After a difficult weak of bloodbath on D-Street, investors will shift their focus to global cues and central banks around the world in the coming week for anticipated rate cut timelines. Several triggers such foreign capital inflow, crude oil prices, US Federal Reserve policy meeting outcome, and global cues will decide market movement in the third week of March.
The domestic equity benchmarks snapped four-week rally and recorded the worst week since October 2023 with Nifty and Sensex declining 2.09 per cent and 1.99 per cent dragged by broader indices. The move was subdued in the following sessions, tracking mixed cues. Indices rebounded in the final sessions from its intraday lows. The Nifty 50 held steady at 22,000, supported by Bharti and Bajaj Finance.
Small caps and midcaps logged their worst week in 15 months, witnessing a severe decline in the range of 4.7 per cent-5.5 per cent after capital markets regulator Securities and Exchange Board of India (SEBI) raised concerns over stretched valuations. Experts have also flagged concerns over markets being in a bubble zone.
Eventually, both Nifty and Sensex, closed near the week’s low at 22,023.35 and 72,643.40 levels. All the key sectors, barring IT, ended in the red wherein realty, metal and energy were among the top losers. The stress test results of mutual funds indicated a disparity in the durations that funds would take to liquidate their portfolios.
“After touching a new high, the domestic market witnessed a correction due to concerns over the broader market valuation and increase in volatility. The unfavourable risk-reward balance of mid- and small-cap stocks, fuelled by prolonged premium valuations, has aggravated the downfall,” said Vinod Nair, Head of Research, Geojit Financial Services.
‘’We expect bargain opportunities to persist in mid- and small-cap stocks whose valuations are supported by fundamentals. Meanwhile, FMCG and contrarian plays like gold are offering some refuge,” added Nair.
The upcoming week will witness a buzzing primary market with some new initial public offerings (IPO) especially in the small-and-medium enterprises (SME) segment and listings are slated across both mainboard and SME segments.
Overall, analysts expect markets to be volatile this week with Nifty 50’s likely further slide till 21,500. However, if the index holds above 22,500, then there are chances of an up move. Experts also advice that traders should prefer index majors and refrain from loss-making positions in broader markets.
Here are the key triggers for stock markets this week:
US Fed Policy, BoE, BoJ meeting outcomes:
The upcoming week will place a significant focus on monetary policy decisions of central banks, as the US Federal Reserve will begin its two-day policy meeting on March 19. The US Fed will announce its interest rate decision after its two-day policy meeting on March 20, 2024.
According to reports, the US Federal Reserve will leave its benchmark overnight interest rate unchanged. Bank of Japan (BoJ) will announce its interest rate decision on March 19 while the Bank of England (BoE) will likely declare its policy decision on March 21, 2024.
3 new IPOs, 8 listings to hit D-Street:
In the mainboard segment, no new issues are listed to open for subscription so far. Among the ongoing issues,…
Read More: Week Ahead: US Fed Policy, FPI inflows, crude oil prices, global cues among key