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Published on 31/07/2021 4:57:27 PM | Source: Religare Broking Ltd

Weekly Note by Ajit Mishra, VP Research. Religare Broking

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Below are Views On Weekly Note by Mr. Ajit Mishra, VP Research. Religare Broking

Markets remained range bound for yet another week amid mixed cues and ended marginally lower. Initially, feeble global cues dented sentiment and pushed the benchmark lower however dovish policy by the US Fed led to a recovery in the final sessions. Consequently, Nifty settled at 15,763.05 level; down by 0.59%.  Amid all, the momentum remained strong for the broader markets as both Midcap and Smallcap indices ended with gains of 0.8% and 1.1%. Amongst the sectors, banking continues to underperform as it ended lower by 1.3%. Even auto witnessed selling pressure owing to subdued results from the likes of Maruti Suzuki and TVS Motors. On the flip side, IT and Metal were in thelimelight and ended with strong gains.

 

The coming week is going to be eventful as we have lots of important macroeconomic data lined up during the week. To start with, Markit Manufacturing PMI and Markit Services PMI data are scheduled on August 2 and August 4 respectively. Besides, the auto sales monthly figures also start pouring in at the beginning of the month. Above all, we have RBI monetary policy review meeting scheduled during the week and the committee would announce the outcome on August 6. The majority expect status quo on key rates however the commentary on inflation trajectory and growth will be in focus. Meanwhile, the global COVID trend will also be closely watched by the participants.

 

We expect fireworks to continue on the earnings front as some of the prominent names like HDFC, Bharti Airtel, SBI, Dabur, M&M and Cipla will announce their numbers along with several others.

 

Markets have been consolidating in a range i.e. 15,450-15,900 for the last two months and the trend may endure until we see alignment between Nifty and the banking index. While index majors from other sectors are helping the index to hold at higher levels, participation of the banking pack is critical for any sustainable directional move. Meanwhile, we reiterate our view to focus on themes that are currently playing out well and select stocks accordingly.

 

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