Among broader indices, BSE Largecap ended flat, while Smallcap and Midcap indices outperformed the main indices with a gain of 1.4 and 2 percent
The market traded within a range in a volatile week ended on February 3 amid FIIs continuing with their selling spree, the RBI raising the interest rates, Adani crisis escalating, and mixed Q3 earnings.
For the week, the BSE Sensex lost 159.18 points, or 0.26 percent, to close at 60,682.7, while the Nifty50 ended flat at 17,856.5.
Among broader indices, BSE Largecap ended flat, while Smallcap and Midcap indices outperformed the main indices with a gain of 1.4 and 2 percent.
“Sector-wise, BSE Metal and BSE Power index witnessed sharp correction, whereas BSE Healthcare, BSE IT, BSE capital goods, and BSE Realty reported gains this week,” said Shrikant Chouhan, Head of Equity research (retail) at Kotak Securities.
FPI flows in India remained negative. Third quarter earnings of Nifty50 stocks reported so far have been broadly on the expected lines. The RBI Monetary Policy Committee raised the repo rate by 25 bps and remained concerned about core inflation. International oil prices rose this week with Brent Crude now trading close to $86-87 per barrel.
“As the Q3FY23 result season comes towards an end, the investor focus will now shift towards domestic and global macro factors,” Chouhan said.
Among sectors, BSE Metal index sheds 4.3 percent, Power index fell 3.3 percent, Energy and FMCG indices ended down 1 percent each. BSE Realty added 2.5 percent, Telecom index rose 2 percent and Capital Goods index gained nearly 2 percent.
The BSE Smallcap index rose 1.4 percent as more than 60 stocks rose 10-64 percent, including BF Investment, WPIL, Radhe Developers (India), Pennar Industries, Kirloskar Brothers, D-Link India and Rane Madras.
On the other hand, PC Jeweller, Timex Group India, JTEKT India, Tata Teleservices (Maharashtra), Everest Kanto Cylinder, Fairchem Organics, Vadilal Industries, Fermenta Biotech, Mold-Tek Packaging, Goldiam International, Centum Electronics, Barbeque Nation Hospitality, Manali Petrochemicals, Mangalam Industrial Finance and Andhra Petro fell 10-22 percent.
“The Nifty index remained volatile within a small range of 17,650 and 17,950. During the week, the Nifty closed above the 14DMA, suggesting a near-term bullish trend. Besides, the index ended the week above 17,800, which again points towards a strong weekly close,” said Rupak De, Senior Technical Analyst at LKP Securities.
“Momentum indicator RSI is in a bullish crossover and rising. On the higher end, resistance is visible at 17,950-18,000; a sustained basis breakout above 18,000 may open the gate for 18,350-18,400. On the other hand, failure to move beyond 18,000 may attract selling pressure in the market,” he said.
Although the foreign institutional investors (FIIs) continued to sell off Indian equities, there was a noticeable slowdown in the rate of sell this week. The foreign institutions offloaded equities worth Rs 3,201.63 crore, while domestic institutional investors (DIIs) picked up equities worth of Rs 2,287.48 crore during the week.
FIIs sold equities worth Rs 5,414.21 crore so far this month and DIIs bought equities worth Rs 6,453.05 crore.
Where is Nifty50 headed?
Let’s take a look at expert views on the likely movement in the benchmark index.
Amol Athawale, Deputy Vice President – Technical Analyst, Kotak Securities
Technically, last week, the index took the support near 17,650 and reversed but it failed to close above 17,900, the important resistance mark. The Nifty is now consolidating near the 20-day SMA and it also formed inside the body candle on weekly charts.
For traders now, 17,900 would be the immediate breakout level to watch out, above the same, the index could move up to 18,200. On the flip side, fresh selloff is possible only after the dismissal of 17,750. Below the same selling pressure is likely to accelerate and the index could slip till 17,650-17,500.
Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
On the daily charts, the Nifty has been consolidating since past couple of trading sessions within a range of 17,740– 17,920.
On the upside, the key daily moving averages placed in the 17,870 – 17,960 range, acting as a stiff resistance and restricting upside. On the downside, 17,800–17,744 zone is providing cushion and has been absorbing the selling pressure.
The breach of this range shall lead to trending moves in that particular direction. Overall, we expect this range to break on the upside and test the upper end (18,100) of the downward sloping channel from short term perspective.
Technically, bullishness could be seen as long as the Nifty holds above its make-or-break support at the 17,551 mark. The immediate goalpost for the index is seen at 18,000 mark and then aggressive targets at the psychological 18,300 mark. For Nifty to bounce hard, BankNifty needs to outperform.