The Nifty 50 and BSE Sensex declined by 1.2 per cent this week as market mood became cautious on rising global and local bond yields.
Soaring commodity prices now pose a serious threat to 31 companies or 46% of the free-float weighted market cap within the benchmark Nifty 50 index.
BSE Sensex and Nifty 50 ended at nine-day lows on Friday as bears took over the Dalal Street. Headline indices finished in the red for the fourth consecutive day. BSE Sensex plunged 435 points or 0.85 per cent to 50,890. While Nifty 50 ended down at 14,982 level. In the intraday trade, the 30-share index tanked 800 points from the day’s high to hit a low of 50,624. While NSE’s Nifty touched a day’s low of 14,898.20 level. Both the headline indices ended this week 1.2 per cent lower. The broader markets, too, ended in the red. The S&P BSE MidCap index underperformed BSE Sensex and finished 1.7 per cent or 340 points down at 20,035. The SamllCap index settled at 0.7 per cent or 153 points down at 19,863.
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities
After a stellar rally from 13600 to15430/46200-52516 currently the market witnessed selling pressure. From the last four days, the index corrected over 450/ 1000 points. Technically, on weekly charts the index has formed a bar reversal candle which clearly suggests short term weakness will continue in the near future. However, the medium term texture of the market is still bullish and likely to continue if the nifty succeeds to trade above 14900-1500/51500-51850 which is earlier resistance level (Prior to the Budget of announcement). In addition, despite short term weakness the market is still trading well above short term and medium term averages which also support medium term uptrend.
We are of the view that we are expecting the market to find support between 15000 -14900/51500-51850 but in case there is furthermore weakness in global markets, then we may even see the level of 14750/50250 which was earlier the resistance level. As the market already shaded over 450/1000 points initial strategy should be to look for adding long positions and on bounce back we can reduce near 15250-15300/51500-51900.
Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder of Gemstone Equity Research & Advisory Services
From the high of 15431, the NIFTY has come off nearly 500-odd points. From the FO data, until expiry on 25FEB, we feel that some technical pullback is likely as the NIFTY has got deeply oversold in the immediate short term. It is unlikely that the NIFTY dips much below 15000 as the Index enjoys a good short term support at 14950-14900 levels. From the current levels, we expect some technical pullback to happen until 15200-odd levels. Fresh directional cues will appear only after that.
Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities
The Nifty-50 & BSE Sensex declined by 1.2% this week as market mood became cautious on rising global and local bond yields. The broader markets that is NSE Mid Cap 100 Index and BSE Small Cap Index are both in the green this week. The US 10 Year Bond yields have risen from below 1% to 1.29% building in economic impact of the US$ 1.9 trillion stimulus package. In India too the 10 year bond yields have moved up from recent low of 5.76% to 6.13% which could mainly be linked to the higher fiscal deficit estimates. We expect domestic 10-year bond yields to be in the range of 6-6.75% in this calendar year. Oil & Gas & power stocks were major gainers this week. Almost 37 stocks from Nifty-50 lost ground this week with Pharma and select consumers having lost the most. This week PSU banks were in demand on reports of government likely to bring amendments to two legislations later this year to facilitate privatisation of public sector banks. We need to see if Nifty-50 holds the 15,000 level in the near term. The next major support for the Nifty-50 is the 50 DMA placed at 14,321 as of now.
Abhishek Chinchalkar, CMT Charterholder and Head of Education, FYERS
Profit booking extended for a fourth session today, as Indian markets briefly dipped to their lowest level in 2 weeks. The selling today was across the board, with broader markets also retreating sharply before a minor recovery in the last hour of the session. For the week, Nifty formed a Bearish Engulfing candlestick pattern. The early week reversal from just underneath the 161.8% fibonacci retracement level of 15470 indicates that this is an important resistance to keep an eye on in the short-term. Meanwhile, the immediate support to focus on is today’s low of 14900. If Nifty sustains below 14900 in the coming week, the correction is likely to extend towards 14730-14600. However, if the index manages to hold above 14900 and goes on to surpass 15470, a fresh up leg can be expected to unfold that could take the index towards 15910.