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Volatility likely to remain high, market will seek global cues for further direction, say experts

While the long-term structure of the market continues to remain positive, it may face some hurdles in the near term till concerns over the rising bond yields, commodity prices and the risk of an increase in inflation recede, says Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.

March 15, 2021 / 08:01 AM IST
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The market ended higher in the truncated week ended March 12 amid volatility, with the Nifty50 holding above 15,000 level, tracking positive global cues. The BSE Sensex jumped 386.76 points or 0.7 percent to close at 50,792.08 and the Nifty rose 92.85 points or 0.6 percent to finish at 15,030.95. During the week, the Sensex traded in the 51,821.84-50,318.26 range and the Nifty in the 15,336.3-14,919.9 range. On the sectoral front, the Nifty realty index fell 2.3 percent and the Nifty auto index slipped 1.3 percent. The Nifty IT index rose 2.6 percent. During the week, foreign institutional investors (FIIs) bought equities worth Rs 1127.82 crore and domestic institutional investors (DIIs) bought equities worth Rs 1,238.89 crore. (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.)
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities | After opening on the high side, the market suddenly changed its mood and closed at the lowest point of the day and week. It was expected that bond yields would go up after the announcement of the passage of the stimulus bill but the pace was faster than expected, leading to crash landings in Indian markets. Nifty / Sensex hit hard. With 15431 and 52561 levels not crossed, the Indian market has once again come to the lower support. The 14850/50150 could be a decisive support and if it breaks, the Nifty/Sensex could move closer to 14650/49500 or 14500/49000. It seems difficult to get out of weakness immediately. However, if Indices hold above 15,200/51250 levels, we can see an upward activity. Maintain a bullish bias on technology stocks. Nifty has formed the bearish hammer with a lower high formation in the weekly chart, it is advisable to reduce weak long positions at resistance levels. Buying is advisable in select companies on dips (14500/49000)
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities | After opening on the higher side, the market suddenly changed its mood and closed at the lowest point of the day and the week. It was expected that bond yields would go up after the announcement of the passage of the stimulus bill but the pace was faster than expected, leading to crash landings in Indian markets. The Nifty and the Sensex were hit hard. With 15431 and 52561 levels not crossed, the Indian market has once again come to lower support. The 14850/50150 could be a decisive support and if it breaks, the Nifty/Sensex could move closer to 14650/49500 or 14500/49000. It seems difficult to get out of weakness immediately. However, if Indices hold above 15,200/51250 levels, we can see an upward activity. Maintain a bullish bias on technology stocks. The Nifty has formed the bearish hammer with a lower high formation in the weekly chart, it is advisable to reduce weak long positions at resistance levels. Buying is advisable in select companies on dips (14,500/49,000)
Markets - Image: Reuters
Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities | Indian markets have been following global markets, which are nearing the previous peaks. The Nifty gained 0.6% during the week, going above the 15,000-mark. The S&P 500 and Dow Jones Industrial Index are both 1% away from their 52-week highs, whereas the Nasdaq Composite Index is 5% away from its 52-week high. The Nifty50 is 3% away from its 52-week high. European markets rallied smartly in the previous week after the ECB pledged to ramp up bond-buying programme and bond yields fell sharply. Sectorally, the BSE IT Index was up 3.3% followed by BSE Capital Goods up 1.6%. Among the Nifty50, major gainers were UPL (up 4.6%) followed by Tech Mahindra (up 4.5%) and Infosys (up 4.5%). Auto stocks were the major losers, with Hero MotoCorp, Bajaj Auto and Tata Motors taking the biggest hit. Going by recent moves, there is selling pressure at higher levels, which is capping the gains in Nifty50. Bond yields are moving erratically, which could keep volatility on the higher side. Even though the European bond yields have come off sharply, US 10-Year bond yield is still trading at the year-high level of 1.6%. All eyes will be on the Fed action. The Nifty50 needs to sustain above 15,000 for a couple of more days for the uptrend to continue.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | Technically, Nifty has to decisively hold above 15000 zones to witness an up move towards 15200 and 15300 zones while on the downside immediate support exists at 14900 then 14800 levels. Bank Nifty has to continue to hold above 35500 zones to witness an up move towards 36000 and 36500 zones while on the downside support exists at 35000 then 34750 levels. India VIX inched up by 4.6% and closed at 21.71 levels. Cool down in VIX below 21-20 zones is required for bullish grip and smoother move in the market. While the long term structure of the market continues to remain positive, we believe that markets may face some hurdles in the near term till the concerns over the rising bond yields, commodity prices and risk of increase in inflation recedes. Investors would look for cues from global markets and Institutional flows which has been patchy for last few days. Volatility is likely to remain as market would look at global cues for further direction
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | Technically, the Nifty has to decisively hold above 15000 to witness an up move towards 15,200 and 15,300 zones. On the downside, immediate support exists at 14,900 then 14,800. The Bank Nifty has to continue to hold above 35,500 zones to witness an up move towards 36,000 and 36,500 zones. while on the downside, the support exists at 35,000 then 34,750. India VIX inched up by 4.6% and closed at 21.71 levels. VIX has to cool below 21-20 zone for bullish grip and smoother move in the market. While the long-term structure of the market continues to remain positive, we believe that markets may face some hurdles in the near term till the concerns over the rising bond yields, commodity prices and the risk of an increase in inflation recede. Investors would look for cues from global markets and Institutional flows, which have been patchy for the last few days. Volatility is likely to remain as the market would look at global cues for further direction.
