Sunday, 6 December 2015

Market Brief (7th Dec 2015)

Stalement on GST and other reform bills, a very much expected hike in US interest rates, depreciating rupee, improved economy of US and geo-political fears were instrumental in FIIs pulling money from Indian markets. Hence, Indian market, being bearish in the intermediate trend, continued its down trend and gave negative close for the day and the week. Going forward, a lot depends on whether GST and other critical bills get cleared in this winter session of Parliament and until that happens, market will remain under pressure. Although, sharp fall in the oil prices is positive for the Indian economy, but at the same time the depreciation of Indian rupee negates the benefit of falling oil prices. A caveat here is that if oil price starts rising, it could be a big negative for the Indian markets.

In conclusion, with mixed news flows and non-clarity on many issues, the upside for the market will remain capped for some times until Union Budget. It further needs to be seen how corporate will do this quarter, though expectations are low. Positive surprises can lift the markets on higher levels. Where technical of the market go, 7700 on the Nifty is very important, and this is the last hope for the market, if 7700 is held than at best in the near term, market could remain in range between 7700 and 8000. A close below 7700 on nifty would witness a swift sell-off in the market and the Nifty would test its 2015 of 7540. On the higher side, multiple resistance area between 8000 and 8350 would keep the markets under check.

The broader markets though look vulnerable, but the selected midcaps and the small cap stocks are still doing well. Investors should weigh higher on mid and small cap companies. And in event of sharper declines, one can utilise for buying stocks since the long term view of the market is bullish.

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