INSUBCONTINENT EXCLUSIVE:
The domestic equity market steadily gained strength during the week gone by keeping aside electoral fears
across-the-board buying in global equities with a corresponding fall in the prices of precious metals and commodities
There are expectations of aggressive buying by FIIs in India and other emerging markets after the recent market correction of 10-15 per
cent, which has made stocks cheaper at current valuations.
However, this is a sudden euphoric reaction by the market participants and only
the actual meeting will reveal the true picture
Stocks and sectors that had witnessed abnormal selling pressure either due to negative sentiments or due to weak quarterly numbers are
expected to offer good value proposition from a medium-term perspective.
Event of the WeekThere was a lot of fear this week, majorly in one
stock, Yes Bank, but on deeper analysis, there were apparently no transactions that will inflict losses on the bank
unless some frauds are revealed in the bank itself.
Technical OutlookNifty50 is facing resistance at 50 per cent retracement levels
It formed a Doji pattern on daily charts after a strong move indicating the first weakness in the market
Indicators have turned overbought and divergence is spotted, indicating loss of momentum in the upward move
The hurdle at 10,950 is very strong to penetrate
Traders are advised to book profits on long positions and wait for weakness to short the market.
Expectations for the WeekGiven the
expectations of a dovish stance by the central bank at the December Fed meet, RBI too is unlikely to increase cost of funds by raising
On the contrary, the pick-up in bank credit growth has more than doubled to 15.6 per cent in the first week of November, which is a sign
that economic actions and capex of corporates are picking up.
This is positive for the sustainable economic growth of around 7 per cent and
Even though a few stocks such as Bajaj Auto, Cipla, Bosch and MGL are expected to be good picks at the current levels and offer a good
margin of safety for the investors from a long-term horizon
However, broadly the markets are highly volatile and can show weakness at any instance of negativity.
Hence, it is best to remain cautious
Aggressive bets should be avoided in this uncertain environment.
The Nifty50 ended the week 3.32 per cent higher at 10,876.
