GDP, macro data to drive market. 16,500 an important support for Nifty: Experts
Going ahead, in case of any dip, Nifty would find support at 15,500 and 15,380 levels. We feel it’s prudent to maintain a positive yet cautious approach and choose stocks from the sectors which are trading in sync with the benchmark, says Ajit Mishra, VP Research. Religare Broking.
Indian benchmark indices rose to fresh record highs last week supported by positive global as well as domestic cues. For the week ended August 27, BSE Sensex added 795.4 points (1.43 percent) to close at 56124.72, while the Nifty50 rose 254.7 points (1.54 percent) to end at 16705.2 levels. Here's what experts expect on the Street this week:
2/8
Ruchit Jain, Senior Analyst - Technical and Derivatives, Angel Broking | Despite the volatility in the mid and smallcap space, the benchmark index has managed to hold on and has continued to register new highs. Market continues to be in an uptrend and thus one should trade with a positive bias and avoid taking any contra trades until any reversal seen. The only concern that we have been highlighting is the banking index which has shown a relative underperformance for so long. But, this index is still in a consolidation phase and has not breached its important supports. Hence, there's a good probability of some buying interest emerging in this sector which would then lead to further support to the benchmark. The immediate supports for Nifty are placed around 16,600 and 16,500 while the levels to watch on the upside will be 16,800 and then 17,000-mark. Recently we have seen that when everything looks hunky-dory, we see some volatile stock-specific moves. Also, how the global markets shape up in the near term due to events can have an impact on our markets. Hence, one should keep track of the global developments and also book timely profits in trading positions.
3/8
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | The result season is over with better-than-expected delivery and vaccination drive going on in full swing. However, the sharp outperformance in the past 18 months led to concerns on valuations. Also, the likely impact on liquidity due to changes in global monetary policy had investors concerned over the last few days. While midcaps have started participating in the market's up move in the last couple of days, we believe that largecaps offer better margin of safety in the current environment and could continue to remain in focus in the near term. From the long term perspective, the overall trend of the market remains positive led by the opening up of the economy, improving economic data points and pickup in vaccinations.
4/8
Vinod Nair, Head of Research at Geojit Financial Services | In the coming week, the market expects the release of key economic data such as Q1 GDP growth rate and Manufacturing & Service PMI. The Q1 GDP is expected to show a sharp growth owing to a low base and recovery in economic activities towards the end of the quarter.
Samco Research | Indian bourses are expected to face whipsaws post Fed’s Jackson Hole meeting outcome. Participants are eager to understand the timelines for gradual tapering of bond purchases to judge the mood on the Street. Markets could also be impacted by an eventful economic calendar which begins with quarterly GDP growth rate numbers, followed by auto sales numbers and manufacturing PMI data. Profit booking may occur in certain overpriced stocks, however investing in high quality companies in stages would be a smart strategy.
6/8
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities | Technically, post the short-term correction Nifty has maintained higher high and higher low series formation and after a strong pullback rally, the index is currently trading near the breakout level. The texture of the chart suggests that the 10 days SMA or 16550 would be the sacrosanct level for the breakout. If the index crosses the level, the uptrend could continue up to 16825-16950 levels. On the flip side, dismissal of 16550 may trigger temporary weakness till 16375-16300 levels. Meanwhile, the Bank Nifty index has been consistently taking support near the 50 days SMA, and 35200 would be the key support level for the index and above the same, the index is likely to outperform in the near future.
7/8
Ajit Mishra, VP Research. Religare Broking | In the coming week, participants will be eyeing crucial macroeconomic data to start with. First, the GDP data for the second qtr of FY 22 and Infrastructure Output data are scheduled for August 31. In the following sessions, the monthly auto sales will also start pouring in. Besides, the Markit Manufacturing PMI data and Markit Services PMI data are scheduled on September 1 and September 3 respectively. Markets will be initially taking cues from global counterparts, in reaction to the statements made by the US Fed Chair in the Jackson Hole symposium. In line with the latest Fed meeting minutes, he also signaled the beginning of tapering by the end of this year however sounded flexible on rate hikes. Though the Nifty is inching towards the next milestone of “17,000”, the recent surge lacks decisiveness due to the continuous underperformance of the banking index. Going ahead, in case of any dip, Nifty would find support at 15,500 and 15,380 levels. We feel it’s prudent to maintain a positive yet cautious approach and choose stocks from the sectors which are trading in sync with the benchmark. Also, participants should prefer index majors and other heavyweights as any correction in markets may again derail the recovery midcap and smallcap space.
8/8
Ashis Biswas, Head of Technical Research at CapitalVia Global Research | The market witnessed a swift recovery after the initial fall in the market. The market suggests 16500 will be an important support level in the short-term perspective. If the market breaches the level of 16720-16740 and is able to sustain above this level, the market expects to gain momentum, leading to an upside projection of 16950-17000 levels. The momentum indicators like RSI and MACD to stay positive and market breadth to improve, further strengthening the short-term bullish outlook.
