Weekly Outlook Nifty for week (June 06, 2016 – June 10, 2016):
Nifty weekly performance (May 30, 2016 – June 03, 2016):
Indian stock markets traded in the green during the week. For the entire week, the BSE Sensex was up by 0.71% and the NSE Nifty was up by 0.78%.
The index ended this week on a flattish note after a sharp 400-point rally in the previous week. Although it has managed to cross the 8,200 mark, but it seems like the momentum is slowing. Intraday charts suggest exhaustion. 8,150 remains a support to watch out for on an immediate basis and breach below it could setback the bulls.
Nifty Prediction for Week (June 06, 2016 – June 10, 2016):
Support for the index lies in the zone of 8000 from where the index has broken out from the triple top formation. If the index manages to close below these levels then the index can drift to the levels of 7800 where 200 Daily SMA is lying.
Resistance for the index lies in the zone of 8250 to 8300 from where the index has sold off in the month of Oct – 2015. If the index manages to close above these levels then the index can move to the levels of 8600 to 8650 levels.
Broad range for the week is seen from 8000 on downside to 8400 on upside
Bank Nifty Prediction for Week (June 06, 2016 – June 10, 2016):
Support for the index lies in the zone of 17000 from where the index has broken out of the double top formation. If the index manages to close below these levels then the index can drift to the levels of 16500 where 200 Daily SMA is lying.
Resistance for the index lies in the zone of 18000 from where the index has sold off in the month of Oct – 2015. If the index manages to close above these levels then the index can move to the levels of 19000.
Range for the week is seen from 17000 to 17100 on downside to 18100 to 18200 on upside
COMMODITIES :
Gold traded on a negative note during the week. On Monday, it opened the week on a negative note. Prices fell as marketmen reduced their positions in the yellow-metal after tracking a negative trend in precious metal overseas. Losses were also seen midweek on prospects of an interest rate hike by the US Fed this month. During the end of the week, gold witnessed slight gains but failed to inch enough upward and ended its session in the red. The MCX Gold June contract opened the session at 28,523/10 grams. It traded at a low of 28,410/10 grams before finally closing the session at 28,679/10 grams.
Weekly News and Highlights:
1) The much-awaited OPEC meet went off with no decision on the freeze of crude supplies. The Organization of the Petroleum Exporting Countries (OPEC) members failed to change the oil output policy at the meeting scheduled in Vienna this week. This came as Iran insisted on steeply raising its production.
This was seen as yet another failure by oil producers after they failed to agree on a production cap during the summit in Doha earlier in April.
However, some respite was found as Saudi Arabia promised not to flood the market and sought to mend fences within OPEC. Also, Saudi Arabia's oil minister stated that oil prices have recovered and will continue to.
The failure of the meet could lead to an increase in crude oil supplies and weigh on prices, which only recently touched their 2016 highs. Last week, crude oil touched US$50 a barrel after reports showed a drop in US inventory levels.
2) The European Central Bank (ECB) sounded a note of cautious optimism on the eurozone's economic recovery in its policy meet. The bank left its stimulus program unchanged but left open the door for action if inflation remains below target. The ECB's members also kept the inflation forecast for this year untouched.
The above development follows aggressive moves by the ECB in recent months to ramp up its stimulus. In March, this year, the ECB cut its main interest rate from 0.05% to 0% and its bank deposit rate from minus 0.3% to minus 0.4%. It also announced borrowing terms as low as the minus 0.04% rate on the deposit facility. This meant the ECB would pay banks to take its cash if they show they are lending it to households and firms.
3) The US employment report released late during the week came in worse than expected. The Labor Department reported non-farm payrolls rose by just 38,000 in May. This was recorded as the lowest since September 2010 and far below the expected 164,000.
The goods producing sector shed 36,000 jobs during the last month. This was recorded as the highest since February 2010. Further, average hourly earnings rose 0.2% last month. This was as against 0.4% recorded in April. The private sector added only 25,000 jobs, the lowest since February 2010. Manufacturing employment fell by 10,000 jobs and construction payrolls dropped by 15,000, the most since December 2013.
The above news lingered the prospects of an interest rate hike by the Fed later this month.
India:
4) During the week, the World Bank dropped the use of developing nation tag for India in its specialised reports. This came as the World Bank changed the status of the country from 'developing' to 'lower-middle income' based on poor performance on parameters such as electricity generation, sanitation facilities, and labour force participation rate.
This can be a clear wake-up call for India despite it having to be the fastest-growing economy
5) As per The Economic Times, more than 200 stocks in which the overseas holding is more than 5% have fallen as much as 30% since the Securities and Exchange Board (SEBI) tightened disclosure norms for participatory notes (P-Note) on May 19.
