Market participants and investors will look out for several stock market triggers in the second week of the March, when the focus will shift to crucial economic data, electoral announcements ahead of General Elections 2024, foreign capital inflow and global cues.
The domestic equity benchmarks witnessed a volatile week but extended their winning streak for a fourth consecutive week to hit new all-time highs –the best such streak in three months. The frontline indices Sensex and Nifty 50 hit fresh record highs in the previous session at 22,525.65 and 74,245.17 respectively and also gained about three per cent each in four weeks.
The NSE Nifty 50 settled the week at 22,493.55, while Sensex ended the week at 74,119.39. Most sectors traded in green with maximum gains in Banks, Metals and Energy, while, Media, IT and healthcare ended the week in red. Bank Nifty outperformed this week and is poised to reach fresh highs.
According to Santosh Meena, Head of Research, Swastika Investmart Ltd, the regulatory concerns regarding excessive enthusiasm and profit booking in the midcap and smallcap space, coupled with recent actions on certain NBFCs and city gas distributors, dampened investor sentiment last week.
The domestically-focussed small-caps dropped 2.18 per cent, while the broader mid-caps added 0.36 per cent– both underperforming the blue-chip indexes on concerns over excessive fund inflows and stretched valuations.
Vinod Nair, Head of Research, Geojit Financial Services said, ‘’Amidst mixed signals from the global market, the domestic market exhibited a range bound movement but concluded on a positive note. Expectations of a rate cut from the Fed and declining bond yields prompted rational investors to shift towards equities, bolstering the market.”
An improved macroeconomic narrative favoured banking stocks, while uncertainties in the global market led to weakness in the IT sector. Faster-than-expected economic growth for the current fiscal drove sentiments for metal and capital goods stocks, resulting in a rally in the respective sector indices.
Small and mid-cap stocks underwent corrections leading to increased demand for large-cap stocks, according to Nair. The analyst expects volatility to persist in the upcoming week due to high valuations and forthcoming policy rate guidance releases.
In the coming week, some new initial public offerings (IPO) and listings are slated across the mainboard and small-and-medium enterprises (SME) segments which will keep primary markets buzzing.
Overall, analysts expect markets to sustain its trend with rotational buying despite volatility, but also foresee Nifty 50 to inch towards the 22,750-22,800 zone with the ongoing rally focused towards large caps. Experts also advice that traders should continue with stock-specific approach.
Here are the key triggers for stock markets this week:
Domestic Macroeconomic Data:
Investors will keenly eye macroeconomic data this week as India’s consumer price index (CPI)-based inflation or retail inflation rate for February and the index of industrial production (IIP) data for January are scheduled for release on March 12, followed by the wholesale price index (WPI)-based inflation on March 14.
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