For the weekend 08th Oct'21-Friday... Updated on 02.10.21, Saturday-3.30 pm

Last week Nifty trend: Nifty Index last week, opened on a positive note i.e., 17932.20; on Monday, it made a weekly high 17943.50 thereafter, the sell-off dragged the Index throughout the week, made a weekly low on Friday 17452.90 and closed the week at 17532.05 on a negative note with a weekly loss 321.15 points i.e., -1.80%. 

Sector wise performance: Last week, most of the major sectoral indices were closed with a positive note, except Nifty IT, Nifty Financial Services, Nifty FMCG & Nifty Bank, on the positive side, the Nifty Energy index leading with a weekly gain 5.91%, followed by the Nifty Metal gained 2.56%, Nifty Pharma gained 2.09%, Nifty Auto gained 1.61%, Nifty Realty gained 0.95%, Nifty Infra & Nifty Health gained marginally 0.49% & 0.39%, respectively. On the other hand, Nifty IT leading to a weekly loss -6.26%, followed by Nifty Financial Services lost -2.64%, Nifty FMCG lost -1.68% and Nifty Bank lost -1.60%. Likewise, Nifty Midcap Index closed on a positive note with a weekly gain 0.84%; as well as, the Nifty Smallcap Index also, closed on a positive note  with a weekly gain 0.64%. 

Institutional Investors trading data: The Foreign Institutional Investors-FII's last week, continued as a net seller in the Equity segment, this week they sold to the tune of Rs.6092.56 crore on the net basis; at the same time, the Domestic Institutional Investors-DII's, continued as a net buyer, they bought to the tune of Rs.4305.40 crore on the net basis, as per the data forwarded to the SEBI, we must watch the FIIs/FPIs behaviour this week, whether they continue the funds outflow or not.

USD Vs INR: The USD Vs INR opened near $73.81, made a weekly low $73.61 on the opening move; thereafter, it moved up, made a weekly high $74.46 on Wednesday, further it moved down till $74.08 and closed the week with a positive note at $74.15. This week, the USD Vs INR should move above $74.28-74.36, if moves and sustain above $74.36 then, the USD may re-test $74.46-74.54-74.63-74.69-74.74-74.84-74.98-75.09 levels. On the other hand, if the USD moves below $74.07-73.99-73.91 then, it may re-visit $73.88-73.81-73.72-73.62-73.56-73.50-73.42 levels in the near term. 

Key Events: No major key events are expected this week on the global front except US unemployment data for Sep'21, which is expected on 08th Oct-Friday. On the domestic front, the major event this week is RBI MPC Meet, scheduled on 08th Oct'21-Friday and PMI data for the Services sector, we must watch this week. The Reserve Bank of India, may maintain the status quo in the repo-rate at the same level of 4%, we must wait & hear, what the RBI Governor says about the tightening the liquidity and about  the Indian Economy. Further, the India Inc. Q2 (Jul-Sep'21) results may starts on or after 10th Oct'21, these are the events, to be taken into the consideration.

Q1-2021-2022 Earnings: The India Inc. Q1(Apr-Jun'21) corporate results, so far 4024 out of 4248 companies were declared their Q1 results, on a QoQ basis the Net profit seen a drop and continued in the negative zone by -13.70% when compared with last quarter i.e, the Net Profit of these 4024 companies were at Rs.172,895.60 crore, as against in the Q4 (Jan-Mar'21) the Net profit seen Rs.200,439.10 crore. On the other hand, on a YoY basis, the Net profit seen positive growth about 416.90%, last year these 4024 companies made a Net profit Rs.33,447.60 crore. 

Covid19: The Covid-19 second wave has continuously been witnessed a flat trend, as of today the country seen everyday covid positive around 25k, the number of active cases now at 273,889 the death toll rose to 448,573 the daily death rate has moved down below 250 in a day. We will have to wait and see the further developments, the lockdown relaxation already started, the daily positive numbers are moving down, may be from Oct-Nov, the Covid infected numbers may rise due to the ensuing festive seasons across the India, it depends on the vaccination drive, around 89.75 crores vaccinations are used till now.  

Crude Oil: Crude Oil price has traded in range bound between $73 to $76 per barrel with upward bias and hovering around $75, the domestic Petrol & Diesel prices continued to sell above Rs.100-102 mark without any major changes, since the International Crude price hovering near $74 and USD Vs.INR is also hovering above $74, hence, the oil marketing companies started to increase Petrol and Diesel prices last week.

Price Earnings: The price valuation i.e, Price Earnings ratio-PE, has come down from the last week levels, i.e., 27.29 times and  settled on Friday at 26.84 times. The lower PE valuation around 26-27 times, is due to the changes have been made in the PE calculation from 01st Apr'21 i.e., from an existing pattern of standalone profit, to the consolidated profit and Nifty50 stocks Q4 good numbers when compared with last year at the same quarter.  

Advance & Decline (ADR) Ratio & Average Daily Volume(ADV): Market breadth, in the overall NSE listed stocks, last week seen in a negative zone, out of 2120 stocks were traded daily on an average basis, 4930 stocks advanced and 5213 stocks declined, the ADR maintained 0.95 times; also, the Nifty50 stocks ADR seen in a negative zone at 0.71 times with 103 advances and 146 declines, this data infers that, more selling by profit booking seen in the Nifty50 stocks, rather than NSE listed stocks.

F&O Cues & PCR (Put/Call Ratio): The Nifty future was settled at a discount 1.85 points from the last week premium level 0.40 points, the Nifty Futures Open Interest-OI as of Friday at 12018150 i.e.,240363 contracts, when compared with the last week levels 12059850 i.e., 241197 contracts. The PCR(Put/Call Ratio) has moved up to 0.90, from the last week level i.e., 0.88, the maximum open interest seen in 17300 PUT option and 17600 CALL option, it indicates this week, the Nifty may face a strong hurdle near 17600 and 17300 levels, may act as a strong support.

This week Nifty Trend: Nifty Index as written last week, the technical sell-off continued till our threshold levels, i.e, 17465, made a weekly low 17452.90 and closed well above 17465. By considering the above mentioned micro, macro data and other factors I, conclude the weekly outlook that, the Nifty Index on Monday may open on a flat to positive note to test 17570-17610-17640, subject to the Asian indices movement if, moves above 17640 then, the pull-back rally may try to lift the Index to test till 17665-17700-17740-17792 levels, further strong move above 17792 may take the Index to re-test the recent all time high 17947 then, till 18085-18150 in the near term. On the other hand, if the Index unable to move above 17570-17640 levels, then the weakness may drag till 17500-17455-17435 further, sell-off below 17435 then, the Index may re-visit 17325-17265-17150-17060 levels very soon. It looks, till this week the Index may trade with a consolidation between 17350-17800 levels, further move depends on breaking either side, to continue the journey towards that direction. 

Trading Strategy: The Investor/trader those who booked profit near 17900-17950 levels, start to re-invest partially near 17500-17300 then, any further correction till 17000 levels in the Nifty50 stocks, especially Nifty IT stocks for the short to  medium term perspective to again 5-10-15%.

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