Volatility likely ahead of July F&O expiry 

Mumbai: The domestic markets may witness volatile trading in the wake of the expiry of July derivative contracts in futures and options (F&O) segment. The first quarter of earnings and the progress on the GST Bill would continue to remain in focus for the investors.

Major corporates such as Maruti Suzuki India, Zee Entertainment Enterprises, Bharti Infratel and Dr Reddy’s Laboratories, ACC, Ambuja Cements, Bharti Airtel, HDFC, Asian Paints, Yes Bank and Bajaj Auto, ICICI Bank and Larsen & Toubro are yet to announce the results.

The capital infusion into state-owned banks by the government was the major news during the week. The Centre has allocated Rs 22,915 crore to recapitalise 13 public sector banks (PSBs), including the biggest lender State Bank of India (SBI). The sum, which is 92 percent of the budgeted provision of Rs 25,000 crore, is aimed at supporting lending operations of these banks.

The technical charts indicate strong resistance in the band of 8600-8650. If Nifty closes above this level, it can fuel the rally further upside till 8750. If Nifty does not breach this level, then a correction till 8380 is expected.

Nifty was in the range bound throughout the week and closed unchanged at 8541. There would be no major global events next week. Hence, the markets will mostly react to corporate earnings from the heavy weights like ACC, Bajaj Auto, Asian Paints, HDFC, YES Bank, ICICI, L&T,Vedanta.
The technical charts indicate strong resistance in the band of 8600-8650. If Nifty closes above this level, it can fuel the rally further upside till 8750. If Nifty does not breach this level, then a correction till 8380 is expected.

Equities witnessed choppiness during the week’s trade, declined marginally by 33.26 points to close at 27,803.24, while the broader Nifty finished flat, loosing a minuscule 0.20 points to 8,541.20. Sector-specific government announcements and hope of GST passage in the ongoing monsoon session.

This ruled the trading momentum in the midst of somewhat mixed corporate earnings numbers, while heavy FII buying failed to cheer the investors sentiment. The market went into consolidation mode on value buying amid tinge of short covering during the week.

Buying was generated due to encouraging earning season results like last weekend’s bullish first quarter results of Reliance Industries and some of the key blue chips, it was supported by government’s decision to pump Rs 22,915 crore into 13 PSU banks.

Buying was generated due to encouraging earning season results like last weekend’s bullish first quarter results of Reliance Industries and some of the key blue chips, it was supported by government’s decision to pump Rs 22,915 crore into 13 PSU banks.
The market also received sector-specific boost following USFDA approval for Indian pharma companies for sale in the American market.

The IT sector saw selling pressure on poor earnings results before recovering on value buying. Banking sector saw profit-booking amid concerns over bad loans despite good earnings results.
Market player shrugged off IMF’s slight drop in India’s growth projections and global volatility due to geopolitical tensions and dashed hope of more stimulus following European Central Bank (ECB) monetary status quo and statement of Bank of Japan (BOJ) chief Haruhiko Kuroda’s so-called ‘helicopter money’.

Source: Agencies