Selling pressure to aggravate? – Weekly Market Newsletter

Selling pressure to aggravate? – Weekly Market Newsletter


Market Overview

It was an eventful week for the markets wherein both domestic, as well as global developments, dictated the trend. Firstly, the stimulus package announcement completed on Sunday and the markets were clearly disappointed by it as it focused mainly on providing liquidity and credit support to MSMEs, farmers, etc. However, encouraging developments on vaccine trials lifted the mood for global markets including India. The rally was short-lived as markets feared that China’s new proposed law changes in Hong Kong could increase tensions between already strained relations between US-China. Read more on it here.

Back home, the recent announcement from RBI underwhelmed the markets as these measures were largely on expected lines and markets were anticipating more measures from RBI. Consequently, the Nifty ended lower by 1.5%. Sector-wise, underperformance continued for the banking sector as markets feared deterioration of asset quality and governments push on banks to lend more in such a scenario. The FIIs continued to remain net sellers, as they sold stocks worth Rs. 6,900 cr whereas DIIs pumped in Rs. 3,900 cr this week.

Market Outlook

The selling pressure could aggravate in the holiday-shortened week ahead if tensions between US-China escalates. In India, the rising infections of COVID – 19 would keep investors on the edge in the coming week. Further, the economic stimulus and RBI measures have widely disappointed the street especially the banking sector.

The underperforming banking stocks could limit the upside for the markets due to its high weightage in the Nifty. The following companies would announce their quarterly results – Bata India, HDFC, Max Financial, Dabur, Ujjivan Financial Services, Lupin, TVS Motors, CEAT, P&G Health and Amara Raja Batteries.

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