Investors will look to global cues for direction

Market benchmarks Nifty and Sensex closed 0.6 per cent lower on weekly basis with some recovery from lower levels coming on Friday.  

The Sensex opened over 70 points up at 37,383 after Thursday’s holiday but due weak domestic cues touched an intra-day low of 36,974. However, there was a pullback from the lows and the benchmark index closed 0.10 per cent or 38.80 points up at 37,350.33. The Nifty-50 index closed at 11,047.80 up 0.17 per cent or 18.40 points. Buying by DIIs of equities worth Rs 1,058.28 crore seem to have led to flat close on Friday as FPIs were net sellers by  Rs 1,339.27 crore.

Sectoral indices on BSE closed mixed, the gainers included BSE Bankex (0.75 per cent), Auto (1.14 per cent), Power (1.08 per cent) and Telecom (0.50 per cent). The laggards were BSE IT (-0.78 per cent), Consumer Durables (-0.60 per cent) and Metal(-0.51 per cent).  

For the week, though the benchmark indices closed in the red, some index constituents shined. RIL gained 15.8 per cent during the week closing at Rs 1,277.40 on the BSE, other big gainers were Hero MotoCorp (6.58 per cent), Power Grid Corporation (6.32 per cent), Bajaj Auto (5.69 per cent) and Vedanta (5.60 per cent.).

Technical View
Dharmesh Shah, head – Technical, ICICI Direct said, “Equity benchmarks on weekly basis traded in a range and closed marginal down by 0.6 per cent. Broader markets performed in tandem with benchmarks as the Nifty Midcap and Small cap indices close marginally down by 0.6 per cent and 0.8 per cent respectively. Index on expected lines managed to hold previous week low (10782) and despite global volatility indicating abating downward momentum and presence of strong support around 10,800 levels.” “In the coming week, we expect the index to maintain positive bias and move above last two weeks high (11,181) and extend the up move towards 11,300 levels in the coming weeks,” Shah said.

Market View
Mustafa Nadeem, CEO , Epic Research said, “Markets were able to hold on lower levels on the back of positive global cues as Trump eased down and postponed the tariffs. The better than expected retail sales also shrugged off global slowdown pressure. Domestic cues noticed WPI inflation dropping to 1.08 per cent which further posed concerns over slowdown.”

“Earnings cues have not been stimulating for the market. While we have seen a drop in companies missing estimates, but it has been increasing since Q2 FY18. While companies beating the estimate has seen a sharp drop from almost 40 per cent to now a mere 8 per cent. Moreover, it is now more than 50 per cent of NSE50 components that have missed estimates due to slowdown.”

Ajit Mishra, Vice-President, Research, Religare Broking said, “The earnings season has ended and there are no fresh key domestic triggers. Hence, the focus will now shift to earnings recovery and investors will also take cues from global developments.”