This week market will be volatile due budget
Sensex rose 243 points or 1.67% to 14764 and Nifty lost 72 points or 1.61% to 4241 in the week ended 26-6-2009. Technically market gave perfect correction, which is required for next bull phase. Still we can’t say that correction phase is over but looking to budget market could not decide its way. There are some good reasons same time we have bad issues also, details are mentioned below.
The June-September monsoon rains are a major influence on the economy, as two-thirds of Indians depend on agriculture and large areas of the vast south Asian country suffer from a lack of modern irrigation facilities. Poor monsoon rains could dent rural demand, hurt corporate profitability and undermine sentiment in financial markets.
Meanwhile, foreign funds activity will be closely watched. After aggressively buying during the past three months or so foreign funds sold shares totaling Rs 3,168.40 crore in eight trading sessions from 15 June 2009 to 24 June 2009. FII inflow in June 2009 totaled Rs 2,964 crore (till 24 June 2009). FII inflow in calendar year 2009 totaled Rs 24,283.40 crore (till 24 June 2009).
The Indian government may unveil a roadmap in its 6 July budget to deregulate fuel pricing and give leeway to state-run oil refiners to fix petrol and diesel prices within a band. If the reform proposals are approved prices of petrol could rise by Rs 5.1 a litre and diesel by Rs 2.6 a litre. After the ruling coalition was re-elected in May with a stronger mandate, Oil Minister Murli Deora had said the government was considering a proposal to free state controls on transport fuel prices.
The market could be volatile ahead of the presentation of the Union Budget 2009-2010 on 6 July 2009. Stock-specific activity may rule the roost based on budget expectations. The Annual Economic Survey will be presented on 2 July 2009, a day ahead of the Rail Budget on 3 July 2009. Investors will track global cues for a direction
The Government has made its intention clear to push for reforms and pursue the disinvestment agenda. For the power sector, the Budget may contain significant increases in spending, including for generation, rural electrification, and for minimising transmission and distribution losses. A big push to Public Private Partnership (PPP) projects in infrastructure may be also on the cards.
The next major trigger for the market is the Union Budget 2009-2010. Many equity analysts have been raising earnings forecasts of India Inc on hopes that the new government will provide thrust on the infrastructure sector and push economic reforms to boost growth. Citigroup expects the economy to grow by 6.8% in the year ending March 2010 (FY 2010) and 7.8% in the year ending March 2011 (FY 2011).
The Union Budget 2009-2010 attains significant importance in the wake of the global financial crisis. Despite the country being relatively unharmed compared to the West, the UPA government will have many tasks on its to-do list, which includes boosting growth and demand, continuing to maintain liquidity, balancing inflation and also containing the country’s worrying fiscal situation.
Use Stop loss strictly in your every trade, because market is heavily volatile with narrow trading range.
| INDEX (WEEKLY) | THIS WEEK CLOSE | PREVIOUS WEEK CLOSE 19-6-09 | PERCENTAGE CHANGE (%) |
| SENSEX | 14764.64 | 14521.89 | 1.67% |
| NIFTY | 4241.85 | 4313.60 | -1.61% |
NIFTY WEEKLY CHART
NIFTY FUT. (4384)
RELCAP (938.90)
Buy this stock above 944 for target of 962-988. Keep Stop loss of 929.
CAIRN (234.10)
Buy this stock above 238 for target of 243-249. Keep Stop loss of 230.
ABAN (892.75)
Buy this stock above 900 for target of 925-951-982. Keep Stop loss of 875.
Rupesh Yatesh Dalal
