INSUBCONTINENT EXCLUSIVE:
The domestic equity market opened the week on a good note with the frontline indices showing a keen interest in reaching higher levels, but
smallcap and midcap stocks showed divergence in performance and underperformed
With a constant depreciation in the rupee, RBI finally stepped in on Monday to calm the currency market
This indicates that the rupee should most likely stay in the 67-68 a dollar range, which will effectively keep inflation in check.
Markets
are extremely unpredictable and pleasant surprises happen when we least expect it
ICICI Bank was one stock, which gained 7 per cent without any extraordinary numbers
In fact, the bank reported an increase in net NPA from 4.20 per cent in Q417 to 4.77 per cent in Q418, which was disappointing
On the other hand Jubilant Foodworks delivered superlative numbers, but the stock slipped 3.5 per cent for the week
70 per cent and 38 per cent bottom line growth, respectively
However, with higher US bond yields, peaking earnings cycle and spike in currency market volatility, the Indian market would be seeing
negative commentaries in the medium term.
Event of the WeekThe Burman-Munjals have prima facie cracked the Fortis deal, but other suitors
They are likely to up their ante and bid aggressively over and above Rs 176 a share
significant stake (77 per cent) in Flipkart should keep valuations of other offline retailers at higher levels, as they could be the next
India still controls 88 per cent of retail trade offline.
Technical OutlookNifty50 is marching upward with lesser velocity
The upward rally has lasted nearly 32 days and, statistically, a rally over these many days should be a turning point, which, hopefully,
would emerging in the coming week.
Other indices are showing divergence, which indicates that the Nifty50 is the lone runner, as other
sectoral indices are still under pressure
A break of the upward sloping trend line will confirm the profit booking phase of the market
Traders should wait for a break of trend line to initiate short trade with stop losses at market highs.
Expectations for the weekAlthough
everyone is looking out for the outcome of Karnataka election, which might have insignificant effect on the market, the real threat may
emerge from the Iran-Israel conflict, which can escalate into a war-like situation after the US withdrawal from the nuclear deal
High crude prices and a strong dollar are bad omen for the bulls, and therefore, the market should remain under pressure given the
Earnings numbers have mostly been discounted for, but valuations are quite rich at this point.
Investors should partly book profits and stay
on the sidelines for the market to correct
Nifty50 closed for the week at 10,806, up 1.77 per cent.
