Tiding Volatility Patiently Could Lead To Higher Returns

Share Market Weekly

Our Analysis

This week market witnessed a bidirectional run where bears dominated most of the trading sessions. Lofty market valuations, substandard monsoon expectations, NBFCs liquidity crisis remained some serious botts' dots for the market. However, a series of meetings by Prime Minister and Finance Minister to draw a road map for 100 days agenda and budget, provided confidence to the market.

The confidence was further boosted by the macros. A relief rally in the global markets on account of the dovish stance by federal reserve turned on the domestic market sentiments. On the back of all these factors, on the weekly expiry day markets spiked by 488 points.

Technically, the Nifty was seen taking the support at 50 EMA through-out the week. A Doji created on Tuesday followed by flat close indicates a short spanned halt in the downfall. Nifty seems to be retraced above 38.02 percent from the bottom on Thursday but the same was not supported by the volumes. So, bide your time till the next retracement point of 61.8 percent which is hanging at 11940, the wait will cater you with newer highs.

As we are entering in the monthly expiry week ahead expect prolonged volatility. With no major event on the domestic front, the budget remains the key trigger for the market. Till then its supposed to stay away from the debt-ridden stocks which are recently driven by the operators and traders. Jet Airways tops the list however there are many following the cue Reliance infra, reliance capital, Jain irrigation are some of them. Being a smart investor, keep your stance cautiously optimistic till upcoming budget. Being a major economic event it can shed some light on markets direction ahead.

This Weeks Market Highlights:

Benchmark Indices:

1) On Monday, The Indian share market in the last hour of trade accelerated the pace of decline with benchmark indices closing with a drop of more than 1 percent. the bloodshed leading from metal, pharma & bank spread across all sectors. The selling also followed in the broader market with Mid & Small-cap down more than 1.20 percent. In closing, the Sensex shrink by 491.28 points at 38,960.79, while Nifty declined by 148.40 points at 11,674.90.

2) On Tuesday, The last hour of trading in d-street was highly volatile with frontline indices fluctuating between gains & losses. However, the market turned around and given a positive closing with 85.55 points Sensex gains whereas Nifty grew by 19.30 points at 11,691.50.

3) On Wednesday, In the last hour of trade, benchmark indices witnessed a see-saw trade with the rise in volatility. The selling pressure remained through-out the day after a gap up opening. However, the closing of frontline indices was flat to positive with Sensex up by 66.40 points at 39112.74, while Nifty ended flat at 11691.50.

4) On Thursday, the Indian share market had witnessed a spectacular run in today's trade, with buying emerged across the market. The Sensex rallied 488.89 points or 1.25 percent to 39,601.63 and the Nifty climbed 140.30 points or 1.20 percent to 11,831.80. Among sector, All the eleven sectoral gauges compiled by NSE advanced, led by the Nifty Pharma Index 3.06 percent gains. Parallel to benchmark indices the broader market also closed with the gains of more than 1.50 percent.

5) On Friday, Indian equity benchmarks opened lower.

Broader Index & Global Market:

- Globally, the US markets were seen on the rise as optimism on future rate cuts by the Fed overshadowed geopolitical tensions. The kickstart in the US-chain trade talk also provides positive sentiment throughout the globe. however, the US-Iran saga over the oil tank attack is likely to be taking the negative turn and will be creating some buzz in the crude price, also the decrease in us crude inventories resulted in the rally in Brent crude

- In the broader market, The Mid & Small Cap was traded mixed with a stock specific action continued. Going ahead, the investor should focus on investing in the quality mid-cap business for the time horizon of 18-24 months.

Movers & Shakers

Shares of HEXAWARE surged nearly 8 percent after Japanese brokerage Nomura upgraded to the company to 'neutral' from 'reduce' after the acquisition of Mobiquity and also increased the target price to Rs 340 from Rs 325 earlier.

Shares of JAIN IRRIGATION dropped more than 30 percent in a week after India Ratings and Research said it had downgraded Jain Irrigation Systems' Long-Term Issuer Rating to BBB from A-. It has currently being placed on 'Rating Watch Negative' (RWN).

Key Market Drivers

  • Oil grew on tensions of Middle East tanker attacks.
  • India imposes higher customs duty in 28 US products retaliating the US.
  • Exports up by 3.93% in May; the trade deficit had widened to $15.36 bn.
  • Fitch cuts the India growth forecast to 6.6% for FY20
  • Hiring activity records 11% rise in May: Report
  • The Reserve Bank of India said it will infuse Rs 12,500 crore of liquidity into the system through purchase of government bonds.
  • A Reserve Bank of India (RBI) expert committee on micro, small and medium enterprises (MSMEs) has recommended doubling the cap on collateral-free loans to Rs 20 lakh from the current Rs 10 lakh.
  • Federal Reserve holds the rate cut, may go for cuts later this year.

Event Watch

International:

  • Japan PPI Services YoY
  • US GDP Annualized QoQ
  • China Industrial Profits YoY
  • UK GDP YoY

Domestic:

  • Crude price
  • INR Price
  • India Fiscal Deficit
  • Monsoon progress

Stocks To Watch

ESCORT & HAVELLS On Upside while LUPIN & TECHM on Downside.

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ABOUT AUTHOR

Niveza Editorial Desk : We are a team of stock market nerds trying to stay ahead of the herd. We spend our grey cells everyday to a pave a smooth road for our clients in the shaky world of stock market. While tracking the mood swings of the market we bring our clients the most rewarding deals.

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