Stock market may see selling at higher levels
Probable, trading range for Nifty could be between 10540 and 10900
Last week, the broader Nifty managed to close with a gain of 0.63% at 10795 level though the market was very choppy and range bound. Meanwhile, the mid and small cap indices remained flat to positive.
Among the sectors, FMCG (1.88%), Pharma (1.30%) and IT (1.14%) emerged as the winners while Metals (-1%), Media (-0.91%), Energy (-0.75%) were the top losers. Bank Nifty also gained by 0.95% with both the PSU and private banks rose 1.1% each with Axis Bank and ICICI Bank advancing by 7.5% and 3% respectively.
The foreign institutional investors (FII) sold equities worth Rs 238 crore while the domestic institutional investors (DII) bought shares of Rs 1,130 crore.
In the last week highlights, earnings season kicked off with not much of excitement as IndusInd Bank announced a mere 5% profit growth due to provisioning for IL&FS exposure. Operating performance of Tata Consultancy Services (TCS) was weak and missed in profit margin. Infosys also announced lower than expected profits but raised FY19 growth guidance upwards aided by strong deal wins. The company also announced a buyback of shares worth Rs 8,360 crore from the open market.
In the key global events this week, UK Parliament Brexit vote is scheduled tomorrow and G20 meeting which is commencing from Wednesday. Domestically, India's CPI and WPI data will be released today while December month Trade Balance data will be out tomorrow. In the ongoing earnings season, Wipro, Zee, KPIT Tech, DCB Bank, Mindtree, Federal Bank, Hind Unilever, NIIT Tech and HDFC Bank will announce their Q3'19 results. The outcome of Reserve Bank of India vs Kotak Bank promoter holding case hearing will be on Thursday.
Technically, Nifty formed Doji pattern on a weekly scale which indicates selling at higher levels. The 50-share index traded in the range of 10870-10730 within my predefined range of 10560-10940. This week, markets will take cues from the corporate earnings, Brexit vote and outcome of the US-China trade talks. Nifty has closed below its 200- day simple moving average (DSMA) of 10800 now support levels at 10710-10650-10540 while resistance levels at 10880-10940. The probable, trading range for Nifty could be between 10540 and 10900.
The writer is VP-retail research, Motilal Oswal Financial Services
SELLING PRESSURE:
- Technically, Nifty formed Doji pattern on a weekly scale which indicates selling at higher levels
- Nifty has closed below its 200- D SMA of 10800 now support levels at 10710-10650-10540 while resistance levels at 10880-10940