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| Edited By: Yogesh Vinod Mehta |Source: DNA |Updated: May 28, 2018, 05:25 AM IST
Last week, Nifty slipped to 10418 level on worries of rising dollar-rupee which touched its 18 month low of 68.42/$ and Crude prices near $80 mark. This can push India’s fiscal deficit higher than expected. Markets recovered on Friday as dollar-rupee recovered with Reserve Bank of India (RBI) intervention and Crude price also corrected by estimated 3% as Saudi Arabia and Russia discussed easing supply curbs. Nifty gained 9 points on weekly basis and closed at 10605.
Sectorally, Bank Nifty continued its outperformance and gained 1.54% mainly by the PSU Bank stocks which rose whopping 11% led by State Bank of India (SBI) which came out with a better set of results as well as better credit cost guidance for next two years. Energy, FMCG, Auto and Metal sector were the losers while Information Technology (IT), Pharma, Infra were among the gainers.
The mid-cap index lost 0.55% while the small-cap Index remained unchanged curbing its four-week losing streak. The foreign institutional investors (FII) sold equities worth Rs 3,929 crore while the domestic institutional investors (DII) bought worth Rs 5,845 crore.
Among the previous week highlights, Tata Consultancy Services (TCS) market capitalisation crossed Rs 7 lakh crore retaining its top rank. Ultratech Cement board proposed the acquisition of Century Textile’s cement division for a consideration of Rs 8,300 crore. Petrol and Diesel prices remained a matter of concern as it rose for last 12 consecutive days on rising Crude prices and have reached to their new all-time highs.
However, the rupee closed at 67.73/$ post correction from its 18-month low of 68.42. India’s net direct tax collection for FY18 grew 18% to Rs 10.03 lakh crores. In the earnings corner, Tata Motors, Stride Shasun, Cipla results were disappointed while SBI, Tech Mahindra and Sun Pharma delivered better than expected results.
Key global events to watch this week includes the US employment data and first quarter preliminary GDP data will be released on Wednesday. India Q4’18 GDP and April month fiscal deficit data will be released on Thursday while the southwest monsoon is expected to hit in this week. The US markets are closed today in observance of Memorial Day.
Automobile companies will be announcing their monthly sales numbers for May. In the concluding corporate earnings season companies like Aurobindo Pharma, Bank of India, L&T, PEL, Bharat Electronics, BHEL, BPCL, Dish TV, Glenmark and M&M will announce their Q4’18 results.
This week, markets are expected to take cues from the Crude and rupee movements. Also, expect bouts of volatility ahead of May month F&O expiry and release of GDP data on Thursday.
Technically on weekly charts, Nifty has made “Dragon Fly Doji” pattern which indicates support at lower levels. Last week, Nifty corrected post breaching 10630 level and touched low of 10418 and saw bounce towards 10630 level on last Friday.
For the week, Nifty support levels are at 10530 and 10470 while resistance at 10650 and 10700 levels. For the week trading range could be 10450 to 10700.
The writer is VP- retail research, Motilal Oswal Securities Ltd
