Stock Market

Will Nifty cross the 11,000 mark before elections It’s a possibility

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The domestic stock market was in for a rollercoaster ride during the week gone by with a disappointing first half, while sentiment improved after the US Fed decided not to raise interest rates, indicating a pause for a reasonable period. The Fed’s decision had a cascading effect on the Indian indices.

This will be good for equity markets in the medium term, but nonetheless, concerns of a slowdown across the world will have an over-arching effect to keep the market in a non-trending (corrective) phase.

The latest economic numbers from the Indian government indicate that India’s economy expanded at a much faster rate than initially estimated in the last two financial years.

This boosts optimism in the market.

However, given the drastic drop in the number of IPOs and a warm response from retail investors to the recently-concluded IPO of Chalet Hotels, it is likely that the indices are nearing a bottom, which is expected sometime before elections. In quarterly earnings, there is strong resistance at the support levels, as the market is trying hard to go down but is unable to.

The earnings are proof enough: – Vinati Organics delivered spectacular numbers, but still there was no significant impact on its share price, which has an upper cap.

At the same time, Thirumalai Chemicals reported a bad quarter, but the stock bounced back. This indicates the confused state of the market on the upside, but unwillingness to go lower at the same time. Event of the WeekThe much-awaited Interim Budget was a populist one with a focus on farmers and the salaried middle class.

It is expected to give a good boost to the consumption and affordable housing.

Fiscal deficit target of 3.4 per cent is more or less in line, it will have no drastic implications on the economy. Markets reacted positively intraday immediately post Budget.

However, they will eventually lose steam and glide lower. Technical OutlookNifty50 made a V-shaped recovery last week, indicating that the market is in no mood to go down for now and has taken strong support at 10,605.

Such non-trending phases of the indices are considered the worst for traders.

The bulls are unwilling to commit and at the same time lower prices are unsustainable.

The market is currently in a confused state and is waiting for a major trigger to go higher. Expectations for the WeekSince the Interim Budget is over, which has time and again proven to be a non-event, all eyes will be on the political battlefield.

The sixth bi-monthly monetary policy next week is expected to bring down interest rates by 0.25 per cent to boost spending.

However, the market might be in for a positive surprise if the MPC reduces rates by 0.50 per cent, which will take Nifty to test the 11,000 level after which profit booking will emerge at higher levels. Moreover, share buybacks will also act as a positive to boost market sentiment, which will improve liquidity in the system.

Additionally, the central bank’s move to remove BOI, Bank of Maharashtra and Oriental Bank from the PCA framework sends out a positive signal of recovery in the banking sector. The Nifty50 closed the week 1 per cent higher at 10,893.




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Category: Stock Market


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