A Happy Ending To An Eventful FY’16

Market This Week

Market is no where in the mood to give any breathing space to the investors as juggernaut rally is still going strong. The positive events that boosted the market last week, are expected to continue the momentum in the coming days. The build up suggests that good days are in store for the investors.

Most of the stocks are trailing around their 52-week high, few are doing well with their all time high levels. Since last month most of the investors were waiting for the correction and lower levels to enter into the market. But in our last few articles, we were giving a hint that there is no negative event ahead for Indian market so correction is on the back burner at this point. Minor profit booking could be possible, but FIIs are leaving no space, pumping high into the equity market. In last couple of weeks, FIIs already have bought more than INR 15,000 cr equities. DIIs are on profit booking side.

Movers And Shakers

This week, midcaps were on gainers side as large caps are marginally on overvalued side as they have already gained significantly in last month. So the focus of majority of the investors is on the midacaps now. As everybody knows midcaps are usually aggressive in nature as far as growth is concerned. So if there are any major rallies, they are most likely to be in the midcap segment. Talking about sectors, post the anti-dumping of rubber, tyre industry is looking promising from here on. Most of the stocks have already rallied while more are expected to follow. Most of the tyre stocks might be the major market movers in the coming days.

Key Market Drivers

Large caps were driving the market last week as Indian giant Reliance, infra daddy Larsen and Toubro were in the driver's seat. In the banking space, State Bank of India and ICICI Bank are looking in pretty good share. Among the tyre side Ceat and JK Tyre gained good post the anti-dumping news. Realty space is making a comeback, as it's looking much stronger as some of the midcaps joined the party. Sunteck Realty zoomed up last week.

Furthermore, demonetisation quarter ended with December, and now we have come to a point to count the returns in this quarter, so either the entire market or some major stock will hit all time higher levels.

Event Watch

GST is on the verge of its final statement, and final rollover may take place from June 1st, 2017. Majority of the sectors are welcoming GST. On the other hand, discussion is still on regarding the non-performing assets (NPA) of the banks, while some are raising concerns regarding asset quality going down, but governments is ready to step in which will give a major boost to the banks stocks. Quarter earnings are around the corner, as majority of the sectors are ready to post better results after demonetisation hit quarter, it seems investors will see a happy ending to an eventful FY'16.

Stocks To Watch

Rural Electrification Corporation Ltd is on up side while Tech Mahindra is on down side.