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Indian Stock Market: Nifty and Bank Nifty Share Price Target- Before jumping to Nifty and Bank Nifty share price target let us first know the Indian stock market updates and next week's events. Next week the market is closed on Monday 11th Aug due to Bakrid and 15th Aug on occasion of Independence day, check out the Market Holidays
Indian stock market update last week
Last week after the initial fall, the benchmark indices closed in a positive note. The Nifty and Sensex share price gained 112.30 and 463.69 points respectively up almost 1% and 1.23% during the week. The Bank Nifty share price also gained 227 points around 1% up in the last week.
The Nifty Midcap and Smallcap 100 index rallied 237.95 and 63.55 points respectively during the week. Both the indices rallied above 1% percent last week. On a weekly basis, Future consumer and Prestige Estate are the top gainer in the Nifty Midcap 100 index whereas NBCC and Jindal Steel are the losers.
In Nifty 50 stocks, top gainers last week are Hero Motorcorp, Bharti Airtel, HCL Tech, and Bajaj Finserv. The top losers in the Nifty 50 stocks in the last week are Tata Steel, UPL, Yes Bank, Tata Motor, and Cipla. The share price of Yes Bank fell 9% intraday last Friday due to the opening of QIP at a floor price of Rs87.90 with a proposed discount of 5% maximum.
Reasons for Indian stock market volatility last week
Last week after China devalued its currency Yuan, the focus of trade war shifted to Currency War. In order to make exports more competitive in the global market and import more expensive, countries sometimes devalue their currency. Last week the devaluation of Yuan has also effected Indian Currency, Indian Rupee got depreciated 1.76% and closed at Rs 70.92 against the dollar
On 7th Aug Wednesday RBI has cut the repo rate by 35bps. The rate cut is the fourth time a row in this calendar year 2019. The six-member Monetary Policy Committee (MPC) has also lowered the FY20 GDP growth forecast from 7% to 6.9% but maintained its stance as accommodative.
The RBI tried to push the growth by cutting the repo rate and also relaxing the bank’s exposure to single NBFC’s from 15% of its tier 1 capital to 20%. RBI has also allowed banks that they can meet their priority sector credit targets by lending to NBFCs for on-lending to agriculture investment with some caps.
Though the market fell after the RBI monetary policy but on the 8th Aug Thursday market jumps on the expectation of withdrawal of FPI surcharge. The manufacturing PMI data also rose to 52.5 in July from 52.1 in the previous month which was positive for the market. Short covering was seen in the market on Thursday and it closed above 11000 psychological levels.
The Indian stock market rose for a second straight session on Friday with a hope that Government will roll back the FPI surcharge and will take measure to revive the auto sector. The auto industries are in very bad shape at present.
Indian stock market events next week
On Friday after market hours, Finance Minister Nirmala Sitharaman met representatives of mutual funds, investment banks, FPIs, and others. The agenda of the meeting was to discuss the rollback of FPI surcharge and other issues like abolishing long term capital gain tax, a review of the dividend distribution tax, simper KYC, etc.
The government may take positive steps to revive the auto industry and roll back the FPI surcharge soon maybe next week. This can be the immediate trigger for the Indian Stock Market
On Friday after market hours, the IIP data for the month of June was released. As expected the June Index of Industrial Production (IIP) growth dropped to 2% YoY from an upwardly revised 4.6% in the previous month. There was a slow down in the manufacturing sector, which grew at 1.2% in June as compared to 6.9% a year ago.
Next week there are only three trading days, the Indian stock market will react to the IIP data first. Tuesday 13 Aug retail Inflation (CPI) will be announced after market hours and on 14th Wednesday WPI is scheduled. On Friday Foreign exchange reserve and Bank loan growth data will be released. Next week market is also expecting positive news from our Finance Minister regarding FPI surcharge.
Nifty and Bank Nifty share price target for next week
Primary Trend of Nifty Future: Volatile (Bias Sideways)
Range-Bound Trend:
All up Moves Initiates Profit Booking (Sale) @ 11220 whereas All Down Moves Initiates Short Covering (Buy) @ 11020
If Nifty Future Share Price Moves Above 11132 then you should Buy with 1st Target of 11154 during the day or any point during the week by Trailing the Stop Loss from 11094- 11162- 11190- 11220 FOR the Target of 11154- 11182- 11210- 11242
If Nifty Future Share Price Moves Below 11090 then you should Sell with 1st Target of 11062 during the day or any point during the week by Trailing the Stop Loss from 11126- 11047- 11020 -10980 FOR the Target of 11062- 11038- 11007 -10952
Primary Trend of Bank Nifty Future: Volatile (Bias Sideways)
Range-Bound Trend:
All up Moves Initiates Profit Booking (Sale) @ 28650, whereas All Down Moves Initiates Short Covering (Buy) @ 28200
If Bank Nifty Future Share Price Moves Above 28558 then you should Buy with 1st Target of 28638 during the day or any point during the week by Trailing the Stop Loss from 28480- 28590- 28680- 28760 FOR the Target of 28638- 28705- 28774
If Bank Nifty Future Share Price Moves Below 28418 then you should Sell with 1st Target of 28340 during the day or any point during the week by Trailing the Stop Loss from 28480- 28315- 28240- 28200 FOR the Target of 28340- 28260- 28180
Conclusions:
The Indian stock market was highly volatile last week. The market sentiments improved in the last two trading days after getting the assurance from the Finance Minister Nirmala Sitharaman. In a meeting with Finance minister Nirmala Sitharaman and representative of Mutual Fund, Corporates, FPIs, the finance minister has assured to rollback or withdrawal FPI surcharge. This can be hugely positive for the Indian stock market. Government measures like a cut on GST in the auto sector are also expected next week.
The above two events can become a positive trigger for the market for next week otherwise, both nifty and bank nifty futures share price will move sideways. Traders are advised to trade with strict stop loss mentioned above for Nifty and Bank nifty future share price target. Traders are also advised to track the global market particularly the trade war and currency war-related developments.
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Finogyan Team
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