Weekly Market Wrap: Dalal Street remained in consolidation phase this amid higher-than-expected inflation
The passing week was more of a consolidation one with markets paring some of their weekly gains in the last session. While BSE Sensex gained 320 points, or 0.5 per cent, at 61002.6, the Nifty moved 87.7 points up, advancing 0.5 per cent to 17944.2 during the week ended February 17. Markets traders remain concerned with India’s retail inflation breaching the RBI’s comfort zone and rising to a three-month high of 6.52 per cent in January 2023, mainly on account of a spike in food prices. Investors were also worried about future interest rate hikes by the US Fed after the recent release of upbeat US economic data.
Market watcher Vinod Nair, Head of Research at Geojit Financial Services, said: “Dominated by the release of key macroeconomic numbers and persistent FII buying, domestic markets witnessed a positive trend during the week. However, the unfavourable combination of higher-than-expected inflation and a stronger job market in the US market dragged markets lower towards the end of the week, raising concerns about tighter monetary policy. The whammy over India’s retail inflation breaching the RBI’s tolerance level was cooled by WPI inflation easing to 4.73% in January.”
“The US inflation rate, though it slowed its pace compared to the previous month, came in higher than expected at 6.4% YoY. Oil prices fell during the week as the US announced the release of more crude from its Strategic Petroleum Reserve (SPR), lifting supply concerns. A lack of major triggers in the domestic market will attract global cues to dictate the market’s trend going forward.” he added.
As many as 26 stocks in the Nifty 50 index delivered a positive return for investors in the week ending February 17, 2023. With a gain of 10.9 per cent, Tech Mahindra emerged as the top gainer in the index. It was followed by Shree Cement (up 7.6 per cent), Oil & Natural Gas Corporation (up 6.8 per cent), UPL (up 6 per cent), and Apollo Hospitals Enterprise (up 4.5 per cent). Reliance Industries, ITC, and Tata Steel also advanced over 3 per cent. On the other hand, IndusInd Bank, State Bank Of India, and HDFC Life Insurance declined 4.1 per cent, 4 per cent, and 3.5 per cent, respectively.
Sector-wise, the BSE Metal index gained the most (1.9 per cent) during the week gone by. Followed by the BSE Capital Goods index (up 1.6 per cent)and BSE Oil & Gas index has given a 0.4 per cent return. While on the downside BSE Power, BSE Realty and BSE Bankex indices have registered a weekly decline of 3 per cent, 2.8 per cent, and 1 per cent, respectively.
Market veteran Deepak Jasani, Head of Retail Research at HDFC Securities, said: “Nifty snapped a three-day winning streak to end in the negative on Feb 17, pulled down by weak global cues. Shares slipped in Europe and Asia (monthly lows) on Friday after benchmarks on Wall Street had their biggest drop in four weeks as investors registered disappointment over an inflation reading that came in hotter than expected that could force central banks to continue their aggressive monetary tightening.”
“Nifty fell on Feb 17 making lower low and lower close and now it seems the recent up move could have ended. On a weekly basis, it rose 0.49% with the weekly candle showing a larger upper shadow, opening up more downside. 18100-17744 could be the new trading band for the Nifty for the near term.” Jasani Added.
Kunal Shah, Senior Technical Analyst at LKP Securities, said: “The Bank Nifty index on the daily chart witnessed a breakdown with a rise in volumes. The index remains in a sell mode as long as it sustains below the level of 41500. The index’s immediate support stands at 41000 and if it fails to sustain it on a closing basis will accelerate the downside move towards 40,000 levels.”
