Expect market to remain under pressure for the short term, macro data in focus: Analysts Markets will remain busy dealing with global macro numbers where US inflation numbers that are scheduled on 10th November will be the most critical one whereas China will also announce its inflation numbers on the same day. On the domestic front, we will have our IIP numbers on the 12th of November, says Santosh Meena, Head of Research, Swastika Investmart.
November 08, 2021 / 07:40 AM IST
Market snapped two-week losing streak and ended higher in the truncated Diwali week ended November 4 amid mixed global cues. In the week gone by, BSE Sensex added 760.69 points (1.28 percent) to close at 60,067.62, while the Nifty50 jumped 245.15 points (1.38 percent) to close at 17916.8 levels.
Sahaj Agrawal, Head of Research - Derivatives, at Kotak Securities | Nifty has entered a corrective phase and is expected to remain under pressure for the short term. Resistance is expected around 18,000-18,100 levels, while we see value around the 17,000-17,200 mark. I will advice traders to keep a check on leverage positions while investors can use deeper correction to accumulate frontline stocks. IT and metals can be accumulated on corrections.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities | Nifty has formed a lower top formation near 18,000, which is broadly negative for the market. However, as long as it’s trading above 17,750, the uptrend texture is intact. We are of the view that 17,750 would act as a key support level for the day traders, and above the same we can expect one more intraday upmove up to 17,900-17,975 levels. On the flip side, trading below 17,750 could possibly trigger one more round of correction wave up to 17,700-17,660.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas | The short-term consolidation process is expected to continue further. The downside is expected to be restricted to 17,600 for the short term, whereas on the higher side, 18,000 will continue to act as a cap for the short term.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One | Traders are advised not to carry aggressive bets on the long side as long as we remain below 18,000–18,100 on a closing basis. On the flipside, we may see this corrective move extending towards 17,450 first and if things worsened then the possibility of sliding towards 17,200–17,000 cannot be ruled out. The coming week would be quite crucial for the market as it may dictate the near term direction.
Yesha Shah, Head of equity research, Samco Securities | Given a slew of significant economic data releases and the ongoing earnings season, the volatility experienced this week is expected to persist into the forthcoming week as well. The United States and China’s inflation figures will influence the global markets. As long as inflation remains a concern, even D-Street investors will closely monitor domestic inflation rate, which has remained within the RBI’s comfort zone. However, an inflation rate that is sustainably higher than its tolerance level, coupled with the stance adopted by Fed on the interest rate hike this week, may nudge the RBI to consider adopting a hawkish stance and begin policy tightening sooner than anticipated.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services | After the spectacular returns in Samvat 2077, investors should prepare for modest returns in Samvat 2078. However, as always, certain sectors and individual stocks will outperform. Among the best performing sectors during Samvat 2078, there would be banking since there are clear signals of credit growth, which was muted last year. So, leading private sector banks, the top 2 or 3 names in PSU banks, and the leading names in mortgage and fintech spaces are poised to do well. The star performers of Samvat 2077 - Realty and Metals – will continue to be resilient since the boom in these segments appear to be multi-year stories. Accelerating digitisation globally augurs well for IT too. All construction related segments – cement, ceramics, paints, adhesives and electrical – stand to benefit from the construction boom.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | Macroeconomic trends continue to see good recovery, with high-frequency indicators improving month on month. On the earnings front, companies have largely delivered in line with expectation. Most companies have indicated recovery in demand as the economy opened up although higher commodity and energy prices have exerted downward pressure on margins. Companies have taken price hikes to pass on the impact of commodity costs, and the impact of it on demand remains to be seen. Nevertheless, companies have delivered a resilient quarterly performance in an inflationary environment and 2QFY22 earnings surpassing our expectations so far. However, valuations are still at a premium and would demand consistent earning delivery going ahead. So, the market might continue to remain under pressure till valuations get reasonable and global cues improve.
Ajit Mishra, VP Research. Religare Broking | In the coming week, participants will be closely eyeing macroeconomic data i.e. IIP and CPI inflation of November 12. We’re going to see noticeable traction in the primary market as well as Paytm IPO is opening for subscription on November 8. On the earnings front, some of the prominent companies like Auropharma, Britannia, BHEL, IGL, M&M, Bergepaint, Pidilitind, ONGC and Tata Steel will announce their results along with several others. Indications are in the favour of further consolidation however the range could be broader next week. On the downside, Nifty would find support around 17,750-17,600 levels. In case of a rebound, the resistance remains intact at the 18,000-18,100 zone. Amid all, we’re still seeing noticeable action on both sides so participants should maintain their focus on stock selection and overnight risk management.
Santosh Meena, Head of Research, Swastika Investmart | FIIs' behavior along with inflation numbers from US and China will remain key factors for the next week. After an extended weekend, Indian markets are likely to start a fresh week with a positive note on the global backdrop however there is a risk of selling pressure at higher levels as we are underperforming the global peers where the near term texture has changed to 'sell on rise' from 'buy on dip'. Markets will remain busy dealing with global macro numbers where US inflation numbers that are scheduled on 10th November will be the most critical one whereas China will also announce its inflation numbers on the same day. On the domestic front, we will have our IIP numbers on the 12th of November. FIIs' behavior will be the most critical element from here because they are selling continuously and if they stick with their current mood then we can expect that correction can see the further extension. Technically, Nifty is respecting its 50-DMA however the near term texture is weak where 18000-18200 is a critical resistance area where we can again see selling pressure while if Nifty manages to take out this zone then we can say that correction has ended and the market is ready for fresh expansion. On the downside, if Nifty slips below its rising 50-DMA that may coincide with the 17700 level then we can expect further weakness towards the 17450-17250 zone.