Markets Lose Nearly 0.5% Amid Weak Global Cues
Markets started the week on a feeble note and lost nearly half a per cent, tracking weak global cues. After the gap-down start, Nifty traded under pressure in the first hour however resilience in select heavyweights capped the decline as the session progressed. Eventually, it settled around 19,488.00; down by 0.26 per cent. Meanwhile, a mixed trend across the key sectors kept the traders occupied, wherein energy and metal closed higher while IT, FMCG and pharma were among the top losers. Amid all, the broader indices maintained their outperformance as the smallcap index gained over half a per cent.
We are largely mirroring the US markets on the benchmark front however there is no shortage of stock-specific trading opportunities, thanks to prevailing outperformance of the broader indices and rotational buying across the sectors. We thus reiterate our view to focus more on stock selection and prefer long trades until the Nifty future breaks 19,303 points.
Meanwhile, India's retail inflation eased in October on lower food prices, edging closer to the central bank's medium-term target of 4 per cent, which it has said would need to be firmly in sight before it can start lowering rates. Annual retail inflation fell 4.87 per cent in October, down from 5.02 per cent the previous month. A Reuters poll of 53 economists had forecast a rate of 4.80 per cent.
Food inflation, which accounts for nearly half of the overall consumer price basket, rose 6.61 per cent in October as compared with 6.56 per cent in September. October inflation was below the Reserve Bank of India's (RBI) upper tolerance band of 2-6 per cent for a second consecutive month but the central bank last month kept its key lending rate steady for a fourth consecutive policy meeting and said it remains focused on bringing inflation close to the target of 4 per cent.
Technically, the important key resistances placed in Nifty future are at 19,505 levels, which could offer the market on the higher side. Sustainability above this zone would signal opens the door for a directional upmove with immediate resistances seen at 19,533 - 19,575 levels. Immediate support is placed at 19,404 - 19,373 levels.
