Nifty ended with weekly declines 0.7% led by selling pressure in the IT sector. When markets resume trading on Monday, a host of important domestic and global events lined-up during the week are likely to impact them.
It was a truncated week as markets were closed on Friday on account of Holi. Nifty closed at 22,397.20, lower by 73.30 points or 0.33%.
Commenting on the day's action, Rupak De, Senior Technical Analyst at LKP Securities said that the Nifty has been forming a symmetrical triangle pattern on the hourly chart, which is a continuation pattern. For the past three days, Nifty has largely remained within the range of 22,350–22,550, he added. "A decisive move above 22,550 could trigger a meaningful rally in the short term. Conversely, a decisive fall below 22,350 could weaken sentiment in the short term," De said.
FOMC meeting
The two-day Federal Open Market Committee (FOMC) meeting will begin on March 18. The policy announcement will happen on Wednesday, March 19 and will be followed by a press conference by Chair Jerome Powell.
The US Central Bank is unlikely to alter the policy rates but Street will be keeping an eye on his commentary on inflation and economy.
US Markets
Indian markets could take cues from Wall Street which ended with strong gains on Friday. Currently they are in oversold territory and US-based analysts see a rebound for this reason.
On Friday, Dow 30 closed at 41,488.20, gaining by 674.62 points or 1.66% while the S&P 500 finished 117.42 points or 2.13% higher at 5,638.94. Nasdaq Composite, which has been the biggest laggard among major Wall Street indices closed at 17,754.10, witnessing a 451.08 points or 2.61% growth.
Trump tariffs
Even as Trump tariffs are unsettling the world order, the development over the weekend could calm the nerves of global stock markets.
On Friday, US Secretary of State Marco Rubio told G7 foreign ministers that President Donald Trump's tariffs were not meant to be hostile to US allies.
Meanwhile, media reports suggested that Elon Musk’s Tesla has written to the Trump administration, warning that US exports are exposed to retaliatory tariffs.
FII / DII Action
While the selling foreign institutional investors (FIIs) remains unrelenting, the trajectory of markets could depend upon the intensity of their activ ..
Selling of Indian equities by the Foreign Portfolio Investors (FPIs) continued in the first fortnight of March where they sold shares worth Rs 30,015 crore. The total FII selling in this year so far has been at Rs 1,42,616 crore.
Technical Factors
On Nifty's prospects, this week, Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates highlights the presence of the selling pressure. "Technically, on the daily chart, Nifty formed a red ca ..
In his view, if Nifty breaches 22,300, the weakness could extend towards the 22,000 level and he recommends traders to closely track these levels for potential trading opportunities.
India's retail inflation, as measured by the Consumer Price Index (CPI), eased to 3.61% in February from 4.26% in January, showed data released by the National Statistics Office (NSO) on Wednesday.
“The CPI inflation came in better than expected and the strength in the rupee shows that markets have started pricing in further and possibly even deeper rate cuts,” said Dilip Parmar, currency research analyst at HDFC Securities.
The currency had risen to 86.94 levels during the day but gave up its gains in the final hours of trading, dealers said. “There was some (dollar) buying in the last hour since the currency broke past the 87/$1 level, and hence the rupee gave up its gains to close slightly weaker,” Parmar said.
Crude Oil
Oil prices remain critical for markets with their impact on inflation and on the rate trajectory of global central banks including India's.
“Brent oil has hovered around the $70 mark for the past two weeks. Whether it will remain at this level in the coming week depends on the political news situation,” Reuters reported quoting Commerzbank analysts note.
The US WTI oil contracts ended at $67.19, up by $0.64 or 0.96% while Brent oil futures were hovering near $70.58, lower by $0.77 or 1.10%.
Higher crude oil prices do not augur well for the equity markets, fuelling inflation fears.
Corporate Action
March 18, Tuesday will be the ex-date and record date for the Rs 5 per share and Rs 4 per share dividends of Castrol India and DIC.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Source Name : Economic Times