The domestic stock market shrugged off the bears this week and posted gains of 5% tracking a rebound in the global markets, appreciation in the rupee and slumping of crude oil prices.
The domestic stock market shrugged off the bears this week and posted gains of 5% tracking a rebound in the global markets, appreciation in the rupee and slumping of crude oil prices. The Nifty posted the biggest weekly gain since May 2016, climbing over 5% during the week.
While quarterly corporate results continued to give a mixed performance, a big relief this week came in the form of easing tensions between the government and the Reserve Bank of India over the monetary authority’s independence.
“Nifty climbed more than 5% this week, to close at 10553. This rise is the biggest weekly rise since 27th May 2016. Good news was pouring in from all directions. Recent bugbears of high crude oil prices, falling currency and dwindling liquidity all are on the way to sort themselves,” said VK Sharma, Head PCG & Capital Markets Strategy, HDFC Securities.
“Crude oil traded near 7 months lows pressured by higher output from major oil producers. Indian currency also experienced one of the best days in 5 years. Rupee has appreciated back almost 3% in last three weeks,” Nair added.
What to expect next week
Next week, the BSE and NSE will conduct a special ‘Muhurat’ trading session between 1700 hours and 1830 hours (5 pm-6.30 pm) on Wednesday, November 7 on the auspicious occasion of Diwali. The stock market will remain closed on Thursday, November 8 on account of Diwali Balipratipada.
According to market observers, global market movements, along with the rupee direction and some more set of earnings, are likely to provide direction to the Sensex and Nifty in the upcoming truncated trade week.
Cipla, PNB Housing, Godrej Agro, Gail, Power Grid, Centuryply, Balkrishna Industries, Natco Pharma, Graphite India, Manappuram Finance Limited, Voltas, MRF, Hindustan Aeronautics Limited, Titan, Amara Raja, Avanti Feeds, India Cements, Wockhardt and NALCO are among the companies which will come out with their quarterly corporate earnings next week.
“For markets as we said, It will be global cues and any positive news or move from western markets will have an exponential factor for domestic markets and the recent drop in crude is further keeping sentiments positive,” said Mustafa Nadeem, CEO, Epic Research.
“The volume may remain thin due to holidays in coming week on the occasion of Deepawali. We recommend being now cautious after this run up as a confirmation would come only above 10,700 while it is best to book some profit in the short term while adding blue-chips for a longer-term perspective,” he added.
Stock picks for next week
Among stock picks for next week, Mustafa Nadeem has suggested Motherson Sumi Systems, saying the stock outperformed well with good volumes and closed in green. “We recommend buying from the current level for the target of 178 with the stop loss of 168,” said Nadeem.
Other stocks include Indigo (buy from current level for the target of 985 with the stop loss of 970) and Bharat Financial Inclusion (buy from the current level for the target of 960 with the stop loss of 935).
Key takeaways this week
Weekly losses: The Sensex surged 1662 points or 4.98% to close the week at 35,011.65 points. The Nifty 50 of the National Stock Exchange rose 523 points or 5.21% to end at 10,553 points week-on-week.
FII/DII activity: Provisional data from the stock exchanges showed that foreign institutional investors sold stocks worth Rs 196.90 crore on November 2. Domestic institutional investors, on the other hand, purchased stocks worth Rs 852.99 crore.