Weekly Market Report by Mr. Abnish Kumar Sudhanshu, Director & Research Head, Amrapali Aadya Trading & Investments
Week began with landslide victory of Narendra Modi led BJP Government in Uttar Pradesh election, which showcase the Modi lahar was remained intact. BJP victory with majority fueled the rally in benchmark indices on account of expectation of several stalled projects and reforms getting their way for clearance. Moving ahead in the week, despite of US Fed increase in interest rate by 25 basis points, market again zoomed following strength in rupee against basket of currency. Sweeping victory in country's largest state Uttar Pradesh has provided strength to rupee on the back of stable government along with hope of more and more bold reforms coming in future without any disturbance in the Parliament. Also RBI neutral stance on policy rates has signaled rupee to trade higher against the dollar. Further, FII who had turned to net seller in the Indian debt as well as equity markets post demonetization, have been taking return flight after seeing the current India scenario. Moreover on the weekly basis, benchmark indices closed on the higher side, Nifty touching the new high during the week.
On the larger side coming week could be not have much of action for the benchmark indices. However, further clearance to the GST rollout could give some clue to the market. We can expect news related to reforms in Infrastructure, healthcare and banking to keep proving road to the already surging indices. Off late, FIIs have become net buyer in the market so it would be interesting to watch sustainable buying pattern, which can pour the liquidity in the market, hence generating positive sentiments. Overall, after NIFTY touching all-time high, we are likely to consolidation in the absence of any crucial event. Hence, we foresee benchmark indices to trade on the flattish note. We advise to look to enter in to the infrastructure and healthcare sectors for short to medium term.
Well supported by global and domestic cues such as Fed moderate stance in US fund rate and victory for BJP in state poll and GST council clear the draft bill. Renewed buying interest was evident on Nifty reaching beyond 9100 which was for a long seen as a major resistance point. Further liquidity eases after FII back into the market on BJP's win in state elections. With higher flow of money after favorable domestic trigger and supportive global cues after Fed Reserve less hawkish stance on US fund rate base of Nifty is switch to 9000 where it will see enough support. Market may consolidate here for some time with no more near term trigger to play on and some profit booking is very likely at this level as technical indicator such as RSI reaching to an oversold zone.