Led by the downside in private bank stocks, Nifty slipped 0.33% lower and broadly consolidated in the 21,600–22,000 range during the week. PSU banks outshined with SBI leading with a 12% upside in just five days.
Going ahead, analysts expect the consolidation to continue in the Nifty and banking holds the key for the next directional move as other key sectors have done their part.
There is lack of conviction due to pessimism over delay in rate cuts by the US Fed as persisting global tension and its likely impact on inflation going ahead is holding back central banks from initiating rate cuts, said Prashanth Tapse of Mehta Equities.
“A decisive break above 22,150 in Nifty and 47,000 in banking could only fuel the fresh momentum while the 21,200-21,450 zone would offer support, in case the profit taking resumes. On the sectoral front, we reiterate our preference for IT, metal & pharma for long trades and expect a cool-off in the others, especially the PSU pack. Traders should continue with a stock-specific approach and prefer a hedged approach,” Ajit Mishra of Religare Broking said.
Key factors that may dictate Nifty mood in the week ahead:
The last batch of Q3 earnings can lead to stock-specific movements this week in stocks like Coal India, HAL, SAIL, Samvardhana Motherson, Mazagon Dock, Hindalco, Eicher Motors, IRCTC, BHEL, M&M, Gland Pharma and Muthoot Finance.
2) IPO calendar
During the week, four IPOs – Rashi Peripherals, Jana SFB and Capital SFB and Entero Healthcare – will get listed on stock exchanges. IPOs of Vibhor Steel and WTI Cabs will open for subscription this week.
Also read | IPO Calendar: Primary market to breathe easy with only 2 IPOs scheduled next week
3) FII/DII
After being net sellers to the tune of Rs 25,744 crore last month, FIIs remain on the selling side in February. So far in the month, FIIs have sold Indian stocks worth over Rs 3,000 crore.
“A reversal of the FPI selling in equity will happen when the US bond yields drift down and stay there for long,” Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.
4) Crude oil
Following a 7% loss in the prior week, crude oil price settled 6% higher on a week-on-week basis buoyed after Israeli Prime Minister Benjamin Netanyahu’s rejection of a Hamas ceasefire proposal on Wednesday. Brent crude futures settled at $82.19 a barrel on Friday.
5) Macro data
Some major economic data that could impact the market are the US inflation, initial jobless claims, industrial production and retail sales.
India’s IIP and retail inflation numbers will be released on February 12th, while the WPI will be released on February 14th. US CPI numbers will be released on February 13th, while their retail sales numbers will be announced on February 15th.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
