Markets week ahead: Wall Street likely to dictate trends in Indian equities; indexes rejig, F&O expiry among key factors

This week, markets were in a seesaw amidst the lack of major developments in domestic equities which led to global cues dominating sentiments across. Both Sensex and Nifty 50 closed the week with half a percent upside. In the coming week, between February 20th to 24th, global markets especially Wall Street are likely to dictate the performance. In addition to this, other key factors that could sway domestic markets movement are — indexes rejig, SpiceJet Q3 earnings, monthly F&O expiry, foreign funds inflow, and RBI’s minutes of the meeting.

On Friday, Sensex and Nifty 50 halted their 3-day winning spree. The 30-scrip benchmark barely breathed above the 61,000 mark and closed at 61,002.57 lower by 316.94 points or 0.52%. Meanwhile, Nifty 50 pulled back from its psychological level of 18,000, to end at 17,944.20 below 91.65 points or 0.51%.

Overall, the weekly upside in Sensex is around 0.53%, and in Nifty 50 is about 0.49%.

Also, foreign institutional investors snapped their five consecutive days of buying to emerge as net sellers with an outflow of ₹624.61 crore on Friday. Similarly, domestic institutional investors (DIIs) took a U-turn from their four days straight buying spree to sell about ₹85.29 crore in the day.

However, broadly, both FIIs and DIIs are buyers in the week from February 13th to 17th, with an inflow of ₹6,088.48 crore and ₹2,820.39 crore respectively in Indian equities.

Meanwhile, the rupee continued to drop for the fourth day in a row against the US dollar on worries over surging U.S. yields. However, the downside was limited in the rupee due to likely intervention by RBI in the non-deliverable forward (NDF) market. The local unit closed at 82.83 against the greenback compared to the previous session’s print of 82.7175 per dollar.

What to expect in the week ahead According to Ajit Mishra, VP – of Technical Research, Religare Broking, markets continue to trade volatile amid mixed cues and ended with a gain of nearly half a percent. After the initial downtick, Nifty regained some strength in the middle, tracking favorable global cues and buying in select heavyweights. However, the profit-taking in the final sessions trimmed the gains and it finally settled at 17,944.20 levels. On the sectoral front, buoyancy in the IT and energy heavyweights kept the tone positive while banking and financials were under pressure. Meanwhile, the broader indices underperformed the benchmark and lost over a percent each.

Mishra pointed out that with all the major events behind us, the performance of the global markets, especially the US, will be in focus for cues. Besides, crude and rupee movements will continue to offer indications in between.

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