Going forward, we expect the rupee to face stiff resistance around 70.80 levels and witness some depreciation all over again
The Indian rupee surged to its highest level in a month on September 13 against the dollar on the back of improved risk appetite amid positive development on the US-China trade front along with stimulus package announced by the ECB, Ajit Mishra, Vice President Research, Religare Broking, said in an interview with Moneycontrol’s Kshitij Anand.
Q) Market closed with gains of over 1 percent above 11,050 levels for the week ended September 14. The macro data also did not infuse much confidence in 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) The Nifty50 gained over a percent amid volatility and settled around 11,075.90. The bias remained positive almost for the entire week and the majority of sectoral indices contributed to the move.
Besides, the broader indices also witnessed a noticeable recovery and settled with decent gains. We reiterate our positive yet cautious approach on the Nifty50 and expect 11,150 to be tested shortly.
Above that level, 11,250-11,300 zone would act as a strong hurdle. In case of decline, 10,800 would provide the much needed cushion.
Q) What are the important data points to watch out for in the coming week both global and domestic?
A) There are no key domestic data points lined up in the following week expect WPI inflation for August on September 16, 2019.
On the event front, GST council meeting is scheduled on September 20 and there are hopes that government may announce some tax relief majors for auto sector, as well as, some changes in duty structure for some of the sectors. However, currently maintaining the fiscal balance is also crucial.
Among the global factors, the US Federal Reserve is expected to slash interest rates by 25 bps during its meet on September 17-18 and this could infuse more positivity in the global markets.
Further, any positive news w.r.t. US-China trade war and oil and currency movement will have a bearing on the markets.
Q) Rupee also touched 1-month high in the week gone by. Do you see the momentum continuing in the coming week?
A) The Indian rupee surged to its highest level in a month on September 13 against the dollar on the back of improved risk appetite amid positive development on the US-China trade front along with stimulus package announced by the ECB.
Going forward, we expect the rupee to face stiff resistance around 70.80 levels and witness some depreciation all over again.
The local unit is likely to trade in the range of 70.80-71.60 levels. Markets would now focus on the upcoming Fed meeting for further cues.
Q) Any specific sector which could remain in 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) The consumption-driven sectors such as Consumer Durables, FMCG and Auto are likely to be in focus as expectations have risen of a possible GST rate cut.
Further, the expectations are high amongst market participants for measures in the real estate space as it has been facing issues of subdued demand.
Currently, the positive measures announcements are getting factored in by market participants.
Among the sectoral indices, the Nifty Bank also witnessed sharp rebound and gained over 3 percent last week. We expect this recovery to extend further in the coming week too however we prefer private banks over the others.
On the higher side, it could face hurdle around 28,500-28,800 levels while 27,750-27,500 would act as support.
On the global side, positive announcements regarding trade deal between US-China has led to a decent run in the commodity prices and has led to some respite in metal stocks in India. Hence, global developments would have a bearing on metal stocks in India.Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.The Great Diwali Discount!
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