The Nifty50 declined back to 10150-10200 for the week ended March 16. The higher levels of 10450-10500 have remained a major supply zone in this consolidation.
However, global markets have remained relatively stable. This may restrict a major fall in the Nifty in the coming sessions.
The volatility index also failed to sustain below the crucial 14 percent mark, which is leading to wild swings in the market within the range.
We believe that if the Nifty recovers above 10300, then the comfort should come back to bulls. Otherwise, it may be a stock-specific painful scenario for some time.
In the current fall from 10400, the Nifty has seen short addition of 10 percent, which may keep the index under pressure for some more time.
The highest Put base is placed at the 10000 strike which remains a crucial support on the declines. The non-banking heavyweights have particularly put pressure in the recent fall.
Also, last week, the breadth was positive in four out of five sessions. This means that the midcap space was not beaten severely for a major part of the week.
The index remained extremely volatile for the week where it started on an optimistic note after witnessing a decent support near 24400 and moved towards 25100.
However, in Friday’s session, the index gave up its gains after falling sharply towards the end. The index ended near 24600 with sharp selling in private sector banks.
Marginal short covering was seen in PSU banks during the week but stocks like SBI and Canara Bank continued to remained under pressure.
Soft economic data, including lax inflation in the US, has pushed the fear gauge of the market lower, with US 10-years falling to 2.8 percent level (lower band of last three months). However, despite this, global markets, led by the US, headed lower during the week. The key reason was the political turmoil and trade tariff wars emanating from the US.
As per the latest news flows, HR McMaster, the national security advisor, is likely to be moved out and would follow the resignation of the White House’s top economic adviser, Gary Cohn, and the ouster of the secretary of state.
Investors were already grappling with heightened US trade protectionism measures. During the week, MSCI world equity index ended negative while MSCI EM recovery faded and the index traded with gains of less than 1 percent.
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1 Comments
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