Markets next week: After a strong rally in the past two weeks, Indian stock markets remained in the consolidation phase, falling nearly 1 percent in the week ended March 25 amid mixed signals, including rising crude oil prices on the back of the Russia crisis. and Ukraine, increasing covid cases in some parts of the world, while the easing of covid restrictions in India boosts investor confidence. For the week, BSE Sensex lost 501.73 points (0.86 percent) to finish at 57,362.2, while the Nifty50 fell 134.05 points (0.77 percent) to finish 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 negative bias as global signals chased domestic investors, forcing them to sit on the sidelines. Higher crude prices oil, a tightening of the Fed’s monetary policy, higher inflation levels and rising covid cases in parts of the world led to this downward trend.The easing of covid restrictions in India is boosting sectors such as hospitality, multiplex, transportation , etc., leading to better performance.”
The domestic market will continue to follow global developments. An end to the war and an increase in oil supply could help India maintain its resilience, otherwise high short-term volatility will be a concern.
According to Ajit Mishra, VP – Research, Religare Broking, mixed global signals combined with erratic fluctuations in crude oil are causing discomfort for participants and could linger into the week ahead.
“In the future, market participants would probably keep an eye on developments around the war between Russia and Ukraine. Any ceasefire between Russia and Ukraine could potentially lead to a cooling of global crude oil and commodity prices. International central bank policy changes and central bank policy response 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 turning into buy mode is positive for the market, but due to ongoing global uncertainties, domestic retail investors were not confident to take new positions.
Foreign Institutional Investors (FIIs) sold shares worth Rs 5,344.39 crore, and Domestic Institutional Investors (DIIs) bought shares worth Rs 2,820.72 crore. However, in the month of March so far, FIIs sold shares worth Rs 46,961.57 crore and DIIs bought shares worth Rs 34,440.74 crore.
Helpful Technical Perspectives
On the index front, Nifty hovered within a narrow range of 17,000-17,350 and a pause on either side would trigger the next move. Meanwhile, participants have no choice but to focus on sectors/stocks that are performing well and focus more on overnight risk management.
Read all the latest news, breaking news and the war between Ukraine and Russia here.