Market outlook: Buy on dips; Nifty to trade between 10650 and 10930
In the last choppy week, Nifty traded in a very narrow range but still managed to gain 0.54% week on week and closed at 10773 level
In the last choppy week, Nifty traded in a very narrow range but still managed to gain 0.54% week on week and closed at 10773 level. The mid and small cap indices gained marginally by 0.22% and 0.63% respectively replicating probable arrest of selling pressure. Sector-wise, Bank Nifty gained 0.50%, again led by private banks while the Auto sector accelerated by 3.35% post impressive June monthly sales numbers by two-wheer and four-wheeler companies. The FMCG sector also gained 1.3%. Among the losers, the metal sector melted 3.43% on weak metal prices on LME and concern over global trade war. In the last week highlights, Bajaj Auto, Hero Motocop, Maruti etc announced strong June sales numbers. Tata Motors touched its 52-week low post-Jaguar Land Rover (JLR) CEO raised concern over the probable loss of $1.6bn per year due to hard Brexit and also shelved its global investment plan. TCS, Hindustan Unilever, Asian Paints, Britannia, Page Industries etc. made their new lifetime highs. The India rupee touched a new low of 69.10/$ during the week and finally settled at 68.94/$.
The government announced a significant hike in the minimum support prices (MSP) of various crops. Karnataka state government in its budget announced Rs 34,000 crore worth of farm loan waiver and proposed 4% hike on liquor. Globally, last week all the overseas markets were on the edge as the US imposed a tariff on an additional $34bn worth of goods from China.
The FIIs sold equities worth Rs 3,660 crore while the DIIs bought shares worth Rs 2,441 crore.
In the key events this week, India’s May month Industrial production data and CPI and June month trade balance will be announced on Thursday and Friday respectively. The Q1’19 corporate result season will commence from this week and companies like IndusInd Bank, TCS and Infosys will announce their quarterly results.
Last week, Nifty made low of 10605 on Monday and gradually moved towards a high of 10816 on the closing day Friday. For the week, Nifty will take cues from the results of the IT majors and progress of monsoon and more importantly from the development of any news flow on the global trade war.
Technically, on the weekly charts, Nifty made an inside bar pattern which suggests consolidation and buying on dips. Nifty supports are at 10730 and 10660 while resistance at 10835 and 10930. The probable trading range for the week could be 10650 to 10930 zone.
By Yogesh Vinod Mehta
The writer is VP- Retail Research, Motilal Oswal Securities Limited