The momentum in the equity market continued for the second consecutive week ended May 7, though it was a volatile and range-bound week.
Overall the market has been in a range for three consecutive months and there has been no directional move in the market.
“Though we have not seen any major impact of the COVID second wave on markets yet, the news of strict lockdown in several states may deteriorate the sentiment ahead.
“We expect revenues to increase by around 9 percent YoY mainly due to ramp up in execution of core E&C segment.
Motilal Oswal expects order inflows in core business to increase 10 percent YoY at Rs 53,000 crore.
Infact there is a fear of more waves as recently K Vijay Raghavan, the Indian government’s principal scientific advisor, himself told in a news conference, “Phase 3 is inevitable given the high levels of circulating virus.
The outflow by foreign institutional investors continued in the month of May as well, as they have net sold more than Rs 5,000 crore worth of shares in May so far in the cash segment, in addition to Rs 12,039 crore of selling in April.
The important economic data points to watch out for in the coming week would be IIP and inflation.
Several key commodity prices continued their upward momentum on the back of likely strong demand amid global recovery hope especially after optimism over the US economy and easing travel related restrictions in Europe.
Last week, LME Copper price has jumped to record high levels above $10,200 per tonne; crude oil has resumed its upward momentum and tested the highest level since March, gaining 1.5 percent during the week and 8.5 percent in the last one month.
However, Dallas Fed Robert Kaplan said he wants the central bank to start talking about reducing policy accommodation sooner rather than later,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
“If commodities continue to trade higher, inflation concerns may strengthen further fueling debate about how long central banks can continue with loose monetary policies.
The Nifty50 gained 98.40 points on Friday but formed Doji kind of pattern on the daily charts as the closing was near to its opening levels, indicating indecisiveness among bulls and bears.
But as long as Nifty trades below the lower end of the rising channel, there are chances of this rally being a bull trap,” said Nirali Shah, Head of Equity Research at Samco Securities.
On the option front, the maximum Put open interest was seen at 14,500 followed by 14,600 and 14,800 strikes while maximum Call open interest was seen at 15,200 followed by 15,000 and 15,100 strikes.
The brokerage further said, “Since mid-March, the Nifty was unable to close above these levels.
Volatility in the markets moved lower towards 20 , which is the lowest level for volatility since mid-April.