Despite the fall recorded by benchmark indices throughout the final two trading sessions, Dalal Street nevertheless managed to finish the week with gains. S&P BSE Sensex closed at 50,405, up 2.66% from the earlier week even though the 50-stock NSE Nifty ended at 14,938, up 2.8% from final Friday’s closing. “On a weekly basis, the market closed in the positive territory the market mood was sluggish. A substantial jump in the long term treasury yields and upward activity in the dollar index towards 92, resulted in weakness across the globe,” mentioned Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.
Profitable week partly marred by yields
On the charts, Sensex closed beneath the important assistance levels of 50,500 and Nifty fell beneath 14,950, according to Chouhan. “On a daily basis, the market has formed the long-legged Doji formation, which is an indication of indecisiveness,” he added. However, Nifty has nevertheless not broken the medium-term assistance variety of 14,700-14,800, mentioned Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments. Breaking these levels could outcome in a fall to 14,400-14,500, Hathiramani added.
The industry momentum was in-line with the worldwide trend, exactly where most markets have been observed slipping owing to the jump in increasing yields in the latter half of the week. “… a surge in the US bond yield towards the end of the week rattled investors across the globe. The week also witnessed changing investor preference from blue-chip stocks to small and mid-caps,” mentioned Vinod Nair, Head of Research at Geojit Financial Services.
What’s ahead for Dalal Street
The lengthy-term structure of the industry continues to stay positive, it might face some hurdles in the close to term due to issues more than the bond yields, commodity costs and danger of an raise in inflation, mentioned Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services. He advises investors to hold tabs on worldwide cues for additional hints. On the exact same lines, Vinod Nair mentioned that the industry will now be focusing on how the US Fed reacts in its upcoming meeting as bond yields rise.
Investors are also advised to hold an eye on bond yields. “Any unexpected outcome in the 3/10/30 year US treasury auctions arranged next week could directly influence bond yields and in-turn equity valuation,” mentioned Nirali Shah, Head of Equity Research, Samco Securities.
From a technical viewpoint, we could see, Nifty and Sensex touching minimum 14,750 and 50,000 to 14,550 and 49,300 levels, according to Chouhan of Kotak Securities. “On the higher side, 15150/51200 and 15280/51600 would be major hurdles. The focus should be on FMCG and Auto companies,” he added. Until Nifty gets previous the 15,300 level the index is anticipated to be variety-bound and choppy, mentioned Manish Hathiramani.
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