By Rahul Shah

Equity benchmark index Nifty on Friday ended on a flat against the previous week close. Nifty declined 19 points or -0.1% to close at 17539 while Sensex declined marginally by 31 points or -0.1% to close at 58803. Auto, realty and banking stocks were major gainers last week while IT and energy stocks witnessed profit booking. Realty stocks witnessed a smart rally due to 20% jump in Mumbai registration. Oil & gas stocks witnessed profit booking due to oil price falling to nearly 3-week low. FMCG stocks witnessed fresh buying on hope of improving demand ahead of good monsoon and festival sessions.

Expect Indian markets to continue its upbeat despite weakness across the global markets. Index ended flat against the previous week close despite decline across the global market by 2-4% (US Market declined 3%). Strong fundamentals will support Indian bourses while volatility in the global market will continue. Sentiment is positive due to Manufacturing PMI reported at 8-month high, GST collection surged over 28% (YoY) to nearly 1.5 lakh cr and robust August monthly car sales data. Moreover, oil prices fell to 3-week low at $93/bbl and above normal monsoon are key positive factors which boosted the market sentiment. However, geo-political tension, Covid lockdowns in China’s major city Chengdu and Russia halting gas deliveries to Germany via a key pipeline for an indefinite period may negatively impact on the macro front.

Global markets expected to be volatile on expectation of the US Fed aggressively hiking interest rates on account of 40-year high inflation. Moreover, Eurozone inflation touched record high at 9.1% and Japan Inflation spiked to 24-year high. Wall Street stocks reversed course on Friday, finishing sharply lower (Intra-day declined over 2%) after Russia kept shut a key gas pipeline to Germany. US stocks had initially gained after data showed a robust US labour market along with an unexpected increase in the US unemployment rate. But markets did a 180-degree turn midday as worries increased about the winter ahead after Russian gas giant Gazprom moved to keep natural gas deliveries to Germany off-line.

Moreover, US Dollar Index surged to 20-year high, US 2-Year bond Yield at 3.40% while 10-year bond is 3.19%. It is clear that the short term pain may continue in the US Market. Federal Reserve Chair Jerome Powell, in his speech at Jackson Hole last month signalled that interest rates were heading higher and reiterated the bank’s resolve to keep inflation tethered which is a major concern in the global markets.

Nifty has formed an Inside Bar on daily scale but a Bullish candle on weekly frame with long upper shadow. Now, it has to hold above 17550 zones, for an up move towards 17667 and 17777 zones whereas support is placed at 17442 and 17350 zones.

Bajaj Finance: Buy
CMP: Rs 7190 | Stop loss: Rs 7000 | Target: Rs 7600

Bajaj Finance has given a consolidation breakout on the daily scale and has formed a bullish candle which indicates buying interest in the counter. It is respecting the 20 DEMA and sustaining above the same which indicates positive price setup. RSI oscillator is also positively placed on daily and weekly charts. Considering the current chart structure, we advise traders to buy the stock on dips near 7150-7200 for an up move towards 7600 with a stop loss of 7000.

DLF: Buy
CMP: Rs 395 | Stop loss: Rs 382 | Target: Rs 430

The stock has retested the 11 year breakout on the monthly scale and has formed a strong bullish candle in the month of July. There is a breakout of the falling supply trend line for the first time after October 2021 on the weekly scale and follow up buying visible which will take the price to higher level RSI oscillator is also very well placed on the weekly and monthly charts which will support the up move towards 430 .Buy with a sl of 382.

(Rahul Shah is the Senior Vice President, Group Advisory Leader-PCG, Broking & Distribution, Motilal Oswal Financial Services. The views expressed are the author’s own. Please consult your financial advisor before investing)