Weakness in Domestic Equities Expected to Continue
The Indian benchmark indices, Sensex and Nifty 50, gave negative weekly returns for the second consecutive week. Persistent concerns over rate hikes by the US Federal Reserve, amid sticky inflation, are having an effect on investor sentiment. The week ahead is likely to be action-packed as several corporate developments, macroeconomic data points, and global events will be on the investors’ radar. The weakness in domestic equities last week is likely to spill over into the week ahead, as clouds of uncertainties persist globally, which will weigh on investment decisions.
Adani Group Move
Gautam Adani is looking to reduce debt through stake sales in Ambuja Cements, a company he recently acquired. Promoter entities are looking to raise a little over Rs 3,000 crore by selling 4.5% equity through block deals, and have sought permission for the same from lenders.
YES Bank Share Sale
Shares of YES Bank will be in the limelight next week, as the 3-year lock-period for the 8 lenders who bought stake worth Rs 10,000 crore in the private sector bank, expires on Monday.
Global markets will continue to lend direction to domestic equities, with investors likely to keep a closer watch on the events unfolding in the Silicon Valley Bank crisis. Investors and depositors tried to pull out $42 billion from Silicon Valley Bank on Thursday in one of the biggest US bank runs in more than a decade.
India and US’ Consumer Price Inflation
Among the major data points to watch out for next week is India and US’ consumer price inflation. India CPI index-based inflation for February will be released after market hours on Monday. The US will release its inflation numbers on Tuesday.
FPIs have net invested Rs 13,586 crore through exchanges in the Indian market through March 10, but a bulk of this has gone into Adani stocks by GQG Partners. So net of bulk deals, FPIs continued to sell in India, so far in March too, even though the intensity of selling has subsided.
The boards of GAIL India, Sun TV, NALCO, HUDCO, Mishra Dhatu Nigam, Bharat Electronics, and Glenmark Life Sciences will meet next week to consider payment of interim dividend for FY23. Apollo Pipes will meet on Tuesday to consider fundraising options.
Divgi Torqtransfer Systems, whose IPO received a strong response from qualified institutional investors as well as retail investors, is likely to list on the bourses on Tuesday. The IPO of Global Surfaces is set to open on Monday and will be available for subscription till Wednesday. The company has fixed a price band of Rs 133-140 a share.
Volatility in the market has been high, with fear gauge India VIX rising for the last four sessions. India VIX ended 5.4% higher at 13.41 points on Friday.
On the weekly charts, Nifty 50 is consolidating for the past many weeks and prices are gradually shifting their base lower, indicating a bearish to sideways momentum. The overall trend remains in a bearish mode where ‘sell on rise’ is advisable.
The support for the Nifty is placed at around 17200-17250 levels and resistance is capped at 17650-17800 levels.