Indian Stock Market Outlook by Epic Research
Indian Stock Market Outlook by Epic Research

Global markets recovered by Indian market remained under pressure last week. The markets recovered during Friday's trading session but market analysts are still not sure if the markets will show a strong upside movement in the coming week. Have a look at Epic Research analysis on Indian Stock Market.

Nifty rebounds after three weeks of consecutive losses and end with indecisiveness forming a long-legged Doji on the weekly chart. A week with a lot of consolidation as the market traded within a range of 2%. Global market cues were also mixed as most leading indices were in consolidation while only Euro markets traded higher. Late weekend buying helped Nifty to almost reclaim the 10500 mark while bank Nifty also rebounded from 24800 to comfortably settle above 25K mark.

The week started off with consolidation as Global cues were mixed with most indices in consolidation. A better than expected Data from US and Eurozone helped leading indices to form a short-term bottom after the sell-off that was seen in the first few weeks of February. Better than expected building permits and consumer sentiments sidelined the aggressive bears as indices went into consolidation. Higher Mfg and Services PMI data also boosted the sentiments during the week.

Indian equity markets opened higher but lost almost 1.5% as it dropped from a critical resistance zone of 10500 to 10350 levels on the back of recent scams being unearthed in the banking sector. The fire spread in the banking sector, which shredded down to below the 25K mark. Nifty consolidated within the range of 10350 to 10450 as Bulls defended the 100 Days SMA very well. Technically, We have never seen Nifty going below the critical average in last 1 year, while it has always worked well for bulls and that too at the point of time when we have an expiry. Nifty bounced in the later part of the week covering the losses for the week to end almost at the same price where it opened the week, making it an indecisive week while it does calm down the aggressive bears. In Coming week We need to see follow up buying and a close above 10600 for this trend to continue on the upside. In case nifty is not able to cross this mark, we may see selling pressure being built up since it has been a resistance to entire February series.

The rollover analysis suggests the data be mildly weaker than before, since the rollover stats, provisional, indicated a weaker rollover. Nifty provisional data suggested a rollover of 2.5%, which was down by almost 3% as compared to January while bank Nifty saw a sharp cut in Feb Series from 71.05 in Jan to 65.27%. In Coming weeks, We expect IT and Pharma sector to perform well since a good buying built up is seen there while apart from that sector like Realty, Fertilizers, and Aviation may do well. Oil and Gas and Chemicals may see some more pressure in March Series.

Fundamentally, We will be having a few crucial numbers of data which will be eyed by investors. Nikkei, MFG, PMI data which saw itself consistently above 52 in the last few months, also, a recent jump to above 54. It is expected to be above 52.7 levels while Infrastructure output will also be released which has been in the higher territory since July 2017. Investors and traders will be looking at a GDP growth rate, which will be released on Wednesday. Better IIP and economic data in the last few months may push GDP higher which was at 6.3% vs 6.5%. It is expected to be better than previous one and to be at 6.7 - 6.9% zone.