Indian Stock Market Outlook by Epic Research
Indian Stock Market Outlook by Epic Research

Indian markets scaled new highs this week as the global sentiment was bullish. As the U.S. Government announced new tax rates, investors in the United States are upbeat about economy and future results from companies (mainly due to tax cuts). BSE Sensex and NSE Nifty touched all-time high during the week. Trading in majority of stocks remained positive and many companies touched their 52-week high during the trading sessions.

Buying interest was observed in select blue-chips and small and mid-cap space. Nifty touched a new all-time high of 10461.7 and closed the week on a strong note as it ended just a tad below the all-time highs at 10452. The week started off on a consolidated note with the market in a tight range between 10350 - 10280 levels. Mild profit booking from Banking sector also showed lackluster momentum. Renewed buying interest in few sectors along with momentum picking up in specific sectors.

India's improved ranking in "ease of doing" business was the main driver for the break out as Nifty breached the consolidation and inched up to new all-time highs. Renewed buying interest in the banking sector, specifically, Banking and some private banks also contributed the gains. Bank Nifty saw a huge move as it added gains for the second consecutive week and broke out of almost 3-month range. A new high of 25695 with a strong note shows the momentum may continue. Bank Nifty has next resistance at 25900 - 26000 levels and we may see momentum continuing in the coming week.

Nifty momentum may continue as we see next hurdle at 10570. Presently we look at 10300-10350 as the short-term base that has been formed. Support on an immediate basis is at 10350 - 10300 and breach of these levels will turn bulls cautious on a short-term basis. Resistance for the market is at 10550 - 10570. Any dip in between this should be an opportunity to trade for higher levels.

Few sectors like PSU Banks, Auto and FMCG continue to do well and may also gain further momentum in the coming week. Realty, Banking and select stocks from mid-cap and small-cap space may outperform the week. We continue to maintain our bullish stance in these sectors along with broader indices as Buy on Declines.

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