Indian equity benchmarks witnessed a week of volatility yet managed to extend their winning streak for the fourth consecutive week, hitting new all-time highs. The benchmarks, Nifty and Sensex, surged to fresh record levels on Thursday, reaching 22,525.65 and 74,245.17 respectively. Nifty closed the week at 22,493.55, while Sensex ended at 74,119.39. Despite fluctuations, sectors like Banks, Metals, and Energy recorded significant gains, while Media, IT, and healthcare faced downward pressure.
The market outlook remains dynamic, with various factors influencing investor sentiment and future trends. Amid the ongoing market dynamics, several key economic indicators and events are set to shape the trajectory of Indian equities in the coming weeks, said Arvinder Singh Nanda, senior vice president, of Master Capital Services.
Sectoral trends
While benchmark indices continued their upward trajectory, sectoral indices showcased a mixed performance during the week. PSU banks led the gainers, followed by Pharma and Energy sectors, whereas Media observed the most significant decline.
Economic indicators and FII activity
India’s Services PMI dipped to 60.6 in February from 61.8 in January, reflecting a slight slowdown in new orders growth and output. Despite the moderation, positive demand trends fuelled sales and business activity, sustaining growth momentum. Additionally, FADA reported a 13 per cent year-on-year growth in auto sales for February, with passenger vehicles (PV) retail sales exhibiting 12% growth, driven by new product introductions and enhanced vehicle availability, Nanda noted.
However, foreign institutional investors (FIIs) remained cautious, selling around $2.4 billion of Indian shares so far, citing concerns over valuations and global economic conditions. Sectors like financial services, telecom, and construction raised red flags for FIIs, while healthcare, consumer services, IT, and automobile sectors garnered bullish sentiments.
Market outlook
The market outlook hinges on a multitude of factors including major global and domestic economic data, US Federal Reserve rate decisions, and investor behaviour. Key economic data scheduled for release in the upcoming week include Japan and UK GDP, US CPI Inflation numbers, and India’s CPI and WPI inflation figures, among others.
“Technical analysis suggests that Nifty reclaimed its upward-sloping resistance trendline post-breakout and defended the 10-day EMA. It faces resistance at 22,600-22,700 levels, with support at 22,200-22,100. Similarly, Bank Nifty is expected to sustain its upward momentum, with a potential to surpass its all-time high of 48,600 marks in the near term, supported by strong resistance at 47,400-47,000 levels,” Nanda added.
