The Indian equity market in the coming week will be largely driven by developments around global economic sentiment with first quarter earnings season nearly over, say analysts. The AGR dues payment hearing in Supreme Court would remain on the participants’ radar, they say.
Nifty Future Price Support Zone 11100—11000 Above, Target 11680—11910 (Positional), Buy on Dips, Any Panic Buy – Neal Bhai Reports
In the week ended August 21, benchmarks Sensex and Nifty advanced around 1.5%, supported by higher global markets.
“Nifty has failed to gain much in the last five weeks but the buying interest on every dip shows that bulls are not in the mood to give up easily. We advise continuing with the “buy on dips” approach till Nifty holds above 11,200. Apart from the global cues, the performance of the banking pack is also influencing the market tone these days as other sectors are in consolidation mode,” said Ajit Mishra, VP – Research, Religare Broking Ltd.
“This week, the broader market attracted noticeable interest and outshined the benchmark with strong margins. The coming week, the AGR dues payment hearing in Supreme Court would remain on the participants’ radar. Also, updates related to COVID-19 will be closely watched. Amid all, we expect volatility to remain high due to scheduled F&O expiry of August month contracts,” he said.
Also on the radar will be news on covid vaccine development.
“From here on the pace of the improvement of economic indicators along with outcomes of a possible vaccine or cure for COVID-19 would determine the movement of the market,” Shibani Sircar Kurian, Executive Vice President, Fund Manager & Head-Equity Research, Kotak Mahindra Asset Management Company, said.
Lofty valuations combined with a sharp rally from March lows despite rising covid cases in India has made some analysts cautious. India’s COVID-19 tally zoomed past the 30-lakh mark.
“We advise taking some money off the table now and aggressive bets should ideally be avoided overnight. Adding to all this, we would like to draw attention towards an important development in US dollar index. We have seen massive correction in this over the past few months, which has triggered some gravity defying moves in equity markets; but now this index seems to have rebounded from key supports along with the ‘Positive Divergence’ in RSI.
Hence, further pullback in the dollar index can lead to some corrective moves going forward. By mentioning all these points, we do not expect a complete reversal, rather such intermediate correction is considered a healthy development and provides better opportunities for those who have missed the bus in the last few months,” says Sameet Chavan, chief Analyst for technicals at Angel Broking.
Other factors like global crude oil movement, trend in rupee-dollar trade and foreign fund inflows will remain in focus.
Nirali Shah, Senior Research Analyst, Samco Securities, said: “Going ahead, given that domestic bourses have suggested inkling of mirroring US markets, any clues on the US presidential elections will impact Indian bourses. Investors should abstain from deploying fresh monies and even consider to book profits at higher levels.”
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