Flattish Market, Q2 Results - Karvy

It was a week when markets reacted cautiously to the raft of data, good and bad, that kept fl owing in. First came the CAD numbers that soared to 4.9% ($21.8 billion) of GDP in the Q1 ending June from 3.6% ($18.1 billion) in the preceding quarter and from 4% in the same period last year. Markets rose on Tuesday as investors hoped the CAD numbers are expected to go down further given the recent fall in rupee. This, along with gain in rupee and higherthan-normal monsoon until September 30, gave some support to the market. However, tracking global cues, investors remained jittery over the deadlock between Republicans and Democrats in the US. Another negative was the HSBC Services PMI data coming on Friday that showed India's services sector shrank at the fastest pace in over 4 years in September. Markets now seem to be eagerly looking forward to the Q2 results beginning October 11, but whether it would give the much-needed direction is anybody's guess!

The Nifty started the week on a negative note around the 5800 mark and thereafter saw selling pressure which dragged it towards 5700. The index then staged a strong contrarian pullback rally towards 5950 levels despite negative news fl ow on the Global front. The index remained highly volatile and saw over 5% bounce back from the lows of 5700 levels in the last two trading sessions. Realty, Banking and Automobiles sectors saw healthy participation and outperformed benchmark indices. On the other hand, FMCG and PSU sectorial Indices underperformed the benchmark indices. Long positions can be assumed in Metals, Automobiles and Healthcare stocks if the Nifty sustains above 5850 levels in the coming week. It is advisable to avoid the Technology space since Infosys is due to announce its results next week. Short positions can be accumulated in Banking, Realty and Capital Goods stocks if the Nifty slips below 5800 levels. Short positions can also be initiated in them if the index bounces towards 6050 levels. Overall, we expect the Nifty to trade in the range of 5800-6100 levels for the next week. However, a break of 5800 levels can drag the index towards its recent bottom of 5700 levels in coming days.

Source : Equity Bulls

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