INSUBCONTINENT EXCLUSIVE:
Markets whipsawed its way through the week with good profit booking on Thursday due to monthly F-O expiry
Street participation and volumes were far lower than the previous few weeks, which aptly captured the mood of the holiday season, both
locally and internationally
But this narrow participation was visible with broader indices trying to play catch up, even though, buying seems to be eluding the broader
market, especially smallcaps and midcaps.
Nifty has returned 12-13 per cent for the year, but smallcaps and midcaps have delivered negative
returns, disappointing the investing community at large, especially Indian retail investors, who have heavy exposure to such stocks
During the past few weeks/months, the government had genuinely tried to lubricate the economy, the results of which can be expected only in
the first quarter of next year
The market is likely to move sideways with an upward bias amid hopes of a revival package in the Budget.
Calendar 2019 witnessed one of the
most hated rallies, with only a few pockets of the market creating wealth while a large spectrum of stocks still languishing mainly due to
the somber economic scenario captured in the lowest GDP growth in last six years
But such times have occurred in the past in 2015-16 when the indices had fallen over 20% even when the economy grew nearly 8%.
The logical
conclusion of this divergence is the hopeful nature of investors, who are investing when the economy is at the bottom, so they can smartly
reap the benefits when times change
Considering the current market rally, the most likely scenario seems to be a turn in the economy a few quarters down the line, which will
justify high valuations later.
Event of the WeekExpectations of a truce in trade tensions with the US-China trade deal and other positive
global factors should have led to lower prices for precious metals, but the opposite seems to be happening
In the past few weeks, gold and silver prices have taken a U-turn and rallied handsomely
It could be a forewarning for equities as well, which are expected to experience profit booking, especially in the developed
economies.
Technical OutlookNifty50 is trending higher
However, it may face resistance at 12,300 level wherein profit booking may emerge
On the weekly chart, Nifty50 has formed a Doji pattern, indicating confusion
Many sectors are not replicating the buoyancy in Nifty50, and hence, the market will only see stock-specific movement going forward
In case Nifty50 decisively trades below 12,100 level, then a bout of heavy profit booking can be expected till 11,800 level
Traders may selectively take long positions with tight stop loss at weekly lows.
Nifty50 is trending higher
Expectations for the WeekMarkets are expected to remain volatile with a lot more dilly-dallying next week as the year begins with
contrasting forecasts from market pundits
There will be a tint of optimism in the New Year, as the investing community starts preparing for a stellar Budget
But it will be little early to tell how far that can help make people actually tap their bank accounts to start buying shares
Till then, investors should look for quality stocks in the metals, pharmaceuticals, consumer durables and FMCG sectors, which are likely to
experience good traction in the New Year given their muted performance this year
One should not compromise on quality while adding stocks to a portfolio
