on interest rate hikes later this year. Fed officials said a rate increase in April would signal an inappropriate sense of urgency. However, some officials want to raise rates as soon as April if the incoming economic data is consistent with their expectations.
Last month, 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 against the four interest rate hikes this year the Fed predicted earlier. The focal question for now is whether the Fed raise interest rates in its meeting later this month or leave them untouched.
India:
4) During the week, India's third-largest software services exporter, Wipro Ltd, announced its results for the fourth quarter and the full fiscal year 2015-16. The actual numbers for the company came in below expectations with the topline of its IT services business growing by 3.7% YoY to US$ 7.35 billion. This was marked as the company's slowest pace of growth since 2009-10.
Revenue of the company grew 9% YoY in FY16 while net income grew 3% YoY. For the quarter ended March 2016, revenue of the company grew 12% YoY.
COMMODITIES
GOLD:
Gold traded on a positive note during the week. On Monday, it opened higher as against its previous week's closing. Gains were seen on the back of a firm trend in precious metals overseas. Also, the metal witnessed buying interest after the failure of talks among oil producers to freeze output triggered a sell-off in crude oil and equities. Slight losses were seen midweek as investors went on for profit booking at prevailing higher levels. Losses were also seen during the end of the week and gold closed its session in the red. The MCX Gold June contract opened the session at 29,010.00/10 grams. It traded at a high of 29,756.00/10 grams before finally closing the session at 29,021.00/10 grams.
Indian indices clocked marginal gains during the week. For the week, the BSE Sensex was up by 0.82% and the NSE Nifty was up by 0.62%. During the week, India's third-largest software services exporter, Wipro Ltd, announced its results for the fourth quarter and the full fiscal year 2015-16.The index opened the week with a gap but has failed to make any headwind after that. It ended the session on a very flattish note every day this week.
This indicates that the index may be losing out on momentum as the resistance at 8,000 kicks in.
3 Day SMA : 7908 & 15 Day SMA 7742 .
Nifty Prediction for Week (April 25, 2016 – April 29, 2016):
Support for the index lies in the zone of 7850 where 200 Daily SMA is lying. Minor support for the index lies in the zone of 7700 to 7750 where the index has opened gap up on 13/04/2016. If the index manages to close below these levels then the index can drift to the levels of 7500 to 7550 from where the index has broken down after making the double bottom pattern and 100 Daily SMA is lying.
The index has closed around the strong resistance zone of 7950 to 8000 where 500 Daily SMA is lying. If the index manages to close above these levels then the index can move to the levels of 8100 where trend-line joining earlier highs is lying.
As we have mentioned in our weekly report on 15/02/2016 to 19/02/2016, the index has achieved our target of around 8000.
Now it seems that we can witness some sharp correction or consolidation in the market, so it is wise to remain cautious and wait for the further direction.
Broad range for the week is seen from 7700 on downside to 8100 on upside.
Weekly News and Highlights:
1) The summit in Doha among the world's largest oil producing countries turned out to be a complete wash. This came as oil producers failed to agree on a production cap that could have tightened supply.
Until a few years ago, US$100 per barrel was the new 'normal' for oil price. And then this capricious commodity proved everyone wrong. Early this year, crude oil prices hit US$30 per barrel for the first time in 12 years. The root of his turmoil has been the global supply glut. To get out of this oversupply, major oil producers held talks on 17 April in Doha, Qatar, over a plan to freeze output. As per the proposed freeze, crude oil producers were going to cap production at January levels up through October this year. However, the summit finished with no final accord.
It was noted that Saudi Arabia, the world's largest exporter of crude oil, refused to go along with the plan. The nation said that it would not limit its own output unless all OPEC (Organisation of the Petroleum Exporting Countries) nations, including Iran, do the same.
2) China's economy grew at an annual rate of 6.7% in the first quarter of 2016. This was slightly below the 6.8% growth in the final quarter of last year. While the growth was in line with government's expectations, it was the slowest quarterly growth in the Chinese economy in seven years.
3) In another news update it was noted that the Bank of Japan (BOJ) is considering applying negative rates to its lending program for financial institutions. The BOJ may consider the new step if policymakers decide to lower further the negative 0.1% interest rate applied to some bank reserves parked with the central bank. All eyes are now on the BOJ policy meeting scheduled for April 27-28.
One of the factors to weigh on the BOJ's stimulus decision will be signals coming out of the Federal Reserve meeting the day before. The upcoming federal policy meeting is scheduled for April 26-27.
The US Federal Reserve has waved the caution flag on interest rate hikes later this year. Fed officials said a rate increase in April would signal an inappropriate sense of urgency. However, some officials want to raise rates as soon as April if the incoming economic data is consistent with their expectations.
Last month, 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 against the four interest rate hikes this year the Fed predicted earlier. The focal question for now is whether the Fed raise interest rates in its meeting later this month or leave them untouched.
India:
4) During the week, India's third-largest software services exporter, Wipro Ltd, announced its results for the fourth quarter and the full fiscal year 2015-16. The actual numbers for the company came in below expectations with the topline of its IT services business growing by 3.7% YoY to US$ 7.35 billion. This was marked as the company's slowest pace of growth since 2009-10.
Revenue of the company grew 9% YoY in FY16 while net income grew 3% YoY. For the quarter ended March 2016, revenue of the company grew 12% YoY.
COMMODITIES
GOLD:
Gold traded on a positive note during the week. On Monday, it opened higher as against its previous week's closing. Gains were seen on the back of a firm trend in precious metals overseas. Also, the metal witnessed buying interest after the failure of talks among oil producers to freeze output triggered a sell-off in crude oil and equities. Slight losses were seen midweek as investors went on for profit booking at prevailing higher levels. Losses were also seen during the end of the week and gold closed its session in the red. The MCX Gold June contract opened the session at 29,010.00/10 grams. It traded at a high of 29,756.00/10 grams before finally closing the session at 29,021.00/10 grams.
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