Tuesday, February 20, 2024
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Banking crisis, F&O expiry, FII flows to drive Indian equity markets this week

Banking Crisis,

The selling pressure in metals, energy, and real estate stocks caused the equity benchmark indices Sensex and Nifty to drop nearly 1% for the second consecutive session on Friday.

Rupak Dey stated, “Bears regained control of the market as Nifty slipped below the crucial level of 16950.” Additionally, after a few days of consolidation, the Nifty fell, indicating an increase in bearish bets. Rupak Dey stated, “Momentum The indicator RSI is in a bearish crossover.” LKP Securities’ senior technical analyst

Vinod Nair, Head of Research at Geojit Financial Services, stated, “Market volatility is expected to continue in the near term as the global banking system is yet to fully recover from the crisis, especially in Europe.”

The most important things that will keep traders busy this week are as follows:

Global Market,

global market On Friday, bond yields fell and risk-averse investors fled to the dollar, sending global stock markets plunging as a result of worries about bank contagion.

Deutsche fell 8.5% on Friday after announcing plans to pay off $1.5 billion in Tier 2 debt by 2028. Deutsche has experienced a decline of 27.6% thus far this month.

After two weeks of turmoil in the US and European banking sectors that brought back memories of the global financial crisis of 2008, the move demonstrates how weak sentiment remains.

Dealers have likewise valued in an approximately 90 bps premise focuses cut in the US rate before the year’s over to around 3.9 percent.

The Federal Reserve raised its key interest rate on Wednesday by a quarter point to a range of 4.5% to 4.75%, but it said it would consider a pause in light of the stress in the banking system.

The markets, on the other hand, are betting on a US recession and a rate cut soon.

Due to the monthly F&O expiration and high FII short positions, this week will see additional volatility due to derivatives expiration and FII inflows. Additionally, due to Thursday’s holiday, the trading week will be brief.

“Due to the scheduled expiration of March month derivatives contracts, we expect volatility to remain high in the coming week, which is shortened by holidays. Other than this, worldwide signs, unfamiliar inflows and unpredictability in unrefined petroleum might weigh further,” said Ajit Mishra, VP – Specialized Exploration, Religare Broking.

“Weak global cues are further dampening the mood, and FIIs are selling. Plus, we might see breaks across areas and new fall in wide records could additionally demolish opinion,” Mishra said.

corporate action Several businesses have scheduled board meetings this week to discuss fundraising, share buybacks, and dividend distributions.

Ex-dividend trading will take place for Hindustan Zinc, SBI Cards & Payment Services, Angel One, Crisil, Dwarikesh Sugar Industries, and Indraprastha Gas.

Symphony and Godavari Power & Ispat, on the other hand, will conduct pre-buybacks next week.

Tomorrow’s board meeting will discuss the possibility of issuing unsecured redeemable NCDs.

The fifth interim dividend for the current fiscal year will be approved at the Vedanta board meeting this week. PNB Housing Finance’s board of directors will think about issuing rights to shares to raise money.

technical overview On the daily Nifty chart, a long bear candle has formed, indicating a market selloff around the 17200 levels. According to Nagaraj Shetty, a Technical Research Analyst at HDFC Securities, the market is moving toward a new lower bottom—below the 16800 level—in the near future. The most recent swing high of 17207 can now be considered a new lower top of the sequence.

“The short-term trend of the Nifty remains weak. Quick protections have been deserted areas of strength for and have begun separating consistently. By next week, the Nifty is expected to fall toward levels between 16800 and 16700. at the top. side, the 17050 region may serve as a significant overhead resistance,” he continued.

“In the short term, the Nifty index may slide down with a possible downside until 16750,” Rupak Dey stated. At 17200, resistance is evident at the higher end.

 

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