The market failed to continue its five-week rally as investors chose to book profits. Caution ahead of the GST Council meet lined up over the weekend, and rate hike hinted by Federal Reserve Chair Janet Yellen Friday led to Nifty missing the crucial 9000-mark by a fraction despite hitting fresh 52-week highs. Better-than-expected Q3 GDP at 7.1 percent despite demonetisation, and strong February manufacturing & services PMI, however, helped trim losses.
Investors are now in a wait-and-watch mode avoiding any fresh positions. Assembly election results next week and Federal Reserve policy meeting on March 14-15, are keenly watched. The two upcoming public issues will see a chunk of both domestic and foreign funds being routed into the primary market.
The market may pick a direction once exit poll numbers are out on March 9, experts say.
They believe that after these events (elections results & Fed meet) or any positive outcome from elections, the market may surpass its record high on the back of overseas and domestic money. FIIs bought nearly Rs 12,000 crore worth of shares since February.
In view of optimism in the IPO market and keenly awaited assembly election results in some important states, market is likely to remain in a rangebound zone, Jimeet Modi of SAMCO Securities feels.
He says, however, the undercurrent of the market is strong; investors should currently hold on to their portfolio and accumulate more where prices of quality stocks have corrected.
Technical analyst Nagaraj Shetti of HDFC securities says Nifty as per larger time frame is sideways and placed near the key hurdles; hence, any upside bounce back from here is unlikely to show sharp upside breakout of 9000 mark. The high low range to be watched for next week is 9000-8850, he adds.
On Monday, the market may react to Federal Reserve Chair Janet Yellen’s speech, wherein Fed officials including Yellen indicated likely rate hike in March meeting.
Reaction is also likely to the outcome of GST Council meet, wherein the government is likely to consider integrated GST, central GST and state GST drafts, which are important for it to get approved before the second half of the budget session of Parliament that will start on March 9 and end on April 12.
March 8 will be a last day of assembly elections, so the market may start getting some cues through exit polls (on March 9) before actual elections results out on March 11. All eyes are on Uttar Pradesh that gives parliament most number of representatives.
On the macro front, industrial output data for January month will be announced on Friday after market hours. IIP in December had contracted 0.4 percent due to demonetisation, against 5.7 percent in November and contraction of 0.9 percent in December 2015.
Primary market will also be in action next week as two initial public offerings – D-Mart owner Avenue Supermarts (Rs 1,870 crore) and Radio City operator Music Broadcast (Rs 488.5 crore) – are proposed to be opened for subscription. Music Broadcast on Friday already raised Rs 146 crore through anchor investors’ book.
Among stocks, Shree Cement on Monday may react positively to a win of bid for 60,000 tonne per year of coal from Coal India unit in coal linkage auction. Religare Enterprises may also react as broking business of Religare Securities will be demerged to Religare Broking.
There may be some reaction in Bharti Airtel stock as the company and Millicom signed agreement to combine operations in Ghana.
DCB Bank’s board meeting will be held on March 7 to consider and approve issue of securities/shares, including issue of securities/shares to qualified institutional buyers.
Kingfa Science and GAIL shares will start trading ex-rights and ex-bonus from March 9 onwards, respectively.