INSUBCONTINENT EXCLUSIVE:
Mr Market had a rough week with the indices witnessing a steep fall
Indian bourses also became vulnerable to the US-China trade spat, which made global markets fearful and led to a massive fall from high of
Any depreciation in the yuan will put further pressure on the rupee, as the dollar keeps gaining strength amid the trade tussle
Globally, there is extreme weakness in macros and on the home front too, the political scenario is heating up in the last lap of the general
election, making market participants wary of taking any major positions.
The crack in the market had its effect on the political analysts
analysts had predicted a comfortable NDA win since the markets were rising upwards in full throttle
This proves the wavery mind of the political analysts, who dance with stock market volatility before the actual outcome
Reliance Industries led this massive fall this week
However, the main reason for the largecaps cracking is none other than the euphoria which had buoyed the rally in the first place
The fact that massive selling is happening in frontline counters means smart money is exiting for reasons best known to these
companies.
When the entire Street turns bullish on the biggies, that is time an investor should take a contrarian stance
season is on in full swing and the numbers are pouring in from all sectors
However, if you look at the results reported till now, in entirety, the pickup in corporate profits has been quite subdued this quarter
Nonetheless, certain stocks are trading at premium valuations
On the other hand, there are companies like Vedanta which reported a 5% degrowth in bottom line, ICICI Bank and BSE also reported a
double-digit de-growth in PAT, but they are fairly valued compared with their peers in spite of poor earnings.
Technical OutlookNifty50
slipped swiftly after making a failed attempt to make new highs
Consolidation near the double top formation eventually brought it to lower levels, thereby indicating that 11,000 can be a reasonable target
to expect before this month end
Sell-on-rally should be the stance to adopt for traders
Volatility is expected to increase, which also increases the possibility of stop losses getting hit faster, and therefore stop losses must
outcome and quarterly results, which one will dominate the market and swing the bourses in its favour
peak as the battle intensifies
Some important results to look out for the next week would be those of ITC, HDF, Honeywell and Hindalco
Investors must continue to keep a watchlist of quality companies for their portfolios, especially in the midcap space to buy if there is
sudden panic in the market
FMCG is one sector that is showing value currently and a systematic investment approach must be adopted on a basket of stocks.
Nifty closed
the week at 11,278, down 3.70 per cent.
