Equity benchmarks, such as the Sensex and the Nifty, ended a two-day winning streak on March 11, facing downward pressure attributed to weaknesses in banking stocks.
Despite this setback, analysts remained upbeat about the market’s prospects, citing expectations of continued upward momentum, fueled by anticipated short covering in index futures by both foreign and domestic investors.
Both the Sensex and Nifty saw declines of up to 0.8 percent, with the Sensex reaching 73,502 and the Nifty at 22,332. Concurrently, the India VIX, a measure of market volatility, spiked by 2.8 percent to trade around 14.
Analysts from ICICI Securities expressed their outlook, stating, “We anticipate the Nifty to advance towards the 22,700 level in the coming week, supported by a stable positive bias. Moreover, we expect large caps to outperform the broader market, as evidenced by the bottoming out of the Nifty vs. Nifty 500 ratio.
Anand James, Chief Market Strategist at Geojit Financial Services, shared a similar sentiment, asserting that the Nifty is poised to breach the 23,000-23,500 range, signaling potential for further gains.
In the challenging landscape ahead, the 22,550-600 zone presents an intermediate hurdle, with a potential direct descent below 22,410 targeting 22,260. Should this level not hold, a close beneath 21,860 could become a tangible outcome,” remarked an analyst, outlining the technical obstacles for the market.
On March 11, broader market indices, including the Nifty Midcap 100 and Nifty Smallcap 100, experienced significant declines of up to 2 percent. Market experts foresee continued underperformance in the near term, especially after regulatory concerns raised by the Securities and Exchange Board of India (Sebi) regarding the need for mutual fund houses to establish investor protection frameworks due to burgeoning ‘froth’ in the small- and mid-cap sectors.
With the exception of the Nifty Healthcare index, which managed to hold steady, all other sectors faced a sea of red. The Nifty Media index suffered the most, plunging over 2 percent, closely followed by declines in the Bank Nifty and Nifty Realty indices.
Internationally, investors are closely monitoring the upcoming US inflation report, which could provide insights into the Federal Reserve’s potential timing for interest rate cuts.
Preliminary reports suggest that the US consumer price index is poised to increase by 0.3 percent in February, following a 0.4 percent rise at the beginning of the year.
Despite inflationary concerns, the US economy shows few signs of strain. The latest jobs report indicates a healthy but moderate pace of employment growth, supporting continued consumer spending.
Looking ahead, investors will also pay attention to other key US economic indicators scheduled for release, including February industrial production data and the preliminary March consumer sentiment index from the University of Michigan.
Disclaimer: The opinions and investment insights provided are intended solely for informational purposes and should not be construed as financial advice. Bystox.in strongly advises users to consult certified financial experts or professionals before making any investment decisions. We emphasize the importance of conducting thorough research and seeking personalized guidance tailored to individual financial goals and circumstances. Please be aware that investing involves inherent risks, and past performance is not indicative of future results. Bystox.in does not assume any responsibility or liability for the accuracy, completeness, or reliability of the information provided. Users are encouraged to exercise caution and diligence in their investment endeavors. Remember, your financial well-being is paramount, and seeking expert advice is highly recommended.