Investors will focus on several stock market triggers in the final week of the month, including domestic and global macroeconomic data, auto sales, oil prices, foreign capital inflows and other global cues.
The market has been volatile for the past five days, but it managed to extend its winning streak for the second week in a row, finishing up almost 1%. After an initial rally, mixed global cues combined with profit-taking by some heavyweights capped momentum.
Global stock indexes soared, mainly due to the rise in high-tech stocks following the steady rise in market valuations following the earnings results of US semiconductor manufacturing giant Nvidia, and also supported by sentiment in the Indian market.
Domestic benchmark indices Nifty and Sensex continued to move in a narrow range until the end, settling at 22,212.70 and 73,142.80 respectively. Sector-wise, most ended in the green, with real estate, FMCG and metals being the top performers.
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However, the broader index failed to match this move and ended flat. The Nifty 50 and BSE Sensex rose 0.78% and 1%, respectively, for the week, despite falling 0.02% each on Friday.
Despite a volatile week amid mixed global developments, the benchmark Nifty 50 index hit record highs in all five sessions, supported by gains in leading financial stocks. This week, domestically focused small-cap stocks fell 0.12%, while mid-cap stocks rose 0.30%, both below the benchmark.
“Domestic markets temporarily stalled after hitting record highs again earlier in the day, supported by positive signals from global markets. The goods and industrial sectors showed strength,” said director Vinod Nair. The research division of Geojit Financial Services.
“Earnings season has come to an end, and markets are riding high on pre-election momentum, but are waiting for new catalysts. Concerns about rising oil prices, soaring U.S. Treasury yields and skyrocketing valuations persist. Selling by FIIs is likely to continue,” Nehru added.
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It’s a busy week ahead for major markets, with several initial public offerings (IPOs) and listings scheduled across the mainboard and small and medium-sized enterprises (SME) segments. Next week will be an important week from a domestic and technical perspective as investors will focus on stock price movements along with domestic and global indicators.
Analysts say overall trends remain positive, but expect volatility to remain high as February derivatives contracts are scheduled to expire. Going forward, indications are that the Nifty 50 is likely to move steadily higher towards the 22,500-22,800 zone, with some major index stocks likely to provide the needed impetus. Experts advise investors to continue with a “buy-on-the-moment” strategy and focus on stock selection.
Here are the main drivers for the stock market next week:
Macro data, car sales:
On the macroeconomic front, India’s third quarter gross domestic product (GDP) will be announced on February 29, 2024. Infrastructure output data and fiscal deficit data will also be released on the same day. All eyes will be on auto stocks as automobile companies will announce their monthly car sales figures for February on March 1, 2024.
Analysts said the stock market could see some volatility this week with some direction ahead of the February F&O expiry and the MSCI rebalancing scheduled for Thursday.
6 new IPOs, 5 to be listed on D-Street:
In the mainboard category, Exicom Tele-Systems IPO and Platinum Industries IPO will open for subscription on February 27, while Bharat Highways InvIT IPO will start on February 28. Among the ongoing stocks, GPT Healthcare IPO will close its bidding on February 26th.
In the SME segment, Owais Metal and Mineral Processing IPO will start offering on February 26, Purv Flexipack IPO on February 27 and MVK Agro Food IPO on February 29. Among the ongoing issues, Sadhav Shipping IPO will be auctioned on February 27th.
As per the listing plan, Juniper Hotels shares will be listed on the BSE and NSE stock exchanges on February 28th, while GPT Healthcare IPO shares will be listed on February 29th. Also, shares of Zenith Drugs and Deem Roll Tech will be listed on NSE SME on February 27. Sadhav Shipping’s shares may also be listed on NSE SME on March 1.
FII activities:
Foreign institutional investors (FIIs) were sellers in three out of five sessions last week, with total sales of INR1,939.4 million, Domestic Institutional Investors (DII) were buyers in 4 out of 5 sessions, and the total investment amount was INR3,532.82 million, according to stock exchange data.
“Investors are becoming cautious about the banking sector as credit demand slows and struggles to raise deposits.Other sectors on the FII seller list are construction and telecom.Sectors that are bullish include healthcare , IT, consumer services and automobiles. Arvinder Singh Nanda, senior vice president, Master Capital Services Ltd. Investors around the world are becoming cautious about Chinese stocks.”
