Markets pause winning streak, settle with a 0.5% cut; Analysts eye volatility amid holiday-shortened weekBy Ajit Mishra Markets ended a 7-week long gaining streak and settled with a cut of half a percent. The beginning was subdued however profit taking in the middle followed by recovery in the final sessions kept the traders on their toes. Eventually, both the benchmark indices, Nifty and Sensex, settled with a modest cut to close at 21,349.40 and 71,106.96 levels respectively. We saw the change on the sectoral front as defensive viz. FMCG and Pharma took the front seat while others witnessed profit taking. At the same time, we expect muted action from the global indices. The Dow Jones Industrial Average (DJIA) is also seeing some profit taking around its record high but expected to maintain the positive tone. We reiterate our positional target of 39,000 for the index and the 36,300-36,600 zone would act as a buying zone in case of any dip. We are eyeing further consolidation in the Nifty index amid mixed signals and the range could be broader now citing recent swings. A decisive close above 21,500 would pave the way for the 22,150 level and expect the 20700-21000 zone to offer a cushion in case the profit taking resumes. Participants should prefer index majors over the midcap and smallcap counters and focus more on FMCG, pharma and IT basket for long trades. Besides, we have identified a few stocks from the derivatives pack that look promising for long trades. Nifty (CMP: 21349.40) – We are eyeing further consolidation in the Nifty index amid mixed signals and the range could be broader now citing recent swings. A decisive close above 21,500 would pave the way for the 22,150 level and expect the 20700-21000 zone to offer a cushion in case the profit taking resumes. Bank Nifty (CMP: 47,491.85) – The banking index is also seeing choppiness around its record high zone, mainly due to the mixed action within the private banking space. And, indications are in favor of prevailing consolidation to continue but the bias would remain on the positive side. We expect up trend to resume above 48,200 and then gradually towards the psychological mark of 50,000 levels. In case of any dip, the 46,000-46,650 zone would act as a strong cushion. Traders should stay selective and limit aggressive trades. Bullish– Aartiind, Apollohosp, Chambalfert, Cipla, Deepakntr, Glenmark, ITC, Hindunilvr, VoltasBearish– ABFRL,Escorts, Deltacorp, M&M Fin, Marico, SBI Card (Ajit Mishra, SVP- Technical Research, Religare Broking. Views expressed are author’s own. Please consult your financial advisor before investing.)
However, that doesn’t take into account the fact that geopolitical tensions on the Middle East are undeniably rising again which will mean limited downside.”
In the U.S., oil drilling rigs were up by one at 501 last week, Baker Hughes said in its weekly report.JPMorgan forecasted 26 oil rigs to be added this year, most of them in the Permian during the first half of the year.
“The timing of drilling is paramount, as rig additions at the start of the year will contribute to 2H24 production growth,” the bank’s analysts said in a note.
“Despite an impressive 1 mbd of crude and condensate production growth in 2023, we expect 2024 supply to increase by only 400 kbd due to lower completions activity levels vs 2023.”