The week gone by saw the market consolidating to a significant extent. Benchmark indices snapped key milestones as investors turned cautious ahead of the rollout of goods and services tax (GST) as well as June F&O expiry. The Nifty, too, closed lower for 6 straight sessions, a first instance for the calendar year.
Having said that, mid and smallcaps outperformed with gains of 0.24 percent and 0.27 per-cent. Banks posted losses, while metals and pharmaceuticals gained.
Two major companies made their debut on indices viz. Tejas Networks as well as Central Depository Services Limited. While the former had a tepid listing, the latter was cheered by investors as the stock listed over 80 percent higher than the issue price. There was imminent excitement in the stock right from the time when the IPO was floated. The issue was oversubscribed 170 times.
GST
The Narendra Modi-led government rolled out the much-discussed goods and service tax (GST) on the midnight of June 30, 2017.
President Pranab Mukherjee and Modi symbolically pressed a buzzer at the stroke of midnight, signalling the launch of goods and services tax (GST) with its impact on prices and businesses likely to play out over months in an economy characterised by multiple pain points.
Earnings
The earnings season, which is due to start soon could be in focus as the effect of GST could be visible. Several market experts had focused on the fact that companies or dealers have indulged in de-stocking, and see that being a challenge.
Auto sales
The auto sales figures for June 2017 have already started coming in and the Street could watch out for the trends from these and set the course for few of the index heavyweights.
Global Cues
The market could watch out for hints from global economic and market-related movements.
In the US, there could be some policy-related uncertainty after leaders of the Senate were forced to delay a vote on Healthcare Bill. Further, there could be some cues from the geopolitical tensions arising out of China accusing Indian troops of crossing the boundary in Sikkim.
Corporate Action
Over the course of next week, companies largely plan to meet up to discuss their bonus issues, conduct annual general meetings (AGMs) or to discuss the upcoming results.
More than 30 companies are scheduled to hold meetings or hold AGMs to discuss their dividend issue. Banks such as Federal Bank, Axis Bank, South Indian Bank and Kotak Mahindra Bank will discuss their will be conducting their AGMs, while companies such as Petronet LNG, PCJ Jeweller, and Motherson Sumi, among others are set to meet to discuss their bonus issue.
Macro Data
Back home, investors could react to the core sector data that was released late on Friday post market hours. Furthermore, the manufacturing and services purchasing mangers’ index (PMI) for June would be released by India.
Monsoon Update
Trends from the monsoon season would be on the radar of investors. According to a media report, the season has begun well as India received 4 percent more rainfall in June.
FII/DII data
Trends from the week that passed show that domestic investors continued to support the market, while foreign institutional investors (FIIs) continued to be on the fence and watch the activities unfold.
Technical cues
The Nifty which started off on a weak note managed to recoup losses and closed above its crucial support level of 9,500 and 50-days exponential moving average (DMA) placed at 9480. The index made a small bullish candle on the daily candlestick charts on Friday.
Gold prices
Prices of gold fell to a six-week low on rampant selling and experts see it continuing further to the levels of Rs 26,862. “Prices managed to settle the week below their 20 and 50-week EMAs which strengthens the case for technical recession ahead,” Globe Capital said in its report. On the other side, validation of 27900 will increase the chances of U turn for 29585 where we can spot fresh round of selling pressure, the report added.
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