Mr. Market always knows but majority were surprised at 7% GDP
Market began the week with mild optimism rising mid week to cheer No Negatives from President Trump, but continued profit booking brought down indices by the close of the week. GDP numbers came at 7% growth for Q3 compared to previous year, which was a pleasant surprise to many economist but Mr Market knew it all. Markets had continuously sprinted since the beginning of this financial year as seen with the 1000 point rise in Nifty in previous two months, contrary to majority opinion on the street that due to demonetization the performance of the economy will get impacted. Even the so called most professional players the FPIs or the FIIs have also not been able to invested in this 1000 point rally. But collectively, Mr Market is far more intelligent and well informed as to what the future holds for it. That is why it is said, people cannot predict correctly all the time and therefore it is advisable to follow the Market rather than predict it.
Events of the week: ONGC is all set to take over complete control of HPCL from the government and forward integrate its operations. Whether or not the synergies will accrue, only time will tell, but one thing is sure such divestment will not affect the liquidity of the market, otherwise government divestments are the biggest show spoilers for bull market.
Technical Outlook: The market has entered in a narrow range of sideways corrections. On weekly chart there is a formation of small dark cloud indicating that the upward momentum has stopped for a while. Weakness in NIFTY50 inspite of index heavy weights rising indicates that the market is actually in a swift corrective mode but is not visible on the front line indices. The rally of two months has practically gone uncorrected and hence a natural correction is expected and the same is likely to continue for some more time. Traders are expected to trail their long positional trades at 8800 levels on the Nifty. Traders should keep low profile during corrective phase and go all out when the market clearly breaks above 9100 on the Nifty50.
Expectations for the week: The market is in no big hurry to move before the outcome of state elections until March 12th, which will give a signal to FPI’s and domestic investors to commit fresh funds. There are many IPOs lined up for the month of March & April, the rush is probably the highest in last 5 years. Such rush of IPO’s approximately worth a billion dollar also poses a threat of short term top in the market amid rising barometer of optimism, however the quality of IPOs are good and must be subscribed by the investors for long term gains. IPO of Music Broadcast Ltd and Avenue Supermarts Ltd should be subscribed to. In view of this optimism in the IPO market and keenly awaited assembly election results in some important states, market is likely to remain in a range bound zone. However the undercurrent of the market is strong; investors should currently hold on to their portfolio and accumulate more where prices of quality stocks have corrected. Nifty50 closed for the week at 8897.55, down by -0.47%