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Benchmark indices gained over 1% this week as Wipro and Mahindra & Mahindra shares jumped around 11%. For the fourth consecutive session indices closed higher. US bond yield increased and CPI numbers were more than the expectation. Most sectoral indices ended the week with gains except Metals, Media, and FMCG.

Meanwhile, the Q3 earning season comes to an end with most of the companies posting numbers in line with estimates. Earnings growth and demand were sustained in this quarter, with optimism continuing for Indian corporates' business performance. Some companies witnessed margin pressure due to rising input costs and expenses. The overall earnings grew 34% YoY as compared to the estimate of 28% YoY. The star sectors of the Q3 earning season were Energy, Metal, BFSI, and cement with the highest YoY surge in net profit, driven by an upswing in the capex cycle, robust demand, and healthy margins. The major laggards were IT and FMCG.

On the domestic front, India’s CPI inflation eased to a three-month low of 5.1% in Jan from 5.7% in Dec due to easing food prices. The food inflation stood at 8.30% in Jan as compared to 9.53% in Dec. India’s WPI inflation eased to 0.27% in Jan from 0.73% in Dec. IIP rose to 3.8% in Dec’23 vs 2.4% in Nov.

On the global front, US inflation in Jan rose by 3.1% in Jan 2024 YoY down from 3.4% in Dec 2023 indicating that the price surge due to the pandemic is coming under control but only gradually. US Initial jobless claim rose to 2.12lk for the week ended Feb 10 compared to 2.20lk in the previous week. Japan's Q4 GDP contracted 0.4% unexpectedly slipping into recession due to weak domestic demand losing its spot as 3rd largest economy in the world. UK Q4 GDP fell by 0.3% vs 0.1% in the previous quarter.

Going ahead, the market will react to the major domestic and global economic events, global news, Asian market performance, Investment patterns of FII/DII, movement of the rupee against the dollar, crude oil, inflationary pressures, interest rate, the evolution of government spending ahead of the 2024 general election and steps taken by different governments domestic and globally to tackle their economy.

The Indian benchmark indices traded positively this week, buoyed by global market strength and a favorable easing in domestic inflation. The Nifty 50 and Bank Nifty prices rose by 1.20% and 1.64%, respectively, closing the week at 22040.70 and 46384.85. Notably, the Nifty prices concluded the week above the key psychological threshold of 22,000 for the first time. The market's upward momentum was supported by strong performances from key index heavyweights, including RIL, HDFC Bank, ICICI Bank, SBI, Infosys, and L&T. FIIs were net sellers for the second consecutive week, withdrawing approximately 6237.2 crores from the cash market. Meanwhile, DIIs remained net buyers.

In Nifty, the price has consistently closed above 21EMA for the last few days, indicating a positive trend. On the daily chart, Nifty has been trading in a bullish ascending triangle pattern. In the short term, the index can move towards 22,200 and a move above it can take it to 22,600. Support on the lower end is placed at 21,750, while strong support is anticipated in the range of 21350-21450.

In Bank Nifty, the weekly chart has formed a double bottom pattern near its strong demand zone near the level of 44500-44800. The short-term texture is on the bullish side as 45200 will act as an immediate support level, while 46800 is the hurdle for the upside. Once it sustained above 46800, a move of more than 1000pts. can be expected till the levels of 48000.