Premium| Listen to this article |
Indian markets are headed for a bumpy ride in the company week with Kremlin and Ukraine's conflict dominating the mood yet again. After four consecutive weeks of settling on a bearish tone, benchmarks Nifty 50 and Sensex finally made fruitful gains in the previous week as a host of state elections result heavily lifted sentiments, and easing in crude oil prices in the last two sessions further sparked the upside.
On Friday, Sensex closed near 55,550 and Nifty 50 held a little over 16,630. Nifty was slightly shy of the 17,000-mark throughout the day as markets remained range-bound with pharma stocks outperforming and oil stocks adding notable gains too. Meanwhile, paper stocks also moved actively amidst price hikes for offsetting input cost pressures. Overall, markets witnessed broad-based buying across the basket with little correction in auto and IT stocks.
From March 07 to March 11, both Nifty and Sensex have risen by more than 5%. Except for opening in the red on Monday, markets were well supported by bulls on the remaining days.
Talking about the previous week's (March 07-11) performance, Vinod Nair, Head of Research at Geojit Financial Services said, "The domestic market opened weak witnessing a heavy sell-off as oil prices surged above $130 a barrel for the 1st time since July 2008, following the risk of a U.S. and European ban on Russia’s oil export."
Nair added, "However, the mood was reversed as the results of the state election turned positive for the market, and oil prices started cooling off. Indian markets witnessed increased optimism in the progress of high-level talks between Russia & Ukraine and a surge in the global markets. US CPI inflation recorded a 40 year high due to high gasoline, food, and housing cost, adding doubts to the global trend. Inflation levels in India & abroad are poised to rise even higher in March, though on a temporary basis, considering the impact of the Russia-Ukraine issue."
In the upcoming weeks, the focus will be shifted towards inflation data, major central banks policy announcements, and weekly F&O expiry. While development in Russia and Ukraine's war will continue to hold a majority part of swaying markets outlook.
"Next week the market will focus on the reduction of commodity prices & diplomatic development between Russia & Ukraine. If these global trends turn positive, the performance of the Indian market will be good, or else it may get choppy. The market will also focus on inflation data to be released in India & US, and US Fed & BoE meeting is scheduled for next week," Nair concluded.
Rupak De, Senior Technical Analyst at LKP Securities, "Nifty consolidated during the day, which can be taken as a pause before the next directional move. On the higher end, 16700 is likely to act as a resistance to the rising index value. A decisive move above 16700 may induce a rally towards 17000. On the lower end, the support is visible at 16400-16380 below which Nifty may witness a correction."
India will be announcing its wholesale and consumer price inflation data for February 2022, tomorrow. Furthermore, the US Federal Reserve is set to meet from March 15-16 to decide their take on bonds tapering while a rate hike is on cards. Later on, the Bank of England will also announce the policy outcome on March 17 followed by India's weekly F&O expiry on Thursday as well.
However, the week will be shorter for tradings as Friday markets will be closed due to the Holi festival in India.
Never miss a story! Stay connected and informed with Mint. Download our App Now!!