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Equity benchmarks recouped intra-week losses and concluded the week on a positive note at 11464, up 130 points or 1.2%. Broader market extended breather over second consecutive week as Nifty Midcap, Small cap lost 1% and 0.5%, each. Sectorally, IT, energy outshone while banks and metal underperformed during the week.Technical OutlookThe weekly price action resembles a hammer like candle with small real body and long lower shadow, as index recovered more than 300 points after witnessing supportive efforts from key support of 11100, as it is 80% retracement of August rally (10882-11794) at 11064. Since May 2020, index had not posted more than one negative weekly close. This rhythm was maintained in the last week as well, indicating up trend is intact.Going ahead, we expect Nifty to extend the ongoing consolidation (11100-11500) amid stock specific action as over past ten sessions index retraced 80% of preceding 10 sessions up move (11111-11794). Lack of faster retracement on either side signifies prolonged consolidation. We believe Nifty has stiff resistance in the range of 11500-11550 as it is confluence of a) 61.8% retracement of ongoing decline (11794 -11185), at 11562 b) negative gap (11527 – 11452) recorded on September 4, 2020.Our technical outlook is based on following monitorablesSince May lows, the Bank Nifty index has not extended intermediate corrective phase for more than nine consecutive sessions. In current scenario, Bank Nifty index has taken a breather after nine consecutive sessions decline (25233-22080) amid oversold placement of daily stochastic oscillator (placed at 23), indicating impending pullback in banking stocks, which will help Nifty to drive higher towards 11550, as constituents of Bank Nifty carries 33% weightage in NiftySince beginning of CY20, the domestic market have enjoyed positive correlation with developed market peers. Currently as DJIA has approached its key support threshold of 27500 (as per change of polarity concept June high of 27580 would now act as strong support). Thus, lack of follow through selling in global equities would be key monitorable for similar price action to pan out in domestic marketWe believe any cool off from here on would find its feet around key support threshold of 11100 as it is confluence of:80% retracement of August rally (10882-11794) at 11064Identical weekly lows of mid-August at 1111150 days EMA is placed at 11119We expect, broader market to relatively outperform the benchmark, as after past two week’s correction (~8%), both, Nifty midcap and small cap indices found support from ~50% retracement of their August rally. We believe, broader market has undergone healthy consolidation, thus any cool off from hereon should not be construed as negative, instead it should be capitalized to accumulate quality midcap and small caps which offers fresh entry opportunity with favourable risk rewardImportant data releases in next weekUS: Core Retail Sales MoM (Aug), Crude Oil InventoriesEurope: Industrial Production MoM, Trade Balance (July)China: Industrial Production MoM (Aug), Chinese Unemployment RateJapan: Industrial Production MoM (July), Exports YoY (Aug)India: CPI YoY, WPI Inflation (Aug)Upcoming Results Next WeekApollo Hospitals, HDFC Ltd, Solar Industries, P&G Healthcare, Zee Media, Vedanta Previous Week HighlightsIndia’s fuel demand fell 16.2% YoY to 14.4 MMT in August. Diesel demand was down 21% YoY and 12% MoM to 4.8 MMT. Petrol demand was down 7.5% YoY but up 5.3% MoM to 2.4 MMT in AugustAs per FADA data, total auto retail volumes fell 26.8% YoY to 11.9 lakh units. PV decline was at 7.1% while 2-W, 3-W and CV segments came off by 28.7%, 69.5% and 57.4%, respectively. Tractor segment was the only one in the green, with volumes up strongly by 27.8%As per AIOCD data, Indian pharma market (IPM) de-grew 2.2% YoY in August 2020 after exhibiting growth of 0.2% in July 2020 amid continued Covid-19 impact. Cardiac therapy grew 11.5% (vs. July: 13.1%), Anti-diabetic growth slowed down to 1.6% (vs. 5.9% in July) whereas respiratory de-grew 12.4% vs. 2% de-growth in July. Antiinfectives continue to be impacted with 11% de-growth (vs. -10.2% in July) whereas vitamins maintained their growth track at 6.2% (vs. 5.5% in July)The KV Kamath committee has released its guidelines regarding stressed loans restructuring amid Covid-19. As per these guidelines, only those borrowers would be eligible for resolution under this framework, which were classified as standard or SMA-0 with lending institution as on March 1, 2020. The committee has identified 26 sectors for restructuring and has also provided key ratios to be considered by lending institutions with respect to eligible borrowers.The Supreme Court has adjourned a petition seeking extension of moratorium and waiver of interest on interest till September 28, 2020. Further, the court ordered that loans classified as performing as of August 2020 will remain standstill until the case is disposedBrent Crude prices was lower at US$ 39.9/barrel as compared to previous week’s closing price of US $ 42.6/barrelGold prices ended higher at $ 1954/ounce as compared to previous week’s closing price of $ 1938/ounceBond yields ended higher at 6.04% as compared to previous week’s closing price of 5.99% *Last Traded Priceorally, IT, energy outshone while banks and metal underperformed during the week.Technical OutlookThe weekly price action resembles a hammer like candle with small real body and long lower shadow, as index recovered more than 300 points after witnessing supportive efforts from key support of 11100, as it is 80% retracement of August rally (10882-11794) at 11064. Since May 2020, index had not posted more than one negative weekly close. This rhythm was maintained in the last week as well, indicating up trend is intact.Going ahead, we expect Nifty to extend the ongoing consolidation (11100-11500) amid stock specific action as over past ten sessions index retraced 80% of preceding 10 sessions up move (11111-11794). Lack of faster retracement on either side signifies prolonged consolidation. We believe Nifty has stiff resistance in the range of 11500-11550 as it is confluence of a) 61.8% retracement of ongoing decline (11794 -11185), at 11562 b) negative gap (11527 – 11452) recorded on September 4, 2020.Our technical outlook is based on following monitorablesSince May lows, the Bank Nifty index has not extended intermediate corrective phase for more than nine consecutive sessions. In current scenario, Bank Nifty index has taken a breather after nine consecutive sessions decline (25233-22080) amid oversold placement of daily stochastic oscillator (placed at 23), indicating impending pullback in banking stocks, which will help Nifty to drive higher towards 11550, as constituents of Bank Nifty carries 33% weightage in NiftySince beginning of CY20, the domestic market have enjoyed positive correlation with developed market peers. Currently as DJIA has approached its key support threshold of 27500 (as per change of polarity concept June high of 27580 would now act as strong support). Thus, lack of follow through selling in global equities would be key monitorable for similar price action to pan out in domestic marketWe believe any cool off from here on would find its feet around key support threshold of 11100 as it is confluence of:80% retracement of August rally (10882-11794) at 11064Identical weekly lows of mid-August at 1111150 days EMA is placed at 11119We expect, broader market to relatively outperform the benchmark, as after past two week’s correction (~8%), both, Nifty midcap and small cap indices found support from ~50% retracement of their August rally. We believe, broader market has undergone healthy consolidation, thus any cool off from hereon should not be construed as negative, instead it should be capitalized to accumulate quality midcap and small caps which offers fresh entry opportunity with favourable risk rewardImportant data releases in next weekUS: Core Retail Sales MoM (Aug), Crude Oil InventoriesEurope: Industrial Production MoM, Trade Balance (July)China: Industrial Production MoM (Aug), Chinese Unemployment RateJapan: Industrial Production MoM (July), Exports YoY (Aug)India: CPI YoY, WPI Inflation (Aug)Upcoming Results Next WeekApollo Hospitals, HDFC Ltd, Solar Industries, P&G Healthcare, Zee Media, Vedanta Previous Week HighlightsIndia’s fuel demand fell 16.2% YoY to 14.4 MMT in August. Diesel demand was down 21% YoY and 12% MoM to 4.8 MMT. Petrol demand was down 7.5% YoY but up 5.3% MoM to 2.4 MMT in AugustAs per FADA data, total auto retail volumes fell 26.8% YoY to 11.9 lakh units. PV decline was at 7.1% while 2-W, 3-W and CV segments came off by 28.7%, 69.5% and 57.4%, respectively. Tractor segment was the only one in the green, with volumes up strongly by 27.8%As per AIOCD data, Indian pharma market (IPM) de-grew 2.2% YoY in August 2020 after exhibiting growth of 0.2% in July 2020 amid continued Covid-19 impact. Cardiac therapy grew 11.5% (vs. July: 13.1%), Anti-diabetic growth slowed down to 1.6% (vs. 5.9% in July) whereas respiratory de-grew 12.4% vs. 2% de-growth in July. Antiinfectives continue to be impacted with 11% de-growth (vs. -10.2% in July) whereas vitamins maintained their growth track at 6.2% (vs. 5.5% in July)The KV Kamath committee has released its guidelines regarding stressed loans restructuring amid Covid-19. As per these guidelines, only those borrowers would be eligible for resolution under this framework, which were classified as standard or SMA-0 with lending institution as on March 1, 2020. The committee has identified 26 sectors for restructuring and has also provided key ratios to be considered by lending institutions with respect to eligible borrowers.The Supreme Court has adjourned a petition seeking extension of moratorium and waiver of interest on interest till September 28, 2020. Further, the court ordered that loans classified as performing as of August 2020 will remain standstill until the case is disposedBrent Crude prices was lower at US$ 39.9/barrel as compared to previous week’s closing price of US $ 42.6/barrelGold prices ended higher at $ 1954/ounce as compared to previous week’s closing price of $ 1938/ounceBond yields ended higher at 6.04% as compared to previous week’s closing price of 5.99% *Last Traded Price
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