Equity

Wait and Watch Mode for Nifty 50.

by DeepakGupta

After yesterday’s fierce move on Nifty 50 when the benchmark was up by almost 2.4%, its time for some consolidation today. It will be a wait and watch mode for Nifty 50.

Double whammy and twin concern in the form of US 10 year bond yields at 1.75% and Dollar Index at 93.4 is not giving positive signals for developing markets like India.

Also, Nifty took resistance at 20 day MA ( Moving Average ) at 14850 and has retraced from there.

Hence the call would be to wait and watch levels of 14850-15000 on up side and 14250 on downside to call some sense of direction.

On cash side, few of the interesting calls and bets can be taken on:

  1. IT- Stocks like TCS, Infosys, HCL tech, etc which will benefit from depreciating INR and higher Dollar index. Also because of the digitalization wave after pandemic, the revenue pipeline and earnings for last quarter of FY 21 would be good.
  2. Pharma – Pharma as a sector is in a consolidation zone since 2015-16 and broke out in 2020 because of Covid. This also benefits from higher conversion rate of USDINR. Also, the overhangs in sector because of US FDA has trimmed down because of higher demand for medicines and India is a key exporter. Hence, stocks like Sun, Lupin, Dr Reddy looks good from current levels relative to the overall market.
  3. Consumer Staples – Evergreen defensives like HLL, Colgate, Dabur, etc. seems to gain in the current uncertainty and can be looked for accumulation.