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| Edited By: Yogesh Vinod Mehta |Source: DNA |Updated: Jan 08, 2018, 06:00 AM IST
Equity markets managed to close at new highs in the first week of 2018. The week started on a negative note, but managed to recover losses and closed with the marginal gains at new high territory. Nifty gained 28 points, or 0.3%, to close at 10559. BSE Mid and Small cap indices outperformed the Nifty by a wide margin, gaining 1.4% and 2.5%, respectively. Metals, telecom, consumer durable and capital goods sectors were top gainers while IT, auto and oil & gas were among the losers. Foreign institutional investors bought equities worth Rs 1,738 crore, while domestic institutions sold Rs 936 crore worth of equities in the last week.
PSU banks were in focus last week after the government got Lok Sabha approval to issue Rs 80,000 crore worth of recapitalisation bonds. Some positive developments on the macro front buoyed market sentiments. India’s December Nikkei manufacturing Purchasing Managers’ Index rose to 54.7 – the highest level in five years – led by a rise in output and new orders. Further, the index of eight core industries expanded at the fastest pace in 13 months at 6.8% in November 2017 on account of robust performance in segments like refinery, steel and cement. However, Brent crude prices crossed $68 a barrel level for the first time since May 2015 posing a risk to Indian economy. Rupee touched a high of 63.48 against the US dollar during the week and ended at a 32-month high of 63.37 on Friday.
Auto monthly sales during the month of December reported a mixed bag. TVS Motor, M&M, Tata Motor reported impressive monthly sales while Eicher Motor, Maruti and Hero MotoCorp announced monthly sales volumes that were lower than the Street expectations.
The positive momentum amid volatility is likely to continue in this week as well. The December quarter earnings would start with heavyweights such as TCS, Infosys, IndusInd Bank reporting their results this week. Further, expectations from Union Budget, which will be presented on February 1, could also keep market volatile.
On key data for this week — China’s December CPI and US’s crude oil inventories data will be released on Wednesday. On Friday India’s November CPI and IIP data would be announced after market hours. Also data on US inflation & retail sales, China’s trade balance would be released on Friday.
Nifty made a new life-time high of 10566 by surpassing its previous high of 10552 levels. Technically, it formed a Bullish candle with runaway gap and given a breakout from its consolidation range of 10400 to 10550 zone. Now, the index needs to hold above 10500 zone to extend its move towards 10600-10650 while on the downside support is seen at 10450 level.
The writer is VP-retail research, Motilal Oswal Securities Ltd
