How do you see the stock markets on 08th November after a rather short Diwali trading week?
Answer
Answer
Despite being a truncated week, the previous week was rather action packed and in the positive side. The Nifty gained 1.28% during the previous week ended 04 November with markets closing in the positive even on Muhurat trading day on 04 November. However, Nifty is yet to break above its psychological barrier level of 18,000 levels.
There are a couple of positives. Firstly, the advance decline ratio or the A/D ratio has turned for the better during the week. Also, the volatility index or the VIX has fallen sharply to 15.7 levels which should offer support. This will be the last week of results for Q2, with big numbers expected like ONGC, Britannia, BHEL, M&M, Motherson Sumi and Tata Steel.
FPI activity on Muhurat trading was tepid but negative. Foreign investors sold Rs.328 crore of equities while domestic funds bought stocks worth Rs.38 crore. FPIs continue to bet on a correction. In global markets, Dow and NASDAQ showed positive signals and Europe was also in the green. In early trades, the SGX Nifty is up nearly 23 bps.
The positive takeaway is that despite the margin pressures, the overall results have been positive this quarter. However, top line recovery is absolutely real, despite input cost pressures on the bottom line. Lower petrol and diesel prices should come as a boost to many of the sectors due to its downstream effects.