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Last Updated : Dec 31, 2019 09:17 AM IST | Source: Moneycontrol.com

Market Headstart: Indices could trade in a range in short term; 10 picks for 2020

Trends on SGX Nifty indicate a negative opening for the broader index in India, with a 38 points loss or 0.31 percent. The Nifty futures were trading around 12,288-level on the Singaporean Exchange.

Indian market is likely to consolidate on Tuesday amid mixed global cues and mixed trend seen in other Asian markets. Markets in Japan and South Korea were closed for a holiday.

The fall in Asia came after profit-taking pushed the Dow Jones Industrial Average down 0.64 percent to 28,462.14, the S&P 500 0.58 percent lower to 3,221.29 and the Nasdaq Composite off 0.67 percent to 8,945.99, said a Reuters report.

Trends on SGX Nifty indicate a negative opening for the broader index in India, with a 38 points loss or 0.31 percent. The Nifty futures were trading around 12,288-level on the Singaporean Exchange.

Close

Indian market closed on a flat note on Monday tracking muted trend seen in other Asian markets amid New Year holidays.

The S&P BSE Sensex and Nifty50 recouped losses but ended on a mixed note. Let’s look at the final tally on D-Street — the S&P BSE Sensex closes 17 points lower at 41,558 while the Nifty50 ended with gains of over 10 points t0 12,255.

The broader markets outperformed as BSE Midcap and Smallcap ended with gains of 0.3 percent and 0.8 percent respectively. The sectoral indices exhibited a mixed trend.

Sectorally, the action was seen in telecom, autos, metals, and healthcare stocks while profit-taking was recorded in IT, banks, and finance stocks.

On the macro front, investors would watch out for fiscal deficit data for the April-November period and eight-core industries output data for November.

Experts are of the view that the market is likely to remain rangebound in the absence of any major triggers, but smart money continues to flow into broader markets.

The government might breach the fiscal deficit target this financial year amid a drop in the revenue mobilisation and expected additional expenditure by the government, says a report. According to Dun & Bradstreet's Economy Forecast, the need for fiscal stimulus has increased even as the government finances remain "strained".

In the second special open market operation (OMO), the Reserve Bank of India on Monday bought Rs 10,000 crore of long-term government securities and sold Rs 8,501 crore of three short-term bonds.

The rupee appreciated by 4 paise to settle at 71.31 against the US currency amid a weakening of the US dollar in overseas markets even as crude oil prices surged.

On the institutional front, FPIs were net sellers in Indian markets for Rs 130 cr, while the DIIs were net buyers to the tune of Rs 201 cr, provisional data showed.

What to buy in 2020?

Rally will spread to small & midcaps in the year 2020, suggest experts.

The S&P BSE Sensex rallied by about 15 percent, and the Nifty50 was up nearly 13 percent so far in the year 2019, but the broader market indices underperformed which is one of the factors that kept investors away from celebrating new highs.

In 2019, the FIIs turned net buyers and pumped in nearly Rs 87,000 crore into Indian equities. The change in the US interest rate trajectory and several measures by the Indian government to revive the economy resulted in the buoyant mood of the FIIs.

The mutual funds too participated as fund managers pumped in nearly Rs 49,000 crore in 2019 led by a steady SIP inflow of Rs 8,000 crore.

Religare Broking New Year picks – Bajaj Auto, Britannia Industries, Coromandel International, Crompton Greaves, Gujarat Gas etc. among others.

BP Equities recommend Bharti Airtel, IndusInd Bank, Ramco System, RIL, and Sun Pharma.

Technical View:

The Nifty50 closed flat with a positive bias to make a small bearish candle on the daily charts which also resembles a Hanging Man kind of pattern on charts

It bounced back near its 5-Days EMA placed around 12223

The index is just 38 points away from hitting fresh record highs

It remains critical for the index to sustain above 12213 levels for the bulls to retain their hold on D-Street

If bulls manage to push the index beyond 12293 levels then the said index can head into the critical resistance point placed around 12350 levels.

Traders are advised to remain neutral on the long side but meanwhile, they can shift their focus towards stock-specific opportunities, suggest experts

Three levels to track – 12213, 12293, 12350

Max Call OI: 12500, 12700

Max Put OI: 12000, 11500

Stocks in news:

Indian Bank on December 30 said it would revise lending rates on the marginal cost of funds from January 3.

AstraZeneca and Merck's ovarian cancer drug Lynparza has received US.regulatory approval for the treatment of advanced pancreatic cancer, cementing its lead in a niche category of cancer treatments.

Reliance Industries and UK's BP plc paid USD 36 million to get their defaulting Canadian partner Niko Resources to exit from the eastern offshore KG-D6 block. In a statement, Niko said it has exited from the KG-DWN-98/3 block and its 10 percent stake has been taken over by Reliance and BP.

Technical Recommendations:

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

Vedanta: Buy | LTP: Rs 154.50 | Target: Rs 162 | Stop loss: Rs 150 | Upside: 5%

Federal Bank: Buy | LTP: Rs 87.55 | Target: Rs 91 | Stop loss: Rs 85 | Upside: 4%

Bharat Petroleum Corporation: Buy | LTP: Rs 493.05 | Target: Rs 520 | Stop loss: Rs 475 | Upside: 5%

Disclaimer: The views and investment tips expressed by investment experts on 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 31, 2019 08:49 am
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