These stringent rules for P-notes are initiated to check the flow of black money into stock markets.
Indian stock markets traded in the green during the week. For the entire week, the BSE Sensex was up by 0.71% and the NSE Nifty was up by 0.78%.
The index ended this week on a flattish note after a sharp 400-point rally in the previous week. Although it has managed to cross the 8,200 mark, but it seems like the momentum is slowing. Intraday charts suggest exhaustion. 8,150 remains a support to watch out for on an immediate basis and breach below it could setback the bulls.
Nifty Prediction for Week (June 06, 2016 – June 10, 2016):
Support for the index lies in the zone of 8000 from where the index has broken out from the triple top formation. If the index manages to close below these levels then the index can drift to the levels of 7800 where 200 Daily SMA is lying.
Resistance for the index lies in the zone of 8250 to 8300 from where the index has sold off in the month of Oct – 2015. If the index manages to close above these levels then the index can move to the levels of 8600 to 8650 levels.
Broad range for the week is seen from 8000 on downside to 8400 on upside
Bank Nifty Prediction for Week (June 06, 2016 – June 10, 2016):
Support for the index lies in the zone of 17000 from where the index has broken out of the double top formation. If the index manages to close below these levels then the index can drift to the levels of 16500 where 200 Daily SMA is lying.
Resistance for the index lies in the zone of 18000 from where the index has sold off in the month of Oct – 2015. If the index manages to close above these levels then the index can move to the levels of 19000.
Range for the week is seen from 17000 to 17100 on downside to 18100 to 18200 on upside
COMMODITIES :
Gold traded on a negative note during the week. On Monday, it opened the week on a negative note. Prices fell as marketmen reduced their positions in the yellow-metal after tracking a negative trend in precious metal overseas. Losses were also seen midweek on prospects of an interest rate hike by the US Fed this month. During the end of the week, gold witnessed slight gains but failed to inch enough upward and ended its session in the red. The MCX Gold June contract opened the session at 28,523/10 grams. It traded at a low of 28,410/10 grams before finally closing the session at 28,679/10 grams.
Weekly News and Highlights:
1) The much-awaited OPEC meet went off with no decision on the freeze of crude supplies. The Organization of the Petroleum Exporting Countries (OPEC) members failed to change the oil output policy at the meeting scheduled in Vienna this week. This came as Iran insisted on steeply raising its production.
This was seen as yet another failure by oil producers after they failed to agree on a production cap during the summit in Doha earlier in April.
However, some respite was found as Saudi Arabia promised not to flood the market and sought to mend fences within OPEC. Also, Saudi Arabia's oil minister stated that oil prices have recovered and will continue to.
The failure of the meet could lead to an increase in crude oil supplies and weigh on prices, which only recently touched their 2016 highs. Last week, crude oil touched US$50 a barrel after reports showed a drop in US inventory levels.
2) The European Central Bank (ECB) sounded a note of cautious optimism on the eurozone's economic recovery in its policy meet. The bank left its stimulus program unchanged but left open the door for action if inflation remains below target. The ECB's members also kept the inflation forecast for this year untouched.
The above development follows aggressive moves by the ECB in recent months to ramp up its stimulus. In March, this year, the ECB cut its main interest rate from 0.05% to 0% and its bank deposit rate from minus 0.3% to minus 0.4%. It also announced borrowing terms as low as the minus 0.04% rate on the deposit facility. This meant the ECB would pay banks to take its cash if they show they are lending it to households and firms.
3) The US employment report released late during the week came in worse than expected. The Labor Department reported non-farm payrolls rose by just 38,000 in May. This was recorded as the lowest since September 2010 and far below the expected 164,000.
The goods producing sector shed 36,000 jobs during the last month. This was recorded as the highest since February 2010. Further, average hourly earnings rose 0.2% last month. This was as against 0.4% recorded in April. The private sector added only 25,000 jobs, the lowest since February 2010. Manufacturing employment fell by 10,000 jobs and construction payrolls dropped by 15,000, the most since December 2013.
The above news lingered the prospects of an interest rate hike by the Fed later this month.
India:
4) During the week, the World Bank dropped the use of developing nation tag for India in its specialised reports. This came as the World Bank changed the status of the country from 'developing' to 'lower-middle income' based on poor performance on parameters such as electricity generation, sanitation facilities, and labour force participation rate.
This can be a clear wake-up call for India despite it having to be the fastest-growing economy
5) As per The Economic Times, more than 200 stocks in which the overseas holding is more than 5% have fallen as much as 30% since the Securities and Exchange Board (SEBI) tightened disclosure norms for participatory notes (P-Note) on May 19.
These stringent rules for P-notes are initiated to check the flow of black money into stock markets.
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