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Market outlook for this week: Key Nifty, Bank Nifty levels and events to watch out for

07 Nov , 2021   By : Kanchan Joshi


Market outlook for this week: Key Nifty, Bank Nifty levels and events to watch out for

After an extended weekend, Indian markets are likely to start a fresh week with a positive note on the global backdrop. But, analysts say, there is a risk of selling pressure at higher levels as Indian markets are underperforming the global peers where the near term texture has changed to “sell on rise" from “buy on dip".


Indian stock market benchmarks Sensex and Nifty managed to gain more than 1% in the week gone by, offering some respite to participants after two weeks of decline. Favourable global cues combined with upbeat GST collection numbers lifted the sentiment. A mixed trend was witnessed on the sectoral front wherein realty posted phenomenal gains of 10%. The broader indices also witnessed recovery and gained in the range of 2.5%-3.2%.


“In the coming week, participants will be closely eyeing macroeconomic data i.e. IIP and CPI inflation of November 12. We’re going to see noticeable traction in the primary market as well as Paytm IPO is opening for subscription on November 8," says Ajit Mishra, VP Research. Religare Broking.


Paytm, Sapphire Foods India and Latent View Analytics are set to launch their IPOs this week to collectively mop up about Rs21,000 crore.


On the earnings front, some of the prominent companies like Aurobindo Pharma, Britannia, BHEL, IGL, M&M, Berger Paint, Pidilite, ONGC and Tata Steel will announce their results along with several others.


“Indications are in the favour of further consolidation in Indian markets. However, the range could be broader next week. On the downside, Nifty would find support around 17,750-17,600 levels. In case of a rebound, the resistance remains intact at the 18,000-18,100 zone. Amid all, we’re still seeing noticeable action on both sides so participants should maintain their focus on stock selection and overnight risk management," says Ajit Mishra, VP Research. Religare Broking.


Markets will remain busy dealing with global macro numbers where US inflation numbers that are scheduled on 10th November will be the most critical one whereas China will also announce its inflation numbers on the same day. On the domestic front, we will have our IIP numbers on the 12th of November. 


“FIIs' behavior will be the most critical element from here because they are selling continuously and if they stick with their current mood then we can expect that correction can see the further extension," says Santosh Meena, Head of Research, Swastika Investmart Ltd.


“If we talk about the derivative data then FIIs' long exposure in the index future stands at 53% whereas put call ratio is trading at the 1.08 mark that is neutral for the market. If we look at the open interest distribution for the 11th November expiry then it is very wide between 17000-18000. However 18000 is immediate and strong resistance," he adds. 


World equities markets reached new heights on Friday, booking a week of solid gains following a strong US jobs report.


Technically, “Nifty is respecting its 50-DMA however the near term texture is weak where 18000-18200 is a critical resistance area where we can again see selling pressure while if Nifty manages to take out this zone then we can say that correction has ended and the market is ready for fresh expansion. On the downside, if Nifty slips below its rising 50-DMA that may coincide with the 17700 level then we can expect further weakness towards the 17450-17250 zone," says Santosh Meena, Head of Research, Swastika Investmart Ltd.


The “Nifty Bank is trying to respect its 20-DMA on a closing basis however 40500-41000 is a critical supply zone at any pullback and if it manages to sustain above 41000 level then it may again start to show strong bullish momentum. On the downside, 39000 is immediate support while 38500 will remain sacrosanct support," he adds. 


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