Indian Market Remains Under Pressure: Nifty 50 Experiences Another Volatile Week

Nifty 50 down by 1.80 percent during the week and closed at 17100.

Nifty 50 down by 1.80 percent during the week.

NSE Nifty 50 index opened in the red on Monday with a decline of 154 points. However, it managed to close in the green on Friday with a gain of 100 points. Despite this, on a weekly basis, the index closed in the red with a decline of 1.80 percent, closing at 17,100.

Nifty Bank index opened lower on Monday with a decline of 565 points but managed to close in the green on Friday with a gain of 598 points. However, on a weekly basis, the index closed in the red with a decline of 2.19 percent, closing at 39,598.

Weekly

Nifty and Sensex indices experienced a significant decline on Monday, shedding 1.5% each. This decline occurred amidst negative global cues and mixed investor sentiment, with some investors remaining watchful of the fallout from Silicon Valley Bank and its potential impact on domestic markets.

Nifty 50 indices and Sensex experienced a significant decline in value. The Nifty 50 index also experienced a substantial drop, with a decline of 258 points, which caused it to break below the 17,200 mark for the first time since October 17. The Nifty 50 index closed at 17,154 points Meanwhile,the Sensex index fell by 900 points and closed below the 58,500 mark, ending the day at 58,237 points.

The market witnessed heavy selling for the second straight week that ended on March 17. This selling occurred amidst weak global cues, triggered by the crashing of several US banks, which led to offloading by foreign institutional investors (FIIs).

However, there was some recovery in the second part of the week, which may have been due to several factors. Firstly, financial aid was provided to support the US banks, which may have helped to restore investor confidence. Secondly, there was a softening in crude oil prices, which could have had a positive impact on the market. Finally, there were expectations that the US Federal Reserve may not go aggressive in the upcoming policy, which could have also contributed to the recovery in the market.

Overall, the market appears to have experienced a period of volatility, with significant selling in the first part of the week followed by some recovery later on. The factors contributing to this volatility include weak global cues, offloading by FIIs, financial aid to US banks, crude oil prices, and expectations regarding the US Federal Reserve’s policy.

Weekly

Sectoral front, several key indices experienced significant declines. The Nifty PSU (public sector undertakings) index fell by 4.5%, indicating a significant decline in the performance of public sector companies. The Auto index also shed nearly 4%, which may have been due to a variety of factors, including concerns about supply chain disruptions, rising raw material costs, and declining consumer sentiment. The Information Technology (IT) index was down 2.3%, which could be due to concerns about the impact of rising inflation and interest rates on IT companies’ margins.

Finally, the Bank index shed 2%, which may be attributed to a variety of factors, including concerns about the impact of rising inflation and interest rates on the banking sector, as well as concerns about the impact of non-performing assets (NPAs) on bank profitability. It is important to note that these declines occurred amidst overall weakness in the market, as indicated by the declines in the Sensex and Nifty indices.

FII & DII

Foreign Institutional Investors (FIIs) turned net sellers for the week, selling equities worth Rs 7,953.66 crore. On the other hand, domestic institutional investors (DIIs) bought equities worth Rs 9,233.05 crore during the same period.

It is interesting to note that while there was selling by FIIs this week, both FIIs and DIIs have been net buyers of equities so far this month. FIIs bought equities worth Rs 6,408.19 crore, while DIIs purchased equities worth Rs 16,162.40 crore.

This indicates that while there may have been some short-term selling by FIIs during the week, there is still a significant amount of buying interest from both domestic and foreign investors in the Indian equity market. The reasons for this buying interest could be varied, including positive sentiment around the Indian economy, attractive valuations of Indian stocks, or specific factors affecting individual stocks or sectors.

Market breadth and Volatility

During the week, the market breadth was unfavourable, with a weekly advance-decline ratio of 0.60. Further, it is a bit lower than the previous week’s figure of 0.91. The volatility index India Vix further decreased during the week and closed at 8.94 and settle at 14.77.

Top Gainers and Losers of the Week

The top gainers in the Nifty 50 were BPCL (+7.67%), Tech Mahindra (+6.22%), Titan (+3.37%), Nestle India (+2.01%) and LT (+1.76%).

The top losers in the Nifty 50 were IndusInd Bank (-10.83%), TCS (-4.56%), Eicher Motors (-4.53%), M&M (-4.48%) and Reliance (-4.30%).

Nifty Sectors and Broader Indices

NIFTY SECTORS – WEEKLY ACTION
IT -2.34%
Realty +0.21%
FMCG -1.05%
Pharma -0.07%
Auto -3.89%
Metal -0.59%
Media -0.42%
Consumer Durables -0.07%
Oil & Gas -1.50%

Weekly Pivots

As per the above pivots data, 16780 to 17480 is the Nifty 50 trading range for the next week and based on this week’s action.

Read our earlier blogs here.
Second Consecutive Day Sees Nifty50 Close in Green After Sharp Swings in Both Directions
Nifty’s Rollercoaster Session! Marginal Gains of 13 Points After Positive Opening
Nifty Falls Below 17,000 as Market Loses Ground !

This article is only for educational purposes and is not an investment advice. Please consult with your investment advisor before investing.