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Markets may remain under pressure amid Q4 earnings, F&O expiry: Experts

This week, investors would keep an eye on the outcome of the Federal Open Market Committee meeting for any change in interest rates and their future guidance on inflation. Any central rate change will have a ripple effect on other rates, including foreign exchange rates and bond prices which may have a sizeable influence across emerging markets, said Nirali Shah of Samco Securities.

April 26, 2021 / 07:48 AM IST
The Indian market remained under pressure throughout the truncated week ended April 23 as investors were worried about the intensifying second wave of coronavirus. For the week, BSE Sensex fell 953.58 points or 1.95 percent to finish at 47,878.45 and while the Nifty50 shed 276.45 points or 1.89 percent to close at 14,341.4 levels. The BSE Large-cap Index shed nearly 2 percent, BSE Mid-cap Index shed 1 percent and BSE Small-cap index ended flat. On the sectoral front, Nifty Realty fell 3.6 percent, Nifty PSU Bank index fell 3.5 percent and Nifty FMCG index shed over 3 percent. Last week, rupee ended higher by 34 paise at 75.01 per dollar on April 23, against its April 16 closing of 74.35 per dollar.
Indian markets remained under pressure last week as the resurgence of COVID in the country forced investors to reassess their expectation on economic recovery. Last week, BSE Sensex fell 953.58 points or 1.95 percent to finish at 47,878.45 and while the Nifty50 shed 276.45 points or 1.89 percent to close at 14,341.4 levels. The broader market outperformed the frontliners as the BSE Midcap Index shed 1 percent and the BSE Smallcap index ended flat. Here's what the experts said about this week:
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities | The short term texture of the Nifty/ Sensex is still bearish and likely to continue in the near future. We are of the view that, 14250/ 47450 would be the immediate support level for the bulls and below the same we can expect one more leg of correction up to 14150/47150. Further downside may also be possible which could drag the index till 14000-13900/46500-46000. On the flip side, 14500/ 48300 would be the immediate hurdle for the Nifty/ Sensex, above the same uptrend structure will continue up to 14700/49100. Ahead of monthly F&O expiry, the sectors which would be in focus are banking, metal and pharma.
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities | The short-term texture of Nifty/Sensex remains bearish. 14250/ 47450 would be the immediate support level for the bulls. A break below could lead to a correction up to 14150/47150 and then 14000-13900/46500-46000. On the flip side, 14500/48300 would be the immediate hurdle for Nifty/Sensex.
 Over the coming week, investors across the globe would keep an eye on the outcome of the FOMC meeting for any change in interest rates and their future guidance on inflation. Any central rate change will have a ripple effect on other rates, including foreign exchange rates and bond prices which may have a sizeable influence across emerging markets. Concurrently, with the ramping up of vaccination drives it is expected that focus would shift back to growth, cyclical recovery and fundamentals. Next week being the monthly expiry, traders are advised to abstain from taking aggressive bets as there is high probability of whipsaws due the Q4 results.
Nirali Shah, Head of Equity Research, Samco Securities |This week, investors would keep an eye on the outcome of the Federal Open Market Committee meeting for any change in interest rates and their future guidance on inflation. Any central rate change will have a ripple effect on other rates, including foreign exchange rates and bond prices which may have a sizeable influence across emerging markets. Also, Concurrently, with the ramping up of vaccination drive, it is expected that focus would shift back to growth, cyclical recovery and fundamentals.
Ajit Mishra, VP Research. Religare Broking | We do not see the volatility easing out in the coming week too, thanks to scheduled data and events. First, the monthly expiry of April month derivatives contracts will keep the traders on their toes. On the data front, core sector data will be unveiled on April 30. The recent proposal by the US president to raise capital gains tax has started showing its impact in US markets which may cascade to others in the coming week. Needless to say, the COVID-related updates will remain on the participants’ radar. Markets are showing tremendous strength this year so far but it’s too early to presume that we’re out of woods. We reiterate our view that the prevailing sideways bias in Nifty would end below 14,100 and it may slip towards the 13,800 zone. In the case of a rebound, 14,600 would act as a crucial hurdle. We feel it’s prudent to stay with defensive names and see how the markets pan out in the coming week.
