Week Ahead

A turbulent week for investors ended with the Indian equity market marking its worst week since May 2020 amid a global sell-off.

The Sensex and the Nifty plummeted nearly 6 percent each this week as foreign investors continued their selling spree.

Among sectoral indices, Nifty IT, PSU bank and commodities were the worst hit, falling 8.2 percent, 7.7 percent and 7.4 percent, respectively. Nifty FMCG and auto indices outperformed the Nifty 50 but still ended 3.1 percent and 4.9 percent down, respectively.

In the broader market, Nifty smallcap 100 index and midcap 100 indices plummeted 7.9 percent and 6.2 percent, respectively.

We expect the market to remain under pressure with increasing fears of economic slowdown.

Tightening global monetary conditions and expensive valuations at home have made foreign investors net sellers of Indian equities for straight eight and a half months. Foreign investors have net sold equities worth Rs 31,453 crore, so far, in June in the secondary market and look set to break last month's selling record of Rs 45,276 crore.

While foreign investors have been on a dumping spree, domestic investors have been scooping stocks at every dip. Domestic institutional investors (DIIs) have net bought local stocks worth Rs 30,312 crore in June, so far, and are on course to match May's record inflows of Rs 50,835 crore.

Technically Nifty formed a Doji candle on the daily scale and a bearish candle on the weekly frame. "Going forward unless the Nifty recovers and sustains above 15,360 levels, the trajectory of this market shall remain sideways with a negative bias. In case, if the index slips below 15,183 in the next session then the weakness shall extend towards 14,900 levels.