Indian stock markets ended higher on Friday, albeit from their intra-day highs. For the week, both Sensex and Nifty rose around 1.7%, recording their first weekly climb in three. The NSE Nifty 50 index closed at 17,833 on Friday, while the BSE Sensex touched 59,793 after crossing the 60,000-mark in Friday’s session. Apart from global cues, Indian markets will be eyeing Monday’s retail inflation data.
Some analysts say that the Indian stock market may continue its northward journey amid supportive global cues.
While some analysts are warning of costly valuations, foreign investors are pouring money into the market in the hope that the growth of the Indian economy will be better than that of global competitors. For the year, the Nifty 50 is up nearly 2.8%, while MSCI’s broadest index of Asia-Pacific shares outside Japan is down 19.7%.
Also improving investor sentiment is the fall in oil prices. India is the world’s third largest oil importer and benefits from a fall in prices as it reduces imported inflation.
Nifty, Bank Nifty Outlook for the next week:
Santosh Meena, Head of Research, Swastika Investmart Ltd.
“Indian Equity Market Benchmark Index nifty And the Sensex broke its two-week losing streak and continued its northward journey, although last week’s losses were minor and we were outperforming our global peers. The bullish momentum is likely to continue with global cues coming in support. Strong FII inflows and sharp fall in crude oil prices were the major contributing factors for the Indian markets. If inflows from FIIs remain supported, our market may soon move towards new highs. This week the market will be looking at macro numbers where we will have IIP and inflation numbers while US inflation numbers will play an important role.
Technically, the immediate and psychological hurdle in Nifty is 18000; Above this, we can expect a rally towards the 18350/18600 level. On the downside, the 20-DMA around 17700 will act as an immediate and strong support level while 17500 is a sacred support level.
Bank Nifty is outperforming and has moved above 40000 mark where 40800-41000 is an immediate and strong resistance zone; Above this, we can expect a rally towards the 41800-42000 area. On the downside, 40000-39500 will act as a strong demand zone.
If we look at the derivatives data, the short position of FIIs in index futures is still around 80%; Hence, the market will also get support from the short covering rally.”
Ajit Mishra, VP – Research, Religare Broking Ltd.
,Market Ended the long consolidation phase of 3 weeks and posted decent gains, tracking favorable signals. A number of factors, such as softening crude oil, continued foreign inflows and a rebound in US markets in the later part, helped propel the index higher. As a result, both the benchmark indices, Nifty and Sensex, closed week highs at 17,833 and 59,793 levels respectively. All sectors contributed to the move with banking and financials leading the growth. The broader indices also saw good traction and moved up in the range of 2-3.5%.
The eyes of the participants will be on the macroeconomic data. IIP, CPI and WPI for signals next week. In addition, the performance of global markets, especially the US, will remain on their radar.
We are now eyeing Nifty at 18,100 though volatility may continue amid mixed global cues. Since all sectors are now in line with the market trend, more attention should be paid to stock selection. We reiterate our preference for leaders like Banking, Financial, Auto and FMCG and suggest maintaining a selective approach to others. While the broader markets are also seeing good traction, it is prudent to stick with quality names and avoid fishing in the backyards.”
Vinod Nair, Head of Research at Geojit Financial Services
“Bulls dominated domestic markets as indices moved in line with developments in global markets. Global indices edged higher as investors raised the outlook for monetary policy following ultra-hawkish comments from the Fed Chair and a 75 bps rate hike by the ECB. While the energy crisis continued to haunt investors in Europe, renewed efforts by Chinese policymakers to bolster their economy bodes well for Chinese markets. In an effort to stabilize the fall in oil prices, OPEC + opted to cut output in view of faltering global growth outlook.Domestic investors topped the outlook for the week on a firming economic data, continued FII inflows and pick-up in corporate activity.
Market direction in the coming week will be determined by cues from global markets as well as key macroeconomic data points such as inflation and manufacturing and industrial production data to be released next week. Domestic retail inflation is expected to rise from 6.71% in July to 6.9% in August.
Amol Athawale, Deputy Vice President – Technical Research, Kotak Securities Ltd.
“Though the market made gains, Sensex hitting psychological 60,000 mark intra-day reflects investor confidence in the domestic economy. While the stock market may look a bit pricey, India’s long-term growth potential brings some stability at a time when the economic slowdown in major economies is beset by fears of a slowdown. On the exit of 18000, Nifty can climb up to the level of 18300 while support will be found at the level of 17800 and 17600. Below this Nifty will come to the level of 17400 or 17200. We need to focus more on midcap and smallcap stocks. In the coming week, we expect profit taking in financial stocks and outperforming technology stocks.”
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