Week Ahead

Nifty 50 and BSE Sensex closed over 1.4 percent higher each for the week led by gains in banks, information technology, and Reliance Industries. Nifty IT index surged over four percent amid bargain hunting.

Reliance Industries rose nearly eight percent in one of its best weekly performances of the year on hopes of strong June quarter earnings as global refining margins continued to strengthen.

Buying in the market was broad-based as reflected in the over four percent gains in Nifty Smallcap 100 index and over one percent rise in Nifty Midcap 100 index.

We believe the present market volatility offers an attractive opportunity to build a long term portfolio of quality companies, which have lean balance sheets, are capital efficient and have growth longevity.

Markets would be closely watching :

The Reserve Bank of India's Monetary Policy Committee will meet next week with the outcome expected on June 8..

Besides the Reserve Bank of India, the European Central Bank is also set to meet next week with the outcome expected on June 9..

The price of black gold will be in focus next week as a recent upswing in the commodity's price had investors concerned over the trajectory of inflation.

. Several key economic data points will also be on investors' radar next week.

The earlier-than-expected arrival of the south-west monsoon rains have helped ease investor concern around food prices but in coming weeks the market will track the progress of the rains critical to crop yields, farm income, and rural demand.

Technically Nifty 50 index failed to hold above its 50 day moving average of 16,870 points on Friday and closed the day below that crucial level..

A long negative candle was formed on the daily chart after opening higher. Technically, this pattern indicates a formation of counter attack of bears type candle pattern (not a classical one) at highs. But the formation of such a pattern amid a range movement rules out any sharp negative impact as of now.

The support for the index is likely to be around 16,350-16,400 points while 16,800 points remains a key resistance.