28.02.2020- 11.55 am

Indian Equity Market: Tough challenges and more bumpy rides are ahead!

I am writing this Market update after a very long time since, 07th Sep'19, now the necessity has come, to share some of my market views with the readers of this article:

Though the New Year 2020, had started with a good note, the Nifty Index made high at 12430.50 on 20th Jan'20, but unable to surpass our threshold levels i.e 12500, made attempts but the Head & shoulder pattern in daily chart at 12280 levels given the clear indication for the drop till 11930, as expected it came down till 11930 and further sell-off continuing till today, the low made today 11269.80 (as of 11.55 am), the global sell-off due to the Corona Virus impact spreads worldwide, the numbers of death increasing day-by-day and infected numbers are alarming one and also, it is creating the jolt in the global economy in terms of Imports and Exports, affecting the supply chain and distribution too.

The global economic slowdown will not isolate our Indian Economy since, we are also facing unrest in the domestic political disturbance and the weak economic data like GDP and IIP numbers and Inflation started moving up northwards. 

The important factors to watch-out now:

1. Corona Virus impact, how long it is going to prevail.. no one knows

2. Global Sell-off, it may continue till any control mechanism is placed for the Corona Virus impact

3. US Dollar rate against INR appreciating due to the vigorous sell-off by FIIs, any close above $72.40 then, the rally is possible till $73.50-$75.

4. Domestic demand in all leading sectors, facing a slowdown 

5. The Q3 GDP data is expected by today

The Indian Inc. Q3 (Sep-Dec'19) performance is good as on date, 3889 Indian corporate companies were declared their earnings as of 27th Feb, out of 4248 in total, the Net profit jumped 399.10% i.e. Rs.92,569.40 Cr, when compared with last quarter i.e Q2 (Jul-Sep'19) the Net profit was Rs.18,547.60 Cr.

Technical View on Nifty Index:

Based on the outcome of the above factors the Nifty Index may take further direction. The possible downside supports are seen 11200-11090, any weakness below 11090 then, the Nifty Index may test 10850-10640-10575, the weakness may negate only when, the Nifty Index move above 11750 and closes for three consecutive sessions. 

Anyone wants to bet for the medium term perspective may invest in lower valuation stocks in Nifty top 100 companies for 10-20% return at 11000-10640 levels in the Nifty Index.

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