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The past week was marked by volatility in domestic equities, largely influenced by events in the global banking industry. The sentiment turned negative with the unexpected hike in securities transaction tax on futures and options and tax amendments in debt funds. The market outlook remains weak as investors digest domestic news while keeping a close eye on global developments. According to technical analyst, any intermediate bounce is being sold into, and prices continue to move in a lower top-lower bottom formation. While the market is currently oversold, traders should avoid aggressive bets for a while due to potential disruptive financial issues.
Investors will look to global markets for direction as there are no significant domestic triggers. They will be closely watching events unfolding in the global financial services industry, particularly the concerns around the banking sector after the crisis at Credit Suisse and its merger with UBS, and the rising credit default swaps of Deutsche Bank.
Several companies have scheduled their board meetings in the coming week to consider dividend payments, share buyback, and fundraising. The derivatives expiry for the March series will take place on Wednesday, likely bringing in some volatility as traders carry forward positions to the next month’s series. F&O traders will face increased hedging costs due to the withdrawal of the ‘do not exercise’ facility and the government’s hike in securities transaction tax on F&O trading.
Foreign institutional investors turned net buyers in March after being sellers for three consecutive months, primarily due to mega block deals, including those in Adani Group stocks. Investors will closely track crude oil and gold prices due to the global banking crisis and rate hike uncertainties.
Maiden Forgings’ Rs 24 crore-IPO will remain open until Monday, and the price band for the issue is Rs 60-63/share.
Technical indicators suggest that the Nifty50 may slide down to 16800-16700 levels by next week, with the recent swing high of 17207 points considered a new lower top of the sequence. Immediate resistances are left unchallenged, and strong supports have started to break on the downside one after another.