Profit-taking hit D-Street on November 8 after Moody’s Investors Services changed the outlook on India to negative from a stable, which pulled down the returns for both the Sensex and Nifty for the week ended November 8.
The Sensex which hit a record high of 40,749 on November 8 closed the week with gains of just 0.4 percent. The Nifty had a touch-and-go moment with 12,000 but managed to hold above 11,900 to close the week with gains of 0.15 percent for the week ended November 8.
The broader market continued to remain under pressure as the S&P BSE Mid-cap index fell 1.07 percent while the S&P BSE Small-cap index was down 0.93 percent in the same period.
But, there was plenty of action in individual stocks. As many as 21 stocks in the S&P BSE 500 index rose 10-40 percent in the week gone by that include names like IIFL Finance, CG Power, Varun Beverages, Indiabulls Real Estate, Coffee Day, DHFL, Raymond, and Reliance Power.
After a sharp rally seen in the past five-weeks, experts feel that the market could consolidate in a range before moving higher. The Nifty is expected to face resistance near 12,000-12,100 levels, they say.
"The recent run-up and Moody’s negative outlook on India could impact sentiments in the near term. Nonetheless, we remain cautiously optimistic in the medium term led by positive global markets and the government’s increased focus on reviving the economy," Ajit Mishra, VP - Research, Religare Broking told Moneycontrol.
"After this sharp up move, indications are in the favour of consolidation in the index with marginal profit-taking in between. We expect Nifty to trade within 11,700-12,100 zone," Mishra added.
What to watch out in the coming week:
Action on D-Street will be dictated by earnings, as well as macro data. On the earnings front, nearly 2,800 companies will declare their results for the September quarter. Investors would watch out for NTPC and OIL India results on November 9.
Britannia Industries, Coal India, Hindalco, Motherson Sumi, NHPC and NMDC among others will be out on November 11.
On the macro front, IIP data for September is scheduled on November 11, while CPI inflation for October on November 12 and WPI inflation data on November 14.
"India’s CPI inflation is expected to be on the higher side at 4.3 percent due to the rise in vegetable prices as per consensus estimates. Despite the festive season the IIP is expected to decline to 2.3 percent as per estimates," Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.
"The data released is expected to put pressure on rate-sensitive stocks. However global concerns related to trade war have eased and the same could provide comfort for investors," Nair added.
The Nifty witnessed profit booking on the November 8 session which saw the index give up its weekly gains and close on a flat note at 11,908.
"The weekly price action formed a high wave candle signalling breather after a rally of more than 900 points in the last four weeks. The index on November 8’s session for the first time in the entire up move of the past month has closed below previous session low signalling pause in the upward momentum after almost achieving our embarked target (12,100)," Dharmesh Shah, Head, Technical, ICICI direct told Moneycontrol.
"We expect the index to undergo a temporary breather towards 11,700-11,800 range as after 900 points sharp up move in the past four weeks has led stochastic to overbought territory. However, such a breather should not be suspected as negative but would rather provide an incremental buying opportunity," Shah added.
He does not foresee the index breaching the crucial support area of 11,700-11,800.
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