Will the market cheer withdrawal of farm laws?

The benchmark Sensex index erased over 1,000 points, or nearly two per cent, last week to end at 59,636. The Nifty50, too, declined two per cent to settle at 17,765.
This sell-off was triggered as a flare of new Covid-19 cases world-over made investors cautious on the global economic recovery.
Meanwhile, back home, multiple rating downgrades by global brokerages, coupled with margin pressure faced by India Inc in Q2, worried investors.

Going-forward, as trading sentiment is expected to remain subdued this week too given the absence of fresh triggers, analysts suggest investors accumulate quality stocks at lower levels.

Overall, central bankers’ commentary on interest rates and inflation, bond yield trajectory, foreign fund flow and monthly Futures and Options expiry will steer the indices this week.  
In the primary market, the Rs 1,013-crore initial public offer of Go Fashions will close today. So far, the issue has been subscribed 6.8 times with retail investors’ portion seeing a subscription of 24.6 times. That apart, Tarsons Products may also debut on the bourses later this week. 

In another development, Prime Minister Narendra Modi on Friday announced the repeal of all three controversial farm laws. The bills will be withdrawn in the forthcoming session of Parliament.

“This is more a political development rather than a market-related one. The stock market is unlikely to pay any attention to this,” said G Chokkalingam, founder and CIO, Equinomics Research. Chokkalingam doesn’t expect markets to react to the announcement as he believes it is a political development rather than related to markets.

Madan Sabnavisn who is chief economist at CARE Ratings, believes the decision to repeal the Bills is unfortunate as the laws were progressive and had the potential to benefit farmers and commercialise the sector.

Overall, with no major events lined up this week, benchmarks may remain range-bound.

As per tech charts, the Nifty index is expected to trade within a range of 17,150 to 18,000, facing stiff resistance at 17,850 levels. The BSE Sensex, on the other hand, could find support at 58,950 levels, keeping the overall trading range between 58,550 and 60,600.

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