STOCK MARKET NEWS

Looking into current market situation and taking into consideration higher interest rates, higher inflation rates and rising crude oil prices it could not be ruled out that bears are on hold and temporary, for short term, bulls are vanishing.
As we mentioned in our previous weekly posts the important support of Nifty at 4600. After this support level was violated, Nifty breaches drastically down and moved below 4400 and currently trading at around 4500 levels.
The important point to notice about the markets is that they are moving down with significant volumes. According to most of the analyst’s Indian market is still expensive taking into consideration 12 months forward earnings in comparison with other Asian markets.
The factors like higher inflation, increasing crude oil prices and higher interest rates could hamper the Indian corporate earnings in coming quarters due to which analyst feel that at current levels the Indian markets are expensive.
In January to may trading session Indian was the second worst performing
market. FII’s (foreign institutional investors) sold approx $4 billion.
FII’s have been sellers this year while Mutual funds and insurance who where
buyers at the beginning of this year are not doing so the reason could be
inflows (buyers) in mutuals funds and insurance may be slowing down.

What to expect Next week?
Important support levels -
Nifty has major support at 4400. If nifty closes below this level with huge support of volumes then further downtrend could be expected.
Market Direction
Indian Markets will track the Asian as well as USA Markets.
Increase in petrol and diesel prices will reflect in next week inflation report and most of the analyst are predicating that the inflation rate will move above 9% which is the all time high in the history of Indian economy .
This may have negative impact on stock market.

Action Steps
As we always kept writing you in our weekly posts to avoid day trading and future trading same will continue but if you are confident and knowledgeable about your moves then you can proceed.
Try and avoid bottom fishing (guessing and buying at lower levels) unless you have studied the company fundamentals.
Don’t panic and start selling your stocks in holding in current market situation. If your stocks have strong fundamentals then they will recover as market recovers so need to worry and get panic in bearish markets.
Don’t try to average your stock prices unless they are below more then 40 to 50 to 60% based on its fundamentals and that also in step wise instead of buying in large quantity.

Over all Market Outlook
It is not that the same situation will remain forever in Indian as well as Global markets but the markets may get worse before they get better and normal.

The support at 4,400 was tested on several sessions and proved durable. But, resistances exist all the way up to 4,750-4,800. Huge volume expansion would be required to break those resistances and such volume expansion seems unlikely. The downside support is more likely to crack than the upside resistances.
A downside breakout will be quite dangerous given the lack of visible supports below 4,400. There would be a target projection till 4,200 and that is backed by huge outstanding positions in the 4,200p.

There was some positive action is fertiliser shares with Nagarjuna Fertiliser, Chambal Fertiliser and GNFC all ending strong. Otherwise, winners such as Aurobindo Pharma, Aban, Bharat Forge, Dr Reddy's, IDFC, etc were scattered and isolated. There was some positive action in telecom shares like RCom, Bharti and Idea Cellular as well as in Spice.

Closure of NJHEP, the largest underground hydro-electric power project in the country commissioned by the SJVN, has affected supply to northern states — Punjab, Haryana, Uttar Pradesh, Uttaranchal, Rajasthan, Delhi and Himachal Pradesh.
The six units of 250 MW each of NJHEP were closed on June 11 last as a precaution, SJVN spokesman Vijay Kumar Verma said.
Sand and stone particles mixed silt is coarse and it can damage the machines, he said.
The high silt level has been caused by Spiti, a tributary of Satluj. He said nothing can be done in this condition except wait for the water flow to come to a permissible level.
Due to the stalling of the project, the corporation, a joint venture of the Centre and the state government, is losing about Rs 9 crore daily.