The bulls are breathing heavily after a strong run-up but they are still holding onto the sticks to continue their march towards a new milestone as there are no signs of weakness in the Indian markets. Slow institutional inflows are giving some strength to the market, but below the flat headline index, many quality midcap and small-cap stocks are buying well.
Most of the global markets are also in a bullish mood while the Japanese markets are showing good strength to outperform the developed markets. Global cues will continue to influence our market behavior and some macroeconomic data like China’s industrial output, US inflation numbers next week. China’s industrial production figures for August will be announced on September 15. The US will announce the inflation rate for August on 14 September 2021. US retail sales for August will be announced on 16 September 2021.
On the domestic front, the Wholesale Price Index (WPI) inflation for August 2021 is due on September 14. The market is also watching the progress of the monsoon as we are in the last phase where it picked up pace in September after weakening in August.
Dollar index is cooling down again after facing resistance at 92.8 points and if it keeps falling from here, we may again see FII buying which will see the headline index gaining momentum to new highs. can help. Rising covid cases in many countries can be a challenge, but due to liquidity and strong economic recovery, markets are ignoring it for now.
Technically, Nifty is in a strong bullish momentum but it ended last week with a small uncertain Doji candlestick formation. Last week’s high and low of 17436 and 17254 respectively will be the important reference points where if Nifty starts trading above the level of 17436 then we can see 17600/17750 levels in the coming days while a move below 17254 will be some short term weakness. where 17050 /16900 will be the next support level.
if we talk bank nifty Then it is still performing poorly but it may pick up speed soon. It is consolidating above its 20-DMA of 36088 where 37000-37250 is an immediate resistance area; Above this, we can expect a move towards the 37700-38000 zone. On the downside, 36000 is strong support; Below this we can expect a weakness to the level of 35500/35000.
If we go by the derivatives data, the long exposure of FIIs to index futures is 63 per cent, while the PCR is at 1.45 and both are looking in the comfort zone.
If we talk about sectors, then the chart of Nifty PSE index is looking strong, which means PSU stocks may outperform from here and ONGC, Oil India and GAIL look interesting amid rise in global natural gas prices. Huh. Apart from the PSU sector, metal stocks may also rise as global markets remain benign while metal prices are seeing a rise due to a cooling in dollar index, where Hindalco may continue to outperform on firm aluminum prices. .
(Santosh Meena is Head of Research at Swastika Investmart)
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