During the previous week, Nifty witnessed a steep fall, going below the levels of 14,000 and nearing 13,700. The market has remained highly volatile, with Nifty and Sensex countersigning a movement of around 310 and 1,118 points respectively in a single day on 27th January. On 21st January, Sensex crossed 50,000 mark for the first time in the history, to reach 50,184 and touched the lows of 47,270 on 27th January.
Many events have played a major role which has resulted in a highly volatile market. Investors had mixed sentiments due to a mixed corporate results season. They were highly disappointed by the Reliance’s quarterly result, which resulted in sell-off of the script, dragging the markets to its lows. Additionally, monthly F/O expiry also weighed on the markets. Budget has also been one of the main reasons for high volatility. Also, the India’s volatility index has increased from 18 in mid-December to 25 in the last week. The markets have also been witnessing selling pressure from FIIs, and FPIs since a week, due to weak global cues. Additionally, the farmers’ protest which has been going on since last five months, has been having a worse effect on the economic activity of our country, which has impacted equity markets.
Major Economic events such as lower than expected UK’s retail sales, Flash Manufacturing PMI, Flash Services PMI, French Flash Services PMI, US’ crude oil inventories and Durable Goods Orders weighed on the equity markets. However, the losses were limited to some extent, after the investors’ sentiments were lifted a bit after the release of better than expected US’ unemployment claims numbers, Philly Fed Manufacturing Index, Flash Manufacturing and Services PMI, French Flash Manufacturing PMI, German Flash Services PMI and Eurozone’s Flash Services PMI.
As far as sectoral indices are concerned, all the indices were in red during the previous week, with Nifty Metals, Nifty Energy and Nifty Private Bank indices being the worst performers, losing around 6.2% each. Nifty Financial Services, Nifty PSU Banks and Nifty Realty lost more than 5% each, whereas, Nifty Auto, Nifty Pharma and Nifty IT indices fell by more than 1.5% each.
For the upcoming week, the equity market is expected to witness the highest volatility, as compared to past few weeks, ahead of the budget. We expect Nifty to be in the range of 14,662 to 13,000 for the week, whereas, we expect Bank Nifty to be in the range of 31,821 to 27,989.
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