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Last Updated : Oct 17, 2020 02:05 PM IST | Source: Moneycontrol.com

Fears of lockdown 2.0 spoil party for bulls, but these 26 stocks buck trend

As many as 26 stocks in the S&P BSE Smallcap index bucked the trend. These include Tata Metaliks, Jain Irrigations Ltd, Prakash Industries, Subex, 8K Miles, and Jindal Stainless Ltd.

Bulls remained in control in four out of the last five trading sessions but rising fears of a second wave of lockdown in advanced economies fuelled risk-off sentiment which triggered a round of profit-taking in equity markets across the globe.

The S&P BSE Sensex fell 1.3 percent while the Nifty50 was down by 1.28 percent for the week ended October 16 compared to a 1.2 percent fall seen in the S&P BSE Smallcap index, and about 1 percent fall seen in the S&P BSE Midcap index in the same period.

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As many as 26 stocks in the S&P BSE Smallcap index bucked the trend. These include Tata Metaliks, Jain Irrigations Ltd, Prakash Industries, Subex, 8K Miles, and Jindal Stainless Ltd.

26

Seven stocks in the S&P BSE 500 index rose 10-30 percent in the last five trading sessions. These include IDBI Bank, JSW Energy, Amber Enterprises, JustDial, and Jindal Stainless.

Markets went down significantly this week on the back of weak global cues and set-back in the domestic market due to lack of required fiscal stimulus, suggest experts.

“Indian indices were punished by investors as the govt’s fiscal measures did not meet the strong economic demand. Adjournment of SC verdict on moratorium also impacted the domestic market,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

“In the global market, Europe witnessed a strong surge in coronavirus cases which led to deep sell-off across all markets, which were already trading at rich valuation. Investors’ sentiment further deteriorated, as the US stimulus was delayed post-election,” he said.

Market direction for the coming week will be guided by Q2 results, an end to the moratorium saga, and any update on the stimulus plan. IT, telecom, pharma, and banks will be the sectors under focus with positive bias.

"Bourses will be mainly guided by Q2 numbers of marquee names such as HDFC Bank, Avenue Supermarts, HDFC Life, Britannia, and HUL to name a few. Demand estimates by their management will be a good indicator of recovery in the formal economy,” Nirali Shah, Senior Research Analyst, Samco Securities told Moneycontrol.

“Industries like hotels, travel, and tourism are the most affected due to lockdowns and since they have already rebounded from their lows in the recent past, there could be selling pressure in these stocks going forward,” she said.

Shah further added that markets are expected to witness a sectoral rotation and are likely to trade in a narrow range. Investors may also witness profit-booking at higher levels and are advised to keep calm and wait for a serious correction before investing.

Technical View

Equity benchmarks took a breather during the week amid volatile global cues. The Nifty ended the week at 11,762, down 1.3 percent on a weekly basis. Sectorally, metal and realty stocks outshone while auto, pharma, and PSU banks underperformed during the week.

Profit-booking emerged from the psychological mark of 12,000. As a result, the index formed a small bear candle, indicating a breather after the 1,200-point sharp-up move.

Experts are of the view that the Nifty50 is likely to consolidate in a broad range with stock specific action. Strong buying demand will emerge if the Nifty slips below 11,500 levels, while on the upside, 12,000 would act as immediate resistance.

“Going ahead, we expect the index to consolidate in the broad range of 11,500-12,000 with stock-specific action amid the progression of Q2 FY21 result season. We expect strong buying demand to emerge in the vicinity of 11,450-11,550 and therefore any dip from hereon should not be construed as negative, instead, it should be capitalised on as an incremental buying opportunity,” Dharmesh Shah, Head – Technical, ICICI direct told Moneycontrol.

“Sectorally, the under-owned cyclical like metal and banking are expected to witness catch up activity while IT may take a breather after a sharp up move,” he said.

Shah further added that 12,000 would act as immediate resistance as during last week on four occasions the index failed to surpass the level.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Oct 17, 2020 01:49 pm
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