NEW DELHI: Last week was an exciting one for India’s equity markets. The benchmark Nifty, in a volatile trading session, breached the 13,000-points mark for the first time while the 30-share benchmark index BSE Sensec inched closer towards the 45,000 level. In the coming weeks, a wide range of factors—ranging from increasing coronavirus cases and the RBI policy meet to investment trends of foreign institutional investors (FII) are expected to impact investor sentiment.
According to analysts, this also indicates that the market may experience some form of volatility, or even witness a sharp correction. “The Doji candlestick and intra-day charts formation indicates red flags near the 13,000 level.
Hence, a strong possibility of quick intra-day price correction is not ruled out in the near term. For the next few trading sessions, 12,810 should be the sacrosanct level for the trend following traders. If it sustains above the same then uptrend texture is likely to continue up to 13,050.
And any further upside could lift the index up to 13200 levels. On the flip side, dismissal of 12810 could trigger correction up to 12700-12650 levels,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities. Ashis Biswas, Head of Technical Research, CapitalVia Global Research said lackluster trends are likely to continue in the market and the Sensex will need to overcome the 44,400. level.
He added, “While a breakout above 44,400 is the key factor from a short- term perspective, our research suggests anything above this level to gain momentum, that could lead to an upside projection till 45,100-45,200 level... we advise the traders to consider a breakout above 44,400 as an opportunity to build fresh long.” Last week, the market had remained buoyant due to expectations of a sharp earnings recovery going forward, primarily due to progress made in the development of Covid-19 vaccines.
FPIs bought equities worth $2.05 billion over the past five trading sessions while DIIs sold $1.8 billion worth of equities in the same period. Going forward, Shibani Sircar Kurian, Senior Executive Vice President & Head, Equity Research, Kotak Mahindra Asset pointed out that India’s equity markets will likely also focus on the sustenance of demand post the festival season and the ability of companies to maintain the improvement in profitability.
Five of top 10 firms lose Rs 91,699 crore in m-cap
The combined market valuation of five of India’s top-10 most valued firms declined by Rs 91,699 crore last week, with Reliance Industries (RIL) the worst hit. While RIL, Infosys, HDFC, ICICI Bank and Bharti Airtel suffered losses in market valuation, TCS, HDFC Bank, HUL, Kotak Mahindra Bank, and Bajaj Finance gained.