Home / Markets / Stock Markets /  Nifty week ahead: New Covid variant, FII behaviour, GDP data to be key factors
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It was a black Friday sale and generally, people get excited whenever there is a sale but investors and traders were looking nervous on Friday when there was a sale across global equity markets. It was both black Monday and Black Friday for the Indian equity markets where we have seen a big fall on Monday on the back of weak listing of Paytm while there was a brutal sell on Friday due to worries of new covid variant globally where at the end of the week, Nifty & Sensex ended with a cut of more than 4%, most since January. 

New Covid variant, FIIs' behavior along with macro numbers will be key factors to drive the market next week. Covid related developments will remain key triggers for the market where the market will remain keenly interested to know the efficacy ratios of various vaccines against a new variant of Covid whereas restrictions-related news across the globe will also cause volatility. 

The behavior of FIIs will also play an important role in the direction of our market because they are selling relentlessly for the last many days where they sold worth 21000cr in the cash market last week and if we look at Oct-Nov month data then they have sold more than 50000cr in the Indian market. There is as such no major negative trigger for the Indian market while we have already outperformed so much in 2021 that our weight has increased significantly in MSCI emerging market index therefore we are just seeing a mean reversion. We are getting decent support from retail and DIIs, therefore, Midcap and Smallcap have outperformed Nifty in the month of November where last week, DIIs' bought around 11000cr in the cash market.

If we look at the derivative data then FIIs' long exposure in the index future stands at 59% which is ok while the put-call ratio is sitting at 0.73 mark that is in oversold territory. Domestically, India will announce its Q3 GDP numbers on the 30th of November while monthly auto sales numbers will also have some impact on the market.

Technically, Nifty has slipped below its critical support of 100-DMA that has opened the door for further weakness towards the next important support levels of 16700/16400. On the upside, we have multiple resistances in the 17100-17400 band therefore 17100-17400 area will act as a critical supply zone.

Bank Nifty is underperforming and witnessing a vertical fall however it is trading near critical support of its 200-DMA that is currently placed around 35700 level; below this, it is vulnerable for further sell-off towards 34800/34000 levels. On the upside, the 36700-37000 zone will act as a strong resistance area.

Santosh Meena is Head of Research at Swastika Investmart Ltd.


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