INSUBCONTINENT EXCLUSIVE:
The domestic stock market lost steam during the week gone by and slumped due to the twin pressure points of rising bond yields and crude
prices along with the rupee crossing the 68 a dollar mark.
Frontline FMCG companies surpassed growth expectations by posting double-digit
HUL reported 14.2 per cent rise, while ITC delivered 9.8 per cent increase
Britannia increased PAT by a whopping 25 per cent, which has kept Nifty on a strong wicket.
However, the same is not true for smallcap and
They have been beaten down hard due to the weak sentiment and lesser liquidity in the system amid rising interest rates
but then that is how tops are made.
The oil chart below shows a contrarian picture that it is time for the bears in crude oil and the bulls
The chart is self-explanatory.
Events of the WeekDoes the Karnataka conundrum really matter to equity investors Swinging political fortunes
in the Karnataka elections, being the most watched out event of the year, popular media opinions and perceptions were so heated that to the
common man the election outcome would have felt like a make-or-break event.
But Mr Market is far more mature and is really not bothered
about the outcome of the state elections, save the shortlived kneejerk reactions.
Technical OutlookThe market has made an intermediate top
by forming a shooting star
Lack of momentum since the previous few weeks had signalled fatigue in the market, but eventually a shooting star pattern confirmed the
top.
Other smallcap and midcap indices are still weak and expected to make a bottom sooner than the Nifty50.
We will assess at that time
Currently, the market is expected to head lower.
Traders should not short but wait for lower levels to create long positions.
Expectations
for the WeekThe market will remain extremely volatile with a corrective bias since majority of the earnings season is mostly over and there
is a worry of rising interest rates
This will keep the market under pressure
Panic will strike if and when US bond yields reach the 4 per cent mark, but till that time, it will certainly have negative influences.
Look
add to existing volatility
Investors are expected to be on the sidelines till clarity emerges
The Nifty50 closed the week at 10,596, down 1.94 per cent for the week.
