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| Edited By: Yogesh Vinod Mehta |Source: DNA |Updated: Feb 18, 2019, 05:25 AM IST
The benchmark Nifty 50 last week failed to sustain after entering into higher range post four months of consolidation. The hope of crossing 11000-mark remained short-lived as it took a reverse gear and nosedived 2% week-on-week to close at 10724. The mid and small cap indices also lost with no respite by 2.30% and 3.44% respectively.
Sector-wise, except for Media, all the other ones ended in the red led by the PSU Banks which was down ~7%, Pharma 3.8%, Auto 3.42%, Energy 2.63%, Metals 2.31%, FMCG 1.55% and even Information Technology (IT) lost its shine by 1.27%.The foreign institutional investors (FII) were sellers to the tune of Rs 2,500 crore while the domestic institutional investors (DII) bought equities worth Rs 2,400 crore.
In the previous week highlights, global markets were mixed though positive with stable economy data. Crude oil prices spiked to $66 (+7%) on Opec-led supply cuts and higher than expected cut by Saudi Arabia. At home, January CPI Inflation eased to a 19-month low at 2.05%, WPI also eased to 10-month low of 2.76% largely due to cooling fuel prices and December month Industrial Production rose 2.4%.
The government raised Rs 5,100 crore and Rs 3,500 crore via the sale of Axis Bank shares held through the SUUTI and third tranche of Bharat ETF sale respectively. With this, the government met its divestment target of Rs 80,000 crore in this financial year. The centre has hiked the minimum selling price (MSP) of sugar by Rs 2 to Rs 31 per kg in view of the rising sugarcane arrears to farmers.The Reserve Bank of India (RBI) has found nil divergence in the asset classification and provisioning by YES Bank for FY18. This development comes after months of speculation on the magnitude of divergence and stock gained 25% the biggest gainer of the week. Hindalco was the biggest loser and was down by 9.2% post subdued results. In the auto sector, Mahindra and Mahindra (M&M) and Hero MotoCorp lost 8%. Dr Reddy's also lost 8% on news of indivior filing application in the US Supreme court to block a generic version of Suboxone. Oil marketing companies like HPCL, ONGC, IOC lost 6% each on lower than expected results and rise in the crude price.
In the key global events this week, the US markets are shut today in observance of President's Day, Federal Open Market Committee (FOMC) meeting minutes will be held on Wednesday. The European Central Bank (ECB) president Mario Draghi's speech is scheduled on Friday.Technically on the weekly charts, the 50-share Nifty made Bearish Belt Hold pattern suggests negative bias but bouts of buying can happen from the lower level. Last week, observation of selling at higher levels in Nifty due to the formation of high wave candle turned out to reality. Nifty closed negative throughout the week which started from an earlier week on Friday.
Last Friday turned to Black Friday with selling across the sectors and Nifty touching its lowest level of the week at 10620. The broader index witnessed pull back towards 10724 on closing hour due to buying in heavyweights. For the week, stock markets would look at global trends, movement of crude oil and the rupee to derive cues for further movement. Nifty supports seen at 10620-10580-10480 while resistance at 10750-10850-10930. The probable trading range for Nifty could be from 10480 to 10930 this week.
The writer is VP-retail research, Motilal Oswal Financial Services
