Amid high volatility this week, equity markets will consolidate in the near term

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Against the backdrop of a stock market sell-off and high volatility this week (March 21-25, 2022), the Indian stock market will either consolidate or stay in a range in the very near term.

Although the domestic market shows strong resilience, the easing of geopolitical tensions, the drop in commodity prices, etc. are the key conditions for having a positive sentiment in the market.

The Nifty ended at 17,153 points with a weekly loss of 0.78% due to uncertainty surrounding the Russian-Ukrainian war, rising oil prices and mounting inflationary pressures across the globe, as well as as REITs saw profits primarily in anticipation of faster political normalization than expected by the US Fed.

Sustained increases in international fuel prices are likely to have serious consequences for the global economy, especially for countries whose demand is met by imports such as India.

Technically, the benchmark Nifty is trading in the wider range of 17,000-17,400 levels and it is continuously finding support around the 17080 levels and has managed to hold above it. Moreover, the MACD momentum indicator is trading with a positive cross on the daily charts, which indicates that the bullish movement can be seen in the short term.

The benchmark also managed to close above 21-DMA, which if sustained above the same level may show a northerly direction. The nifty index is also enjoying strong support at the 17,000 levels, while on the upside, 17,400 could be an immediate hurdle for it.

Top weekly winners

Clever winners this week | CNBCTV18

Hindalco Industries Ltd: Investor confidence has been boosted by soaring metal prices and China’s recent comment that it will produce less steel this year, which will put pressure on the supply side.

Coal India Ltd: The stock price surged on the unprecedented rise in the price of coal.

JSW Steel Ltd: Major Indian steel makers have hiked prices due to raw material cost inflation.

UPL Ltd: The investor sees strong quarterly performance due to higher commodity prices and increased demand for the company’s herbicide Glufosinate.

Top weekly losers

Britannia Industries Ltd: Geopolitical tension has pressured FMCG companies in India considering price hikes to offset an unprecedented rise in commodity prices such as wheat, palm oil, etc.

Kotak Mahindra Bank Ltd: Kotak Mahindra Bank Ltd. The stock price plunges after news that the Canada Pension Plan Investment Board is selling a 2% stake in the bank.

(Sachin Gupta is Assistant Vice President, Brokerage of Choice)

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Posted: Saturday, March 26, 2022, 5:42 PM IST

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