Political developments will also be a driving factor for the markets in this week
Last week, Nifty started with a decent gain of nearly 200 points on Monday but remained flat for the next three days and fell sharply on Friday eroding the weekly gain post-TDP moved a no-confidence motion against NDA in the Lok Sabha. Nifty ended negatively for the third week losing 32 points to close at 10195. Mid and small cap indices outperformed after a long time gaining 1.5% and 1.86% respectively. Banks, Media and Pharma sector were the gainers while Energy, Metals, Auto and IT sectors were losers. Foreign institutional investors (FII) bought equities worth Rs 6,288 crore while domestic institutional investors (DII) bought worth Rs 202 crore in the last week.
In last week highlights, India's January month Industrial production grew by 7.5% ahead of rising in consumer goods and capital goods, CPI inflation also fell to four- months low of 4.4% which may keep the Reserve Bank of India (RBI) to maintain status quo through 2018 while on the other side April-December (9MFY18) current account deficit widened to 1.9% of GDP. World Bank projects India's GDP growth at 6.7% and 7.3% for FY18 and FY19. Tata sons sold their partial stake in TCS worth Rs 8,400 crore. Andhra Pradesh's Telugu Desam Party moved a no-confidence motion against the government in the Lok Sabha on Friday and announced exit from NDA which came as another blow for the BJP which lost key by-polls in UP and Bihar earlier in the last week in addition to global trade worries triggered broad-based sell-off in the final closing hour of trade.
In the key global events next week, Federal Open Market Committee (FOMC) meet for interest rate decision on Wednesday and Bank of England meeting for policy rates will be keenly watched on Thursday. In the initial market opening (IPO) market, Bandhan bank IPO is closing today, HAL IPO closing tomorrow and ICICI Securities raising Rs 4,000 crore via IPO will be opening on Thursday.
For the week, Nifty is nearing its psychological mark of 10000, domestic political developments and the US Fed interest rate outcome will define the market trend. Technically, Nifty has made a bearish candle on weekly charts and important 200-day moving average (DMA) is near 10160 level. The nifty trading range could be between 10000-10350 zone.
IN BEARISH MODE
- In the key global events next week, FOMC meeting for interest rate decision on Wednesday and Bank of England meeting for policy rates will be keenly watched on Thursday
- Technically, Nifty has made a bearish candle on weekly charts and important 200-day moving average (DMA) is near 10160 level.
The writer is VP- Retail Research, Motilal Oswal Securities Limited
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