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Below is the Weekly Market Note By Mr. Ajit Mishra, VP - Research, Religare Broking Ltd

Markets continued to reel under pressure in the holiday-shortened week as the war between Russia-Ukraine intensified. There were rounds of negotiations between the two countries but talks ended with no meaningful result. As a result, crude oil prices rose sharply to $119 which impacted sentiments. Meanwhile, domestic data viz. auto sales and GDP data further dampened the mood. Amid all, the benchmark oscillated in a broader range but a sharp decline in the final session pushed the benchmark to a newer weekly low.  Consequently, the Sensex and Nifty shed 2.7% and 2.5% respectively. A mixed trend was witnessed on sectoral front wherein auto witnessed sharp cut and lost 9%, followed by banking and realty pack. On the flip side, metal, energy and IT tried to cap the damage. Amongst the broader indices, the midcap index ended in line with the benchmark while smallcap outperformed but ended lower by 0.3%.

In the coming week, the focus would remain on the Russia-Ukraine crisis and its impact on crude. Besides, on the domestic front, participants will be closely eyeing the state elections results of 5 states- UP, Uttarakhand, Goa, Punjab and Manipur on March 10. On the macroeconomic front, we have IIP data scheduled for March 11. 

Markets are gradually drifting lower amid excessive volatility and the prevailing scenario is pointing towards negativity to continue. We reiterate our downside target at 15,900 in Nifty while the immediate resistance has now shifted to 16,500 and major around 16,800 zone. Along with banking, sectors/stocks having a high dependency on crude are witnessing tremendous pressure while resilience is metal, IT and select energy stocks are offering some breather to bulls. We recommend continuing with a selective approach and keeping a check on leveraged positions until the market stabilises.

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