INSUBCONTINENT EXCLUSIVE:
Mr Market was largely directionless and indecisive during the week gone by, as it whipsawed its way awaiting triggers from local and global
Global macro-economic factors seem to have become stable now and they are offering a ray of hope post the gloomy October
Concerns over exorbitant oil prices have since died down, with crude tanking 30 per cent from its four-year high hit in
October.
Additionally, sliding crude prices have bolstered the rupee, which has gained 2.79 per cent against the dollar this month
The Indian rupee has been among the top three emerging market currencies in November
Given the reported numbers, almost all commercial papers have been successfully redeemed and NBFCs are able to raise fresh funds.
Despite
this, the stock market is still reeling under fear psychosis, which is offering a great opportunity to accumulate NBFC stocks, especially
those of top housing finance companies, which have reported excellent numbers
DHFL reported 52 per cent PAT growth for the quarter compared with that in the previous year despite a rise in provisions and liquidity
Revenues grew 33.8 per cent but NIMs contracted to 3.15 per cent against 3.44 per cent, which was due to the increased cost of funds mainly
due to the liquidity crises.
However, DHFL successfully sailed through the tide and investors must see this as a good opportunity to get
into leading housing finance companies.
Event of the weekRBI and the government are now aligned to lubricate the economy with liquidity
Setting up a committee to reconsider the PCA norms is a big positive for the sector, as this would enable a large part of the 11 banks to
come to the market and lend, which will further ease the liquidity concerns
Now it is up to the stock market when and how it will react to such positive ground-level realities
It does seem that the worse is behind us on this front.
Technical outlookNifty50 has turned lower after retracing about 40 per cent of the
entire fall, which indicates that strength of the rally was weak as Nifty could not even retrace 50 per cent of the entire fall
The price action should oscillate between the upper resistance at 10,750 and lower supports at 10,350 and 10,000
The downward drift might continue for some more time till Nifty50 reaches its first support levels
Traders are advised to stay on the sidelines, or at best, trade in puts as the market is prone to oscillations, causing whipsaw losses to
traders.
Expectations for the weekThe market is expected to remain rangebound in the coming week, less with downward bias wherein open
This shows that market participants are unwilling to commit at this point in time
The next trigger is expected to come in the second week of December with the state election outcome, which might give some direction to the
Till that time, volatility and whipsaws would persist
Traders ideally should stay away, and investors should remain on the sidelines and wait for market to correct.
Nifty ended the week 0.69 per