Foreign portfolio investors (FPIs) continued their January selling streak in Indian markets, but outflows sharply declined in February. According to market experts, FPIs continued to buy in the primary market and bought bonds, offsetting the total net sales in February so far. However, capital outflows by FPIs continue. INR26,168 billion by 2024.
FPI sold INR424 million worth of Indian stocks, total inflows are INR18,633 crore as on February 23, taking into account debt, hybrid, debt VRR and equity, according to National Securities Depository Ltd (NSDL) data.
“An interesting feature of the FPI trend is that FPI equity outflows are decreasing even as U.S. bond yields are rising. Typically, when the U.S. 10-year bond yield rises above 4.15%, FPIs are heavily sold off. But not now. FPIs are on the back burner as DIIs, HNIs and retail investors are currently the dominant players and their sustained buying is pushing the market to new records. ” said Dr. VK Vijayamar, Chief Investment Strategist, Geojit Financial Services.
Global queue:
Markets may pause next week ahead of the release of various global economic indicators. The US is scheduled to report fourth-quarter GDP statistics, along with first-time jobless claims, PCE data and consumer confidence for February. GDP numbers and new jobless claims are likely to influence trends in US Treasury yields.
Investors will focus on global macro data, along with the rupee’s movement against the dollar index, oil prices and comments from US Federal Reserve officials. All eyes will be on the U.S. market after artificial intelligence (AI) chipmaker Nvidia reported strong quarterly results last week, sparking a global tech rally.
“Participants should closely monitor developments in global indexes, especially in the US. The US benchmark index, the Dow Jones Industrial Average (DJIA), has resumed its uptrend after a modest decline, with a new It has breached the $39,000 milestone. With a strong base at around 38,400, we expect the index’s favorable trend to continue, which could help maintain the market’s positive bias.” said Ajit Mishra, SVP Technical Research, Religare Broking Ltd.
Oil price:
Oil prices fell nearly 3% in premarket trading, marking a weekly decline after U.S. central bank policymakers suggested interest rate cuts could be delayed for at least two more months. Federal Reserve President Christopher Waller said Fed policymakers should hold off on cutting U.S. interest rates for at least a few more months, saying doing so could slow economic growth and curb oil demand. .
Brent crude oil futures fell $2.05, or 2.5%, to settle at $81.62 per barrel, while U.S. West Texas Intermediate crude oil futures (WTI) fell $2.12, or 2.7%, to $76.49. For the week, Brent is down about 2% and WTI is down more than 3%. However, signs of concern about healthy fuel demand and supply could cause prices to recover within days.
Corporate activities:
Shares of several companies including Natco Pharma, NMDC and Birla Precision Technologies will trade ex-dividend next week from Monday, February 26. Some other companies are also scheduled to be traded on a bonus-less or installment basis. next week. Bajaj Auto announces share buyback on February 29th.Check the complete list here
Technical view:
“Nifty has respected the short-term moving average, i.e. 20 DEMA, in the recent decline, but mixed performance of index heavyweights has restrained the momentum,” said Ajit Mishra of Religare Brokings.
“Going forward, the outlook points to a steady rally towards the 22,500-22,800 zone, with major index stocks likely to provide the necessary impetus.”On the downside, in case of profit taking Support will be in the 21,550-21,900 zone. Participants need to focus on stock selection and maintain a ‘buy the buy’ approach,” Mishra added.
Santosh Meena, head of research at Swastika Investmart, said, “From a technical perspective, the Nifty has broken out of the 45-day consolidation period, indicating upside potential towards the 22,500 level. “We have 20 days of support for the time being.” “The moving average (DMA) is near 21,900 and the 50-DMA at 21,700 acts as an important support level,” he said.
“Analyzing derivatives, the Nifty currently lacks major call writing up to the 23,000 level, but the put writers at the 22,000 level are showing confidence.Bank Nifty has seen call and put writing with a strike price of 47,000. There is a tug-of-war between writers,” Meena added.
According to Kunal Shah, Senior Technical & Derivatives Analyst at LKP Securities, the Bank Nifty index maintained solid momentum and breached the 46,500 level, which is currently established as strong support.
“A retracement to this support zone provides an ideal opportunity to initiate a long position with an upside target of 48,000.” The index’s immediate hurdle is at 47,100, and a decisive break above this level would be a good one. , would mark a resumption of the uptrend towards the aforementioned target of 48,000,” Shah added.
Disclaimer: The views and recommendations expressed above are those of individual analysts, experts, and brokerages and are not the views of Mint. We recommend checking with a certified professional before making any investment decisions.
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