Equity markets largely remained range bound during the week due to lack of triggers even as developments around the Russia-Ukraine remained unresolved. Nifty was unable to sustain at higher levels as selling pressure kept emerging around 17,300-17,400 zones while 17,000-17,100 acted as a strong support.
Nifty/Sensex lost 134 and 502 points respectively, down 0.8% and 0.9% respectviely to close at 17,153/57,362. Midcap100/Small100 outperformed and were up 1%/ 0.2% during the week.
On the Sectorial front, it was mixed bag. Media was up +7% after the news of Zee Entertainment. Key Shareholder - Invesco Fund said that it would not pursue the EGM requisition – paying way for a smooth merger with Sony.
Metals & Energy stock continued to be in focus after domestic companies increased steel and fuel prices to recoup losses. Buying was also seen in IT counters after positive commentary from Global peers Accenture. FMCG, financial fervices, banking, auto and realty, however, saw weakness.
Domestically, petrol and diesel prices on Friday were hiked three times during the week after four-and-half month election-related hiatus. It is widely expected that the OMCs will continue to increase prices in future to recover the losses, which they bore due to high crude oil price.
Equity Markets globally are facing headwinds from the ongoing conflict in Ukraine, erratic commodity prices and its threat to inflation. The US Fed has recently said that it could be more aggressive in its monetary policy (a likely 50bps rate hike) to fight inflation – thus adding to the overall cautiousness.
United Nation’s UNCTAD cut its global economic growth projection for 2022 to 2.6% from 3.6% due to the impact from the Russia-Ukraine war and changes in macro-economic policies. Global Oil prices witnessed some cool off on Friday after news reports of US’s plan to supply additional 15bn cm of LNG to Europe by the end of 2022 in addition to 22bn cm supplied in 2021. Lately, crude oil prices had surged above $120/bbl on fear of tight supplies.
Fatigue is clearly visible in the Indian markets with profit booking emerging at higher levels. Market was stuck in a range for last 6 days with Nifty moving within the 17,100-17,300 band for most part of the week. The bullish undertone of the market is evident from the fact that despite lots of ambiguous developments, Nifty has not seen a sharp correction and 17,000 acting as a strong support.
A strong close above 17,350 can take the Nifty higher towards 17,600-17,750 zones. We are seeing some strength in heavyweight counters in sectors like metals, energy, IT and media which are supporting the market.
(The writer is Head-Retail at MOFSL)
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