Week Ahead

The BSE Sensex was down 320 points at 57,833 and the Nifty50 fell nearly 100 points to 17,276, while the selling pressure was more in broader markets as the Nifty Midcap 100 and Smallcap 100 indices declined 2.7 percent and 3.4 percent.

Every sector, barring IT, contributed to the correction with metals being the top loser shedding 4 percent. Realty, bank and pharma fell more than 2 percent each.

With earnings season behind us and given the overall tone, markets are expected to move in tandem with global peers in the coming week. Market players will keep a careful eye on developments in the Russia-Ukraine situation, and given the inflation overhang, they will also pay attention to movements in energy prices.

FIIs have net sold more than Rs 12,200 crore worth of shares in the passing week, resulting into total outflow to nearly Rs 22,000 crore this month. They have offloaded more than Rs 1.64 lakh crore worth of shares since October 2021, initially due to high valuations and then Fed tapering fears.

On the other side, DIIs have net bought nearly Rs 10,600 crore worth of shares during the week. Their net buying for the current month stood at more than Rs 16,400 crore on top of consistent buying since March 2021.

Technically Nifty50 has formed small bullish candle on the daily charts and there was Spinning Top kind of pattern formation on the weekly charts, indicating the presence of high volatility in the market. The index fell half a percent for the week and 0.2 percent for Friday.

We expect the volatility to continue with having an initial support at 17,000 and resistance at 17,500..