Below is the Views On daily markets note by Mr. Deepak Jasani, Head Retail Research, HDFC securities
After showing recovery from lower levels in the last few sessions, the Nifty slipped into a sharp weakness on Friday faling in its attempt to recover from lower levels on an intra day basis. It ultimately closed lower. The Nifty index ended 103.90 points or 0.86% lower at 11908.15 recording its steepest fall in almost a month. Moody’s downgrade of India’s rating to negative from stable, noting slowdown in the economy seemed to have affected sentiments later in the day.
The overall market breadth has turned negative today in both NSE/BSE exchange and broad market indices like the NSE Mid Cap 100 and Small Cap 100 indices have closed down 0.49% and 0.32% respectively. Sectorally, the top gainers were the NSE Realty and Banking indices. The top losers were the NSE Pharma, FMCG and IT indices.
Nomura has lowered India’s 2019 GDP growth projections to 4.9 percent from 5.7 percent and lowered 2020 GDP growth projections to 6 percent from 6.9 percent. It expects weak growth to result in fiscal deficit slip in both FY20 and FY21.
Shares in Asia were mostly lower on Friday as investors digested recent developments on the U.S.-China trade front. China’s exports and imports declined less than expected in October, Reuters reported citing data from the country’s customs. In dollar terms, exports fell 0.9% while imports fell 6.4% from a year ago in October, though those declines were less than analysts’ forecasts. Economists polled by Reuters had expected October exports to fall 3.9% and imports to fall 8.9% from a year earlier. European markets were slightly lower Friday morning, as investors reacted to conflicting signals about the ongoing Sino-U.S. trade war.
Technically, Nifty falling sharply from near the new swing high of 12034 levels could indicate a reversal pattern at the highs. The key overhead resistance of 12000 mark seems to have acted as a key overhead resistance in the week ended Nov 08. There is a possibility of further weakness in the Nifty in the coming sessions. Immediate supports to be watched at 11823 levels, while 11955-11976 band could offer resistance.
HDFC Securities Limited (HSL) is a SEBI Registered Research Analyst having registration no. INH000002475
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