MSCI reshuffle, margining rule change and F&O settlement kept the market busy

MSCI reshuffle, margining rule change and F&O settlement kept the market busy

MSCI index rebalancing, easing of margining rules for non F&O stocks and F&O settlement kept Indian equities busy the whole week. November expiry was the best month since April 2020. The level of activity was highest ever last week. Market breadth was very strong as small cap stocks outperformed massively. PSU Banks, metals and Realty were other notable outperformers. Consumers and Infra were notable underperformers. INR gained marginally while yields were marginally higher.

Global markets continue in “risk on” mode

Clarity over US election outcome and enhanced hopes of vaccine availability in couple of months kept the global markets in the risk on mode, with risk assets gaining across the globe. Equities, copper and crude all recorded decent gains. USD, Gold and safe haven bonds sold off. Volatility also eased materially. Bitcoin also corrected sharply from highs. Japanese equities were the best performers.

Outlook for the week

The outlook and trend for Indian markets remains unchanged from the previous week. However, the momentum has increased substantially indicating higher probability of a sudden change in the trend in coming days. The short term (weekly) and mid term (Monthly) trend and outlook for Nifty is firmly negative indicating an adverse risk reward ratio. The near term (daily) outlook and trend for Nifty is neutral. For this week-

· The day traders may avoid trading in 12537-12815 nifty range. The long positions may be held with a stop loss of 12537.

· For Bank Nifty The near and short term trend are presently neutral. All short position may be held with a stop loss of 29988. Day Trading may be avoided in 28770-29395 range. For all long position maintain a strict stop loss of 29184.