After a lacklustre week ended Friday, markets may be headed for further consolidation
Stock specific moves to be in focus, as experts see investors craving for fresh triggers for the market to re-rate
The market snapped its two-week rally on Friday and fell over a percent led by weakness in global markets. Fear of higher US inflation and interest rate hike caused the US markets to drag the sentiments across Asia and India. The increasing commodity prices, in the holiday shortened week ended May 14. But early signs of peaking in COVID-19 cases limited downside.
After a rangebound trade in the truncated week ended May 14, the BSE Sensex declined 473 points to close at 48,732, and the Nifty50 fell 145 points to 14,677 on Friday after rising around 3% in previous two consecutive weeks.
Benchmarks were dragged by banking & financials, IT and metals stocks. Also better CPI, IIP data, in-line earnings, failed to provide support to the Indian market.
In the month of May till now FIIs have sold equities worth Rs 8,713.25 crore, while DIIs bought equities worth Rs 891.20 crore.
As per PTI, among the top-10 most valued companies, only Reliance Industries Limited and State Bank of India managed to book gains on a weekly basis. Eight of the top-10 most valued companies witnessed a combined erosion of Rs 1,13,074.57 crore in market valuation last week.
The valuation of Tata Consultancy Services tumbled Rs 30,054.79 crore to Rs 11,28,488 crore. Infosys witnessed an erosion of Rs 15,168 crore, taking its market worth to Rs 5,61,060 crore.
In contrast, Reliance Industries added Rs 3,518.62 crore to take its valuation to Rs 12,27,855.04 crore and State Bank of India added Rs 2,052.66 crore to help its m-cap reach Rs 3,21,732 crore.
Going forward, markets are going to focus on earnings. The earnings season so far has been in-line with street’s expectations, but has failed to lift the morose sentiment among investors caused by the pandemic. Any indications of commodity prices leading to inflationary pressures. The WPI data for April will be out on Monday as well.
Here’s how experts see markets trading in the coming week
Vinod Nair, Head of Research at Geojit Financial Services
In the coming week, the market is expected to have a stock-specific rally based on the forthcoming results. The effectiveness of vaccination in curbing COVID spread will be a key in determining the long-term trend in the market.
Manish Shah, Founder, Niftytriggers.com
The prolonged sideways action in Nifty continues. Nifty needs to break above 15000-15050 for the index to see any further rally to continue. We have been of the opinion that there is a substantial barrier to Nifty at 15000-15050. The contraction in volatility is palpable and sooner or later the rubber band will snap and a smooth transition will then happen.
For the coming week a break above 14850 would mean that Nifty will again attempt to move above 15000-15050 and if break out does manifest Nifty should rally towards 15450-15500. Any decline to 14450-14500 should be used to buy in to the market with a stop below 14200. The potential for a big rally above 15000-15050 is huge considering the pattern in play.