Stock market likely to be cautious this week

As the bulls continued to dominate for the fifth successive week and the benchmark indices are at historical highs, traders are likely to be cautious in the coming week.

Hyderabad:As the benchmark indices are at all-time highs, the Indian stock market is likely to be cautious in the coming week.

Thanks to favourable local cues like better than expected GDP numbers and growth oriented RBI monetary policy, Nifty settled at 13,258.55 and Sensex gained 2.1 per cent in the last week to close above the 45,000 level.

“We saw some consolidation in the middle but the buoyancy returned with the dovish commentary from the RBI in the final session,” Ajit Misra, VP-Research, Religare Broking Limited, told ETV Bharat.

The broader indices like Nifty Midcap, Nifty Smallcap, etc traded in tandem with the benchmark indices and posted decent gains, he added.

On the sectoral front, most of the stocks witnessed healthy buying interest whereas realty, auto and oil and gas gained maximum.

Outlook for the week

“With all the major events like bi-monthly monetary policy review and quarterly GDP data are behind us, the global markets are likely to dictate the market trend ahead,” observed Ajit Misra.

“Besides, the updates related to COVID vaccines will also be in focus,” he added.

It may be recalled regulatory approval for Pfizer/BioNTech Covid-19 vaccine in the UK last week boosted the market sentiment across the globe.

Despite the optimism surrounding the economic recovery and vaccine approvals, the stock market is likely to be in a cautious mode for some time.

“Markets have been gradually inching higher, but at a slower pace which indicates a positive yet cautious approach among the traders,” said Ajit Misra.

He further added that the recent buoyancy in the rate-sensitive pack may help the index to inch further higher next week but the upside seems capped.

“Technically, Nifty has been trading in a rising broadening formation and the upper band of the pattern currently lies around 13,450. On the flip side, 13,100 and 12,900 would act as support in case of any profit-taking,” he concluded.