Amid rising coronavirus cases and subdued global cues, market benchmarks ended the past week in the red.
For the week, Sensex fell 1.4 percent while Nifty lost 1.1 percent. The BSE Small-cap index declined 1.5 percent while the BSE Mid-cap plunged by about 2 percent in the same period.
There is F&O expiry for the May series in the coming truncated week. The options data indicates that the maximum Put base is placed at 9,000 followed by 8,800 strikes. We have also seen fresh Put writing in 9,000 and 8,800 Put strikes, which are likely to act as a support zone.
Experts point out the broader structure of the market continues to remain weak as Nifty is making a lower top and lower bottom formation.
On May 22, Nifty formed a Doji pattern on the daily chart indicates indecisiveness among the bulls and the bears.
Let's take a look at what the top voices of D-Street have to say about the market.
Ridham Desai, Managing Director at Morgan Stanley India (in an interview at CNBC-TV18)
When the COVID-19 outbreak comes under control and all the government stimulus starts to kick in, the world will see a ferocious bull market.
"Even during World War II and in the aftermath of it, we did not see coordinated policy response either across geographies or across agencies. It is multiple times more than the stimulus that was put after the global financial crisis of 2008-09. When we come out of this, all the stimulus waiting to kick in, it is going to create a ferocious bull market around the world," Desai said.
Pankaj Pandey, Head – Research, ICICI direct
"We remain structurally positive on the Indian economy and equity market over the medium to long-term horizon. While economic recovery could be U-shaped, we remain a firm believer of the fact that market, being a leading indicator, is more likely to witness V-shaped recovery," Pandey said.
The majority of the concerns of economic dislocation is visible in the index levels, currently. Furthermore, recent weakness also prices in the recent reform announcement, albeit long term positive for the economy, seen as short of market expectations. However, the market is yet to gain clarity on the extent of the economic damage both in terms of time as well as quantum. Pandey expects the volatility to continue in the near term keeping the market in a nervous mode for the time being.
Vinod Nair, Head of Research- Geojit Financial Services
The market will hover in a negative bias in the near-term and trade in a broad range of 8,600 to 9,600 in the short-term. The market has factored the merits and demerits of the fiscal and monetary stimulus announced by the government and the Reserve Bank of India (RBI).
It has also understood that the business will be a washout during the period of April to June expected bad developments and news unless the situation evolves better.
It will focus on the effectiveness of the re-opened economy in India & rest of the world. Higher the capacity utilisation and normalcy in public behavior will add comfort to the market.
"The final direction of the market will depend on the world’s health developments. We should be vigilant not be greedy or optimistic. It will be better to accumulate in dips and maintain SIP. We should be reasonable, assuming that this period of accumulation could for a period of more than a year too. The stable places to hide and add are Pharma, FMCG, Chemicals, Telecom, IT and strong domestic-oriented companies like finance and consumption," said Nair.
Vinay Agrawal, CEO, Angel Broking
In the near-term, the market is expected to be choppy as the incessant negative new flows from major economies is presently being counterbalanced by the trillions of dollars of liquidity infusion in the global financial system that has been supporting the market.
"Given the increasing uncertainties on the domestic front, we would recommend to avoid vulnerable sectors and invest in a high quality business in three to four tranches, such as the Healthcare & Pharma, IT, FMCG and Telecom, as these sectors appear to be better placed to weather the onslaught of the COVID-19 storm, that’s hit the world hard and brought it to a virtual standstill. Patience and focus on quality is the need of the hour," Agrawal said.
Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote
The market is encircled with negative news and the only thing that can really bring back confidence in these dark days is the discovery of an anti-drug to fight COVID-19 and a vaccine to keep it away.
Quarterly numbers in developed markets such as the United States are almost over and the commentary from US CEOs, even the Fed Governor are all pointing towards the worst which may still be ahead of us.
Indian bourses, going ahead, will mirror the economic trajectory. Investors are advised to stay away from investing in new monies and conserve cash.
Ajit Mishra, VP - Research, Religare Broking
The market was hoping some measure from the RBI that could boost the banking and financial sectors but the announcement of the extension of moratorium dented the sentiment.
The brewing feud between the US-China is further also adding to the participants’ worries. We may see some rebound next week due to oversold positions in banking and financial space but sustainability would be difficult at the higher levels. Traders should prefer hedged trades and prefer defensive viz. pharma, IT and select FMCG for long trades.
Shibani Sircar Kurian, Executive VP, Fund Manager & Head- Equity Research, Kotak Mahindra Asset Management Company
Indian equity markets remained volatile during the week ended May 22, 2020. During the week, the government outlined in detail the fiscal stimulus plan designed to support and revive the economy.
The government has tried to balance fiscal considerations and the stimulus needed to revive economic growth.
With, further easing of restrictions under Lockdown 4.0, some of the high-frequency data indicators now point towards the resumption of economic activity and this is a positive development for the market. However, reaching normalised level of economic activity will likely take time with social distancing measures in place.
Globally, markets remained volatile even as there was some hope of a possible cure with positive preliminary results of a few drugs. The tightening of geopolitical tensions between the US and China would also be among the key developments to watch out for apart from the trajectory of spread of COVID -19.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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