In the last seven trading sessions, the bears had a strong hold on Dalal Street. During this time, the BSE Sensex has fallen from around 61,319 to 58,900, a decline of around 2,500 points or 4 per cent in this time. The broader Nifty 50, which also witnessed 7 days of non-stop selling, fell below the budget day’s low of 17,353.40.
fear gauge index India The VIX added another 5 percent as selling was seen across sectors. Sectoral indices of IT, Metal and Media declined by 2-4 per cent.
Santosh Meena, Head of Research, Swastika Investmart Ltd, said: “Nifty has slipped below its key support of 17350, which is its 200-DMA as well as the budget day low. However, we should wait for the close because if this breakdown turns out to be wrong, we can expect a short covering move. there is a sharp difference between smelly And BankNifty Today, BankNifty is showing good strength while Nifty is under pressure. Banknifty is a leading indicator in general, and market is oversold based on FII short exposure and PCR, so we should wait for the close of the day. However, if there is no correction in Nifty, then 17130 is the next target level.”
US Fed meeting in focus
Speaking on the reason for fall in Sensex and other benchmark indices, Anuj Gupta, Vice President-Research, IIFL Securities said, “Sensex and other major benchmark indices have been falling since last seven sessions due to rising US dollar rate. In last seven sessions, US dollar index has climbed above 105 level and may move towards 107 level in near term. The strengthening of the US dollar was mainly due to rising US inflation concerns after stronger than expected US economic data in recent weeks. This has increased the concern of the US Fed officials and they are indicating to increase the US Fed interest rates by 25 bps in the upcoming three meetings of the US Fed.
global market
Indian markets are reflecting the bearish sentiments dominating global markets. The Dow Jones fell 3% last week in its fourth straight weekly decline. Asian markets were under pressure this morning, with the Nikkei down 0.2%, the Hang Seng down 0.8% and Australia’s S&P/ASX 200 down 1.3%.
FII selling
Foreign institutional investors have dumped Indian equities worth over Rs 31,000 crore so far in calendar year 2023. F&O data showed that net shorting of FIIs in index futures again crossed 1 lakh contracts.
“Last week, US bond yields continued to rise on expectations that the Fed would take a more accommodative stance in the face of slowing deflation in the US. Rising rates in the US could lead to more capital outflows from emerging markets. Witnesses from South Korea and Taiwan…
Q3 earnings
The December quarter earnings season failed to provide any positive triggers to support valuations. Sharekhan said that 50% of the Nifty 50 companies beat PAT estimates, while 40% missed the estimates. “Margin pressure continued for sectors such as cement, metals, healthcare and oil and gas. Nifty 50 companies excluding BFSI, EBITDA margin declined by 184 bps due to contraction in gross margin amid higher input cost.
market Outlook
Asked how the market is likely to fare in the current year, he said the domestic equity market may remain volatile in the short term. However, Bembalkar is positive about India’s structural growth story.
“Our government is keen to make India a global manufacturing hub and is making a deliberate effort to encourage manufacturing activity within the country. India’s private consumption is on a structural growth path. In fact, according to International Monetary Fund (IMF) data, India is one of the fastest growing large economies. Hence, we find the risk-reward tradeoff favorable for investors with a long-term horizon (more than 3 years),” he said.
On a year-to-date basis, the NSE Nifty index declined 3.50 per cent to 17465.80 on February 24, 2023, from 18105.30 on December 30 last year. On the other hand, the broader index Nifty 500 fell 5.3 per cent to 14,630.45 during the same period.
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