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Below is Weekly Note on Markets traded volatile in a range and settled with a cut of over half a percent amid mixed cues By Mr. Ajit Mishra, VP - Research, Religare Broking Ltd

''Markets traded volatile in a range and settled with a cut of over half a percent amid mixed cues. The beginning was upbeat citing favourable local cues however the hawkish stance by the US Fed dented risk on sentiments in the latter half. The US Fed maintained the status quo however acknowledged inflation fears and projected possible rate hikes in 2023. The news created volatility in equity markets globally which resulted in the Nifty and Sensex ending lower by 0.7% and 0.2% respectively.

The broader indices too witnessed profit taking after strong outperformance in recent weeks. Both midcap and small cap index ended lower by 3% and 1.8% respectively. Amongst the sectors, defensive sectors like FMCG and IT ended with healthy gains whereas other sectors like metal, auto and realty were among the top losers. The inflation data released during the week were not too comforting as the CPI inflation rose to a 6 month high to 6.3% for May mainly due to higher food prices and the WPI accelerated on rising crude.

Markets are likely to spend some more time in a range and we expect volatility to remain high due to the scheduled derivatives expiry of June month contracts. With no major event, participants will be closely eyeing the global markets for cues. Besides, the progress of the monsoon and updates on the vaccination drive will also be in focus. On the benchmark front, Nifty has critical support at 15,400, followed by 15,200. In case of a rebound, it would find resistance around 15,850-16,000 zone. Among the sectors, defensive viz. FMCG and IT are likely to maintain their prevailing positive bias while metals and PSU banks may continue to trade lackluster and drift further lower. We advise traders to align their positions accordingly.''

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