The Indian market took a breather as benchmark indices closed lower on August 19 on weak global cues but the Sensex and Nifty still managed to close the week on a high for the fifth time in a row.
For the week, the 30-pack Sensex gained 183.37 points, 0.30 percent, to end at 59,646.15, while the broad-based Nifty added 60.50 points, 0.34 percent, to close at 17,758.5. During the week, the Sensex crossed 60,000, while the Nifty close in on 18,000.
Both indices have gained 3.5 percent each in August, so far.
“Equity market started the week on a positive note but the correction on Friday erased most of the weekly gains. The BSE midcap and BSE small-cap index outperformed the BSE-30 and Nifty-50 index,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
The smallcap index rose 1 percent, midcap 0.81 and the largecap index gained 0.65 percent.
On the sectoral front, BSE Power gained 3 percent, telecom 2 percent and BSE Capital Goods index rose 1.8 percent. The BSE metal index slipped nearly 2 percent, as commodities continue to be under pressure.
“Recent market rally possibly reflects increasing expectations about peaking of inflation, commodity price correction and decent earnings visibility,” Chouhan said.
India’s consumer price inflation moderated in July. Oil prices have cooled, Q1FY23 results were broadly along expected lines and foreign fund flows too started turning favourable, lifting the sentiment, he added.
Foreign institutional investors (FIIs) bought Rs 3,128.96 crore of equities during the week, while domestic institutional investors (DIIs) sold shares worth Rs 1,808.89 crore.
In August, so far, FIIs have bought Rs 17,970.62-crore worth of shares and DIIs sold shares worth Rs 6,052.67 crore.
More than 50 smallcaps, including Forbes Gokak, Repco Home Finance, DFM Foods, Sanghi Industries, Rane Holdings, NAVA Birla Tyres, Yaari Digital Integrated Services, Brightcom Group, Jubilant Industries and Banco Products (India), rose 10-61 percent.
On the other hand, Navkar Corporation, Voltamp Transformers, Himatsingka Seide, Gayatri Projects, Jagran Prakashan, TCNS Clothing Co, DB Realty, INOX Leisure and PVR shed 10-20 percent.
The BSE 500 index rose 0.7 percent supported by the Brightcom Group, Hikal, Adani Power, Indiabulls Real Estate, Gujarat Alkalies and Chemicals, Happiest Minds Technologies, Hatsun Agro Products, Wockhardt and Mishra Dhatu Nigam.
Where is the Nifty headed?
Gaurav Ratnaparkhi, Head Technical Research, Sharekhan by BNP Paribas
For the last couple of sessions, the Nifty was trading in between the 78.6 percent retracement of the entire October 2021 to June 2022 decline and the 18,000 mark. Thereon, the index has stepped into a short-term consolidation phase.
In the week gone by, the index crossed a crucial falling trendline drawn from October 2021 high and moved back towards the trendline to retest the same. Thus, going ahead, the Nifty is likely to witness a consolidation near 17,700-18000 in the short term.
Apurva Sheth, Head of Market Perspectives, Samco Securities
The D-street will be focusing on the macro trends this week as the results season nears its end. There are also no significant macroeconomic events taking place in the week, thus the focus will be on the FII trends and Brent crude.
Shares worth more than Rs 18,500 crore have been purchased by FIIs in August. The rally has been greatly aided by this buying. The market will be closely monitoring this trend as any reversal can cause a temporary blip.
In light of recessionary worries, Brent crude prices are declining and are now trading at a six-month low of approximately $93.65.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One
In the first half of the coming week, any bounce towards 17,800–17,875 is likely to get sold into.
Traders are advised to lighten up longs in this rebound and stay on the sidelines for a while. Aggressive traders can look to initiate bearish bets by keeping a strict exit strategy beyond 18,000.
If we see some nervousness globally, the Nifty may slip to 17,600–17,450.
The overall trend, however, remains strongly bullish but since the rally has been vertical from 16400, profit booking is likely in the coming week. This view remains valid as long as 18,000 is not breached on a sustainable basis.
The decline should be considered a healthy development for the next leg of the rally and used to go long. Traders are advised to continue with the stock-specific approach.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.