During the first week of the calendar year 2020, market has remained volatile, by steeping to the low levels of 48,174 and touching the high of 48,616. At the start of the week, both the indices were soaring, as the investors sentiments were boosted supported by the positive global cues, such as, US unemployment claims, Manufacturing Purchasing Manager’s Index (PMI), Factory Orders, UK’s data including Final Manufacturing PMI and M4 Money Supply, Euro zone’s Retail Sales, Unemployment change, M3 Money Supply, Services PMI, Producer Price Index (PPI), which came in better than expected.
As far as domestic data is concerned, Market Manufacturing PMI and Export numbers for the month of December 2020 were better than consensus expectations, which also supported the bull sentiments. Additionally, the Indian government gave approval to two of the COVID-19 vaccines for the country, which is again a positive sign for the economy. However, the gains were capped after the imports of the country for the month of December 2020 also increased, resulting into decreasing the trade balance numbers, which came in below the consensus expectations.
In the US, on Wednesday, it was decided that Democrats and Republicans will resume the process of counting the Electoral College votes that will certify President-elect Joe Biden’s victory. President Trump’s supporters left a rally where he was speaking and stormed the US Capitol, breaching the Senate chamber and forcing Congress to halt the certification of the Electoral College vote for President-elect Joe Biden on Wednesday, Jan. 6, 2021. The global markets soaked, after the investors feared ahead of this US political uncertainty, and so did our domestic markets. However, on Thursday morning, the Indian markets advanced after democrats took control of the Senate, following key elections.
As for the sectoral indices’ overall performance during the week, Bank Nifty, Nifty IT, Nifty Media and Nifty Metal were the outperformers, which increased by an average of around more than 0.5%, out of which, IT and Metal stocks increased by around >1%. However, for the week, FMCG stocks were the underperformers.
For the upcoming week, we expect higher volatility in the market ahead of the global cues. India VIX has also been on the up-move. We expect Nifty to remain in the range of 13,658 to 14,700, whereas, we expect Sensex to remain in the range of 47,214 to 49,459.
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