Indian Stock Market Outlook by Romesh Tiwari, CapitalAim

Indian markets have been under pressure after the Union Budget was presented. The markets are lacking direction as there aren't any major events but first quarter results will offer direction to the markets, or at least stock-specific action will be seen.

Market Overview from Mr. Romesh Tiwari, Head of Research, CapitalAim follows...

A negative trend for the Nifty continued from last Friday and Nifty slides to make a low of 11,461 on Tuesday and still trading not faraway from it. A feeble attempt to cross 11,600 saw supply coming in.

For next week Markets are likely to trade negatively given the concerns arising of budget declarations about raising of public holdings and tax surcharges. Technically, Now, the Benchmark Nifty50 is forming a bearish flag pattern on daily chart and the index is still sustaining below the 20 & 50-day moving average on daily chart. These moving averages are heading to converge downward on the same chart and RSI looking weak, which is now placed at 41.07 levels. On the breakout of this pattern, a downward movement could be witnessed in the index.

On sectoral front, results from finance and banking sector, like SBI, Axis Bank, LIC housing finance, Kotak Mahindra Bank, will be declared and hopefully bring some clarity about the prospects of next quarters. Falling bond yields will result in treasury gains for banks and also improving asset quality will help the fundamentals for next quarter. We are positive on SBI, PNB, HDFC Bank, Yes Bank in near to medium term.

The stocks of steel and FMCG sector could show a bearish movement, whereas; the stock of pharma and cement sectors could show an uptrend.

Coming week, in India there would be a data of WPI Inflation (YoY) (Jun) on Monday. On the international front, there would be data on Core Retail Sales, Retail Sales and Fed Chair Powell Speaks on Tuesday, FOMC Member Evans Speaks on Wednesday, Philly Fed Manufacturing Index and Unemployment Claims on Thursday.