Market week ahead 10 key things that will keep traders busy – database tutorial

"The week was marked by important meetings of central banks with the Federal Open Markets Committee hiking interest rates by 25 bps, the European Central Bank signalling an end to the bond purchases by December end, and the Bank of Japan maintained its ultra=loose monetary policy. Rising interest rates in the US and expected increase in interest rates from 2019 may weigh on the foreign portfolio inflows going forward," Teena Virmani, Vice President – Research at Kotak Securities told Moneycontrol.

Going forward, she feels the markets would weigh concerns emanating from a possible trade war between the US and China. "Higher interest rates have resulted in the valuation multiple contracting. Going forward, gains in the market would largely hinge on an earnings recovery."

She sees higher crude prices and minimum support prices impacting inflation and interest rates along with the widening fiscal and current account deficit. "Positives are likely to come from a ‘non-disrupted’ year, earnings recovery, expectations of a third consecutive normal monsoon as well as strong rural consumption."

Jayant Manglik, President, Religare Broking, said with the lack of any fresh positive domestic triggers in the near term, volatility is likely to remain high with stock-specific movement. “Market participants will closely monitor global developments, especially in the US, Europe and China."

Oil prices corrected sharply in the last one month, especially after hitting $80.50 a barrel, the highest level since November 2014. Increase in US crude production and likely increase in crude output from the worlds biggest oil producers dampened investor sentiment.

Brent crude futures, the international benchmark for oil prices, corrected $7 per barrel, or 8.77 percent, in last one month to $73.44/bbl from $80.50/bbl hit on May 17. On Friday, it fell more than $2/bbl ahead of the Organisation of Petroleum Exporting Countries’ (OPEC) meeting in Vienna on June 22-23.

The rupee ended at a fresh three-week low of 68.01 against the dollar on Friday amid global trade war concerns and higher-than-expected widening of the country’s trade deficit in May. It fell 51 paise against the greenback this week to end at its lowest level since May 24.

The Indian currency was the hardest-hit among Asian currencies which suffered due to a strong dollar and emergence of macroeconomic challenges. A rapid surge of capital outflows and the associated volatility also piled pressure on the currency.

But experts feel there is nothing to worry as domestic institutional investors continue to support equity markets. DIIs have been net buyers since April last year. In June so far, they purchased more than Rs 6,000 crore worth of shares as per provisional data on the National Stock Exchange. Technical outlook

"Nifty patterns on multiple timeframes show it finished off the week with an Inverted Hammer candle, which implies a lack of confidence among traders and investors. It show selling pressure is on a rise around its critical resistance of 10,900. Hence, staying cautious on a rise is advised for the coming week as well," Stewart & Mackertich said in a recent note.

However, as the broader pattern suggests, the primary uptrend is still intact and a retracement towards critical supports is likely to be bought in for the next leg of upmove. Downside critical supports are placed around 10,740, 10,700 and, 10,670, the brokerage added. "As the trend suggests, Nifty broader trading range for the coming week is expected to be 10,880 to 10,670."

According to him, the formation of lacklustre type patterns and a presence of key resistance on the weekly chart could dampen effort of the bulls to sustain the highs. "Key overhead resistance to be watched for next week is at 10,900 levels." Futures & Options

"Put writing was witnessed in out-of-money strikes with support for the Nifty gradually shifting higher. Highest open interest for Nifty in the current series is placed at 11,000 CE and in 10,700 PE which was previously placed at 10,600 PE," Rahul Sharma, Senior Research Analyst, Equity99 told Moneycontrol.

The government will kick start its divestment process for FY19 through the initial public offer of railways consultancy firm RITES, which will open for subscription on June 20. The Centre aims to garner about Rs 460 crore through the 12 percent stake sale. The price band for the issue has been fixed at Rs 180-185 a share.

Speciality chemicals manufacturer Fine Organic Industries would be the second company to open its Rs 600 crore public issue on Wednesday, with a price band of Rs 780-783 per share. The public issue comprises an offer for sale of 76,64,994 equity shares by the promoter group.

Dr Reddy’s Laboratories defends its right to launch Buprenorphine and Naloxone sublingual film in the US markets. A New Jersey District Court has issued a temporary restraining order against the company on Suboxone generic. The court has scheduled an expedited hearing of the preliminary injunction for June 28 and a ruling is expected soon thereafter.

PNC Infratech: The Uttar Pradesh government has cancelled the on-going bidding process of Purvanchal Expressway Project that comprises eight individual packages and decided to go for fresh bidding. The company was earlier declared as L1 bidder for the fourth package of the above project.

Panacea Biotec along with its partner, Apotex Inc and Apotex Corp have entered into a settlement agreement with Celgene Corporation (USA) and its subsidiary Abraxis BioScience, for settlement of disputes regarding patents covering Abraxane drug product and the company’s abbreviated new drug application (ANDA) for paclitaxel protein bound particles for injectable suspension, 100mg/vial, a generic version of Abraxane.

Fiberweb India said the proposed preferential allotment of equity shares to New Horizon Opportunities Master Fund to the tune of Rs 40 crore will not be taking place. The company continues to be on track to execute the second phase of its diversification project – production of bi-component flat bond fabric – for which the proposed investment was sought.

Shreyas Shipping & Logistics’ associate company Avana Logistek filed its draft red herring prospectus with the Securities and Exchange Board of India for its initial public offering. The issue consists of a fresh issue of Rs 300 crore and an offer for sale of up to 43 lakh equity shares by Transworld Holdings, Mauritius, the promoter of Avana.

OPEC and Eurogroup meeting organised by European Council meeting are likely to be held on Thursday.Japan’s Inflation (Core CPI) data for May and Nikkei Flash Manufacturing PMI for June; US Markit Flash Composite, Manufacturing & Services PMI for June; and Euro Area Markit Flash Composite, Manufacturing and Services PMI for June will be announced on Friday.