LIVE NOW:Watch the Definedge Conference on Market Analysis (DECMA). Join Now

Market may remain under pressure amid weak global cues, rising COVID cases: Experts

On March 26, the last day of the past week, the market reversed its earlier losses and showed a smart recovery. This week is a truncated one with markets shut on March 29 and April 2. Read on to know what experts feel is the way forward:

March 30, 2021 / 07:41 AM IST
Sensex
After two days of sell-off, Indian market started the April series on a positive note on March 26, with the Sensex gaining 568.38 points, or 1.17 percent, to close at 49,008.50 and the Nifty ending 182.40 points, or 1.27 percent, higher at 14,507.30. In the last week, foreign institutional investors (FIIs) sold equities worth Rs 6,280.85 crore, while domestic institutional investors (DIIs) bought equities worth of Rs 4,596.64 crore. During the week, BSE Mid-cap Index was down 0.3 percent, BSE Small-cap index shed 1 percent and BSE Large-cap Index fell 1.6 percent. Here are views of some experts on what to expect in the market this week. (Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.)
Ajit Mishra, VP Research, Religare Broking | Markets traded under pressure for the second consecutive week and lost over one and a half percent. Subdued global cues combined with the risk of a second wave of COVID cases was weighing on the sentiment. The coming week is a holiday-shortened one and we expect volatility to remain high. It marks the beginning of a new month also so macroeconomic data i.e. core sector and auto sales numbers will remain in focus. Besides, updates related to the COVID situation in India and cues from the global markets will also be closely tracked by the participants. The recent surge in the COVID cases combined with feeble global cues has turned the participants cautious. Besides, the divergence between Nifty and the banking index amid excessive volatility across the board is keeping the traders guessing over the next directional move. The negative bias in Nifty would reverse on the breakout above the short-term moving average (20 EMA) which currently lies around 14,760 levels. On the flip side, the next major support exists at 14,000. We feel traders should limit leveraged positions until we see some clarity emerging.
Ajit Mishra, VP Research, Religare Broking | Markets traded under pressure for the second consecutive week and lost over one-and-a-half percent. Subdued global cues combined with the risk of a second wave of COVID cases was weighing on the sentiment. The coming week is a holiday-shortened one and we expect volatility to remain high. It marks the beginning of a new month also so macroeconomic data i.e. core sector and auto sales numbers will remain in focus. Besides, updates related to the COVID situation in India and cues from the global markets will also be closely tracked by the participants. The negative bias in Nifty would reverse on the breakout above the short-term moving average (20 EMA) which currently lies around 14,760 levels. On the flip side, the next major support exists at 14,000. We feel traders should limit leveraged positions until we see some clarity emerging.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities | After showing steep weakness in the last two sessions, Nifty witnessed a sharp upside bounce on Friday and closed the day higher by 182 points. Nifty on the weekly chart has bounce back from the weekly 10 period EMA in this week. The moving average is now at 14590 and the Nifty closed just below it, as per week's close. Previously, such downside violations of this EMA has offered strong upside bounce in the subsequent weeks in past. Having recovered from the lows in the last two weeks, the odds of further upside bounce could be alive in the market. The short term trend of Nifty seems to have reversed up with sharp upside bounce from near the supports. The next upside levels to be watched around 14700 and a sustainable move above this area could open further upside in the near term. On the dips, 14400-14350 could offer support for the markets.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities | After showing steep weakness in the last two sessions, Nifty witnessed a sharp bounce back on Friday and closed the day higher by 182 points. Nifty, on the weekly chart, has bounced back from the weekly 10-period EMA in this week. The moving average is now at 14,590 and the Nifty closed just below it, as per week's close. Previously, such downside violations of this EMA has offered strong upside bounce in the subsequent weeks in past. Having recovered from the lows in the last two weeks, the odds of further upside bounce could be alive in the market. The short-term trend of Nifty seems to have reversed with sharp upside bounce from near the supports. The next upside level to be watched out is 14,700 and a sustainable move above this area could open further upside in the near term. On the dips, 14,400-14,350 could offer support for the markets.