Market this week: From bank credit growth to US Fed statement, factors that may drive Nifty, Sensex
Domestic equity markets are expecting high volatility over the holiday-shortened next week after the markets managed to end higher on Friday. Indian markets will remain closed on March 7 on account of Holi. The Indian equity benchmarks wiped out the previous session’s losses to end higher on March 3, as the Sensex closed up 899.62 points, or 1.53 percent, at 59,808.97, and the Nifty gained 272.40 points, or 1.57 percent, at 17,594.30.
On the economic front, market participants would be eyeing the industrial production data measured in the Index of Industrial Production (IIP) for January, which is scheduled to be released on March 10. Industrial production in India increased 4.3% year-on-year in December of 2022, easing from an upwardly revised 7.3% rise in November, and slightly below market forecasts of a 4.5% gain.
The deposit growth, bank loan growth, and foreign exchange reserves data are to be out on March 10. On the same day, Foreign Exchange Reserves data will be released. Foreign Exchange Reserves in India decreased to $561,270 million in the week ended February 17, 2023, compared to $566,950 million a week earlier.
Meanwhile, investors will be eyeing the US-India meeting, which is likely to be held on March 8, where US Commerce Secretary Gina Raimondo will be leading a big business delegation to India to discuss ways further to boost trade and investment ties between the countries.
Speaking on the Foreign investor’s movement last week, Dr.V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: ” FPIs continued selling in early March too. However, the data (NSDL) shows a net FPI figure of Rs 8,902 crores up to 4th March. This discrepancy is due to the US-based investment firm GQG making a massive investment of Rs 15446 crores in four Adani stocks.”
“Excluding this, FPIs continued to be sellers to the tune of Rs 6,544 crores in March till the 4th. Excluding the GQG investment, FPIs have sold equity to the tune of Rs 41169 crores in 2023. FIIs are likely to sell at higher levels since the US 10-year bond yield is at 4% and this is an attractive risk-free investment for FPIs. FPIs have been buyers in financials, capital goods, and autos and sellers in Oil & Gas and metals.” Vijayakumar added.
US market data
On the global front, investors would be eyeing a few economic data from the world’s largest economy, the United States (US), starting with Factory Orders on March 06, followed by Redbook, Wholesale Inventories on March 07, Fed Chair Powell Testimony, API Crude Oil Stock Change, Balance of Trade, on March 08, Initial Jobless Claims on March 09, Non-Farm Payrolls, Unemployment Rate and Baker Hughes Oil Rig Count on March 10 and Monthly Budget Statement on March 11.
Nifty Technical Outlook
Amol Athawale, Deputy Vice President of Technical Research at Kotak Securities, said, Indian markets reacted to a strong positive undercurrent across the global equities that triggered a massive bout of short covering in key sectors. Markets were in a fall season and hence the valuations had become attractive prompting traders to shrug off the weak sentiment.
“Technically, the Nifty has formed a double bottom near the 200-day SMA (Simple Moving Average) and bounced back sharply. The index has also formed a promising bullish candle on daily and weekly charts which supports a further uptrend from the current levels. As long as the index is trading above 17400 the uptrend wave is likely to continue. Meanwhile, Bank Nifty successfully cleared the 20-day SMA mark which is broadly positive. For the Bank Nifty, 41000 or 20-day SMA could be the immediate support zone. Above this, it could move to 41700-42300 levels. For short-term traders, 17550-17500 would be the immediate support level while 17700-17850 is the crucial resistance.” he concluded.
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