Download Foreign Liquidity pushing market higher Market opened the week

Foreign Liquidity pushing market higher
Market opened the week down mirroring the Wall Street worries but pulled up slowly on back of
huge year end liquidity gush flooding the financial markets. FPI’s have made a record equity
purchases in the month of March amounting to Rs 27000/- Crs, unseen in last ten years. DIIs have
played contra and sold stocks worth Rs 6000/- Crs, partially booking profits on stocks acquired
during demonetization fall when they purchased shares to the tune of Rs 18500/- Crs, indeed a
smart move. GST passed in Lok Sabha at break neck speed, shows the conviction of the government
to accelerate the reform agenda for the country. July 1st seems to be the reality. CL Educate Ltd lists
at 20% below the issue price contrasting to the 100% listing gain for D-Mart. Markets are far more
intelligent and mature; investors should thoroughly study the business model and then apply,
blindly following grey market premiums will not help. Fundamentals will eventually count, this is
the lesson for all forthcoming IPO’s.
Events of the week: The death of physical infrastructure has arrived in India similar to US, wherein
chain stores and malls are closing down, Warren Buffet selling shares in such companies etc. Kotak
Bank shifting to digital model signals the sunset for physical branch models. The disruption in the
banking space has begun which will result into shrinking branches but digital penetrations will
increase. The reverse race has begun as to who reduces the branches more.
Technical Outlook: The market is still in corrective mode. Indicators are showing some minor
divergence indicating some profit booking can still emerge next week. The momentum of this
week’s rally was slightly slower which means still the bulls are not in full control and therefore some
more consolidation is expected before the up move begins. The market may come to fill the gap and
touch the 9000 levels before making any decisive move up. Traders should buy on dips. All long
positional trades must have a strict stop at 8900 levels on the Nifty.
Expectations for the week:
Indeed Indian market danced to the tune of global market. The strength of US President has
weakened to carry out pro America reforms or America First policy which in a way is good for
country like India. The worry for Pharma sector now is the appreciating Rupee, the moment
reversal in Rupee happens, which seems most likely, the rally in pharma will restart and IT sector too
will follow as the concerns for H1-B visas are also easing. Investors should watch out Rupee
devaluations for lightning action in these two sectors. The Supreme Court’s diktat on BS III
automobiles offers an opportunity to accumulate shares of these auto companies. The annual
results season will start in a week’s time, until then the market is expected to remain in sideways
zone. Investors should remain invested and traders should buy on decline with strict stops.
Nifty50 closed for the week at 9173.75 up by 0.72 %.