Markets are expected to remain volatile in coming week.
Markets are expected to remain volatile in coming week; Nifty (-1.1%), Sensex (-0.9%). Mid Cap & Small Cap index lost -1.30% and -0.2% respectively in this week. FIIs sold equities worth 3858 crore while DIIs bought equities worth 2422 crore. Auto, Bank, FMCG, Metal and Pharma sector dented market this week while IT sector went up and managed downside in markets in broader way. Market will keep an eye on fundraising by Yes Bank will be one of the important domestic factors. On the domestic front another key event to watch out in coming week would be the listing of Ujjivan Small Finance Bank which is scheduled to be on December 12; We are expecting min 50% listing gains stock could list with premium of Rs 20-25/share. The market is expecting the first phase deal between US-China to be signed in coming week.
IIP data for the month of October and CPI inflation for November will be released on December 12; we could see IIP for October around 5% while CPI inflation for November could see near to 5% against 4.62% in previous month which will be within the target given by RBI in 5 December credit policy. The last policy meeting of Federal Open Market Committee this year will be held on December 10-11; we are expecting Fed will keep rates unchanged after three rate cuts in the year. The second national election in less than three years will be conducted in the United Kingdom on December 12; It is the most important event as it will decide the path for Britain’s exit from the European Union. The market is expecting the first phase deal between US-China to be signed in December especially before December 15 deadline when the tariffs on $156 billion in Chinese imports is set to take effect. If trade deal between two biggest economies happens in this week it will be biggest trigger for global economy to drive markets in upward direction. Brent crude rallied more than 3 percent during the last week and closed to USD 64.37/bbl after OPEC members agreed for additional cuts of 5,00,000 bpd for the first quarter of 2020, taking total production cut to 1.7 million barrels per day. Indian rupee appreciated by 42 paisa to closed at 71.28 against USD on Friday.
Monday market may open on positive note as SGX Nifty at 11,975 (+21). Nifty should sustained above 11,923 levels, to see some recovery in the coming week but if index fails to hold 11,923 levels then index may head to 11,800 levels and below that 11,700. On upper side 12,000 will act as a stiff resistance for the market. India VIX fell by 2% closed to 13.64 levels from 13.90 in previous week. On the options front, maximum Call open interest (OI) is at 12,100 followed by 12,000 strike while maximum Put OI is at 11,900 followed by 12,000 strike. Current option data shows a broad trading range between 11,800 to 12,100 levels on the Nifty. On lower side Nifty’s crucial support at 11,923 levels, on the higher side immediate hurdle is at 12,000.
Data shows we may see upside above 12,000 in coming week. So traders are advised to take fresh buy position above 12,000 we may see nifty rally to 12,100 and initiate sell position below 11,923 we may see nifty fall to 11,800.
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:
Kotak Mahindra Bank (+3.66%)
ICICI Bank (+2.38%)
Top Losers of the Week:
Yes Bank (-18.01%)
Eicher Motors (-8.57%)
IndusInd Bank (-6.58%)
Coal India (-6.46%)