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Last Updated : Dec 02, 2019 07:59 AM IST | Source: Moneycontrol.com

Early on D-Street: Below 11,990, correction in Nifty shall get accelerated further

In the next couple of sessions if the index manages a close below 11,990 level then correction shall get accelerated further.

The Indian markets witnessed a historical week as both Sensex and Nifty hit fresh record highs and closed the week with gains of over 1 percent each. The big returns, however, came from the small and mid-cap space.

The Sensex rose 1.08 percent while the Nifty gained 1.19 percent in the week ended November 29, compared to 0.78 percent rise in the S&P BSE small-cap index, and 2.3 percent rally in the mid-cap index in the same period.

Close

The BSE 500 index, which measures the stock performance of 500 large companies listed on stock exchanges in India, rose 1.38 percent outperforming both the Sensex and Nifty for the week ended November 29.

As many as 23 stocks in the BSE 500 index, including companies from both the small and mid-cap space, rose 10-40 percent in just five trading sessions.

On the macro front, Foreign exchange reserves continued the upward move, gaining by a modest $347 million to touch a new high of $448.6 billion in the week to November 22, according to the weekly data released by the Reserve Bank on November 29.

The output of eight core infrastructure industries contracted by 5.8 percent in October, indicating the severity of economic slowdown, according to the government data released on November 29.

The Indian rupee on November 29 settled 12 paise lower at 71.74 against the US dollar, tracking heavy selling in domestic equities and growth concerns ahead of the release of GDP data.

On the institutional front, FPIs were net sellers in Indian markets for Rs 1892 cr, while DIIs were net buyers to the tune of Rs 953 cr, provisional data showed.

Big News:

India's economic growth falls to 4.5 percent in the July-September period, the weakest since the fourth quarter of FY13. This follows slowed growth across segments, barring public administration and defence.

It clearly showed the deepening slowdown in the economy, little or no spending from households and no capacity addition by companies.

The next big questions is -- will it derail the current momentum?

The growth numbers were in line with analyst estimates but were much lower than the gross domestic product (GDP) of 7 percent inthe July-September quarter last year and 5 percent in the June quarter. Hence, a kneejerk reaction cannot be ruled out but it would not derail current momentum, suggest experts.

"The lukewarm GDP growth in the current fiscal year is more or less priced in by the markets and we think right now markets are focusing on the policy steps being taken by the government to reverse the trend," Dinesh Thakkar – CMD, Tradebulls Securities told Moneycontrol.

Technical View:

Nifty forms a long bearish candle on the daily charts on Friday

It slips below its 5-Days EMA placed at 12,067

In the next couple of sessions if the index manages a close below 11,990 level then correction shall get accelerated further. In that scenario, an ideal target on downsides can initially be around 11,800 levels, experts said.

Three levels: 12,017, 12,130, 12,147

Max Call OI: 12,500, 12,000

Max Put OI: 12,000, 11,500

Stocks in news:

Ujjivan Financial Services: Ujjivan Small Finance Bank, whose initial public offering (IPO) will hit Dalal Street on Monday, has raised Rs 303.75 crore in anchor allotment.

Auto stocks will be in focus: Auto sales in the month of November are expected to be a mixed bag with likely fall in the commercial vehicle, two-wheeler and tractor segments, but the passenger vehicle part could see stable numbers.

The board of directors of Yes Bank, on November 29, has taken a decision to raise up to $2 billion through the preferential allotment of the company's shares, according to release filed with the exchanges.

Technical Recommendations:

We spoke to Angel Broking and here’s what they have to recommend:

Union Bank: Buy| LTP: Rs 63.05| Target: Rs 75| Stop Loss: Rs 56| Upside 19%

Lupin: Buy| LTP: Rs 800.65| Target: Rs 850| Stop Loss: Rs 781| Upside 6%

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com<http://moneycontrol.com> are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on Dec 2, 2019 07:26 am
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