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market outlook: Outlook for oil & gas stocks turns bullish amid ongoing choppiness

by WOOWinvest
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market outlook: Outlook for oil & gas stocks turns bullish amid ongoing choppiness


NEW DELHI: Amid choppiness in the market, the headline indices continued to move south as inflation, fear of a sharp increase in interest rates and poor March quarter numbers from key companies weighed on sentiments.

The BSE Sensex ended the week at 57,060.87, down 850.81 points or 1.47 per cent. The NSE Nifty50 fell 291 points or 1.67 per cent for the week to 17,102.55. The broader market represented by the BSE500 was the worst hit, with the index slipping 414 points or 1.73 per cent to 23,551.65. At least 13 stocks from the broader index fell in double digits.

“We’ve been seeing the index oscillating in a broader range for the last two weeks,” said Ajit Mishra, VP – Research, Religare Broking.

“There’s no clarity over the next directional move yet,” Mishra added while reiterating his cautious view on the market and suggested waiting for a decisive break from the 16,800-17,300 range.

The same issues that were relevant last week will continue to haunt markets next week as well. Besides, it will have to deal with some new challenges, including a mega primary issue of LIC, auto sales numbers and US Fed policy meeting.

Some analysts believe the selloff during the last week was due to investors pulling out money from the market to get ready for the LIC’s IPO. The insurer is coming with the biggest ever issue in the Indian stock market.

But that does not mean you should stay away from the market. Most analysts believe it may be the perfect time to cherry-pick stocks for the long term. Though trading in stocks that are seeing wild moves should be avoided.

“Smart money moving to the selected midcap, but they seem cautious. Value buying is preferred instead of just momentum, which we observed last year,” said Vishal Wagh, Research Head of Bonanza Portfolio.

“The energy, oil & gas sector has turned bullish for short to mid-term. Shortage of power, coal and sudden rise in crude oil prices is leading the energy sector higher. IT has completed its mid-term upward cycle, so money is flowing from IT and gets allocated to Energy and infrastructure sector.”

Meanwhile, continued pressure from foreign investors has kept stocks in which they are heavily invested in — IT and banks under pressure. They will be on the radar in the upcoming week as well. They have big weightage in the headline indices and any observable change in trend will impact the overall market.

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