Weekly Markets Outlook - Aug 28, 2020 - Mr. Deepak Jasani, Head Retail Research, HDFC Securities

Indian markets strengthened during the week as investors cheered optimism about a potential treatment for coronavirus and pick up in business activity. Above average rainfall and upbeat global cues on trade talks among U.S. and Chinese officials following weeks of escalating tensions boosted investor sentiments. The Nifty closed the week higher by 2.43% up for the second consecutive week. Markets ended higher on all 5 trading days.

Broader markets mildly outperformed the benchmark indices. NSE Midcap and Smallcap indices gained by 2.6% and 3.7% respectively. Market breadth remained in favour of the bulls with 6 shares advancing for every 5 declining shares.

Average cash market turnover on NSE was up on account of monthly derivatives expiry in this week. Among the sectoral indices Bank index rallied over 10% followed by the Financial Service Index up by ~6.4% and Media index up by ~5.9%. Among the losers FMCG and PSE were down by 1.1%.

Among Nifty 100 stocks Indusind Bank gained ~32%. Tata Motors rallied ~18% as the management announced plans of near zero debt in 3 years. Axis Bank (+16%), SBI (+13.6%) and Shriram Transport (+12.6%) were the other major gainers. On the downside NTPC, Shree Cement, Torrent Pharma and Power Grid were the major losers falling between 3-4.5%.

Mid and smallcaps are correcting / consolidating as expected. Some profit taking in these is advisable. Within largecaps, banks have been doing well for the past 5-6 sessions and we could soon see a shift in attention to some other sector. Nifty continues to do well gaining ground gradually without raising too many eyebrows.

Source : Equity Bulls

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