Comment

The week witnessed a pullback action as the truncated week saw bear-covering at lower levels. Traded volumes were expectedly lower on the dual considerations of a holiday on Friday as well
as trader inactivity on down-tick sessions.

The market breadth was negative as the weekly BSE & NSE combined advance decline ratio stood at 8454 : 7935. The capitalisation of the same was also negative as the commensurate figures were Rs 25,787 crore : Rs 42,632 crore.

The NSE gained Rs 85,824 crore in market capitalisation on a week-on-week basis. Technology and mid-cap sectors were the relative outperformers during the week.

The overseas investors were net sellers to the tune of Rs 814.80 crore, which shows a selling bias on all three days of which figures are available. That had a negligible impact on the rupee, which ended at the 46.50 levels vis-a-vis the US dollar (previous week 46.73).

The Nasdaq Composite index outperformed the Dow Jones Industrial Average, which indicates a possibility of the technology sector continuing to outperform other segments in the domestic markets as well. The UK FTSE 100 outperformed the US markets. In the Asian region, Hong Kong and Singapore outperformed the Japanese indices, which were plagued by profit sales at higher levels.

Technically, the domestic markets have showed indications of a pullback rally but the upthrust has been less than convincing. The traded volumes and qualitative aspects of the markets indicate feeble buying support, even at lower levels. The weekly range advocated for the Nifty between the 5125 / 4525 levels has held as the index traded within these parameters. This week is likely to witness a range of 4975 on the upsides and 4550 on declines.
The bullish pivot will be at the 4780 level and the bearish pivot at the 4740 level. The outlook remains that of a market seeking a clear trend and the uncertainty adds to the lack of buying conviction. I maintain my view that traders should focus on capital preservation for now.