Indian Stock Market Outlook by Epic Research
Indian markets ended the week with major losses and investors have witnessed decline in valuations across the board. Many analysts are suggesting further downtrend in the Indian markets. Comments from Mr. Mustafa Nadeem, CEO, Epic Research on market outlook.
Nifty ends below its 20 Day SMA for the second consecutive week indicating persistence in the bearish momentum in short term. Many factors led to this fall despite global cues been positive in the second half of the week.
The underlying sentiment in the market is negative which is an outcome of multiple factors. The global markets are oscillating at new all-time highs specifically the S&P and Dow while Asian markets were also positive. The domestic cues somehow have not supported the market and that is what is causing the current trend.
The Volatility index has seen a sharp up move which was up almost 6% and coupled with that Nifty has seen a breakdown from a Flag pattern which is a trend continuation pattern. A bearish flag has marked much lower levels for Index in the coming week.
The slowing economy concerns were further heightened as consumer good sales in Rural areas have slowed down. This is a major concern at the moment since the government's focus is now to improve the rural demand and improve expenditure. With that, The monsoon has been dull till now and has been much lower than expected. the major crop and Agri producing belt have seen the deficit in the rain and it is posting another concern to the economy. Along with that, we are already seeing a rise in inflation from the last few months. Earnings have been muted till now and we haven't seen outperformance from any numbers while banks and financials are seeing a drop in NIM and increased GNPA. These factors have led to dismal in foreign investors and we are seeing outflow from the equities market.