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

Markets ended 2-week long consolidation phase and lost over 4%, pressurized by weak cues.  The tone was negative from the beginning and a surprise rate hike from the RBI pushed the bulls on the back foot. Sentiment further dampened in the final session due to increasing fear of aggressive rate hikes from the US Fed. In between, the mixed earnings announcements failed to provide any comfort.  Eventually, both Nifty and Sensex, settled closer to the week’s low to settle at 16,411 and 54,835 levels respectively. Amongst the sectors, all the indices ended with losses wherein realty, auto, and metal were the top losers.  The broader indices too witnessed a sharp cut and lost in the range of 4%-7%.

In the coming week, participants will first react to the Reliance numbers which were announced post-market on Friday. Besides, developments on the Russia-Ukraine front and the performance of global markets will be on the radar. On the macroeconomic front, IIP and CPI Inflation data are scheduled for May 12 and the market will be closing eyeing these numbers, to gauge the next possible move from the RBI in the June meeting.

On the earnings front, several prominent names like Asian paints, LT, Cipla, Tata Motors, SBI, and Siemens will announce their numbers along with several others.

Markets are reeling under tremendous pressure and indications are in the favour of further decline ahead. Nifty has the next major support at 16,000 levels and the 16,650-16,800 zone would act as a hurdle in case of any rebound. Most sectors as well as the broader indices are trading in sync with the benchmark however select stocks are still holding strong. However, since global cues are largely dictating the trend, we recommend focusing more on overnight risk management and maintaining position on both sides.

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