Below is the Views on Weekly note by Mr. Ajit Mishra, VP Research, Religare Broking
Markets took a breather after nearly six weeks of gains, in response to unsupportive global markets and mixed local cues. On the domestic front, the financial stability report by RBI, which points toward the possibility of a sharp rise in NPAs in FY21, spooked investors. Meanwhile, the earnings announcements from select Nifty majors like Reliance Industries, Maruti, Bharti Airtel, Colgate, SBI, and HDFC kept the participants busy throughout the week. Consequently, the benchmarks, Nifty and Sensex, ended lower by 1.3% and 1.4% respectively. Amongst the sectors, heavyweight sectors like Banking and Oil & Gas were the top loser which was partially offset by healthy buying in IT and Healthcare. Interestingly, the broader markets managed to outperform the benchmark wherein both the Midcap and Smallcap index ended flat.
Going forward, markets would react to the Auto sales numbers scheduled to release over the weekend. On the event front, they would also be keeping a close watch on the RBI monetary policy scheduled next week.
On the earnings part, some of the prominent names like Bharti Airtel, Tata Steel, LT, Lupin, Titan and Voltas will announce their numbers during the week along with several others.
We reiterate our cautious view on the market and suggest keeping the leveraged positions hedged. Nifty couldn’t surpass the hurdle at 11,350 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.
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