Markets Next Week: After a strong rally during the previous two weeks, the Indian equity markets remained in consolidation phase and fell nearly 1 per cent in the week ended March 25 amid mixed cues including rising crude oil prices due to the Russia-Ukraine crisis, rising covid cases in some parts of the world, while easing covid restrictions in India added confidence amongst the investors. For the week, BSE Sensex shed 501.73 points (0.86 per cent) to end at 57,362.2, while the Nifty50 fell 134.05 points (0.77 per cent) to end at 17,153 levels.
Vinod Nair, Head of Research at Geojit Financial Services, said: “After a strong rally last week, the market turned sideways with a negative bias as global cues haunted domestic investors forcing them to stay sidelined. Elevated crude prices, tightening monetary policy by Fed, higher inflation levels along with rising covid cases in parts of the world led to this downtrend. Ease in covid restrictions in India is a boost to sectors like hospitality, multiplex, transportation, etc leading to its outperformance.”
The domestic market will continue to follow global developments. An end to the war & rise in oil supply can help India to sustain its resilience or else high volatility will be a concern in the short term.
According to Ajit Mishra, VP – Research, Religare Broking, mixed global cues combined with erratic swings in crude are causing discomfort to participants and it might linger in the coming week as well.
Global Cues
“Going forward, market participants would likely keep an eye on the development surrounding the Russia-Ukraine war. Any truce between Russia and Ukraine could possibly lead to a cooling off of global crude and commodity prices. Global central bank policy moves and the policy response of the central bank in India would be the other key events to watch out for,” said Shibani Kurian, Senior EVP & Head- Equity Research, Kotak Mahindra Asset Management Company.
FIIs
FIIs turning into buying mode is positive for the market, however, due to the ongoing global uncertainties, domestic retail investors lacked the confidence to take fresh positions.
Foreign institutional investors (FIIs) sold equities worth Rs 5,344.39 crore, and domestic institutional investors (DIIs) bought equities worth Rs 2,820.72 crore. However, in the month of March till now FIIs sold equities worth Rs 46,961.57 crore and DIIs bought equities worth Rs 34,440.74 crore.
Nifty Technical Outlook
On the index front, Nifty has been hovering within a narrow range of 17,000-17,350 and either side break would trigger the next move. Meanwhile, participants have no option but to focus on sectors/stocks which are performing well while concentrating more on overnight risk management.
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