By Rohit Vaid
Mumbai, March 28 | Resurgence in Covid-19 cases along with upcoming macro economic data points are likely to subdue key equity indices next week.
Besides, markets are expected to witness low volumes due to fiscal end period in the truncated week ahead.
“Stocks could be buffeted by end-of-quarter and end of fiscal trading in the week ahead, as funds and other big investors rebalance their portfolios,” said HDFC Securities’ Retail Research Head Deepak Jasani.
“Nifty could open higher in the coming week but sustaining at higher levels or building on to gains remains a challenge.”
On the upsides, Jasani said 14,815 points remains a formidable resistance, a sustained move above which could take the Nifty even higher.
“On falls 14,264 remains a support. Accompanied by the fact that the coming week includes the year end, volumes and volatility could be subdued.”
Furthermore, macro-economic data points like Index of Eight Core Industries (ECI) figures, along with the country’s fiscal deficit numbers up to February and external debt data will be keenly watched by investors.
Additionally, the PMI manufacturing and services’ figures, along with monthly automobile sales data will be released during the week.
“Negative global cues, rise in bond yields and spike in Covid cases dented sentiments. Worries over 2nd wave of Covid in India led to sharp fall in the market. India reported the biggest spike in Covid-19 infections in five months,” said Motilal Oswal Financial Services’ Retail Research Head Siddhartha Khemka.
“Going ahead, Next week is a truncated one as far as Indian markets are concerned due to couple of holidays, hence traders would watch the global cues closely.”
India’s key domestic markets will remain closed on Monday and Friday due to Holi and Good Friday, respectively.
Besides, Geojit Financial Services’ Research Head Vinod Nair cited that stability in the market depends on pace of vaccination and fourth quarter results which are expected to be positive, given recovery in economic activity during January and February, 2021.
“On the other hand, prediction of normal monsoon in India this year augur well for a revival in economic activity.”
According to Emkay Wealth Management’s Research Head Joseph Thomas: “The equity markets remained extremely volatile during the course of the week with multiple attempts at testing support levels. While the rise in bond yields visibly subsided and oil prices too declined, markets have reasons to cheer, but the ferocious resurgence in the covid second and third wave, especially in some of the major European countries is gradually bringing in fears of another disastrous shutdown.”
“In that eventuality, it will adversely affect the nascent rebound that is seen in recent times. Most market participants expect stronger measures from governments, but nobody expects it to be of the scale at which it was done ab initio.”
In addition, Thomas said some amount of profit booking cannot be ruled out due to year-end in Japan and India.
“In addition to this, the Passover break for Jews and Christians, with the latter culminating in Easter, shortens the trading week, apart from the Holi festivities in India at the beginning of the week itself.”
(Rohit Vaid can be contacted at firstname.lastname@example.org)