Markets await GDP numbers keenly

Indian equity markets ended flat this week with Sensex touching a new lifetime high of 40,816 during the week. Even Nifty surpassed the 12,000-mark before settling below. Positive domestic cues supported positive movement in the market, which was capped on account of profit booking and negative global cues.

The government plans to divest the PSU stake to help maintain the fiscal deficit target. On the other hand, fresh concerns emerged over the US-China trade war as the US Senate passed legislation supporting Hong Kong protesters, drawing a rebuke from China and potentially complicating trade talks. Additionally, changes in US work visa requirements aimed at protecting American workers fuelled further weakness in the market.

The Sensex ended flat at 40,359 while Nifty was up with marginal gains of 0.2% closing at 11,914. However, broader markets participated with Nifty Midcap100/Smallcap100 closing positively with gains of 0.4%/0.5%.

Sectorally it was a mixed bag with media leading the gainers with gains of 9.9%, followed by pharma (+4.5%), PSU banks (+4.2%), energy (+2.3%), infra (+2%), metal (+0.9%) and private banks (+0.5%). On the other hand, IT was the major loser with a loss of 2.1% followed by auto (-1.5%), FMCG (-1.5%), financial services (-0.5%) and realty (-0.4%).

Both Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) turned buyers this week, having bought equities worth more than Rs 4,700 crore and Rs 330 crore respectively.

Markets have been consolidating near its highs for some time now. It is likely to remain range-bound next week as it is awaiting fresh triggers on developments around the US-China trade deal and the July-September GDP data due next week. The GDP data is likely to indicate whether the slowdown in the Indian economy has deepened or not. Further, market participants would continue to track global factors such as the US-China trade deal, crude oil price, and currency movement along with changes that would take place in the MSCI index on November 26.

Technically, Nifty formed a Red body candle on the daily chart. It formed a Doji candle on a weekly scale for the third week in a row which clearly shows a lack of momentum in either direction. Now it has to hold above 11,850 levels to witness an up move towards 12,000-12,103 zone, while on the downside major support remains intact at 11,850-11,780 levels.

(The writer is the Head of Retail Research at MOFSL)