Indian Markets Outlook for the week - 19 to 23.May.2014
(www.rupeedesk.in)
(www.rupeedesk.in)
With the most keenly awaited event--the outcome of Lok Sabha elections--now
behind them, investors are back to square one, shifting focus to quarterly
earnings, economic data, and trends in overseas markets. Next week, indices
are seen moving in range as profit booking is likely noting this week's sharp
rally. However, the market will take note of the final result of the 2014 Lok
Sabha elections expected later yesterday. Yesterday, National Stock Exchange's
Nifty and BSE's Sensex witnessed their biggest single day gain for the first
time since May 18, 2009. On May 18, 2009, the first day of trade after the 2009
election results were announced, share indices hit the 20% upper circuit in
reaction to the United Progressive Alliance government's phenomenal win.
Yesterday, indices rocketed 6% taking Nifty above 7500 points and Sensex
above 25000 points. That the Bharatiya Janata Party-led National Democratic
Alliance would achieve a clear mandate was largely factored in by the market,
which resulted in profit taking in the second half of the session. This profit
taking is likely to spill over to next week. We remain optimistic on the long
term prospects of the markets. However, in the short term, markets may remain
ranged or may even come under some profit-booking, especially after the sharp
rise witnessed in the recent past.
We see Nifty in the 7100-7400 range next week and expect some momentum in
the mid-cap space. Nifty ended at 7203.00, up 79.85 points or 1.1% after
touching a record high of 7563.50 intraday. Sensex closed at 24121.74, up
216.14 points or 0.9% after testing a record high of 25375.63 points. Large-cap
stocks, particularly rate-sensitive ones, are expected to see profit booking next
week, but accumulating them on dips as the overall outlook is positive. We see
Bank Nifty rising above 15000 points yet again next week, but it may face
resistance at 15400 points. Among banks, HDFC Bank will be in focus on
Monday as the bank's board will consider raising capital on the day.
On the earnings front next week, IL&FS Engineering and Construction Co,
Jubilant Food Works, Reliance Infrastructure, Mangalore Refinery and
Petrochemicals, Ashok Leyland, Gujarat State Petronet, State Bank of India,
and Strides Arcolab will be in focus. Among global events, will eye the release
of the minutes of US Federal Open Market Committee's Apr 29-30 meet in the
coming week.