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | Indian equity market started the April series on a positive note recovering some losses of the previous two trading sessions. Global cues were positive as US markets gained amid progress in vaccines distribution boosting optimism about global growth prospects. President Joe Biden announced a new goal of administering 200 million Covid-19 vaccine doses in his first 100 days in office. Further, positive US jobs data (jobless claims at one-year low) and stronger than expected Q4 GDP data boosted market sentiments. Though the 3rd wave of Covid cases in the US, UK and many EU countries could decide the further trend of the markets going forward. Also domestically, India reported the biggest spike in Covid-19 infections in five months which could possibly lead to some disruptions in the economy. Technically, Nifty has to cross and hold above 14,550 zones to witness a bounce towards 14,675 and 14,800 zones while on the downside support exists at 14400 and 14250 levels. India VIX cooled off by 9% from 22.69 to 20.65 levels. Cool down in VIX below 20 zones is required for bullish grip and smoother move in the market. The market may remain under pressure in the near term amidst weak global cues, and fast spreading 2nd wave of covid in India, which could impact the pace of economic recovery. High commodity prices too is a concern and till it cools off substantially the fear of inflation would continue to loom. Next week would be a truncated one as far as Indian markets are concerned due to couple of bank holidays (29th March, Monday- Holi and 2nd April, Friday -Good Friday), hence the traders would watch the global cues closely and accordingly have positions. Given the likelihood of high volatility continuing in the market for some time, investors would do well by staying calm and gradually accumulating good quality companies on declines in the market.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | India reported the biggest spike in Covid-19 infections in five months which could possibly lead to some disruptions in the economy. Technically, Nifty has to cross and hold above 14,550 zones to witness a bounce towards 14,675 and 14,800 zones while on the downside support exists at 14,400 and 14,250 levels. India VIX cooled off by 9% from 22.69 to 20.65 levels. Cool down in VIX below 20 zones is required for bullish grip and smoother move in the market. The market may remain under pressure in the near term amidst weak global cues, and fast spreading 2nd wave of COVID in India, which could impact the economic recovery. High commodity prices, too, are a concern. Next week would be a truncated one as far as Indian markets are concerned due to couple of bank holidays (29th March, Monday- Holi and 2nd April, Friday -Good Friday). Given the likelihood of high volatility continuing in the market for some time, investors would do well by staying calm and gradually accumulating good quality companies on declines in the market.
Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas | The Nifty witnessed a bounce back on March 26 after having declined sharply in the last couple of sessions. In terms of the price patterns, the index seems to have formed a Wedge pattern. On March 25, it had reached the lower end of the pattern & thereon the index took a leap on Friday. The Fibonacci retracement shows that the index retraced 61.8% of the entire February rise. The Golden Ratio mark induced fresh round of buying in the market. Thus the index is expected to move up further towards its key daily moving averages, which are near 14,700-14,800.
Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas | The Nifty witnessed a bounce back on March 26 after having declined sharply in the last couple of sessions. In terms of the price patterns, the index seems to have formed a Wedge pattern. On March 25, it had reached the lower end of the pattern & thereon the index took a leap on Friday. The Fibonacci retracement shows that the index retraced 61.8% of the entire February rise. The Golden Ratio mark induced fresh round of buying in the market. Thus the index is expected to move up further towards its key daily moving averages, which are near 14,700-14,800.
S Ranganathan, Head of Research at LKP Securities | FPI poured Rs 22,300 crore this month into Indian equities taking their Total inflows to USD 38 billion as of 24th of March 2021. The December quarter flows of USD 20 billion were in fact the highest ever in any quarter. FPI’s today has emerged as the largest non-promoter owner of financial stocks in India as of the December quarter and we expect this trend to accelerate further during the March quarter.
S Ranganathan, Head of Research at LKP Securities | FPI poured Rs 22,300 crore this month into Indian equities taking their Total inflows to USD 38 billion as of 24th of March 2021. The December quarter flows of USD 20 billion were in fact the highest ever in any quarter. FPI’s today has emerged as the largest non-promoter owner of financial stocks in India as of the December quarter and we expect this trend to accelerate further during the March quarter.
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities | On Friday, the market has formed a bullish harami pattern. On Thursday, the market stopped at a large support area and formed a bullish pattern on Friday, which give us an indication that the coming week may be positive for the market. On a weekly basis, the market has completed a corrective pattern and the Nifty could see a level of 14,750 or 14,900 until it breaks to 14,250. Bank Nifty is also expected to move to the level of 34,700 above the resistance at 33,700. The focus should be on FMCG and Capital goods. During the week, FIIs sold to the tune of Rs 6,000 crore till Thursday, while domestic institutions bought over Rs 3,000 crore. During the week, the dollar index was the biggest factor that dragged the sentiment of the market. In the coming week, again the trend of the market would largely depend on the trend of the dollar index.
