Stock Market

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.
In India too, micro concerns are emerging NBFCs and HFCs are expected to report a steep 50 per cent drop in top line (interest income) as there were serious liquidity issues post infamous ILFS saga.Quarterly results for Q3, which will start coming out from next week, are likely to be moderate.
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 wrong with US markets, be it US Fed tussle with President Donald Trump or slowdown in economy at ground level.Moodys has forecast a flat 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 10,727.





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