Nirali Shah, Head of Equity Research, Samco Securities | Nifty50 index closed the week on a neutral note after experiencing selling pressure around its all-time highs. The index is now contained within a narrow range of 14850 to 15270. Market breadth also remained very choppy throughout the week. Bulls and bears seem to be in a tug of war for the short-term directional move. Break of the said range on either side will dictate the trend in the short term. However, on a larger picture markets still remain deviated on the upside and a break below the recent lows of 14470 will trigger short-term weakness. Until then we suggest traders maintain a neutral to negative outlook. As we approach the end of this roller-coaster year, markets are expected to remain range-bound especially because of focus towards tax planning and portfolio rejig. Lack of any relevant trigger in the markets could also keep bourses in a tight range. Individual themes such as PSUs could continue to play out if there is news on disinvestments and sector rotation could be witnessed in search for higher returns. Investors are advised to continue to ride the bull wave and avoid aggressive investments in overvalued stocks.
Nirali Shah, Head of Equity Research, Samco Securities | The Nifty50 closed the week on a neutral note after experiencing selling pressure around its all-time highs. The index is now contained within a narrow range of 14,850 to 15,270. The market breadth also remained choppy through the week. Bulls and bears seem to be in a tug of war for the short-term directional move. Break of the said range on either side will dictate the trend in the short term. However, the market's larger picture still remains deviated on the upside and a break below the recent lows of 14470 will trigger short-term weakness. Until then, traders should maintain a neutral-to-negative outlook. As we approach the end of a roller-coaster financial year, markets are expected to remain range-bound, especially because the focus will be tax planning and portfolio rejig. Lack of triggers could also keep bourses in a tight range. Individual themes such as PSUs could continue to play out if there is news on disinvestments and sector rotation could be witnessed in search for higher returns. Investors should continue to ride the bull wave and avoid aggressive investments in overvalued stocks.
Ashis Biswas, Head of Technical Research at CapitalVia Global Research | The market's short-term technical condition appears like a sideways correction is in the process. While it is subject to further price action evolution, it is prudent and suggested to wait for a decisive breakout above 15,300 and technical factors to improve before going long in the market. The traders are advised to refrain from building a new buying position until further improvement is seen and a breakout above 15,250.
Ashis Biswas, Head of Technical Research at CapitalVia Global Research | The market's short-term technical condition indicates that a sideways correction is in the process. While it is subject to further price action evolution, it will be prudent to wait for a decisive breakout above 15,300 and technical factors to improve before going long in the market. Traders are advised to refrain from building a new buying position until further improvement and a breakout above 15,250.
Rohit Singre, Senior Technical Analyst at LKP Securities | Index managed to close a week above 15k mark with gains of half percent and formed Doji candle pattern on weekly chart hinting uncertainty in the market at the upper range. On the downside index has strong & good support at 14,850 zone and any decisive break below said levels can show some more pressure towards 14,500 zone on an immediate basis. The strong hurdle is still at 15,250 zone, only above that level we may see some stability.
Rohit Singre, Senior Technical Analyst at LKP Securities | The index managed to end the week above the 15k mark, gaining half a percent and formed a Doji candle on the weekly chart, hinting at uncertainty in the market in the upper range. On the downside, the index has strong support at 14,850 and any decisive break below it can pressure the index towards 14,500 on an immediate basis. A strong hurdle is still at the 15,250 zone, above which we may see some stability.
Markets will first react to the macroeconomic data viz. IIP and CPI inflation, which came in after the market hours on Friday. The retail inflation came in higher than the previous month at 5.03% for February as against 4.06% in the previous month. The IIP contracted by 1.6% for January as against 1% growth in the previous month. Next, the WPI inflation is scheduled for March 15. Besides, updates on the COVID situation and related news will remain on participants’ radars. Amid all, we’re seeing noticeable buzz in the primary market and 3 new IPOs are lined up next week for the subscription. On the global front, the market will be closely eyeing the US Fed meet for their stance on interest rates and plans to tackle the volatility in the bond yields. Nifty has been hovering within the 14,900-15,300 zone while we’re seeing a mixed trend on the sectoral front. In case of a breakdown, 14,700-14,500 zone would act as a cushion. On the other hand, a decisive break above 15,300 would fuel the index to test a new record high. It’s prudent to limit naked leveraged positions in the current scenario and wait for further clarity.
Ajit Mishra, VP Research, Religare Broking | Markets will first react to the macroeconomic data—IIP and CPI inflation, which came in after the market hours on March 12. Retail inflation in February was at 5.03% against 4.06% in the previous month. The IIP contracted by 1.6% for January as against 1% growth in the previous month. The WPI inflation data is scheduled for March 15. Besides, updates on the COVID situation and related news will remain on participants’ radars. Amid all, we’re seeing a noticeable buzz in the primary market and five new IPOs are lined up next week for the subscription. On the global front, the market will be closely eyeing the US Fed meet for its stance on interest rates and plans to tackle the volatility in the bond yields. The Nifty has been hovering in the 14,900-15,300 zone, while we’re seeing a mixed trend on the sectoral front. In case of a breakdown, 14,700-14,500 zone will act as a cushion. On the other hand, a decisive break above 15,300 will fuel the index to test a new record high. It’s prudent to limit naked leveraged positions and wait for further clarity.
Rakesh Patil
first published: Mar 15, 2021 07:50 am

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