Indian Markets Outlook for the week – 20 to 24.02.2017
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Indian Markets Outlook for the week – 20 to 24.02.2017
( www.rupeedesk.in )
Domestic share indices may continue to rise next week, but trade will be
volatile, as investors square off positions ahead of the expiry of the
February derivatives contract on Thursday. Next week will be a shortened
trading week because markets will be shut on Friday for Mahashivaratri
celebrations. Benchmark indices ended up for the fourth consecutive week
today, with both key indices gaining over 5% each from its close on Jan
20. The trend is likely to be up as the stocks are not giving up their
gains of recent weeks. Bulls are not loosening their grip on the stock
market and indices are unlikely to turn negative unless there are big
outflows from foreign investors. Yesterday, the 51-stock Nifty 50 ended
up 43.70 points or 0.5% at 8821.70 points, while the Sensex ended at
28468.75, up 167.48 points or 0.6%. Among the sector movers, the Nifty
Pharma index gained 2.1%, followed by Nifty Bank, which rose 1.5%. The
Nifty IT index ended down 1% on profit taking, but some are of the view
that it could rise once again after Tata Consultancy Services details
its share buyback plan Monday. Bank stocks are likely to stay choppy
next week. The stock gained sharply today after the Reserve Bank of
India Thursday lifted its ban on foreign investors buying into the
stock. However, the central bank yesterday once again barred foreign
investors from buying HDFC Bank stocks as their holding topped the 74%
mark in less than a couple of hours of trading. Foreign investors are
likely to have bought shares of HDFC Bank to the tune of $1 bln. Stocks
of HDFC Bank touched a record high of 1,454 rupees, but ended up only
3.7% at 1,377.05 rupees. Stocks of Axis Bank hit a three-month high of
504 rupees after CLSA Asia Pacific Markets said a possible merger with
Kotak Mahindra Bank will be positive. However, Axis Bank closed down
0.8% at 489.10 rupees, while Kotak Mahindra Bank, after also hitting a
three-month high of 811 rupees, closed up 0.5% at 796.50 rupees. So
yesterday's gain in the bank stocks can be termed as technical, pushed
mainly by the heavy buying by foreign investors in HDFC Bank shares, and
the gains (in bank shares) seen yesterday may not sustain next week.
However, pharmaceutical stocks may see some more gains as investors will
once again look for bargain buys in the sector on positive news. Stocks
of Cadila Healthcare continued to rise and ended up 4.8% after it got
approval from the US Food and Drug Administration for generic
fluconazole tablets and clobetasol propionate spray. Cigarette makers'
stocks are likely to be in focus next week as the Goods and Services Tax
Council may discuss categorisation of tobacco products on Saturday, and
decide to keep these products under the highest slab of 28% plus cess.
