There might be the minor sentimental impact of Moody's downgrade but the market may ignore it as rating agencies' reaction.
The Sensex already hit an all-time high, while the Nifty is approaching the same where some strong bears may try their hand in the 12,000-12,100 resistance zone with algorithm trading as it requires too much strength to take out all-time high, Amit Gupta, Co-Founder and CEO TradingBells, tells Moneycontrol's Kshitij Anand.
Q. Fresh record highs for the Sensex, while Nifty had a touch and go moment with 12,000 in the week gone by. Do you think Moody’s outlook change on Indian will impact sentiment?
A. There might be the minor sentimental impact of Moody's downgrade but the market may ignore it as rating agencies' reaction generally comes late and it seems the worst is behind us in terms of domestic problems.
Q. Will the Nifty be able to touch fresh highs in November given the fact it is near the crucial resistance 12,000-12,100 zone?
A. The Sensex has already hit an all-time while the Nifty is approaching the same where some strong bears may try their hand in 12,000-12,100 resistance zone with algorithm trading as it requires too much strength to take out all-time high.
Once 12,100 will be taken out then the market will get further momentum for an immediate target of 12,300. Technically, 11,880-11,850 is the first support which bulls will try to protect while 11,700 is the sacrosanct support mark to buy any dip.
Q. Data suggest that more than 50 percent of companies are trading at a discount to historical averages. Investors are looking for companies that are trading at a relatively cheaper valuation – can they look at buying stocks which are trading at a discount or is it better to stay with companies that are attracting momentum?
A. Some money may shift from expensive stocks to value stocks but some of the expensive stocks may continue their momentum where earning growth is still strong.
Britannia Industries, Asian Paints and Berger Paints are some stocks which may see some profit booking or consolidation as money may chase stock with better valuations but any dip in these quality stocks will attract further buying interest at lower levels.
Companies that are trading a significant discount may do well but this will not be the case for all companies because money will chase only those companies where earning growth is visible.
Q. We are in the last leg of the September quarter earnings. How is the journey so far for Indian Inc. and will there be more surprises on the downside?
A. The last leg of earnings includes important names such as Hindalco, Coal India, Adani Ports, NMDC, Aurobindo Pharma and Pidilite Industries where most of them may come out with weak or inline earnings.
Overall earnings season was mixed to positive where expectations were low. Consumption basket did better than expected as there was fear of a slowdown in retail consumption.
Most of the private banks posted inline or better than expected results while in the public bank basket only big boy State Bank of India comes up with strong earnings.
In IT pack Infosys, HCL Tech and Tech Mahindra did well while TCS's earnings were below expectations. Most of the mainline auto companies posted inline or better than expected results.
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First Published on Nov 9, 2019 09:57 am