Indian Market Updates: Key factors that will influence Nifty and Bank Nifty next week

 

Indian Market Updates- Nifty and Bank Nifty: The downtrend in the Indian stock market continues this week also, on a weekly basis Nifty down by 212.3 points or 1.93% and closed below 11000 levels. While Sensex was down by 720.67 points or 1.90% and closed at 37576.62.

The Banking stocks fell the most in the last week, the Bank Nifty declined by 1345.7 or 4.81% and closed at 27801.45. The Yes Bank fell the most, more than 50% due to the recent crisis and RBI’s took over for reconstructions. 

The Nifty midcap 100 index declined 411.2 points or 2.46% on a weekly basis. Whereas the Nifty small caps 100 index was down by 234.25 points or 4.18%.

The weekly gainers of Nifty50 Stocks were Dr. Reddy’s Lab, Cipla, Sun Pharma, Eicher Motors, and HCL Technologies. On the losing side, the top five losers in Nifty50 stocks were Yes Bank, Tata Motors, SBI, IndusInd Bank and ITC.

In the Nifty midcap space, the gainers were Future Consumer, Indiabulls Venture and the losers were PNB Housing, Edelweiss Finance. In Nifty smallcap space the gainers were DHFL, Deepak Nitrate and the losers are Spice Jet Dish TV.

Among the sectors, the major gainers in NSE were Nifty IT and Pharma whereas all other sectors closed in red on 6th March-end week. Banking and Finance, Media, Metal, Realty were the major losers last week.

FIIs were the net seller and DIIs were the net buyers in the cash segment last. The FIIs/FPI were sold Rs 10,720.49 crores and DIIs bought Rs 10,092.78 crores in the cash segment.

 

The Indian market in derivatives segments- Nifty and Bank Nifty

Last week Nifty futures opened at 11283, it has touched weekly high at 11418 last Monday and weekly low at 10,830 last Friday. The Nifty future share price has given a movement of 588 points. On a weekly basis, Nifty future declined 355.5 points and closed at 10927.50

The Bank Nifty futures opened at 29355.55 on Monday 2nd March, it has touched a weekly high at 29648 on the same day and weekly low at 27280 on last Friday 6th March. The Bank Nifty futures has given a movement of 2368 points. On a weekly basis, the Bank Nifty futures declined by 1605.55 points and closed at 27750.

 

Other news that moved the Indian market last week

The Manufacturing PMI data released last Monday was marginally lower, it was stood at 54.5 as against 55.3 on MoM basis.

The government has decided not to cut stake in PSU’s like Power Grid, PFC, NTPC due to the bond holder’s concern.

Tuesday, the market sentiment was positive as various Central Banks hinted stimulus package to counter an economic slowdown due to coronavirus. The US Fed Reserve has cut 50 bps interest rates as a surprise move ahead of policy meetings.

The Reserve Bank of India has suspended the existing Board of Yes Bank and announced a one-month moratorium period for reconstruction. RBI has also restricted the Bank’s client for the withdrawal limit up to Rs 50000. NSE  in its circular clarified that no F&O contract will be available from May 29, 2020, onwards. 

JP Morgan has revised the target of Yes Bank from Rs 55 to Re 1. The share price of Yes Bank tanks 83% on intraday on Friday and closed at 56% down from the previous close. RBI later in the evening announced the reconstruction plan and asked suggestions from investors, shareholders to finalize the plan within 9th March.

 

Stocks were in the news last week

Auto Stocks were in the news last week

Bajaj Auto has reported a 10% fall in its sales number in February

Eicher Motors has reported a 1.4% up in sales in its Royal Enfield whereas its export was down by 8% on a YoY basis

Mahindra & Mahindra has reported a 42% decline in its total sales in February, the company has reported 56% falls in February production.

Hero Motor Corp has reported 19.3% down in sales as compared to the same period last year.

Maruti Suzuki has reported a 5.4% decline in production in February compared to the same period last year.

Tata Motors has reported that its China impacted due to the spread in coronavirus breakout.

 

Other stocks were in news last week

L&T’s power transmission and distribution segment have got an order in Indian as well as abroad.

Equitas Small Finance Bank has got SEBI approval to float IPO with a fresh issue of Rs 550 crores and OFS of 8 crores equity share.

Pfizer company said that it has identified certain antiviral compounds that have the potential to inhibit coronavirus and is engaging with a third party to screen the compounds.

Morgan Stanley has maintained an overweight rating on Sun Pharma and set a target price of Rs 530 per share.

Mind Tree has appointed Dayapatra Nevatia as a new CEO of the company with effect from 2nd March 2020.

 

Key factors that will influence the market next week

The main factor that will influence the market next week is a coronavirus and its impact on the global economy. The declining crude oil price will actually suppress growing inflation in India but the global market will have a negative impact on it. The Indian equity market will dance on the tune of the global market next week.  

On the domestic front, the Yes Bank crises and RBI’s development can create some volatility on the market especially Bank Nifty. 

On Thursday, 12th March Industrial output data and CPI inflation data will be announced. The previous inflation was increased by 7.59% in January 2020 from 7.35 in December. This February month’s inflation is expected to come lower than last month.

There will be only four trading days in the coming week. Tuesday 10th March Indian share markets will be closed due to Holi.

 

Technical levels for Nifty and Bank Nifty futures for next week

Primary Trend Nifty Futures: down

Range-Bound Trend of Nifty Futures: Nifty future will range from 10660 – 11100 during the week 

Primary Trend of Bank Nifty Future:  down

Range-Bound Trend of Bank Nifty Future: Bank Nifty future will move in the range of 26550- 28300 during the next week

 

Crude and Rupee updates

Crude oil tumbles 9% the biggest single-day fall since 2017 after Russia has refused to back Saudi Arabia and other allies in OPEC on a deeper production cut to support and offset the lost demand created by a coronavirus.

The Brent crude oil future closed at $45.54 per barrel last Friday, it was down 8.90% from the previous close. The Indian rupee closed at Rs 73.73 against the US dollar, the rupee closed 0.38 paise lower on last Friday.

 

Conclusions:

Indian stock market closed another negative week due to fear of coronavirus and its impact on the global economy. Central banks of various countries have decided on a special stimulus package to tackle the dented economy due to the virus. 

The Brent crude oil future is trading three and a half years lower. The lower Crude oil price is good for the Indian economy but traders should track for the rupee movement also. A further weakness in Indian rupee can be seen due to the coronavirus outbreak. Indian equity market can only become stable when the rupee, gold, and crude becomes stable.

The next week the market would remain volatile due to coronavirus and Yes Bank crises. The trader can read our daily market updates and Nifty and Bank Nifty views on a daily basis.

 

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Happy Investing!!

Editor’s desk