Weekly Stock Market Fundamental View Jul 3, 2017

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July 3, 2017

Dear Member,

The Sensex and the Nifty began the truncated week on a negative note and remained volatile during the expiry of the June derivative contracts. Last week, the Sensex fell 216.60 points or 0.70% to settle at 30,921.61. The Nifty 50 index fell 54.05 points or 0.56% to settle at 9,520.90. The S&P BSE Mid-Cap index rose 60.67 points or 0.42% to settle at 14,644.48. The S&P BSE Small-Cap index rose 28.62 points or 0.19% to settle at 15,410.52.

Crude oil jumped 7% last week to close at $46 a barrel. Further rally in oil prices could trigger weakness in the global markets. On the other hand, the rupee fell against the US dollar last week; further weakening can exert more pressure on domestic equity markets. In Asia, China's manufacturing activity accelerated more than expected in June, suggesting the world's second-largest economy continued to confound expectations for a slowdown. The official manufacturing PMI rose to 51.7 in June, from 51.2 in May. Levels above 50 indicate expansion, while levels below signal contraction. In Europe, the European Central Bank (ECB) chief Mario Draghi gave an upbeat view of the euro zone economy on Tuesday, 27 June 2017, but still urged the need for monetary policy to become accommodative

The Goods and Services Tax has become a reality. However, the impact on companies’ revenue and profitability will be known in the coming months. The government expects GST to revolutionise India's taxing system and is being marketed as one nation one tax. Global cues will be keenly monitored amid lack of major domestic triggers next week. Macroeconomic data, progress of monsoon rains, trend in global markets, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), the movement of rupee against the dollar and crude oil price movement will dictate trend on the bourses. If profit booking kicks-in globally, as the US markets are overheated, domestic indices can extend the correction. Investors can follow the progress of the monsoon, rupee movement and foreign inflows

Among sector specific activity, auto stocks will be in focus as these companies will start reporting sales volume data for June 2017, starting from Saturday, 1 July 2017


Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business whose earnings are virtually certain to be materially higher five, ten and twenty years from now. - Warren Buffett

Investing is simple but it's not easy. Because emotions get in people's way or greed and that sort of thing. They get all excited about stocks when they've gone up recently, and they get depressed when they've gone down. Warren Buffett

The best stock to buy may be the one you already own. - Unknown