Week Ahead

The BSE Sensex plunged 2,225 points to close the week at 54,836, and the Nifty50 fell 691 points to 16,411, the lowest closing level since March 9, continuing downtrend for the fourth straight week.

Every key sector was under selling pressure. The broader markets also were also attacked by bears, as the Nifty Midcap 100 index corrected 4.3 percent, and Smallcap 100 index hit hard, down 6.8 percent.

The volatility is expected to continue in the coming week as well, with sentiment in favour of bears as the market will keenly watch the developments in Ukraine, inflation numbers from the US and China, India's CPI inflation, corporate earnings and the IPO market action.

More than 300 companies will disclose their quarterly earnings scorecard in the coming week, including prominent names like UPL, Asian Paints, Cipla, Adani Ports, Larsen and Toubro, Tata Motors, Eicher Motors, State Bank of India and Tech Mahindra.

The fiscal deficit numbers for March 2022 will be released on Monday, while CPI inflation figures for the month of April and industrial output data for March will be announced on Thursday.

CPI inflation is the key factor to watch out for in the next week, especially after the RBI shifted its focus to inflation that was at 6.95 percent in March, and surprisingly hiked repo rate to 4.4 percent and cash reserve ratio to 4.5 percent last week.

The Ukraine-Russia war, which has entered the 11th week now, has created too much volatility in the equity market as well as in commodities markets. Hence, this is going to be a key factor to focus on by investors globally as unless and until Russia decides to take back its forces and stop attacks on Ukraine, the volatility will continue in equity markets as well as commodities, and also inflation remain in the fore,

Technically

.Nifty50 has formed Doji kind of pattern on the daily charts on Friday as the closing was near its opening levels but the index fell 1.6 percent to 16,411, while there was bearish candle formation on the weekly scale as the closing was lower than opening levels.

The charts indicated that bears have strong hold over Dalal Street as the index closed at lowest level since March 9 this year. Hence We feel if the selling extends then 16,150-16,200 could be next logical target followed by 16,000 mark on the downside, whereas generally Doji formation after reasonable weakness indicates some bounce back which could be confirmed only if the index closes above 16,500 levels.

The option data indicated that there has been a shift in wider trading range of the Nifty to 16,000 to 16,700-16,800 levels due to higher volatility, from 16,400-17,000

earlier.