Metals, Oil & Gas and auto likely to hog limelight in the coming week; here’s why

Metals and oil & gas could remain in focus depending on the situation between US and China and the volatility in crude prices, Umesh Mehta, Head of Research, Samco Securities, said in an interview with Moneycontrol’s Kshitij Anand.

Edited excerpts:

Q) Market closed the week with gains of over 1 percent, and above 11,000-11,050 levels. The macro data also did not infuse much confidence in the markets, and the coming week will be dominated by global cues. What are the important levels to watch out for in the coming week?

A) Indian bourses will indeed be guided by global factors at least till the quarterly results start coming in. Due to the slowdown at the ground level and the liquidity issues, there is no sign of aggressive buying by investors. Until the numbers show confidence, the market participants will not resume significant buying.

Specific to the markets, Nifty will experience strong resistance at levels of 11,150 -11,200 and a decisive break above will confirm resumption of the bulls while a failure will confirm resumption of the bears.

Q) What are the important data points to watch out for in the coming week both global and domestic?

A) The coming week can be clouded by speculations of the GST council outcome which is expected on the September 20.

US-China trade war issue can also be a talking point in case the issue further escalates. Any further impetus by the government will also mask the bourses the coming week.

Q) Rupee also touched 1-month high in the week gone by. Do you see the momentum continuing in the coming week?

A) Rupee seems to have halted its upward momentum and there can be a rebound in the short-term, but broadly the bias will be towards an appreciation of the Rupee from these levels. The Indian currency will slowly and steadily appreciate albeit with corrections.

Q) Any specific sector which could remain in the limelight based on any domestic or global news. What are the important levels to watch in terms of Nifty Bank, and govt is likely to announce some more important measure which could benefit the sector?

A) Metals and oil and gas could remain in focus depending on the situation between US and China and the volatility in crude prices.

The Nifty Bank will face resistance at levels of 38,650 on the upper side and support should be around levels of 26,650.

The Government can come out with a scrapping policy which can change the dynamics of auto sector given the huge Rs 20 crore vehicle base. Even if 5 percent of the vehicles are scrapped it would still bring around a material change.

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