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Below Weekly Market Note 04 February 2023 By Mr. Ajit Mishra, VP - Research, Religare Broking Ltd

Markets managed to end higher amid excessive choppiness, taking a breather after the last week’s sell-off.  Much on the expected lines, the benchmark remained volatile throughout the week, taking cues from the Union Budget and US Fed meet. Besides, a sharp sell-off in Adani Group stocks further added to the choppiness. However, sustained recovery in select index majors, especially from the banking and financial pack, helped the index to end in the green. Consequently, the benchmark indices, Nifty and Sensex, settled at 17,854 and 60,841.88 respectively. Meanwhile, mixed trends on the sectoral front kept the traders busy wherein FMCG, banking and IT witnessed noticeable traction while metal, energy and pharma traded subdued. The broader indices too ended higher amid volatility.

We expect volatility to remain high in the coming week as we have important events and data lined up. First, participants will be eyeing the outcome of the RBI policy meeting scheduled on Feb 08. On the economy front, IIP data will be unveiled on Feb 10.

On the earnings front, major corporates like Tata Steel, Adani Ports, Ambuja Cement, BhartiAirtel, Hero Motocorp, Hindalco, Lupin and M&M will announce their numbers during the week along with several others.

The recent rebound in the index has certainly eased some pressure but cues are still mixed. Stability in the global markets is encouraging howeverthe outcome of the RBI meet, earnings and further development ofthe Adani groupwill continue to keep traders on the edge. On the index front, sustainability above 17,900 in Niftywould further subside the pressure and help the index to inch towards 18,200 levels. In case of a decline, 17,550 is critical to hold else the tone would again turn bearish.  Meanwhile, focus on sectors like IT and FMCG that are showing resilience and traders can also selectively look for buying opportunities in the auto and banking space. At the same time, energy, pharma and realty may continue to underperform so plan your positions accordingly.

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