Markets rose for the week ending 16.09.2017. Global rally lifted stocks and Nifty ended firmly above 10k at 10085. It was up 1.5% for the week. Sentiment all across the globe was that of relief. Although, the routine Friday came up with usual news of North Korea activity. This put some brakes on bulls as they were trying to get past the all time highs. Markets sentiment is soured by the recent act of North Korea but such things seems to have a new normal status.
Technically speaking Nifty is past 10k which was its major intermediate hurdle. This in turn will be the level to defend. This week, 10k will provide a certain amount of support on the way down. On its way up Nifty will face supply in the 10100-150 region. It did briefly hit 10131 and receded back below 10100. This is a major supply zone and will be interesting to see it markets blast past this. In all likely hood there can be a very slow and uncertain breakout. Almost a forced move beyond all time highs. The near term support is locked at 9800, while 10k looks good for this week. The more Nifty stays above 10k, call writers will be on their toes.
Fundamentally, nothing has changed, nothing will. Post the 400 point correction, Nifty has smartly and slowly climbed up a wall of worry. Multiples are still way beyond normal. P/E nearing 26-27 range. This is in the historical high range. Still due to lack of negative triggers and ample amount of domestic flows, markets continue to frustrate people who are sitting on cash. FIIs have been net sellers to the tune of 3000-3500 cr. After almost a month of relentless selling Friday they bought 400 cr. A noteworthy number. DII’s continue to force-feed the markets. They pumped in 3500 cr+ in the same week. SIP flows, MFs selling continues to attract retail to equities. People want to make merry while it lasts!
Globally, DOW recorded its highest ever close. It now is firmly above 22k. Apple’s launch was muted. People say Jobs invents, Cook improves! Stock reacted as if nothing new had happened. Markets world over look flushed with liquidity. Korea holds the key. It is almost as if markets expect Korea to do some testing on Friday. A surprise jolt could trigger something catastrophic, albeit the probability is low.
Sector watch – Metals cooled off slightly. Still they look somewhat overheated but the strongest index in all. Nifty metals should try to test 3750. Bottom fishing in pharma continues, the sector looks interesting with a lot of sentiment changing. Nifty Pharma can test 9900 this week.