Benchmark equity indices kickstarted the week on a positive note in this holiday-truncated week. On a weekly basis, the Nifty rose by 0.26%, mirroring the BSE Sensex, which also saw a 315.81 points or 0.48% gain last week. But that said, what’s the key level to watch out for going forward? Here are some expert views-
“This week is a holiday-shortened one and we expect volatility to remain high due to the scheduled expiry of November month derivatives contracts. Apart from domestic factors, we are closely eyeing the performance of the US markets for cues and indications are in favor of the prevailing up move to continue. We are expecting the Dow Jones Industrial Average (DJIA) to inch toward the previous swing high i.e. 35,679 and the 34,800-35,000 zone would restrict the decline in case of any profit taking,” said Ajit Mishra, SVP – Technical Research, Religare Broking.
Where do indices face resistance? Find support
Commenting on the technical aspects, Ajit Mishra said, “We have been seeing time-wise correction in the Nifty and eyeing a possible breakout above 19,850 next week, which would help the index to inch towards a newer high. On the downside, we expect the 19,350-19,550 zone to offer support if profit taking deepens. Though the banking index is also trying to recover its lost ground, we suggest focusing on the other sectors for long trades until it decisively reclaims the 44,100 mark. We may see a marginal fall in the broader indices too but the tone is likely to remain positive so traders can utilize the dip to selectively add quality names from the midcap and smallcap basket too.”
FPIs are likely to invest in Banking
On Friday, the Foreign institutional investors (FII) purchased shares worth net Rs 2,625.21 crore, while domestic institutional investors (DII) added shares worth net Rs 134.46 crore. For the month till November 24, 2023, FIIs sold shares worth net Rs 5,101.72 crore while DIIs bought shares worth net Rs 9,814.84 crore.
“There are some important developments that might influence FPI inflows into India. The better-than-expected decline in inflation in the US has given the market confidence to assume that the Fed is done with rate hike. Consequently the US bond yields have declined sharply with the 10-year benchmark bond yield correcting from 5% in mid October to 4.40% now. This has forced the FIIs to slow down their selling. Importantly, they were buyers on four days this month with a big buying of Rs 2625 crores on Friday, the 24th. FPIs are likely to buy banking which they have been selling during the last 3months. A large-cap led rally is likely in the market, going forward,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.