Market will depend on Bankruptcy bill and WPI inflation data

Market will depend on Bankruptcy bill and WPI inflation data
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Highlights

Nifty future this week traded in a range of 7800-7950 and remained extremely volatile most of the trading session. Although,

Nifty future this week traded in a range of 7800-7950 and remained extremely volatile most of the trading session. Although, market attempted couple of time to break above the 7950 but failed to do so and ended the week within the range of previous week. At the end it has formed an inside bar pattern in weekly chart. An inside bare typically means an indecision and it could turn out either a continuation pattern or a reversal, which depends on which direction the breakout will be in near future. As such we need to wait probably another week or so to see what the price action ultimately does. Holding above 7800 and break out above 7950 will be bullish. On the other hand a break below 7800 could brings more volatility going forward.

This week Nifty future closed with a gain of nearly one per cent. From the trend following technical indicator perspective both the medium and longer term trends are in strong positive. However, short term trend with the recent volatility is indecisive and we need further clue as breaking of the 7800-7950 range to decide.

Among the major factor which could drive the market is the propose Bankruptcy bill which is crucial as it enables Indian banks to address the future case of loan recovery. With that WPI inflation year on year for April is schedule to relies on Monday that too is likely to impact the market.

The government decision to tax investment coming from Mauritius in a staggered manner was the major news in focus this week and main reason behind the volatility market has witnessed. The government plan is to bring durable long term investment from Foreign institutional investments (FIIs) in the long-term. As round-tripping of funds would be reduced which involves domestic money being sent to tax havens and finding its way back to India as foreign investment. Along with this the data of Industrial output in India which increased just by 0.1 per cent year-on-year in March of 2016, slowing sharply from a 2 per cent rise in the previous month and much lower than market expectations of a 2.5 per cent gain dampen the bullish mode of the market participant.

By Rohit Gadia, Founder & CEO, CapitalVia Global Research Limited.​

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