The Indian equity markets were very volatile throughout Monday with most of the bounces from the lows being sold into. It is very interestingly poised and it is to be seen if the Indian equity markets can have a Pre-Budget rally towards 15000 levels of Nifty.
The Reliance stock fell nearly Six (6) Percent on the back of some concerns regarding the results declared on Friday after market closing hours.
The banking index showed some strength till mid-afternoon and then gave away all the gains to marginally in the positive with a gain of 31 points...
Axis Bank and Hdfc bank were the only few stocks from banking pack which closed in the Green. Indusind bank came under severe pressure by the bears and ended up nearly 5% down at 850 levels.
The 2.30pm trade or the Last Half hours trading saw the I.T. stocks coming under pressure and most I.T stocks fell 2 to 3 percent before market closing.
Overall, the Indian Equity markets on Monday showed weakness across sectors.
The Nifty closed weak at 14,438(-133), The Sensex closed at 48347 (-530) whereas Bank Nifty closed at 31198(+31) levels.
Most experts expect the indices on Wednesday to be choppy with trades on both sides especially since the Monthly expiry is nearing on Thursday and the Budget is due on 1st February.
According to Most analysts, the crucial levels of 14200 nifty levels will be decisive support level below which the indices will become weak and selling pressure will follow.
The Foreign institutional investors sold on Monday nearly Rs 765 Crores whereas Domestic institutional investors Sold Rs 387 crores.
FII’s buying towards the budget will be key to the market slowly but steadily moving upwards.
The U.S. Markets closing on Tuesday was flat with Dow Jones closing at 30,937(-22 ),S&P closing at 3849(-5) and Nasdaq closing at 13626(-9 ). On Monday closing, the Nasdaq was up +92 and Dow Jones was Mildly negative (-32) .
The Indian markets will be opening on Wednesday considering both the closing of Monday and Tuesdays in U.S. Equity Markets.
Many analyst believe that Indian markets will be further consolidating in the coming 2 days with opportunity to trade with upward bais. The closing of all 3 Indices in U.S.Markets in positive will give strength to Indian indices opening with a positive outlook.
Some of the stocks which can be active on Wednesday are Axis Bank and HDFC Bank. Both Showed strength in a weak market. It is to be seen if profit booking happens in banking stocks or they are able to bounce back from Monday’s lows.
The private banks like Axis Bank, Hdfc bank, Icici Bank and insurance sectors stocks Max financial services and Hdfc standard life will be good picks .The good results and anticipation of some incentives for insurance sector in the coming budget can be the trigger for positive moves in insurance stocks.
Bajaj Twins, Shriram Transport Finance too will be keenly watched out on Wednesday.
Infosys, TCS came under some selling pressure towards the closing on Monday and will be watched keenly to get an indication of the bounce happening in the I.T. Sector on Wednesday.
Pharma stocks like Divi’s Lab, Sun Pharma, Dr Reddy, Lupin, and Cement stocks like UltraTech Cement, ACC, and Grasim are expected to be in the limelight.
Also Bharat Forge, Bharti Airtel, Maruti, Adani Enterprise, Adani Port, is expected to be keen watched for any trigger by the traders.
The general Sentiments in the market is that the Psu stocks would be active as the budget is expected to bring some positive news for the Psu stocks.
It is also to be noted that few analyst are advising a word of caution about these stocks and are advising a prudent entry and exit strategy for these stocks. These stocks tend to be highly volatile and heavily leveraged trades are avoidable for a prudent investor.
The stocks to keep an eye on in the Indian equity markets will be the Cement Stocks , I.T Stocks ,Banks , Pharma Stocks , FMCG Stocks , NBFC Stocks and Energy sector Stocks.
#5 Information Technology Stocks: Infosys, Wipro, TCS, Tech Mahindra, L&T Technology.
# 5 Banking Stocks: HDFC Bank, ICICI Bank. Axis Bank, Kotak Bank, Indusind Bank.
#5 NBFC Stocks: HDFC, Mahindra and Mahindra financial, Bajaj Finance, Bajaj Fin serves, Shriram Transport.
# 5 Pharma Stocks: Cadila, Cipla, Sun Pharma, Dr Reddy’s, Divi’s Lab.
#10 Other Main Stocks to watch out for on this Wednesday Morning in the Indian Equity Markets:
Grasim ,Maruti , Tata Motors , Ashok Leyland ,Reliance, Adani Port, Bharti Airtel , HDFC Standard Life, Bharat Forge, MindTree.
Analysts are guiding for a Volatile Wednesday in the Indian equity markets. It will be interesting to watch if the markets can manage to recover from the Mondays jolt or continues to slide downwards in trade on Wednesday.
To sum up, for this Wednesday the Trading view is that the Indian equity Markets is very evenly poised with possibility of trades happening on both buy and sell side.
The outlook is of a volatile couple of days before the budget and monthly expiry on Thursday.
The upward movement towards 15000 nifty levels towards the budget will be the bulls best case scenario while the bears will want the nifty to come down another 300-400 points in the near term.
The bank nifty showed more strength on Monday compared to Nifty.
Best wishes for a Profitable Wednesday in the Indian equity markets!
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