Markets looking indecisive in short term

Benchmark indices managed to close in the green despite heavy selling by the foreign portfolio investors on Friday due to buying support provided by the domestic institutional investors.

The Sensex closed at 37118, higher by 99.90 points or 0.27 per cent while the broader Nifty-50 closed higher by 17 points at 10997 in a volatile trading session. The Nifty witnessed a 150 points recovery from the lows of 10848 while the Sensex recovered nearly 500 points from the lows of 36607.

The broader markets were mixed with the BSE Mid-Cap up 0.15 per cent while the Small-Cap fell 0.44 per cent.

The FPI were net sellers by Rs 2,888.06 crore as per the provisional data, the domestic institutions were net buyers by Rs 2812.66 crore.

Technical View
Rohit Singre, Senior Technical Analyst, LKP Securities said, "The Nifty opened marginally lower but managed to gain in second half of trade and closed at 10997 with weekly loss of 2.5 per cent forming bearish candle on weekly chart and doji candle on daily chart suggesting indecision in the markets. Now Index has formed strong support near 10930-10860 zone and resistance is coming near 11070-11140 zone.

Shrikant Chouhan, Head of Technical Research, Kotak Securities said, "Despite weakness in US and Asian markets, our markets managed to closed marginally higher compared to previous close. On weekly basis, this was a fifth consecutive weekly negative close, where Index closed 2.52 per cent lower."

Market View
Ajit Mishra, Vice President — Research, Religare Broking said, "Markets settled almost flat amid volatility, taking a breather after the recent fall. We're seeing possibility of rebound in the Nifty-50 but sustainability at the higher levels seems difficult. "

Sunil Tirumalai, Head of Research, Emkay Global Financial Services said, "The backdrop of a slowing economy and the low probability of any 'big-bang' stimulus events does not bode well for overall growth and earnings outlook. The Nifty consensus earnings per share (EPS) has been seeing cuts, with the downgrade momentum spreading across stocks.

The Nifty company results so far (two-thirds of the index weight) indicate Q1FY20 EPS growth of only 5 per cent YoY. This contrasts with the steep 20-30 per cent growth rates built into consensus expectations for FY20/FY21. Despite the recent correction, we see Nifty valuations not factoring in further earnings risks.