The domestic equity markets had a remarkable Friday, with the Sensex of the BSE reclaiming the 38,000 mark on an intra-day basis and the Nifty 50 index of the National Stock Exchange closing at a record level of 11,470.75 points. Positive cues from the global markets, along with robust buying in metals, banking and FMCG sectors drove the benchmark indices higher. While both the headline indices ended in the positive zone on a weekly basis, we take a look at the factors that are expected to guide the stocks markets in the upcoming week:
Key takeaways this week:
Weekly gains: On Friday, the S&P BSE Sensex ended higher by 284.32 points or 0.75% at 37,947.88. The broader Nifty 50 index settled at a fresh high of 11,470.75 points — up 85.70 points or 0.75%. The Sensex gained 78.65 points, while the Nifty 50 gained 41.25 points during the week.
Top weekly Sensex gainers: Sun Pharma (up 9.22%), ITC (up 3.94%), Infosys (up 3.70%), Yes Bank (up 3.07%), Mahindra & Mahindra (up 2.97%).
Top weekly Sensex losers: Vedanta (down 6.72%), Tata Motors (DVR) (down 5.06%), SBI (down 4.57%), HDFC (down 4.48%) and Larsen & Toubro (down 3.58%).
FII/DII activity: During the week, foreign institutional investors sold stocks worth Rs 2,175.78 crore. Domestic institutional investors, on the other hand, purchased stocks worth Rs 741.54 crore.
Rupee: The rupee hit a record low of 70.39-40 on Thursday and closed below the historic low-level of 70-mark for the first time at 70.15-16.
What affected the domestic stock markets: Mustafa Nadeem, CEO, Epic Research, said the week started on a weaker note given the Turkish Lira crisis hitting Asian economies and rising trade tensions between the US and Turkey. “Most Asian currencies tanked while INR also depreciated to a record level of 70.5. A rebound was witnessed on improved sentiment between US and China on the back of fresh talks on Trade conditions. A retreat in Lira was also seen. Though, Volatility was one factor that jumped up by 30% giving jitters to Investors across the globe,” said Nadeem.
What to expect next week:
Rangebound trade: Market observers expect the Sensex and Nifty indices to trade rangebound over the next week. “The benchmark indices settled higher on Friday taking cues from their Asian peers. Result season is over, so now market will move as per global markets. Stock specific moves expected in next week with range-bound market,” said Rahul Sharma, Senior Technical Research Analyst, Equity99.
Global cues impact: “Going ahead, we see volatility and macro risks over the next few weeks from potential escalation in US-China trade issues, possible ‘hard’ sanctions on Iran leading to sharp decline in Iran oil exports and higher crude oil prices and possible EM contagion given Turkey’s fragile macroeconomic situation and weak macroeconomic positions of several EMs,” said Sanjeev Zarbade – Vice President – Research, Kotak Securities.
Nifty levels: On technical levels, Rahul Sharma said on weekly basis, Nifty has a strong support at 11,415 level, break will take it to 11,366-11,340 level. “Keep strict stop loss of 11340 for buys. On the upper side NIFTY will face hurdle at 11500 level which is also psychological hurdle, cross over will create huge short covering up to 11550-11575 levels,” Sharma added.
Stock recommendations: Kotak Securities has advised investors to focus on stocks that have strong balance sheet, respectable management quality and have delivered good numbers in the just concluded earnings.