Market Outlook

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Market last week

Despite border tensions, domestic market ended the week with a positive note given limited scope for escalation and global diplomatic engagements. Volatility was high, but surprisingly broader market outperformed the key indices on account of value buying.

Market was range bound as investors were cautious due to border tensions and F&O expiry. However institutional inflows were strong as market seems to have already factored in mixed Q3 earnings while government’s reforms and strengthening rupee were positives. Market witnessed strong relief rally on Friday despite mixed Auto sales data and slowdown in Q3 GDP as geopolitical tensions eased out.

Markets this week

Market is likely to trade with a positive bias on account of ease in border tensions and expectation of US-China trade agreement. In terms of valuation, if we look at Nifty500 about 60-65% of the stocks are currently below or in-line with seven year average valuations on trailing P/E basis, which is very attractive. Consequently, investors will continue to look at high quality mid and small caps. Whereas rate sensitive stocks are likely to be in limelight on expectation of a rate cut given slowdown in Q3GDP growth

Posted: March 5, 2019

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