NEW DELHI: As India’s equity market benchmark indices - Sensex and Nifty50 - hit record high levels last week as better-than-expected Q3 GDP data propelled fresh buying, market experts are hopeful that the bullish momentum will continue in the coming sessions as well. The fresh buying is also supported by chances of an interest rate cut after the latest US inflation data, gain in Nifty Bank and foreign institutional investors (FIIs) hitting a pause button on their selling spree.
The Nifty50 and Sensex closed last week at 22,378.40 and 73,806.15 levels, respectively. Nifty, Sensex and Bank Nifty gained for the third straight week. On the sectoral front, all sectoral indices ended higher except Media, Pharma and IT.
Santosh Meena, Head of Research, Swastika Investmart said that Nifty50 is resuming its bullish momentum after a period of two months of consolidation. “22500 is an immediate target level, while 22,750 is the next target level. On the downside, 22200–22000 will now act as a strong demand zone. Bank Nifty is gaining momentum and is likely to outperform from here. 47500 is an immediate hurdle; above this, we can expect a move towards 48000/48800 levels. On the downside, 46600–46300 will act as a strong support zone,” added Meena.
Ajit Mishra, SVP - Technical Research, Religare Broking is eyeing 22,800 level in Nifty now, thus participants should continue with a ‘buy on dips’ approach until it breaks 21,900. “We feel the participation of the banking pack would continue to play a critical role in maintaining the prevailing momentum while others may play a supportive part on a rotational basis. Traders should maintain a stock-specific approach and prefer index majors and large midcap counters for long trades,” said Mishra.
Meena said that key upcoming events, such as the release of the US ISM services PMI on March 5, 2024, testimony by US Fed Chair Powell, and the announcement of JOLTS job openings on March 6, 2024, along with the US unemployment rate on March 8, 2024, will be closely watched for their potential impact on market sentiment. “Crude oil is also inching higher, and any negative surprise from there can disturb the mood of the market. However, the market is ignoring any bad news and continuing its bullish momentum… Domestically, attention will be focused on political developments leading up to parliamentary elections,” Meena said. Vinod Nair, Head of Research, Geojit Financial Services said that while robust economic data boosted confidence in the Indian economy, concerns lingered regarding the RBI’s policy decisions amidst high liquidity and inflation worries. “On the global front, in-line US personal consumption expenditure data and benign Euro zone inflation may influence global central banks to take a dovish view on interest rates. US bond yields dipped after the inflation data release, also supporting the equity market,” added Nair. The analyst believes that a correction in mid- and small-cap caps is underway and expected to continue, with regulators urging disclosure of associated risks to AMCs.
Meanwhile, India’s IPO market will a busy week as eight initial public offerings are set to open for subscription while seven companies are scheduled for listing on the exchanges. Among the ongoing mainboard issues, Mukka Proteins’ IPO will close for bidding on Monday. So far, this issue has been subscribed by nearly 7 times. RK Swamy IPO, JG Chemicals IPO, Gopal Namkeen IPO will be available for subscription this week.