INSUBCONTINENT EXCLUSIVE:
Nifty50 continued its downward spell in tandem with global markets during week gone by but showed good resilience too.
Gloomy forecasts are
running high on Streets as trade war tensions and geopolitical posturing seems to have become overriding concerns for world
there were serious liquidity issues post infamous ILFS saga.
Quarterly results for Q3, which will start coming out from next week, are
Nifty50 companies are expected to report a growth of mere 6-7 per cent compared with 13 per cent last year
Companies in auto, cement, oil gas, pharma and telecom sectors are expected to post disappointing numbers whereas private banks, IT,
insurance and FMCG firms are expected to maintain their growth trajectories.
A look at global news suggests everything seems to be going
growth for US of just 1.5 per cent in 2020 against 2.5 per cent in 2019, which indicates that a significant slowdown in economy is around
corner, which will further impact global market growth
It is like US sneezes and world catches a cold
But, hopefully, India is expected to remain strong given young demography and resilient economy; yet, stock market may remain subdued till
general elections.
Events of weekThe government has at last moved ahead with merger of Bank of Baroda, Dena Bank and Vijaya Bank, and
combined entity will be third largest bank in country.
However, it would be unwise to arrive at an investment decision until a clear picture
about merged entity becomes available.
Investors would fare better in private sector banks rather than betting on dark horse
Auto sales numbers were out this week with majority of manufacturers reporting flat growth or de-growth, which was somewhat in line with
market expectations except for Eicher Motors, which posted a 13 per cent de-growth YoY.
Most of weakness was discounted already; Nifty Auto
index fell a massive 3.05 per cent on January 2 followed by a 1.52 per cent fall on next day, with Eicher Motors being top loser, down
around 13 per cent in two days.
Technical outlookThe market is expected to oscillate in a range with 10,950 on upper side and 10,500 on
lower side and further downside support for Nifty50 at 10,300
Nifty movement is expected to be rangebound, which will prove to be a nightmare for traders
Stock-specific moves will be highlights of coming weeks, but Nifty50 is expected to remain rangebound.
Traders can take contra bets on
stocks that rise significantly due to quarterly numbers and at same time buy stocks that have been beaten down due disappointing
numbers.
Expectations for coming weekThe market will shift its focus to corporate numbers, which will keep off global gloom for time being
Since Q3 numbers are widely predictable and very few surprises are to be expected, market is unlikely to overreact
However, stock-specific action may be seen on some counters
IT stocks are expected to drift lower, as trigger for rupee devaluation is already over, and there is every possibility that rupee will
appreciate from here on given high real interest rates prevailing in economy, which will attract dollar inflows from FPIs.
One should book
profits on IT counter on every rise and not make any fresh investment at current levels
No sharp correction is expected due to results season, except due to impact of global events
Investors are advised to stay away currently and begin buying selectively after earnings season.
Nifty50 ended week 1.22 per cent down at
