Bullish after Brexit?

After heavy selloffs last week due to Brexit markets recovered smartly and on Friday closed at 8328 The recent surge is an early indication of a bull market if there is no negative news from the European Union EU zone Nifty has immediate resistance at 8375 and 8402 Most probably minor profit booking and consolidation can be expected before the said extended move Nifty has support at 8195 and 8125 levelsLondon lsquoRemainrsquo supporters near Park Lane in London before marching to Parliament Square to show their support for the European Union PicAPPTIThe Central government has agreed to the 7th pay commission recommendations nearly 47 lakh central government employees and 52 lakh pensioners will get benefits The commission also suggested R 18000 as the minimum salary The new recommendations will put an additional financial burden on the government to the tune of R 102000 crore The policy will give a boost to auto consumer goods real estate and even FMCG Higher spending will revive economic growth This recent decision will have a long lasting positive impact on the Indian economy Investors are also confident that the government will get a majority for passing the GST in the Parliament during the monsoon sessionConfident pictureA good monsoon across the country also gives a lot of confidence to investors Short covering ahead of the June Futures and Option expiry also supported the markets The latest rollover Nifty data indicates a strong market outlook for the July series The July Nifty rollover was higher than that of the previous three months average of 70 per cent and it was at 78 per cent Most of the large cap stocks futures rollover figures also suggested the same trend FIIs also created fresh positions after the Brexit selloff SampP 500 VIX which measures the US market conditions has fallen towards 1477 per cent from the earlier 26 per cent India VIX also retreated from higher levels and on Friday it closed at 1573 per cent which indicates a strong market outlook in the near termTaking stockLast week Brexit took a toll on IT stocks it is still in sell mode whereas sugar and tea sector stocks made a comeback Tea stocks were in good demand due to shortage of tea arrival and higher demand the price of 1 kg of tea moved up by around 13 per cent in the auction in the recent past This price trend may continue Sugar stocks have been in demand since the past three months due to higher realisation because there is acute shortage of sugar exports from Brazil and drought in India Fertilizer sector stocks are likely to move up once the monsoon picks up in the northern regionsFridayrsquos auto sale numbers were mixed Marutis domestic sales dropped by 10 per cent MampM achieved 7 per cent growth Escorts had a sales growth of 12 per cent and last Ashok Leyland reported a sales growth of 7 per centGold sheenCrude moved back towards 48 per barrel after testing 4577 due to lower output from existing wells and reduced drilling which in turn can lift sentiments positively Crude has immediate resistance at 5133 per barrelGold is still looking very positive and many analysts revised their earlier estimates towards 1500 from 1400 per troy ounce Last week both gold and silver have risen substantially due to higher demand partly because of uncertainty over Brexit and currency volatility If currency market volatility increases then investors will park their money in safe havens like gold