Indian market is likely to consolidate around crucial support levels on Monday, tracking mixed trend seen in other Asian markets. The Nifty50 is likely to retest 12,000 levels.
Trends on SGX Nifty indicate a negative opening for the index with a 86 points, or 0.71 percent, loss. The Nifty futures were trading around 11,948-level on the Singaporean Exchange.
US markets ended lower on Friday amid a spike in coronavirus cases and data showing a stall in US business activity in February. The Nasdaq had its worst daily percentage decline in about three weeks on Friday, said a Reuters report.
On a weekly basis, the Nifty50 closed with losses of 0.27 percent while the S&P BSE Sensex fell 0.21 percent for the week ended February 20.In the broader market space, the S&P BSE Smallcap index was up 0.44 percent while the S&P BSE Midcap index gained 0.20 percent in the same period.
Let’s look at the final tally on D-Street – the S&P BSE Sensex fell 152 points to 41,170 while the Nifty50 was down 45 points to close at 12,080 on Thursday. Indian market were shut on Friday on account of a public holiday.
As many as 40 stocks in the S&P BSE Smallcap index rose 10-30 percent. These include Mirc Electronics, Heritage Foods, Indo Count Industries, JMT Auto, DHFL, Firstsource Solutions, Indiabulls Ventures, IOL Chemicals, Subex, among others.
On the macro front, the central government has released Rs 19,950 crore as GST compensation to states, taking the total amount released to them to over Rs 1.2 lakh crore.
In a statement, the finance ministry said Rs 19,950 crore was released to states and union territories last Monday.
The country's foreign exchange reserves swelled by $3.091 billion to a lifetime high of $476.092 billion in the week to February 14, mainly due to a rise in foreign currency assets, according to the RBI data.
The rupee on Thursday declined by 10 paise to settle at a more than one-month low of 71.64 against the US dollar amid heavy selling in domestic equities and strengthening of the American currency in the overseas market.
On the institutional front, FPIs were net buyers in Indian markets for Rs 1495 crore, while the DIIs were net sellers to the tune of Rs 699 crore, provisional data showed.
Big News:
Reserve Bank of India (RBI) Governor Shaktikanta Das has said that while the economy needs monetary stimulus, the inflation outlook remains uncertain.
He also said that there is need for stronger monetary transmission and bank credit flows to revive growth, according to the minutes of the February Monetary Policy Committee (MPC) meeting released on February 20.
Das said that it would be prudent to continue the focus on growth in the context of the expected moderation in inflation. This would indeed be in sync with the concept of flexible inflation targeting.
RBI revised its inflation estimate upwards to 6.5 percent for January-March quarter, 5.4-5.0 percent for the first half and 3.2 percent for the third quarter of the next financial year. It expects GDP growth at 6 percent for 2020-21.
Technical View:
Nifty formed a bearish candle on the daily charts.
The price chart of Nifty remains week as this counter is struggling to get past its 50-day exponential moving average placed at 12,141.
Momentum on the upside shall pick up on a strong close above 12,150 levels, suggest experts.
Traders can retain positive stance as long as Nifty sustains above 12,040 levels but it looks prudent to initiate fresh longs in Nifty only on a close above 12,150 levels, they say.
Three levels: 12071, 12152, 12300
Max Call OI: 12300, 12500
Max Put OI: 12000, 11800
Stocks in the news:
Bharti Infratel on Saturday said its board will meet on February 24 to chart out the future course of action following the telecom department's approval for merger with Indus Towers.
Gold loan financier Muthoot Finance on Friday said it has raised USD 550 million (around Rs 3,900 crore) through dollar bond, offering a coupon of 4.4 percent.
Biocon on Saturday said it has received three observations from the US health regulator following inspection of its insulin manufacturing facility in Malaysia.
Technical Recommendations:
We spoke to IndiaNivesh Securities and here’s what they have to recommend:
Escorts futures | Sell | CMP: Rs 883 | Target: Rs 830 | Stop loss: Rs 920 | Downside: 6%
Bank of Baroda (BoB) | Buy | CMP: Rs 82.30 | Target: Rs 92 | Stop loss: Rs 77 | Upside: 12%
ITC | Buy | CMP: Rs 207.90 | Target: Rs 220 | Stop loss: Rs 198 | Upside: 6%
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