Market Outlook for the Week of September 18-22, 2023

The Indian stock market is expected to remain bullish in the coming week, supported by positive macro data, continued buying from domestic investors, and reduced selling by FIIs. However, experts caution that the market is overbought in the short term and could see some profit-booking at higher levels.

Key Levels

• Support: 20,000, 19,900
• Resistance: 20,300, 20,480-20,500

Expert Views

• Ajit Mishra, Religare Broking: “We expect a positive tone to continue in the Nifty, with some intermediate consolidation citing a hurdle at 20,300 levels. Participants should maintain a ‘buy on dips’ approach and look for stocks offering a favorable risk-to-reward ratio.”
• Amol Athawale, Kotak Securities:“On daily and weekly charts, the Nifty has formed a breakout continuation formation which is indicating that the uptrend wave is likely to continue in the near future. Although the larger texture of the market is bullish, the market is in temporary overbought conditions, and hence we could see some profit-booking at higher levels. For short-term traders, 20075 and 20000 would act as key support zones while 20300-20375 could act as crucial resistance areas for the bulls.”
• Rupak De, LKP Securities: “The trend is expected to remain positive as long as the Nifty remains above the 20,000 mark. In the short term, there is potential for the Nifty to move towards the 20,480-20,500 range on the upside.”
• Jatin Gedia, Sharekhan by BNP Paribas: “Overall, the short-term outlook is positive, however considering the sharp run-up since last three trading sessions we should have a cautious stance and be prepared for a correction. In terms of levels, 20050 – 20000 is the crucial support zone while 20200 – 20250 shall act as an immediate hurdle zone.”
• Rajesh Bhosale, Angel One: “Going ahead, the next leg of up move may not be as swift as recent times, potentially involving in-between pauses or price corrections. The overall sentiment remains positive, and the advisable approach is to view dips as buying opportunities. In this scenario, the previous resistance around 20000 is likely to act as immediate support, while Tuesday’s panic low of 19900 remains a critical pivot point. On the other hand, in an uncharted territory, the next resistance zone lies in the range of 20400 to 20500.”

Conclusion

The Indian stock market is expected to remain bullish in the coming week, but investors should be aware of the potential for profit-booking at higher levels. It is advisable to maintain a cautious stance and view dips as buying opportunities.

Additional Considerations

In addition to the factors mentioned above, investors should also monitor the following global events and economic data releases in the coming week:

• Global: US Federal Reserve policy meeting, US GDP data, China PMI data
• India: Inflation data, IIP data, earnings season continues

• 21 Sep

  SJVN shares tank 9% on OFS launch at deep discount

  SJVN shares tanked 9% in early trade on September 21 after the government launched an OFS for up to 4.92% equity stake at a deeply discounted floor price of Rs 69 per share, a 15% discount to the previous closing price. The OFS opens for non-retail investors on September 21 and for retail investors on September 22.

• 21 Sep

  Sheela Foam shares jump on QIP launch

  Sheela Foam shares jumped nearly 2% on September 21 as the company launched its proposed QIP to fund its acquisition of Kurlon. The floor price for the QIP issue is Rs 1,133.99 per share. Promoters hold the majority 72.95% stake in the company. Sheela Foam stock has delivered a return of 7.14% over the last six months.

• 21 Sep

  Infosys Stock Down Despite Partnership with NVIDIA for Generative AI Tools

  Infosys stock fell nearly 1% on September 21, despite the company's announcement of a partnership with NVIDIA to build generative AI tools for businesses. The partnership will see Infosys integrate NVIDIA's AI Enterprise ecosystem into its AI-first offering Topaz and train 50,000 employees on NVIDIA's AI technologies. NVIDIA also announced partnerships with Reliance and the Tata Group in early September. The partnerships will focus on providing AI supercomputer technologies, developing and processing generative AI applications, and upskilling employees in AI.

• 20 Sep

  Aviation sector faces double whammy of high oil prices and low passenger traffic in Q2FY24

  The aviation sector is facing a double whammy of high crude oil prices and declining passenger traffic in Q2FY24. This could impact aviation companies' near-term profitability if they do not have the right pricing power mix. Analysts at Kotak believe that the shift to international travel could limit pressure on yields, especially for Indigo, which dominates 63% of the domestic market share. However, analysts at IDBI Capital suggested investors warrant caution on the overall sector in the near-term. The aviation sector is facing a double whammy of high crude oil prices and declining passenger traffic in Q2FY24. This could impact aviation companies' near-term profitability if they do not have the right pricing power mix. Analysts at Kotak believe that the shift to international travel could limit pressure on yields, especially for Indigo, which dominates 63% of the domestic market share. However, analysts at IDBI Capital suggested investors warrant caution on the overall sector in the near-term. The aviation sector is facing a double whammy of high crude oil prices and declining passenger traffic in Q2FY24. This could impact aviation companies' near-term profitability if they do not have the right pricing power mix. Analysts at Kotak believe that the shift to international travel could limit pressure on yields, especially for Indigo, which dominates 63% of the domestic market share. However, analysts at IDBI Capital suggested investors warrant caution on the overall sector in the near-term.

• 20 Sep

  PSU stocks rally may pressure government for disinvestment

  PSU stocks have rallied in recent times, which could pressure the government to disinvest in these companies in the run up to the 2023 state elections and 2024 general elections. The government may need to boost social spending ahead of the elections, which could lead to a sharp increase in expenses. A PSU rally could raise the chances of disinvestment in the near-term, as the government would need to raise funds to meet these expenses. Jefferies is cautious on the overall markets for the near-term, given higher global yields, rising crude prices, and rich valuations. They have trimmed weight on mid-cap industrial and property plays and shifted focus toward

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