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Sensex gained over 1% this week
Sensex gained over 1% this week

Sensex, Nifty week ahead: Here is what market experts expect

  • Analysts expect further consolidation in the Nifty
  • Indian markets are up 38% from March lows

Despite a volatility, Indian stock market benchmark indices Sensex and Nifty managed to close the week with a gain of over 1% for the period amid a roller coaster ride as rising coronavirus cases kept the sentiment jittery. Further, geopolitical tension between India-China added to their worries. The Nifty ended the week at 10,383 while Sensex at 35,171. The was the second weekly gains for Indian markets which are up 38% from March lows.

US markets fell sharply on Friday on concerns over surge in coronavirus cases. The governor of Texas temporarily halted the state's reopening as infections and hospitalizations surged. Despite global coronavirus cases approaching the 10 million mark, hopes of continued monetary and fiscal stimulus remain alive. MSCI's gauge of stocks across the globe is up approximately 40% since its March lows.

"In the coming week, we believe global cues will continue to dictate the market trend, in the absence of any major domestic event. Besides, macroeconomic data and auto sales figures will also be on the participants’ radar. Needless to say, they would continue to keep a close eye on India-China border dispute and any news of fresh escalation might not go well with the markets," said Ajit Mishra, VP research at Religare Broking.

"We expect further consolidation in the Nifty index and probable range could be 10,050-10,550. On the sectoral front, we’re seeing rotational buying interest across the board thus traders should focus more on stock selection and prefer hedged positions until Nifty resumes the trend," he added.

Ruchit Jain, senior analyst at Angel Broking, says: "As per the options data, 10000 - 10500 is seen as the immediate trading range for Nifty. Since the data indicates long positions being rolled, traders are advised to continue to trade with a positive bias and use declines as a buying opportunity."

Nagaraj Shetti, technical research analyst at HDFC Securities, says: "The short term trend of Nifty has turned into positive, after the minor weakness from the highs. There is possibility of further upside in the early next week and one may expect Nifty to retest the overhead resistance of 10550-600 levels in the mid to later part of coming week. Immediate support is placed at 10280."

Jimeet Modi, Founder & CEO, SAMCO Securities, says: "Markets are still going to be significantly influenced by updates on India-Sino standoff and US-Sino trade talks. While these influences might only be sentimental but if FPIs start selling, markets can really fall from the cliff as they have already bounced back 38% (from March lows) which statistically is a good number for markets to start drifting lower. All the positives, if any, are discounted, however any negative surprises may take markets lower. Investors are advised to be cautious, conserve cash and wait on the sidelines"

Shibani Sircar Kurian, executive vice president at Kotak Mahindra AMC, says: “From here on, for India, the pace of return to normalisation would be the key along with trends of the corona-virus case curve. Border tension with China would also remain a monitorable While the economy appears to be gradually coming back to normalcy, there are few challenges. Corona-virus cases across India continue to rise with the change in strategy from saving lives to focusing on livelihood and the opening up of the country. Supply of labour also remains a challenge with the migration of labourers from the urban centres to rural areas."

"Recovery in rural India appears to be outpacing urban trends, with a larger percentage of COVID cases being concentrated in the top cities. The monsoon season is off to a good start and consequently, the summer crop (Kharif) sowing has picked up early. The monsoon coverage in July would be crucial for the Kharif crop. Increased government spends on rural segments, hike in minimum support prices (MSP) as well as improvement in cash flows post the rabi (winter) crop harvest has all led to improvement in rural demand."

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