Equity benchmarks Sensex and Nifty 50 extended intial losses on February 26 amid weakness in banking and heavyweight stocks. However, analysts believe that the bullish sentiment is intact as long as Nifty holds above 21,000 level.
Sensex and Nifty declined 0.4 percent each to 72,790 and 22,122, respectively on February 26. Fear gauge India VIX jumped over 4 percent to trade above 15.
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Despite current weakness, Rajesh Palviya, SVP - Technical and Derivatives Research, Axis Securities expects the seasonally weak February series to end on a positive note. "We expect to have a positive February series this time, wherein Nifty may clock another life-time high. We predict Nifty to reach 22,300-400 in the next couple of sessions," he told Moneycontrol.
On the other hand, analysts at ICICI Securities forecasted Nifty to head towards 22,700 in the coming weeks as positive bias remains unhindered. "Bouts of volatility from hereon will be seen owing to global developments but it would offer incremental buying opportunity. Thereby, dips should be capitalised to accumulate quality stocks as strong support is placed at 21,800," the brokerage firm said.
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Broader markets, too, bled as Nifty Midcap 100 and Nifty Smallcap 100 indices slipped up to 0.3 percent. Barring Nifty Auto, Realty, and Oil & Gas indices that ended with slim gains, all other sectors nosedived in the negative territory on February 26.
Going ahead, Sandeep Bagla, CEO, Trust Mutual Fund cited tensions in the red sea, rate cut trajectory, and valuations as key risks for markets. "It is unsure when the rate cuts are going to materialise as central banks have never cut interest rates when markets were at all-time high," he told Moneycontrol.
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