In next week, Global cues will be the major decisive factor for our indices for imparting any direction. On account of weak global cues. Large cap, Mid cap and Small cap stocks witnessed a severe decline this week; chances are on higher side that this selling may carry forward to next week, as envisaged by Finance minister. Advance tax numbers were on lower side and forthcoming quarterly results may fail to generate any buying rush in our market. A pledge by Group of 20 nations to tackle rising risks failed to ease investor concern, in next week we may see further positive steps by global community to restrict a fall in respective economy. Record fall in INR against USD may make import more costly and may result into higher trade deficit beside having negative impact over several Key sectors like, Power, Oil & gas, Metals etc. Internationally, hopes on more action from the European Central Bank to deal with the region's debt crisis and market talks of help from France with some form of capital injection to bolster French banks' like BNP Paribas and Societe Generale’s balance sheets, may be instrumental for global indices to resurrect from present dilapidated condition. In Europe, Banks recovered in last session, any rally may add points to the blue-chip index in next week. Oil fell to six-week lows on Friday, as fresh concerns about the euro zone added to the economic gloom that knocked as much as 9 percent off prices this week. Any gain from this front was offset by INR depreciation against USD. ONGC was being told to pay Rs35,000 cr., up from the 24,000 cr. last year of the fuel revenue losses to the government from the cut in taxes. This may have negative impact on the sector. Positive instance from FITCH that left Germany’s AAA foreign sovereign rating unchanged may support global indices on Monday.
During the week, All Sectoral indices closed in red. Nifty succumbed to profit booking pressure and closed after breeching vital supports of 5000,4900 and 4880. Nifty future was at discount with respect to spot. A high value of Put/ Call ratio, Very High VIX and bulk selling by FIIs(Index Funds) indicates that indices may witness some range bound movement with weak bias and higher volatility in coming sessions. Data on tap for next week in US includes the Goldman store sales, Consumer Confidence, Jobless Claim, Corporate Profit and Durables Goods order. All these will influence investors’ reactions significantly. Earnings forecasts for U.S. companies are starting to feel the pain on Wall Street and in the broader economy as the odds of another recession rise. During next week sectors like Auto, Tech, Cement, Fertilisers and IT may witness good momentum, while record fall in Petrol price may support OMCs. Forthcoming Navratri season may kick start the new buying in Auto and Consumer durable space, which can induce buying in these counters.
Important NIFTY support & resistance for the next week are:
S1/S2/S3 - 4815/4760/4690
R1/R2/R3 - 4920/4980/5040
