Will markets be stimulated?

Government of India and Reserve Bank of India have announced their stimulus packages to revive our Economy. A detailed review of the stimulus package will be made soon on the same blog. For the time being let us discuss about the direction of the markets for the coming week.

This link can be clicked for the detailed report of Government Stimulus package and this link can be clicked for the detailed RBI report.

Week that was

Though, our equity market opened positively for the week, it was not able to sustain the gains because of the negative cues coming from global markets. Global recession particularly that of United States has become a reality now. Further, negative growth of sales reported by Maruti impacted the sentiments of our market which started sinking down. At the same time, expectations on the stimulus packages, rate cut hopes, fall in inflation (8.40%) and fall in international crude prices helped the market in averting a big fall. IT stocks were the major losers for the week because of th expectations of "less order intake" on the backdrop of global recession. Metal stocks gained in a big way because of the better than expected results from Tata Steel. Banking and Real stocks were the other major gainers on the expectations of rate cuts. Power, Capital Goods and Infrastructure stocks have also gained on the expectations of government's investment in infrastructure. For the week, key indices closed with marginal losses.

Week Ahead

Sensex closing above 8900 is a positive sign for the market. We can expect that there may be small rally in the market. Technically it may face resistance at 9350, 9950 and 10200 levels and there are supports at 8350 and 7700 levels. Traders may initiate long position in case Sensex closes above 9350 levels however with a strict stop loss limits.

Auto, Banking and Real Estate stocks may be considered for trading on account of cut in interest rates. Infrastructure, Capital Goods and Power stocks may be considered on account of government stimulus package.

Indian Rupee may appreciate against US Dollar in the coming week on account of the government and RBI measures as said above.

Wish you all a Happy Week Ahead