Spooked by the geo political events in West Asia and depreciating rupee markets had a roller coaster ride during the week ended. Both the Sensex and the Nifty closed marginally lower by 123 points and 31 points at 25,105 and 7511 respectively.
Despite underperformance of the benchmark indices, midcap and smallcap indices showed good resilience. A rise in crude oil prices, below normal progress of monsoon and higher WPI data dampened the sentiment.
For the next few weeks monsoon progress and the Union Budget are the two most important triggers for the market. Crude oil prices and their impact on CAD will dictate the near term direction of the market.
Spike in global gold prices sparked renewed interest in precious metals. US Fed decision to reduce bond purchases induced positive vibes in global markets. For the week ahead chartists predict wide trading range of 24700-25500 for the Sensex and 7375-7650 for the Nifty. Immediate supports are at 25,850 and 24,700 and 7,460 and 7,420.
F&O
Ahead of the settlement week, markets moved into consolidation mode with mild negative bias. Option activity suggests strong support for Nifty at 7500 level. Breach of this level may trigger sharp selling. Buoyed by rupee weakness, renewed buying was seen in IT stocks. Use declines to buy Infosys, HCL Tech and TCS in July series.
Select pharma stocks were in limelight. Stay invested in Cipla, Biocon and Aurobindo. Telecom stocks are likely to stage pullback rally. Buy Idea and Airtel. Good accumulation was seen in infra stocks at lower levels. Use dips to buy GMR Infra for target price of Rs 45. Stocks looking good are ACC, Adani Ports, Bajaj Auto, Biocon, Cairn, Kot-ak Bank, Titan, Petronet, Tata Global, Tata Steel and Zee Entertainment.
Stock scan
Prime Focus operates as a media and entertainment services company in India, UK, US and Canada. It provides creative and technical services. Additionally, it is involved in the media and other investment; broadcast post production and VFX services. Buy on declines for medium term target of Rs 75.
Tasty Bite Eatables Ltd is the largest brand of shelf-stable, ready-to-eat Indian food in North America and Australia. It is distributed through mainstream retail chains. Buy on declines for target price of Rs 425.
Emami manufactures and markets health, beauty, and personal care products in India and internationally. Its focus on health and personal care products, strengthening of brand equity and innovations make it good bet for target price of Rs 750 in medium term.
