Market Outlook

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Market this week

Domestic market witnessed a strong up-move this week supported by reduction in GST rates, FII buying and positive global cues. The recovery in global markets was led by ease in trade tensions between US and Europe, pick-up in earnings and ECB’s status quo on interest rates.

The key indices gained by 2.4% this week as Q1FY19 results so far was in-line with the expectation. Prospects of pick-up in consumption led story on back of reduction in GST rates and good monsoon added impetus to the rally. Additionally, after a long-time we are seeing some respite in the mid-caps & small-cap, gained by 4.7% & 4.6% as worst of earnings seems to be over. The rally was broad based, while the key out performer was PSU banking index which gained by 10.4% on expectation of capital infusion by government and value buying.

Week ahead

As expected, Q1 earnings season has started on positive note. On global front, trade tensions seems to be ease and we are seeing some positive momentum in domestic markets. In the near term the momentum will also depend on the outcome of RBI meet (1st August), were consensus is showing 25bps rate hike. On global front, investors are keenly awaiting US GDP data which might put some influence on US FED policy meet next week.

Posted: July 2018

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