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities | On Friday, the market has formed a bullish harami pattern. On Thursday, the market stopped at a large support area and formed a bullish pattern on Friday, which give us an indication that the coming week may be positive for the market. On a weekly basis, the market has completed a corrective pattern and the Nifty could see a level of 14,750 or 14,900 until it breaks to 14,250. Bank Nifty is also expected to move to the level of 34,700 above the resistance at 33,700. The focus should be on FMCG and Capital goods. During the week, FIIs sold to the tune of Rs 6,000 crore till Thursday, while domestic institutions bought over Rs 3,000 crore. During the week, the dollar index was the biggest factor that dragged the sentiment of the market. In the coming week, again the trend of the market would largely depend on the trend of the dollar index.
Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities | The Nifty-50 Index lost 1.6% last week due to turmoil in global equity markets and the sharp rise in Covid-19 cases in India. The Nifty Small Cap 100 Index declined by 2.7% this week as expiry was weak and fiscal year end phenomenon could also be at play. Investors would like to take fresh view at the start of the next fiscal year. On the economy front, weekly activity indicators such as e-way bills remained strong with total e-way bills generated over March 1, 2021-March 21, 2021 increasing 4% versus the comparable period in February 2021. On one hand the number of Covid cases are going up on the other hand the pace of vaccination is also accelerating. With fresh restrictions and faster vaccination, we can expect sentiment to remain positive at the start of the new fiscal year. The earnings season will also kick in from the second week of April which could turn out to be the driver for stocks. Expect markets to remain volatile as the Nifty-50 has closed below the 50 DMA this week which works to 14,765 levels. Logically, markets should see some uptick from the first week of April. If this does not materialize at the start of April then we could see Nifty-50 drifting towards 13,500-13,600 levels.
Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities | The Nifty-50 Index lost 1.6% last week due to turmoil in global equity markets and the sharp rise in Covid-19 cases in India. The Nifty Small Cap 100 Index declined by 2.7% this week as expiry was weak and fiscal year end phenomenon could also be at play. Investors would like to take fresh view at the start of the next fiscal year. On the economy front, weekly activity indicators such as e-way bills remained strong with total e-way bills generated over March 1, 2021-March 21, 2021 increasing 4% versus the comparable period in February 2021. On one hand the number of Covid cases are going up on the other hand the pace of vaccination is also accelerating. With fresh restrictions and faster vaccination, we can expect sentiment to remain positive at the start of the new fiscal year. The earnings season will also kick in from the second week of April which could turn out to be the driver for stocks. Expect markets to remain volatile as the Nifty-50 has closed below the 50 DMA this week which works to 14,765 levels. Logically, markets should see some uptick from the first week of April. If this does not materialize at the start of April then we could see Nifty-50 drifting towards 13,500-13,600 levels.
BSE Sensex
Vinod Nair, Head of Research at Geojit Financial Services | Equity market has been consolidating under fear of losing its traction of economic growth recovery. Positive US job data and climb in fourth-quarter US GDP to 4.3% helped to reduce the gravity of the contraction. On the domestic front, high-frequency data suggests good economic activity in Q4FY21 and results will be announced from April. The second wave of Covid and high valuation will maintain volatility in the near term.
Rohit Singre, Senior Technical Analyst at LKP Securities | Index closed a week with loss of one and a half percent and formed bearish candle for a second consecutive week. The index has stiff resistance near 14,600 zone any decisive move above 14,600 zone can active good traction and then we may see quick move-in index towards 14,800-15,000 zone in the near term, good support is coming near 14,300 zone. If index saved mentioned levels then we may see sort of consolidation move in the range of 14,300-15,000 zone.
Rohit Singre, Senior Technical Analyst at LKP Securities | Index closed a week with loss of one and a half percent and formed bearish candle for a second consecutive week. The index has stiff resistance near 14,600 zone any decisive move above 14,600 zone can active good traction and then we may see quick move-in index towards 14,800-15,000 zone in the near term, good support is coming near 14,300 zone. If index saved mentioned levels then we may see sort of consolidation move in the range of 14,300-15,000 zone.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments | The markets were unable to get past higher resistance hurdles of 14,700-14,800. Hence not much progress was made post the opening. However, what needs to be seen in the coming week is that we do not retest the lows of this week as that could cripple the index. Should that happen, we will slip further to test 14,000.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments | The markets were unable to get past higher resistance hurdles of 14,700-14,800. Hence not much progress was made post the opening. However, what needs to be seen in the coming week is that we do not retest the lows of this week as that could cripple the index. Should that happen, we will slip further to test 14,000.
Rakesh Patil
first published: Mar 30, 2021 07:41 am

stay updated

Get Daily News on your Browser
Sections