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The Nifty snapped a 3-week rally last week on fears over the US economy. The start of this week is muted. Do you expect consolidation in the markets to continue at the Fed meeting?
Benchmark indices were seen improving by 1-2% last week on weak US jobs data and fears of a US recession in 2025. Although crude oil prices fell to 14-, global markets also witnessed selling. The low for the month clearly shows that investors appear to be treading cautiously ahead of the US FOMC meeting next week.
It is a foregone conclusion that the probability of a rate cut is very high, it is the magnitude of the cut that is driving the markets. Also, there is a feeling from some quarters in the US that the US Fed seems to be behind the curve in rate cuts this time around. Hence, we are witnessing uneasiness and uneasiness in the markets, which can be affected either way until there is clarity.
What are the important levels for Nifty and Bank Nifty for this week?
Nifty has outperformed Bank Nifty based on strength in IT, Pharma and FMCG. However, given the current domestic and global market scenario, markets are expected to trade sideways, with crucial support for the Nifty seen around the 24400-24500 zone while resistance is seen around the 25,200-25,300 zone.
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For Bank Nifty, crucial support is seen around 49,600-49,800 zone while resistance is seen around 51,400-51,600 zone.
Banks’ underperformance is not abating and is a major concern for the markets. Should investors make any new moves if the view is medium-term?
Banks are currently struggling to maintain their Net Interest Margin (NIM) as credit growth and deposit growth have not kept pace, affecting the banking sector. Further, some private sector banks – such as ICICI Bank, Axis Bank, have managed to maintain their growth, but many public sector banks are witnessing higher levels of growth in the near term, adding to the existing pressure.
Overall, some frontline banking stocks should ideally be in an investor’s long-term portfolio, which can be added in stages, rather than all at once.
Crude oil has hit a 14-month low, boding well for OMC, paint and tire stocks. Do you agree with this scenario and have you seen your choices here?
A sharp sell-off in crude oil prices has definitely boosted OMC, paints and tire stocks as their cost burdens eased, boosting their bottom lines, but it seems to be short-lived as most of these stocks sectors are witnessing profit booking. . Only a sustained drop in crude oil prices could add some significant value to these companies, but it is highly likely that OPEC may announce crude oil production cuts in the coming weeks, boosting prices, as OPEC is high. Comfortable with prices trading in the $75-$85 range.
FPIs have been net buyers so far in September which is a positive despite valuation concerns. Where are they seeing the most action and should retail investors take their cues from them?
So far in September itself, FPIs have raised Rs. 11,000 crore has been invested, clearly signaling renewed interest in the Indian markets, with money flowing into a few large caps as well. Given the possibility of a rate cut in the US and emerging opportunities in Indian markets based on strong macro-fundamentals, FPIs are likely to continue to view India as an investment opportunity. However, given that valuations cannot be called cheap in some pockets, it will prevent FPIs from going all out, instead choosing to be selective in their approach.
Piramal Pharma, Godrej Industries and Godfrey grabbed the eyeballs with big rallies while Vodafone, Oil India and Hudco were among the top losers? What should investors do with them?
Investors should book at least 50% profit in Piramal Pharma, Godrej Industries and Godfrey Phillips, unless they want to hold these stocks for a long-term perspective of 4-5 years, as the market is expected to be volatile in the short term. U.S. The run-up to the Fed meet and the US presidential elections are both significant events, capable of affecting both domestic and global markets.
On the downside, investors need to keep a close watch on Vodafone and ideally look for exit opportunities. OIL India and HUDCO can be held with support seen around 590/600 zone for OIL India and 220/230 zone for HUDCO and exit opportunities can be looked for on bounce back, as short-term tops formed for both these stocks. is
(Disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. These do not represent the views of Economic Times)
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