After a sharp correction in markets on Friday, what’s in store for Indian markets this week
For the next few weeks, the market trend would depend on the long-term bond yield trend, which should be on the watch list, say experts
A steep hike in US treasury yields took the global markets by surprise on Friday, February 26, as investors dumped equities for bonds.
Additionally, geo-political tensions on the back of the US air strike in retaliation for a rocket attack in Iraq earlier this month cautioned investors.
The Sensex fell 3.5% and the Nifty50 3% for the week ended February 26.
In fact, the Sensex and the Nifty indices posted weekly losses for the second straight week and have now erased 50% of the gains clocked post Budget presentation.
In broader markets, the S&P BSE SmallCap index settled only 0.7% down. The S&P BSE MidCap index, on the hand, ended 1.75% on Friday but gained 0.5% during the week.
Going forward, the markets will react to the Q3 GDP numbers. Indian economy came out of technical recession. After two quarters of negative growth, the country reported a marginal rise in GDP for the December quarter at 0.4%
Here’s how experts believe markets may trade in the week to follow
Shrikant Chouhan, EVP, Equity Technical Research, Kotak Securities:
Going back for the second week in a row, the market closed in negative territory. On a daily chart, the Nifty / Sensex hit a low and closed below the lowest level of the previous week.
A sharp jump in the 10-years bond yields (US) has turned the sentiment negative. It touched a high of 1.55 during the week, despite a positive comment from the Fed Chief. For the next few weeks, the market trend would depend on the long-term bond yield trend, which should be on the watch list.
Technically, the Nifty and the Sensex fell by 568 and 1,939 points, respectively. Bank Nifty lost 1,750 points, which is the biggest in the last six months. The market has established a series of ‘lower top and lower bottom’ that would be negative for the medium-term trend of the market.
The Nifty / Sensex would find support at 14,300/48,000 for the coming week. If the market falls to 14,300-14,350 / 48,200 without meaningful bounce, then it would be a buying opportunity for short term / medium term traders/investors.
Manish Shah, Founder, Niftytriggers.com
Nifty asserted their supremacy in style as a decline from the high of 15,431 completed its decline and the impulsive action resumed.
On Wednesday, Nifty made a long candle followed by a rally today. If we blend candles for the last two days we see a long candle that runs parallel to Monday’s debacle. This is a railroad track. Nifty has closed above the high of Monday’s candle and above the fifty per cent retracement of the 15,430-14,635 decline, this is a trend continuation signal.
Nifty will continue to trade above the recent high at 15,432 and we should see momentum picking up. Expect the initial two weeks of March 2021 to be in favour of bulls possibly aided by a move in Reliance.
The stochastic oscillator has moved up from the oversold zone and it is usually the first oscillator to pick up a turn MACD remains in a sell mode; it is usually the last one to turn. The target for Nifty will 15,500-15,600 over the next couple of days.