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Stock Market Weekly Outlook – Gaurav Bora, Market Expert

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Markets will be in consolidation in coming week due to low volumes but focus will shift to budget.

Gaurav Bora

Markets will be in consolidation in coming week due to low volumes but focus will shift to budget; Nifty (-1.1%), Sensex (-1.2%). Mid Cap & Small Cap index loosed -0.20% and -0.10% respectively in this week. FIIs bought equities worth 1155 crore while DIIs sold equities worth 1500 crore, fund flow could be lower in coming week due to holiday season. Metals, Auto and Reality sectors were gainers in last week. The focus in the coming week would be on auto stocks as sales data for the month of December will be released on first day of 2020, we are expecting passenger vehicle segment to report growth during December month as companies announced attractive discounts to consumer. On domestic front focus would shift to October-December quarter earnings and Budget 2020 but global sentiment remained positive due to the easing of US-China trade tensions. Prince Pipes IPO will list on exchange on 31st December, issue got subscribed 2.21 times but we are not positive on this issue as we may see listing below IPO price in secondary market.

On 31st December Govt will declare Budget value and infrastructure output for November, on the same day current account data, external debt data for Q2 will be announced. Markit Manufacturing PMI data for December will be released on January 2. Globally the trade deal optimism is expected to remain for the coming days as we can expect both countries to sign the deal in January. Brent crude jumped from October low of $56/bbl to $68.16/bbl. If the US-China trade deal agreement is signed and OPEC nations continue its production cuts as planned; the oil market will remain balanced and optimism surrounding these events will keep price supportive. Currency continued to depreciate for the second consecutive week due to a consistent rise in crude oil prices. Indian rupee depreciated 23 paisa during the week against USD and closed at $71.35.

Monday market may open on flat note as SGX Nifty at 12,320 (-21). Market is expected to be in the range bound trade may continue in coming week as well with 12,000-12,300 being a strong support-resistance. On upper side 12,300 will act as a stiff resistance for the market and 12,100 will act as crucial support. India VIX fell by 5.35% closed to 10.52 levels, which is positive sign and it will attract traders for fresh buying position. On the options front, maximum Call open interest (OI) is at 12,300 followed by 12,400 strike while maximum Put OI is at 12,200 followed by 12,100 strike. Current option data shows a broad trading range between 12,100 to 12,500 levels on the Nifty. On lower side Nifty’s crucial support at 12,100 levels, on the higher side immediate hurdle is at 12,300.

Data shows we may see upside above 12,300 in coming week. So traders are advised to take fresh buy position above 12,300 we may see nifty rally to 12,500.

FOR INVESTORS THIS IS BUYING OPPORTUNITY ACCOUMLATE QUALITY STOCKS ON EVERY DIP, AS THIS VOLATILITY IS BECAUSE OF MAJOR EVENT BUT FUNDAMENTALS ARE VERY MUCH INTACT. VOLATILITY IS FRIEND OF INVESTOR.

Top Gainers of the Week:

Zee Entertainment (+6.88%)

Tata Steel (+5.09%)

Bajaj Finance (+3.93%)

Coal India (+3.35%)

Hero MotoCorp (+3.33%)

Top Losers of the Week:

Reliance (-4.20%)

Yes Bank (-3.81%)

ITC (-3.05%)

Kotak Mahindra Bank (-2.54%)

Britannia Industries (-2.27%)

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