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

The week gone by was an eventful one as Fed Chairman Jerome Powell's testimony, Reliance AGM and monthly expiry of derivative contracts kept volatility high across bourses. Further, rotational buying across sectors such as metals, capital goods and IT pack supported the benchmark to inch higher and close with decent gains. Consequently, the benchmark indices, Sensex and Nifty, ended higher by 1.1% each.

The broader market indices, midcap and small cap, marginally outperformed the benchmark and ended 1.4% each. On the sector front, all the indices ended with a positive bias, except for FMCG and oil & gas. Underperformance in banking worried investors in the first half of the week however buying across private banking and PSU stocks in the final sessions aided sentiments.

 Among the key events, Reliance AGM was in limelight. Key takeaways from Reliance AGM 1) Deal with Saudi Aramco is expected to be completed by end of 2021 and to strengthen partnership they appointed Aramco chairman and head of wealth fund PIF i.e. Yasir Othman as an independent director of Reliance Industries. 2) It announced collaboration with Google for launching 'Jio Phones Next' in September as well as for rolling out 5G. 3) The company plans to foray into the green energy business wherein it would make an initial investment of Rs. 75,000cr for the next 3 years. Also, build 4 Giga factories to manufacture and integrate all critical components. These announcements are positive for the growth of Reliance in the long run.

The coming week marks the beginning of the new month also so participants will be eyeing the high-frequency indicators like auto sales and Market Manufacturing PMI during the week. Besides, the progress of the monsoon will also remain on their radar. While the pace of vaccination drive is certainly encouraging as it gives hope of further unlocking by the states, the cases of new COVID variant might derail the plans.

The recovery in the global indices and favourable local cues are helping the index to sustain at the record highs but it still lacks decisiveness. To regain the momentum, banking should lead from here while index majors from other sectors like IT, auto and FMCG continue to provide the support on a rotational basis. A decisive breakout above 15,900 would help Nifty to test the next milestone of the “16,000” mark soon. On the flip side, it would find a cushion around 15,650 and 15,450 zone in case of a decline. On the stock-specific front, we may see further consolidation in the broader indices so traders should focus more on identify the right stocks.

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