Markets Next Week: An Uptrend Is Likely

The week was marked by selling pressure almost through out the week, in which the indices fell for 4 days, in 5 trading sessions.

In fact, the Nifty lost 2.4 per cent as sustained selling pressure, across the globe had its impact on Indian stocks. Strong reemergence of Covid cases in Europe and US were the biggest dampeners for the markets.

The BSE Midcap index saw lesser damage and was down only 0.48 percent. Among the largecap stocks that fell were Hindustan Zinc, Hero Motocorp, Vedanta, DLF and Lupin.

Individual stocks reacted to their results, while some stocks like Reliance Industries will react to results on Monday. The oil to telecom major Reliance Industries posted consolidated net profit at Rs. 9567 crore, a 15 percent y-o-y decline, for the just ended September quarter of FY21. In the corresponding quarter last year, the firm logged a profit of Rs. 11262 crore.

The stock could see a negative reaction.

On the F&O front the Nifty October series had a fantastic run. "Nifty closed the October series with the the decent gains of 8.01%. It witnessed a good momentum in first two weeks of the series and headed from 10800 to 12000 zones. However it remained quite volatile in last three weeks due to weakness in Global indices but holding to 11600 zones.

Nifty future witnessed rollover of around 72% on provisional basis which is slightly lower than last 3 months average of 76.05% indicates that long bias is intact and some position is being liquidate ahead of volatile market scenario and US presidential election," said Mr. Chandan Taparia, Derivative & Technical Analyst, Motilal Oswal Financial Services Ltd.

Overall for next week markets are going to closely watch the outcome of the US elections and or any news pertaining to the same. There is likely to be increased volatility as Covid cases rise in Europe and across the US. As markets have rallied significantly in the last few weeks, it makes little sense to buy at these levels. In fact, the risk to reward ratio has diminished considerably.