Dear patrons, the Indian markets are on a role for last few weeks holding ground and being resilient to the financial as well as geopolitical situation around the globe. In the week gone by indices on the NSE and BSE posted decent gains and ended UP almost 1.5%.
Rise in the markets can mainly be attributed to the fall in inflation both in India as well as the US. Drop in inflation in the US was a substantial 0.5%, highest, for a long time. India CPI also came down from 5.2% to 4.87%. Easing inflation augurs well for the equity market as the pressure on interest rates will also ease and we may see higher liquidity in the system prompting investors to switch to risk ON mode.
Back home, we are consistently witnessing robust growth in the economy, the results season being a testimony to rise and rise of the Indian economy. Rise in economy is the booster to the propulsion of the equity markets towards newer highs.
Let us now look at what transpired in the last week and try to figure out what lies in store next week.
As we can see, Nifty rose in the last week owing to good inflation data. Nifty has strong support in the 19350-19400 zone and resistance in 19850-19900 zone. Closing above the resistance zone should propel the Nifty to newer highs in near future. In case of any adverse event a close below 19300 may lead the Nifty towards 18900, which should act as a very strong support and we are unlikely to witness levels below 18900 in near future.
BankNifty on the other hand was hit by the new RBI regulations on personal loans, where the risk weightage was increased from 100% to 125%. The move by the RBI is likely to impact the earnings of many Banks as well as NBFCs adversely. The steps taken by RBI, although look to be negative for NBFCs particularly, should lead to cleaning up of the personal finance business and reducing risk to the overall economy. BankNifty has strong support around 43400-43500. Close below 43400 opens doors for further downward movement. 44000 should act as resistance and a close above 44000 should lead the BankNifty towards 45000 and beyond.
In the meanwhile keep accumulating good stocks and keep booking profits as well. Ample opportunities are available in the markets to make good profits.
"Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.” ~ Peter Lynch
P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.
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