IGI Logo

Below the Quote on Weekly Note by Mr. Ajit Mishra - SVP, Research, Religare Broking Ltd

Markets resumed their corrective phase after two weeks of recovery, shedding nearly two and a half percent. The sentiment remained negative throughout the week, primarily weighed down by persistent selling from FIIs, mixed corporate earnings, and ongoing concerns over the global tariff war. However, a moderation in retail inflation and resilience in select heavyweight stocks helped limit the pace of decline mid-week. Eventually, the benchmark indices, Nifty and Sensex, ended near their weekly lows at 22,929.20 and 75,939.21, respectively.

All major sectors faced selling pressure in line with the broader market, with realty, energy, and auto were among the top losers. Notably, the sharp plunge in broader indices, ranging from 7.4% to 9.4%, inflicted the maximum damage on market participants. 

With the earnings season behind us, market focus will shift to trends in FII flows and currency movements for further cues. Additionally, speculation regarding U.S. tariffs and their impact on global trade will remain a key factor to watch. On the domestic front, high-frequency data releases such as HSBC Manufacturing PMI, HSBC Composite PMI, and HSBC Services PMI are scheduled for the upcoming week. 

Technically, multiple retests of the January low at 22,800 have weakened its significance, increasing the likelihood of further downside. The next key support levels are now seen in the 22,100-22,500 range. In the event of a rebound, the first major hurdle stands at the 20-day exponential moving average (DEMA) of 23,350, followed by resistance at 23,600. Amid the prevailing pessimism, the relative strength of two key sectors-banking and IT-has helped cushion the broader decline. Traders should closely monitor their performance for signs of a potential directional shift. Meanwhile, despite oversold conditions, we maintain a cautious outlook on broader indices and advise against bottom fishing or averaging down on losing positions.

Above views are of the author and not of the website kindly read disclaimer