Jimeet Modi of Samco Group also advised investors to remain cautious and partly book profits.
After
six consecutive weeks of gains, bears made a comeback on Dalal Street in
the week that ended on August 7. Both BSE Sensex and Nifty50 fell over a
percent, dragged by banking & financials and oil & gas stocks
but technology, pharma and metals stocks provided a cushion.
Weak global cues amid fear of
US-China tensions, RBI'S warning of a potential rise in NPAs in FY21 and mixed
earnings reports weighed on sentiment.
The profit-booking was
warranted as the benchmark indices had rallied more than 12 percent in six
weeks to hit more than a four-month high.
Going ahead, the market may see
further consolidation with a negative bias as most of the positive news has
already been discounted. With major corporate earnings out of the way, the
street will now focus on RBI policy which could set the path for banking sector
as moratorium will end in August, experts feel. Global cues will also be
watched closely by the street.
After
six consecutive weeks of gains, bears made a comeback on Dalal Street in
the week that ended on August 7. Both BSE Sensex and Nifty50 fell over a
percent, dragged by banking & financials and oil & gas stocks
but technology, pharma and metals stocks provided a cushion.
Weak global cues amid fear of
US-China tensions, RBI'S warning of a potential rise in NPAs in FY21 and mixed
earnings reports weighed on sentiment.
The profit-booking was
warranted as the benchmark indices had rallied more than 12 percent in six
weeks to hit more than a four-month high.
Going ahead, the market may see
further consolidation with a negative bias as most of the positive news has
already been discounted. With major corporate earnings out of the way, the
street will now focus on RBI policy which could set the path for banking sector
as moratorium will end in August, experts feel. Global cues will also be
watched closely by the street.
"The
recent high inflation readings have made the rate cut call a close one,
however, we continue to see 25 bps of further easing in August followed by a
pause. Besides policy rate cut, which in this environment may not be
incrementally as effective, we expect the RBI would continue to provide the
policy response required to address the demand shock and financial market
dislocations through other liquidity and regulatory measures," Upasna
Bhardwaj, Senior Economist at Kotak Mahindra Bank said.
RBI may look to widen the
policy corridor to 75bps by easing reverse repo by a higher quantum, she added.
More than 300 companies will
declare their June quarter earnings in the coming week which majorly included
midcap and smallcap names.
Lupin, Mahindra & Mahindra,
Cipla, HPCL, Dhanlaxmi Bank, Exide Industries, Kansai Nerolac Paints, KPIT
Technologies, Astral Poly Technik, Dixon Technologies, Godrej Consumer
Products, Gujarat Gas, Narayana Hrudayalaya, SPARC, Tata Consumer Products,
Varun Beverages, Apollo Tyres, Cadila Healthcare, Canara Bank, DLF, Godrej
Properties, Inox Leisure, JK Lakshmi Cement, Jyothy Labs, Strides Pharma
Science, Adani Enterprises, Adani Power, BASF India, Blue Star, Gujarat State
Petronet, Indian Hotels, JK Tyre, Pidilite Industries, Torrent Power, Alkem
Laboratories, Amara Raja Batteries, Balrampur Chini Mills, Bata India, Emami,
Finolex Industries, Mahanagar Gas, Siemens, Sobha, Affle (India), DCB Bank,
Divis Labs etc will report quarterly results next week.
Auto
Sales Impact
On Monday, auto stocks will
react to July sales performance reported over the weekend. Sales announced so far by Maruti Suzuki and Mahindra & Mahindra were ahead of
analysts' estimates.
Sales by Eicher Motors (Royal
Enfield down 26 percent YoY at 40,334 units, and VECV down 46 percent YoY at
2,184) and Hero Motocorp (down 4 percent YoY at 5.14 lakh units) were more or
less in line with analysts' estimates.
Coronavirus
India's COVID-19 tally of cases
went past 17 lakh on Saturday evening, of which 11.1 lakh were reported in July
alone thus accounting for about 65.48 percent of the total instances of the
viral infection reported in the country so far. Experts feel we still may not
be at the peak just yet.
Majority of experts globally
feel the vaccine is expected to take more time for finalisation, though report
suggested that top three-four companies are in phase 3 where the vaccine is
given to thousands of patients.
Meanwhile, given the rising
cases, especially in the US, the global recovery is expected to take longer
than anticipated, though global central banks are pumping in trillions of
dollars into economies to get back from the crisis, experts feel.
Mindspace
REIT Listing
Mindspace Business Parks REIT
successfully closed its Rs 4,500-crore public issue with nearly 13 times
subscription on July 29. The price band was Rs 274-275 per share.
The listing of units is likely
to take place in the later part of next week and the final issue price is
expected to be at Rs 275 per share.
Technical
View
The Nifty50 shed 28.70 points
on Friday and lost 1 percent for the week to close at 11,073.50. It formed a
bearish candle on daily as well as weekly charts.
Experts feel psychological
11,000 mark is expected to be immediate crucial support, followed by 200-DMA
around 10,870 levels. According to them, if the index breaks 200-DMA in the
coming week, there could be further selling pressure in the coming weeks and
more or less the month of August is expected to be a rangebound one.
"We reiterate a cautious
view on the market and suggest keeping the leveraged positions hedged. Nifty
couldn't surpass the hurdle at 11,350 seen last week while the downside also
remained capped. Going ahead, we feel it may continue to hover within
10,950-11,350 zone and either side break would trigger the further directional
move. Meanwhile, traders should focus on stock selection and managing overnight
risk," Ajit Mishra, VP Research at Religare Broking told Moneycontrol.
F&O
Cues
The weekly options data
indicates that the maximum open interest on the Put side is placed at 11,000
strike, which holds the open interest of 20.6 lakh contracts and also likely to
act as a major support in the coming week. The maximum open interest on the
Call side is placed at 11,500 strike followed by 11,200 and 11,300 strike,
which is expected to be resistance points for the Nifty.
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