Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services
Domestic indices traded cautiously ahead key events lined up this week. Nifty opened positive but soon drifted in red and remained lackluster throughout the session to finally close flat at 18701. Broader market continued with its outperformance with Nifty midcap 100 finally crossing its 52W high and is just 2-3% away from all time high levels.
Going ahead the momentum in the mid and small cap companies is likely to continue. Metals, Banking and Realty sectors would continue seeing traction. Banking stocks will be in lime light ahead of RBI policy outcome. Reopening of China and surge in metal prices would keep momentum in metal stocks while strong demand in real estate would keep realty and building material stocks in flavour.
Even NBFCs might see some action as disbursements continue to remain healthy. Gold finance companies especially will continue to be in limelight as surge in gold price to 8-month high makes them a lucrative bet.
We expect market to consolidate for next few days given the RBI policy on Wednesday and Gujarat election outcome on Thursday. Tomorrow we might see some reaction based on Gujarat exit poll data today.
Vinod Nair, Head of Research at Geojit Financial Services:
Market continued its profit booking trend from the record high as they exercised prudence ahead of the RBI policy announcement on 7th December.
Partially, it was also due to increase in crude prices due to OPEC decision not to cut output target, and ease in China’s covid policy.
The IT sector witnessed the highest profit booking, while bank and metals outperformed. Market expects a 35bps rate hike compared to 50bps in the previous three meets in anticipation of a fall in inflation forecast.
Mohit Nigam, Head – PMS, Hem Securities
In the afternoon session, local equity benchmarks recovered from the day’s low. Selling interest was being seen in IT stocks. Investors awaited the Reserve Bank of India’s announcement on monetary policy, which was scheduled for later this week.
In November, India’s services industry expanded significantly as both company activity and sales increased quickly. In November, the S&P Global India Services PMI Business Activity Index increased to 56.4 from 55.1 in October.
Furthermore, the manufacturing and service output indicators of the S&P Global India Composite PMI Output Index increased from 55.5 in October to 56.7 in November.
Ahead of a ban by the European Union and the implementation of a price ceiling on Russian crude, OPEC+ countries maintained their output objectives, keeping the oil and gas sector in the spotlight.
As firms resumed operations and testing restrictions were loosened in numerous cities, including Beijing and Shanghai, Asian markets were mainly trading in the green on the global front. Prior to the release of important activity statistics, European markets primarily traded in the negative, with prudence being the watchword even as more Chinese cities loosened mobility restrictions.
On the technical front, immediate support and resistance in Nifty50 are 18,600 and 18,800 respectively. For Bank Nifty immediate support and resistance are 43,000 and 43,600 respectively.
Ajit Mishra, VP – Technical Research, Religare Broking
Markets made a muted start to the week and ended almost unchanged. After the flat start, the Nifty index oscillated in a narrow range and finally settled at the 18,701 level. Meanwhile, a mixed trend on the sectoral front kept the participants busy wherein buying in metal, banking and realty space capped the downside.
Amid all, the positive bias on the broader front pushed the market breadth to the advancing side.
We’re seeing consolidation on the expected lines, which is healthy after the recent surge. We expect the resumption of the trend soon meanwhile focus on sectors that are attracting buying interest on every dip and select the stocks accordingly.
Shrikant chouhan, Head of Equity Research (Retail), Kotak Securities
Markets were extremely range-bound with a negative bias with most of the Asian indices too closing on a sluggish note. Investors are keeping a low profile ahead of RBI’s credit policy meeting this week, while lack of fresh triggers from global markets too have been a dampener.
Another factor could be the recent rally was too fast paced and hence nobody wants to risk taking long only bets.
Technically, after the early morning selloff the Nifty took support near 18,600 and reversed sharply. However, the short term texture of the market is still non directional.
We are of the view that 18,600 could act as a sacrosanct support zone for the market. If the index trades above the same it could retest 18,800-18,850 in the near future. On the flip side, below 18,600, the index could slip till 18,500-18,450.
Rupee Close:
Indian rupee closed 48 paise lower at 81.79 per dollar on Monday against Friday’s close of 81.31.
Market Close: Indian benchmark indices ended on flat note in the volatile session on December 5.
At Close, the Sensex was down 33.90 points or 0.05% at 62,834.60, and the Nifty up 4.90 points or 0.03% at 18,701. About 2080 shares have advanced, 1401 shares declined, and 191 shares are unchanged.
Apollo Hospitals, Tata Motors, Reliance Industries, Tech Mahindra and SBI Life Insurance were among the top Nifty losers. The gainers were Hindalco Industries, Tata Steel, UPL, ONGC and Coal India.
Among sectors selling was seen in the auto, IT, pharma, while buying is seen in the PSU bank, realty, and metal stocks.
The BSE midcap and smallcap indices ended on flat note.
Morgan Stanley ‘Overweight’ rating on ICICI Bank, target Rs 1,250 per share
-Overweight call, target Rs 1,250 per share
-Showcased various digital assets where they have made further progress
-Will drive better productivity/cross-sell & higher customer retention
ICICI Bank was quoting at Rs 933.60, up Rs 2.80, or 0.30 percent on the BSE.
BSE realty index rose 0.8 percent led by the Sobha, Mactotech Developers, Indiabulls Real Estate
Rahul Chander, MD & CEO of LivFin (Fintech NBFC):
Since inflation continues to slowly ease off across the world, interest rate hikes have also started to ease off. We are now hopefully in the last possible 75-100 bps hike of the cycle. The MPC will have to keep in mind the impact of rate increases on GDP growth, the expectation for which for FY2023 has moderated sharply.
While part of this could be attributed to unforeseen events like the Russia- Ukraine conflict which has played havoc with the commodity markets, the previous rate hikes have also partially contributed to the falling GDP growth.
The INR exchange rate vis-à-vis the USD especially has also been a matter of concern, though the trend seems to have been reversed over the last few weeks. However, with the MPC meeting in December coming a few weeks before the next US Fed meeting, the MPC will have its task cut out, as a significant increase in US Fed rate will have its bearing on the exchange rate.
Hence a delicate balance is now needed in determining additional rate increases. The US Fed eased off the interest rate hike from about 75 bps to 50 bps and has indicated a further reduction. Similarly, the Reserve Bank of India is also expected to ease it off from a 50 bps hike to 25-35 basis points (possibly towards the lower end of that band).
ALERT | UK November Services PMI at 48.8 versus estimates of 48.8
