There are about 30 stocks in the S&P BSE 500 index that rose 10-30 percent for the week ended May 15 including names like The Ramco Cement, REC, Hero MotoCorp etc.
It was a volatile week for Indian markets which got off to a strong start but resurgence in trade tensions between the United States and China, second wave of new COVID-19 cases, and uninspiring Rs 20 lakh crore stimulus packages capped the upside.
The S&P BSE Sensex fell 1.7 percent, while the Nifty50 was down 1.2 percent. On the broader markets front, the S&P BSE Mid-cap index rose 0.67 percent while the S&P BSE Small-cap index was up 0.47 percent for the week ended May 15.
There are about 30 stocks in the S&P BSE 500 index that rose 10-30 percent for the week ended May 15 including names such as Ramco Cement, REC, Hero MotoCorp, Bharat Electronics, Mphasis, Bharti Infratel and Mahindra Holidays & Resorts.
The responses to the Rs 20 lakh crore stimulus package was strong as benchmark indices rose by about 2 percent, but the finer details of the package unveiled by the Finance Minister was uninspiring, suggest experts.
“Stimulus although optically looks large but the fine print shows that it is not on the Government’s balance sheet but onto the balance sheet of the distressed sectors and individual pockets, which was not expected,” Umesh Mehta, Head of Research, Samco Securities told Moneycontrol.
“This may solve the temporary liquidity crises, but solvency concerns are still not addressed in a meaningful way,” he said. He further added that despite the infusion of Rs 20 lakh crore by the Government, the Street was disappointed which led the markets to bow down to the selling pressure.
Where is market headed?
The Nifty50 closed in the red for the second consecutive week amid elevated global volatility. Sectorally, Auto, PSU Banks, and metals outperformed while energy and NBFC underperformed.
The weekly price action formed a bear candle with a sizable upper shadow, indicating profit booking emerged from an upper band of consolidation placed at 9500, as index pared intra-week gains seen on the announcement of the stimulus package.
Experts are of the view that the index is likely to consolidate in a broad range, and a breakout above 9,500 could take the index towards 9,800 levels. On the downside, crucial support is placed at 8,800 levels.
“The index retraced past seven sessions up move (8,909-9,890) over the past ten sessions. A slower pace of retracement signifies time consolidation. Thus, in the upcoming week, we expect the index to prolong the ongoing consolidation in the broad range of 9,500-8,800 amid stock specific action in the ongoing result season,” Dharmesh Shah, Head – Technical, ICICI direct told Moneycontrol.
“During the ongoing corrective move, on four occasions index made attempts to surpass 9,400-9,500 zone, indicating immediate resistance is placed at 9,500. Thus a decisive close above 9,500 would lead to further acceleration of upward momentum,” he said.
Shah further added that on the downside, we believe any corrective decline from here on would get anchored around the key support threshold of 8,800.
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