MUMBAI: The market snapped a five-week losing streak closing up almost 3% at 16266.15 on Nifty and 54326.39 on the Sensex. In the near term, the bounce could extend up to 16400-16500 levels with 16000 becoming strong support for the week. On Sensex, levels roughly translate into a 52800-54800 plus for the week.
Immediate near-term positives include a cut in excise duty on petrol and diesel, which could cool retail level inflation and China slashing a key interest rate on homes to spur demand. On the flip side, continued selling by FIIs could put the brakes on any rally.
Analysts said until the FII selling doesn’t abate, the uncertainty would linger. “May be for a day or two, there will be positive impact of cut in fuel price as the need to raise rates will be reduced a little bit,” said Nilesh Shah, MD, Kotak Mahindra AMC. “However, the global uncertainty will keep pressure on the market over the near term.” The Nifty is off almost 13% from its record high of 18604.45 on October 19 last year, primarily due to FII sales amid US Fed tightening of stimulus and hiking interest rates. Last fiscal, FIIs sold Indian shares worth $18.46 billion.
“The carnage in the US markets led by new-age stocks continues and as India tracks those markets, it will be tough to call a bottom,” said value investor Vijay Kedia . “However, investors should look for fundamentally sound stocks, where froth has taken a flight and valuations are tight.” Stocks such as Infosys are down 25% from their highs at Rs 1455.