A volatile week saw Sensex and Nifty reach fresh all-time highs and correct strongly from there. Will the volatility carry on next week or will GDP numbers aid the positive momentum?
During the week, BSE Midcap index zoomed 1.66%, jumping smartly after a mid-week correction.
Sensex and Nifty continued their stellar run as they added to gains yet again this week. Nifty managed to breach 13,000 for the first time in history while Sensex crossed 44,000 points. Although they did witness some profit booking but technical analysts believe that the trend has not reversed as of now. “Technically, post strong uptrend rally the Nifty has formed Doji candlestick pattern which clearly indicates indecisiveness between bulls and bears. However, the medium term texture of the benchmark index is still bullish and likely to continue in the short run,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.
GDP numbers to aid momentum: The positive surprise that the Gross Domestic Product has contracted less than expected is likely to aid the positive sentiment. “The Q2 GDP numbers came in at a big positive surprise. Though Agriculture and Services numbers came in a little below expectations, Manufacturing growth has come in much stronger than expected. Equity markets could open higher on Tuesday reflecting the positivity of the Q2 GDP numbers,” said Dhiraj Relli, MD & CEO, HDFC Securities.
Bulls run wild in Broader markets: Broader markets are roaring. During the week, BSE Midcap index zoomed 1.66%, jumping smartly after a mid-week correction. The BSE Smallcap index soared 3.75% during the same period while Nifty smallcap 50 surged over 5%. The recent outperformance of the small and midcap stock might continue in this liquidity driven rally, analysts say. “Midcap IT, Smallcap IT are good to invest in, stocks that are concentrated towards FMCG products too can be looked at. Investors should avoid transport and multiplex stocks,” Vishal Wagh, Head of Research, Bonanza Portfolio told Financial Express Online this week.
MSCI rejig: Changes to the MSCI indices will come into effect from Monday where India’s weightage in the global indices is slated to increase. This move by the global index provider has pulled many foreign funds to invest in India in the past few weeks. “A rejig in MSCI Global Standard Index effective November 30th and a possible increase in India’s weight in the global index led many international fund houses to undergo a massive rejig in their portfolios due to which India witnessed massive monthly inflows from FPIs this month,” said Nirali Shah, Senior Research Analyst, Samco Securities.
What do the charts say: “Nifty on the weekly chart has formed an interesting pattern like doji at the new all time high of 13145. Normally, a formation of doji after a reasonable upmove could indicate alert of trend reversal post confirmation of weakness in the subsequent weeks,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. He added that markets may remain range-bound in the coming week. Nifty would find resistance at 13,100-13,150 levels while 12,850-12,750 would act as support.
IPO watch: Fast food major Burger King’s initial public offering (IPO) will open next week where the firm is looking to raise Rs 810 crore, including a fresh issue of Rs 450 crore and an Offer for Sale (OFS) by the promoters of Rs 360 crore. Investors can bid for Burger King shares in a bid lot of 250 shares in a price band of R 59-60 per share.
What to watch out for: For the coming weeks eyes will be on the Reserve Bank of India’s Monetary Policy Committee (MPC). “Markets are awaiting major events like RBI policy meeting, release of Manufacturing and Service PMI and banking business data which will be decisive factors driving the market in the upcoming week,” said Vinod Nair, Head of Research at Geojit Financial services.