Ajit Mishra, VP Research. Religare Broking | The monthly expiry of April derivatives contracts will keep the traders on their toes. On the data front, core sector data will be unveiled on April 30. The recent proposal by the US president to raise capital gains tax has started showing its impact in US markets which may cascade to others in the coming week. Needless to say, the COVID-related updates will remain on the participants’ radar. We reiterate our view that the prevailing sideways bias in Nifty would end below 14,100 and it may slip towards the 13,800 zone. In the case of a rebound, 14,600 would act as a crucial hurdle. We feel it’s prudent to stay with defensive names.
Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities | Fresh lockdowns and restrictions being imposed by various state governments will impact demand and also business activity. The persistent rise in hard commodity prices is a threat which could weigh on margins of many manufacturing companies. Too many potential negatives have come together which could impact markets in the very near future. Given the near term challenges and sentiment we can expect FPI flows to remain subdued in the near term. On the downside Nifty has major supports at 13,600 and 13,000 which is likely to be the 200 DMA in near future.
Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities | Fresh lockdowns and restrictions will impact demand and also business activity. The persistent rise in hard commodity prices is a threat that could weigh on margins of many manufacturing companies. Given the near term challenges, we can expect FPI flows to remain subdued in the near term. On the downside, Nifty has major supports at 13,600 and 13,000 which is likely to be the 200 DMA in near future.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | Going ahead, Indian markets are likely to continue with its volatility till COVID-19 cases continue its upward trajectory. Investors would continuously watch out government’s course of action along with progress on vaccination drive. Once the availability and the pace of vaccination picks-up and daily cases start subsiding, we expect the narrative to gradually shift from Covid-19 and restrictions back to fundamentals. We would recommend investors to take advantage of this volatility as the medium term thesis remains unchanged.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | Indian markets are likely to remain volatile until COVID-19 cases are contained. Once the availability and the pace of vaccination pick up, we expect the narrative to gradually shift from COVID-19 back to fundamentals. We would recommend investors take advantage of this volatility as the medium-term thesis remains unchanged.
Ashis Biswas, Head of Technical Research at CapitalVia Global Research | The market failed to show resilience to stay above the Nifty 50 Index level of 14400. While it is subject to further price action evolution, the technical factors are aligned to support a lackluster market movement going forward. Any corrective wave down should find support around 14180-14200. The traders refrain from building a fresh buying position until we witness a correction till 14180-14200 level or else a breakout above the 14400.
Ashis Biswas, Head of Technical Research at CapitalVia Global Research | Any corrective wave down should find support around 14180-14200. Traders should refrain from fresh buying until we witness a correction till 14180-14200 levels or a breakout above 14400.
Rohit Singre, Senior Technical Analyst at LKP Securities | Index again closed a week on a negative note at 14333 with loss of nearly two per cent on weekly basis and formed a Doji candle for third consecutive week hinting uncertainty in the markets. The index has created a good base near 14250-14200 zone. Holding above said levels structure will be positive, while any close below said levels can drag index to much lower levels. On the higher side, stiff hurdle is 14450-14500 zone and fresh strength above 14500 zone.
Rohit Singre, Senior Technical Analyst at LKP Securities | The index has created a good base near the 14250-14200 zone. Any close below the said levels may drag the index to much lower levels. On the higher side, stiff hurdle is 14450-14500 zone and we see fresh strength above 14500 zone.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments | The Nifty closed way above the 14200 which is a positive sign for the markets. If we break this level, the markets can slide down to 13800-13900. The upside is capped at 14550-14600 and any rally up will be used to short the markets.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments | The close above 14200 on Nifty is a positive sign for the markets. If we break this level, the markets can slide down to 13800-13900. The upside is capped at 14550-14600 and any rally up will be used to short the markets.
Rakesh Patil
first published: Apr 26, 2021 07:48 am

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