The Nifty would reach the level of 18,350 or 18,450 on the decisive break of the level of 18,200, Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd – said in an interview with Zeebiz’s Kshitij Anand. Edited excerpts:  

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Q) What a week for Indian markets? Nifty had a touch-and-go moment with 18,000. What led to the price action?

A) The market has been under pressure from negative global signals since the beginning of the week. In the middle of the week, FII's relentless sell-off in the cash and the F&O segment pushed the market on the day of weekly expiration.

However, the rejection of the bulls at 17800 (50-Days SMA) changed the sentiment dramatically, which not only closed the market above the 18,100 level but also pushed the market to record new highs during the week. There was no significant reason for the market to rise.

Q) Where do you see Nifty50 in the coming week. Are there any important events that one should keep it on their radar?

A) The recovery was on a broad basis indicating a further uptick in the market. In the coming week, the market will find resistance at 18,170/18,200 levels and support at 18,050 and 17,960.

As the market recorded a new high of 18,123, there should be a buying strategy on the dips. As we discussed, the Nifty would reach the level of 18,350 or 18,450 on the decisive break of the level of 18,200.

With the 2QFY22 results season coming towards the end, investor focus will shift towards macro developments. Going ahead, inflation, oil prices, FII flows and Central Bank policies are some of the key factors directing the markets.

Q) Mid and Smallcap outperformed marginally. Are the largecaps getting punished by FIIs or is it the valuation quotient?

A) The large cap stocks are finding profit-taking pressure mainly due to globally rising worries of inflation. However, most of them have fallen to their intermediate supports and have started recovering from lower levels.

Similar sort of trend we witnessed in the past corrective move.  It seems to us that expert investors are investing accordingly, with a medium to long-term outlook on the domestic front, rather than focusing solely on the global news flow.

Q) FIIs have pulled out more than Rs 4,500 crore from the cash segment of the Indian equity market in November. Do you think this volatility is because of expectations of a sooner than expected rate hike from Fed? Will largecaps be under pressure?

A) Yes. I think the rise in the 10-year bond yield and rising inflation worries must be forcing FPIs to reduce exposure from the emerging markets, however, flows from the FDI, investments from the domestic institutions and confidence of retail investors are supporting the market from time to time.

Q) Banking and Realty stocks took a knock in the week gone by. What led to the price action and what should investors do in the coming week?

A) It was mainly due to excessive run-up in the short term.  The outstanding Q2 numbers from the leading banks, namely ICICI Bank and SBI has helped the bank stocks to outperform in the short term.  

However, we feel, after correcting their important supports they are ready to bounce back. Investors should be buyers in banks with a medium to long-term view.

Q) There are plenty of IPOs which got listed in 2021. Any new-age business which investors can look at for the long term?

A) Yes, they got a strong response from investors and also these companies delivered extraordinary returns on the listing.  We are specifically bullish on Zomato with a long-term view.

Healthy growth in food delivery business, restaurant take rate of 15.8% & delivery take rate of 7.3% remained healthy, average monthly transacting users of Zomato increased to 1.55 crore in Q2FY22 and launch in new cities to kick-start habit creation flywheel are some of the reasons to initiate buy rating on the stock with a price target of Rs 170.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)