Market can keep an eye on global signals next week: focus will be on 4 stocks

US stocks rose in global markets as the 10-year Treasury yield edged lower from recent highs, with gains across sectors. The Dow Jones closed up 1.17%, the Nasdaq 1.97% and the blue-chip S&P 500 up 1.61%. On the other hand, FPIs continued to sell in the domestic market in early March, with total selling 6544 crores from March 1 to March 4. As a result, global investors lost focus on domestic equity markets due to concerns about economic slowdown due to high inflation and contractionary monetary policies as RBI is expected to hike repo rate further. According to experts, the markets will closely follow the global cues in the coming week.

FPI trends this week

Dr VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said that FPI selling continued in early March as well. However, the net FPI figure of the data (NSDL) shows 8902 crores till 4th March. The discrepancy is largely due to investment by US-based investment firm GQG 15446 crore in four shares of Adani. Barring this, FPIs still remain sellers 6544 crore till 4th in March. Except GQG investment, FPIs have sold equities 41169 crores in 2023. FIIs are likely to sell at higher levels as the US 10-year bond yield is at 4% and is an attractive risk-free investment for FPIs. FPIs have been buyers in financials, capital goods and autos and sellers in oil & gas and metals.

market this week

Mr Mitul Shah – Head of Research, Reliance Securities said Indian equities closed higher led by banking and financial stocks amid positive cues in global markets. Nifty was up 1.6%. The broader market with Nifty Mid Cap and Nifty Small Cap gained 0.7% and 0.8% respectively. All the sectoral indices closed in the green. Nifty PSU Bank was the major gainer which climbed 5.4% followed by Nifty Metal and Nifty Bank up 3.6% and 2.1% respectively.

Shares of Adani Group gained on Thursday following a block deal in the secondary market on four shares of the group between the promoters and a US-based investment firm. This improved the overall sentiment in the market and PSU banks in particular. India’s services PMI rose at the fastest pace in 12 years in February 23 on strong demand. The index increased from 57.2 in January to 59.4 in February. Strong growth in services activity lifted the composite index to 59.0 in February from 57.5 in January, while manufacturing growth slowed to a four-month low.

US stocks climbed, with gains across sectors to offset losses in financials and consumer discretionary stocks. The S&P 500 gained 0.8%, the Nasdaq 0.7% and the Dow Jones 1%. The yield on the 10-year US Treasury note rose to 4.078%. Meanwhile, initial jobless claims fell 2,000 from a seasonally adjusted 190,000 last week. Weekly claims since the beginning of the year have remained below the 2019 pre-pandemic average of about 220,000.

Looking ahead, markets will closely track global cues next week.

weekly market outlook

Ratnesh Goyal, Senior Technical Analyst, Arihant Capital said, “On daily chart of Nifty, it is trading near support level of 200 SMA, and on weekly chart it is taking support from lower channel. This indicates that the market Now taking support from its lower levels, and we may see some stock specific action. If Nifty starts trading above 17,650 levels in the coming trading session, it may touch 17,850-18,050 levels. On the upside, support is at 17,500, and if it starts trading lower it could test the 17,350 and 17,100 levels.”

“On the daily chart of Bank Nifty, it is trading close to its 50-day SMA level. On the weekly chart, we see a bullish candlestick formation. This indicates that Bank Nifty may outperform Nifty. In the coming trading session, if it trades above 41,350, it can touch 41,600 and 41,800 levels. However, on the downside, support lies at 40,900, below which we can look at 40,700-40,400 levels,” Ratnesh Goel said.

Rahul Ghosh, Founder & CEO – Hedged, an algorithm-driven advisory platform said, “Nifty index is in a sideways trend, with a very broad-based range between 17250 to the downside and 18220. Markets will continue to yo-yo both up and down.It is also important to note that 18040 is also a near term resistance for Nifty, if Nifty closes above this level with a bullish candlestick formation. If it manages to move above 18220, chances of breaking out of 18220 increase significantly. Talking further about the trend, chances of an upward move are more imminent than a downside move as the index formed a nice circular base. and is moving strongly above the lower Bollinger Band on the weekly chart.”

Stocks to Stay in Focus

Rahul Ghosh, founder and CEO of Hedged, said that there are two stocks to keep an eye on in the near term:

1) Reliance: Reliance chart is looking good for short term. The prices closed strongly on Friday and the stock has formed a good base here also near the lower Bollinger Band. The stock is also reacting from the weekly demand area and breaking out of a divergence pattern on momentum indicators. Can stay in it for a target of 2495 in the short term.

2) Canara Bank: The stock has made a beautiful positive divergence on the weekly charts and closed the last week with a bullish engulfing candlestick pattern. Keeping in mind the target of 320 this stock can be expected to enter around 290 level, SL will be at 275. It was inside, and one can see the redline on this indicator trying to drop below the green line.

Ratnesh Goyal, Senior Technical Analyst, Arihant Capital said that IT stocks have seen some strength, hence they will be in focus next week. Other segments in focus would be midcaps and small caps. Given below are the stock recommendations by Ratnesh Goyal.

3. Hariom Pipes Can see an edge till the target 500/550 with stoploss 360.

4. TDS Power: buy for target with stop loss of 175/190 135.

Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint. We advise investors to do due diligence with certified experts before making any investment decision.