Sensex, Nifty Week Ahead: Markets on a Roll But Analysts say Stay Cautious

Indian markets ended moderately lower on Friday but posted their sixth weekly gains. The NSE Nifty 50 ended 0.19% lower at 11,194 on Friday while S&P BSE Sensex closed 0.03% lower at 38,128.9. But both the indices surged over 2.6% on a weekly basis. Global markets also retreated on Friday as China ordered the United States to close its consulate in Chengdu, in retaliation for being told to shut its consulate in Houston earlier this week. Next week, many market heavyweights including Reliance Industries will announce their earnings. On the global front, US Senate Republicans are expected to unveil their proposal for a fresh round of coronavirus aid. Also, Fed policymakers will meet next week, although expectations are low for any surprises. Renewed US-China tensions, surge in coronavirus cases and strong gains over the past six weeks have led to some analysts turning cautious.


"After the recent spike in Nifty, market is expected to consolidate for a couple of days, given flaring US-China relations and persistent rise in virus cases. Thus the market volatility is likely to continue. We would advise investors to continue with their defensive portfolio approach given the high valuations and maintain stock specific action. Traders on the other hand are advised to stay cautious and keep booking profit at regular intervals," says Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services. "On the upside, 11250 is the level to watch out for; whereas, 11050 has now become key support. As an optimist, one should remain hopeful as long as we are trading above this swing low (11050) and expect the market to give breakout in an upward direction to extend the move towards 11350 – 11400. However, a breach of lower end should be treated as a short-term pause to see some decent profit booking." "We continue to advise traders to remain light and keep booking profits wherever it's necessary. Also, if our markets have to see an upward move, the banking space plays a vital role in this. Hence, one needs to see whether Bank Nifty manages to convincingly go beyond 23000-23200 or not in the forthcoming week."





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