Bulls may feel tizzy at higher lev­els

Nifty may trade be­tween 10740 and 11120 this week; sup­port seen at 10850-10740

DNA (Daily News & Analysis) Mumbai Edition - - FRONT PAGE -

IYOGESH VINOD ME­HTA

ndian bench­mark in­dices rose for the third con­sec­u­tive week and gained 0.46% to close at 10943. But the broader mar­ket un­der­per­formed as the mid and small cap in­dices lost 2.31% and 3.38% re­spec­tively.

Sec­tor-wise, ex­cept Me­dia, In­for­ma­tion Tech­nol­ogy (IT), Pri­vate Banks and En­ergy, all the other ones ended neg­a­tive led by In­fra, Metal and Realty. For­eign in­sti­tu­tional in­vestors bought equities worth Rs 2,570 crore and the do­mes­tic in­sti­tu­tional in­vestors were mar­ginal buy­ers.

In the last week high­lights, the US mar­kets cheered the Fed­eral Re­serve com­men­tary and later re­acted to the US Pres­i­dent Don­ald Trump’s state­ment on trade ten­sions with China. At home, the Re­serve Bank of In­dia re­duced rates 25 ba­sis points (bps) and changed its stance to neu­tral from cal­i­brated tight­en­ing, as per my ex­pec­ta­tion.

Jan­uary sales of auto com­pa­nies were in line with ex­pec­ta­tions, ex­cept for Mahin­dra and Mahin­dra (M&M). Zee En­ter­tain­ment, Bharti In­fratel, Ba­jaj Auto gained be­tween 9% and 12%. Tata Mo­tors lost 17% on its re­sult an­nounce­ment in which JLR im­paired as­sets in use by Rs 28,000 crore. Anil Ambani group com­pa­nies lost around 30-50% due to pledged share sell­ing by two lenders.

In this week global events, Ja­pan De­cem­ber quar­ter GDP and China De­cem­ber Trade bal­ance are ex­pected on Wed­nes­day. The euro re­gion flash GDP will be re­leased on Thurs­day. In­dia’s De­cem­ber month In­dus­trial Pro­duc­tion and CPI will be out on Tues­day while the WPI date is ex­pected on Thurs­day. Jan­uary month Trade Bal­ance data will be re­leased on Fri­day.

In the on­go­ing earn­ings sea­son, Amara Raja Bat­ter­ies, Eicher Mo­tors, Mother­son Sumi, Sun Pharma, Hin­dalco, Coal In­dia, Bharat Forge, Voltas, Ashok Ley­land, Page In­dus­tries, Mcdow­ell Hold­ings, Glen­mark Pharma will an­nounce their third quar­ter re­sults.

Last week, the broader Nifty man­aged to scale higher close on all the days till Thurs­day. The 50-share gauge made a high of 11118, but eroded all the gains on Fri­day as Tata Mo­tors re­sults dis­ap­pointed. Also, re­ac­tion to reignited trade war ten­sions with China and fear of a slow­down in global economies af­fected the in­dex. Nifty traded in the range of 11118-10814. On the weekly scale, it formed a High Wave can­dle with the long up­per shadow, which in­di­cates sell­ing pres­sure at higher lev­els. This week En­ergy, IT and Met­als stocks could be in fo­cus. Nifty sup­ports are at 10850-10780-10740 while re­sis­tance at 1108011120-11180. The prob­a­ble trad­ing range for Nifty could be 10740 and 11120.

The writer is Vp-re­tail re­search, Moti­lal Oswal

Fi­nan­cial Se­cu­ri­ties

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