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Below is the Views On coming week market overview By Mr. Mustafa Nadeem, CEO, Epic Research
Nifty gaps up for the second consecutive day to close above 12000 as the certainty of US-China Trade war solution along with a clear mandate in Britain elections give investors the opportunity to take some risk. The leaders such as Banks and financial outperformed the broader indices while Auto and Metal after a profit booking sessions were seen gaining traction.
The Brexit has been lagging on investors' sentiment for more than a year and it was one of the factors that kept global markets uncertain, and now, since there is a certainty with a clear mandate; one concern is over. Secondly, Global equity markets that are stalling near all-time highs, specifically, US indices, needed a rather definite push which is seen from this election results and on the top of it being "Very close to Deal with China" as trump tweeted was another major factor.
With Fed seems dovish and keeping rates steady for its 2020 outlook in the near term, the downside risk for the market seems to be fading away slowly. The dollar has depreciated to July lows. USD INR is providing positive sentiment with prices moving to 70 levels.
Nifty had every factor to be taken positively despite global ratings being downgraded and market discounting the hope of much better tomorrow. On the economic data front with Indicators such as IIP at -3.8%, Manufacturing prod at -2.1% and inflation at 5.54%; markets seem to be discounting the better tomorrow picture.
Nifty has been in this range of 11850 - 12100 since Mid November with some attempts to close above 12150. A bearish engulfing pattern that was seen last week seems to have faded away with closing in the upper range of the previous week. It is now impending for Nifty to either move out of this range and gives a close above 12150 to make sure the positive sentiments are poised with some fresh liquidity.
The economic data has not been very supportive of the markets in the last few months with every other data plunging while the government continues to put efforts on every front to make sure the revival in the economy is seen.
We expect the market to continue to move higher as momentum is favoring the bulls while easing global sentiments is a much bigger boost for investors at this moment. Nifty still has a very important resistance at 12200 - 12250 on spot basis that needs to be taken out to make sure the trend sustains. The two rising windows at 11920 and 12000 will be important to watch for any buying at lower levels.
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