Weekly Report: Nifty convincingly above 17800 by adding 1.68% to the previous weekly close

Sensex and the Nifty gained 1.68% during the week, boost by falling crude prices and a decline in domestic bond yields. Autos were top losers while banks, capital goods, and healthcare were top gainers. In the last couple of sessions, the oversold U.S. market rebounded, which provided much-needed support for Nifty to come out of the recent congestion phase. With some hint of profit booking on Friday, Nifty convincingly closed above 17800 by adding 1.68% to the previous weekly close.

The domestic market has maintained its sturdy structure over the last couple of weeks amid a declining trend in the US. This clearly restricted our key indices to surpass the higher boundary of the consolidation range despite having an inherent strength. The moment global recovery took place, we witnessed a breakout from the resistance of 17,700 – 17,800. Importantly, the banking space was the major charioteer in this rally with Nifty Bank clocking over 2.50% gains and closing at a 10-month high.

“Domestic equities edged higher amid positive global cues. Although Indian equities closed positive, they faced resistance below 18000 levels as markets failed to sustain yesterday’s momentum and fell from day’s highs. Switching out from recent outperforming sectors led to profit-booking in the market yesterday. Fresh buying was witnessed in IT and metals while profit-booking was seen in cement, real estate, and consumer stocks” said, Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.

The direction of the market in the week ahead will be determined by cues from global markets as well as important macroeconomic data points, such as inflation and manufacturing & industrial production data, to be released next week. Domestic retail inflation is expected to rise to 6.9 percent in August from 6.71% in July.

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