Stimulus Package: Nifty and Bank Nifty View for- 26th to 30th Aug

Finogyan August 24, 2019
stimulus package Nifty and Bank Nifty view
Stimulus Package Nifty and Bank Nifty View
At last the much-awaited stimulus package for economic growth announced by the Financial Minister Nirmala Sitharaman on Friday after market hours.
But the big question is can the market bounce back from here? 
Can Nifty and Bank Nifty which corrected 981.80 and 4517.15 points respectively after FM Nirmala Sitharaman’s maiden budget will bounce back now? 
The stimulus package for economic growth which investors or traders were waiting is a positive for the Indian market. But whether this can be a game-changer or not depends on many other factors.
Last Friday Moody has cut India’s GDP growth rate to 6.2%, Donald Trump added 5% tariff on Chinese goods and the US market fell sharply. These are a few negative news which can affect the Indian market next week.

The Indian rupee is again trading near an all-time low. The poor Q1 results of Indian corporates, the global economic recession, cross border tension, etc are some other factors which market may take it negatively.
Is it wise to expect a bullish market for stimulus package announcement amid of so many negative factors around us? is a big question mark at present.
Last Friday the Indian stock market reversed from the day’s low after the news flashed that Finance Minister will hold a press conference for economic growth. It was a mini-budget from the Finance Minister Nirmala Sitharaman to boost or improve the sentiment of investors and the business community.

The main highlights of the stimulus package are:


  1. Violation of Corporate Social Responsibility (CSR) norms under the companies law will be treated as civil liability and not a criminal offense.
  2. Rs 70,000 crore will be released to PSB’s to boost the liquidity
  3. Banks have agreed to pass on the rate cut through MCLR reductions to benefit all borrowers.
  4. Enhanced surcharge on Foreign Portfolio Investors (FPI) which was introduced in the last budget is now completely rolled back
  5. Finance Minister has announced that the enhanced surcharge levied on LTCG and STCG will be withdrawn.
  6. Angel tax on startups has been withdrawn
  7. FM-RBI is working to bring offshore rupee market to the domestic market
  8. To establish credit enhancement for Infra and housing projects
  9. Liquidity support to housing finance companies increased to Rs30,000 crore
  10. Pending GST refunds to be paid in 30 days. and many more 
Yesterday, Finance Minister Nirmala Sitharaman said the government is focused on continuous reforms whenever it is sluggish. The best part is the Finance Minister will be announcing a few more reforms in the next week.

Nifty and Bank Nifty reacted on last week
Last week Nifty and Bank Nifty fell 218.45 and 1258.35 points respectively on spot level. On percentage, wise Nifty was down 2% and Bank Nifty was down almost 4.7% The Indian stock market was highly volatile throughout the week. Nifty midcap and smallcap 100 also down 841.70 and 351.15 points respectively. Percentage-wise Nifty Midcap 100 was down 5.5% and smallcap was down 6.7%.
Foreign Institutional Investors (FIIs) are still net sellers whereas DIIs are the buyers in last week. On a weekly basis, Indian rupee depreciated 0.50% and closed at Rs 71.513 against 1 dollar. On a weekly basis Brent Crude oil price has increased by 1.19% compared to last week.
On a weekly basis, the top five Nifty50 gainers are Maruti Suzuki, TCS, Tech Mahindra, Infosys, and Sun Pharma. The top five losers in the Nifty 50 stocks are Yes Bank, Indiabulls Housing, Indusind Bank, Tata Motors and Ultra Tech Cement.

Next Week's Event in Indian Stock Market
Next week is the monthly derivative expiry market would be highly volatile. The market will first react to the stimulus package that has announced aftermarket on Friday the last day of the week. The stimulus package will definitely give a gap up opening on Monday next week. 
But how many days the market will remain in a positive zone will depend on global cues, progress in monsoon, movement of rupee against the dollar, Brent crude oil price movement. Investors and traders need to closely watch the movement of Foreign Portfolio Investors (FPIs) and Domestic Institutional Investors (DIIs) to know the direction of the market.
On the macro front, India’s Q1 Gross Domestic Product (GDP) data will be released after market hours on 30th Aug, the last day of the week. Bank loan growth, deposit growth, Infrastructure output, Foreign exchange reserve are other data that will be released next Friday, 30th Aug after market hours.

Nifty and Bank Nifty future trading view for next week
Primary Trend of Nifty Future: Volatile 
Range-Bound Trend: All up Moves Initiates Profit Booking (Sale) @ 11030 whereas All Down Moves Initiates Short Covering (Buy) @ 10680
If Nifty Future Moves Above 10872 then you should Buy with 1st Target of 10945 during the day or any point during the week by Trailing the Stop Loss from 10794- 10960- 11015- 11110  FOR the Target of 10945- 10984- 11032- 11134
If Nifty Future Moves Below 10794 then you should Sell with 1st Target of 10746 during the day or any point during the week by Trailing the Stop Loss from 10880- 10720- 10680 -10590 FOR the Target of 10746- 10705- 10640 -10560


Primary Trend of Bank Nifty Future:  Volatile 
Range-Bound Trend: All up Moves Initiates Profit Booking (Sale) @ 27650, whereas All Down Moves Initiates Short  Covering (Buy) @ 26650

If Bank Nifty Future Moves Above 27150 then you should Buy with 1st Target of 27322 during the day or any point during the week by Trailing the Stop Loss from 26965- 27220- 27380- 27580 FOR the Target of 27322- 27464- 27605- 27920
If Bank Nifty Future Moves Below 26965 then you should Sell with 1st Target of 26825 during the day or any point during the week by Trailing the Stop Loss from 27080- 26910- 26840- 26710 FOR the Target of 26825- 26680- 26520- 26330

Conclusions: 
On Monday market is expected to open gap up because of the stimulus package announced last Friday by FM Nirmala Sitharaman. The Indian stock market will remain highly volatile next week because of monthly derivative expiry scheduled on Thursday 29th Aug.
Traders must remain cautious and trade with strict stop loss only. Nifty and Bank Nifty may show some positive up move next week but for the long term, it would depend on global cues and Q2 results of the Indian companies. Traders and Investors are advised to closely watch the movement of FPIs to get the direction of the market in the next week.






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Finogyan Team
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