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Stock Market Daily Updates: 2 Dec 2020

For the Nifty future, the bounce that started from 12808 continued on the upside. Going ahead, we need to closely monitor the price action near the high at 13232 levels. A failure to sustain near the high would push the index back into the consolidation mode. The near-term support is placed at 13103 levels. But now in the coming days, along with the positive factors, the bullish trade in stocks is likely to ease, so caution will be necessary.

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Dear Trader…

After a break in the index-based rally last weekend and on positive signals from global markets and Asian markets, Indian equity markets maintained their upward momentum with the expected strength.

The dollar index is weakening and it is now at the lowest point in two years, which is positive for emerging markets and especially for India and positive global cues and strong buying interest from FIIs has attracted the highest inflows for Indian equities among emerging markets. 

For the second consecutive month in November, foreign portfolio investors have invested heavily in the equity segment. According to available data, between November 3 and 27, FIIs invested Rs 70844.63 crore in the equities segment and sold Rs 1916.63 crore in the debt segment; that means the steady influx of foreign funds led to a rally in the Indian stock market.

Markets made a cautious start on report that output of eight core infrastructure sectors dropped 2.5 per cent in October, mainly due to decline in production of crude oil, natural gas, refinery products and steel. The production of eight core sectors had contracted 5.5 per cent in October 2019. But, soon after a cautious start, key gauges gained traction and started moving northward as signs of recovery in India’s economic growth supported the market sentiments.

Traders shrugged off report stating that Indian manufacturing sector lost momentum in the month of November, amid slower increases in factory orders, exports, buying levels and output, as per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index - a composite single-figure indicator of manufacturing performance- eased to 56.3 in November as against 58.9 in October, although it well above the 50-level that separates growth from contraction.

India's economy recovered faster than expected in the September quarter as a pick-up in manufacturing helped GDP clock a lower contraction of 7.5 per cent and held out hopes for further improvement on consumer demand bouncing back. Adding more optimism, data from the Department for Promotion of Industry and Internal Trade (DPIIT) showed that FDI inflow rose 15 per cent during the April-September period to $30 billion (Rs 2.2 trillion) as compared to inflows of $26 billion during the same period last fiscal, with India being an attractive destination for foreign funds despite the pandemic.

The most important part is that the broader market is improving, we believe as the overall structure in the index remain firmly positive, any breather on account of the overbought weekly stochastic should not be seen as negative instead it should be capitalized as an incremental buying opportunity. 

Markets will first react to the GDP numbers. Besides, the auto sales numbers and upcoming RBI policy meet would be on their radar. We expect prevailing consolidation to continue in the index however there’ll be no shortage of trading opportunities in broader markets. Traders should maintain a “buy on dips” approach while keeping their focus on the selection of sectors and stocks.

Despite concerns over corona's transition, the country will now look at the Reserve Bank of India's lending policy review on Friday, December 4, 2020, over a four-day weekend in an effort to get the economy back on track for a faster recovery. The Reserve Bank of India is expected to take some more leeway in its credit policy review - measures to increase liquidity.

For the Nifty future, the bounce that started from 12808 continued on the upside. Going ahead, we need to closely monitor the price action near the high at 13232 levels.  A failure to sustain near the high would push the index back into the consolidation mode. The near-term support is placed at 13103 levels.

But now in the coming days, along with the positive factors, the bullish trade in stocks is likely to ease, so caution will be necessary.

  • INDEX MOVEMENT of 2nd December 2020
  • Nifty Future closed @ 13143 as on 01.12.2020..!!

Nifty Future has resistance at 13188 – 13202 Point; above which other resistance levels are at 13232 – 13272 Point with highly Volatile Trend,

Nifty Future has Downside support levels are at 13103 – 13088 Point; below13088 Point, other support levels are at 13033 – 13003 Point.

I am positive for the next bullish trend only above @ 13272 Point but be with the trend. Let the market decide further moves.

As we are saying from many days, Buying is suggested in falls only...and it’s still a better strategy in the given Scenario...!!!

Regarding Long term positions, it is preferable to remain cautious now...!!

If Nifty Future crosses @ 13272 Point, again then the upper side target is quite high and it may touch @ 13303 Point in the short term...!!!

Note :- Before Act please refer & agree Terms & conditions, Disclaimer, privacy policy & agreement on www.nikhilbhatt.in

  • Bank Nifty Future closed @ 29892 as on 01.12.2020..!!

Bank Nifty Future has resistance at 29939 – 30033 Point; above which other resistance levels are at 30133 – 30303 Point with highly Volatile Trend,

Bank Nifty Future has Downside support levels are at 29808 – 29737 Point; below29737 Point, other support levels are at 29676 – 29606 Point.

I am positive for the next bullish trend only above @ 30303 Point but be with the trend. Let the market decide further moves. 

As we are saying from many days, Buying is suggested in falls only...and it’s still a better strategy in the given Scenario...!!!

Regarding Long term positions, it is preferable to remain cautious now...!!

If Bank Nifty Future crosses @ 30303 Point, again then the upper side target is quite high and it may touch @ 30373 Point in the short term...!!

Note :- Before Act please refer & agree Terms & conditions, Disclaimer, privacy policy & agreement on www.nikhilbhatt.in

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


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Nikhil Bhatt | Research Analyst - SEBI

The author is a well established entrepreneur having a more than 16 years of experience in the field of stock market and financial management.

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