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Street signs: Nifty50 undertone still bearish, apparel retailers may gain

A move below 16,900 could result in a faster decline in the coming week, while a breach of 17,118-17,155 levels could result in better momentum on the upside

markets
Ashley CoutinhoChirag MadiaSundar Sethuraman
2 min read Last Updated : Dec 27 2021 | 12:30 AM IST
Nifty50 undertone still bearish

Despite volatility, the Nifty50 last week managed to close above the psychological 17,000-mark. The index is still holding at a lower top formation, which indicates medium-term weakness, according to analysts. A move below 16,900 could result in a faster decline in the coming week, while a breach of 17,118-17,155 levels could result in better momentum on the upside. “The markets will continue to see volatility and whipsaw-like movements as they respond to Omicron-related developments and the monthly expiry. The week may see sectoral rotation, with beaten-down industries gaining traction,” said Yesha Shah, head of equity research, Samco Securities.

Broad participation in MF advisory panel

Sebi has recently reconstituted its Mutual Fund Advisory Committee. The committee advises the markets regulator in matters of development and regulation of mutual funds in the country. The strength of the committee has been increased to 24 members, from 20 members earlier. According to players, in the present committee, there is broad-based participation from across the industry. “This time they have included top executives from a mid-sized fund house, as well as a new entrant into the industry. This is a welcome move,” said an industry player. Among the new members of the committee are Sunil Subramaniam of Sundaram AMC, Swarup Mohanty of Mirae Asset Investment Managers, and Saurabh Jain of Navi AMC.

Listed apparel retailers may gain

Listed apparel retailers are in a better position to manage current uncertainties associated with Omicron, said analysts. Most companies have strengthened their balance sheets in CY20-21 via equity-raise, managed cost structure, and working capital well. Some of the cost savings achieved during the pandemic may sustain, and coupled with high operating leverage, may structurally lead to higher than pre-Covid margins. “Most companies are likely to continue their expansion plans as they penetrate more into tier 2/3 cities. Besides, online as a channel will continue to see accelerated growth,” said a note by ICICI Securities. Trent, V-Mart, and ABFRL are seen among beneficiaries.

Topics :Street SignsNifty50retail marketMutual Funds

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