Although the numbers will remain high, the chances of a major market reaction are low given that the impact has already been factored in: Analyst

Don’t expect a sharp turnaround in stock market sentiment, analysts say, but…

Indian stock markets lost more than 4% this week, ending a two-week period of consolidation. A surprise rate hike from the RBI pushed bulls on the back foot while growing fears of aggressive rate hikes from the US Fed and mixed earnings also weighed on sentiment. And analysts see the possibility of a reversal in sentiment soon.

The direction of global stock markets as well as the move in the dollar index and crude oil prices will continue to dominate domestic market sentiment, they say. The April inflation figures in the United States, due on Wednesday, will be one to watch this week. And any positive surprises could trigger a short cover rally given the oversold conditions, they say.

In India, “REITs continued to sell in early May as well with a net sales figure of 6723.59 cr until May 6. Given that markets have become very weak globally, REITs may continue to sell, perhaps with reduced volume. Even after the recent market correction, valuations are not cheap,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

“Perhaps if Nifty corrects another 5% from current levels, REITs are likely to turn bullish. With aggressive Fed tightening, lockdowns in China and the war in Ukraine lingering, the situation is not favorable to a sharp turnaround in the markets.”

Technically, explains Santosh Meena, Head of Research at Swastika Investmart, the Nifty broke below the key support level of 16800, which led to heavy selling pressure in the market. “However 16200-16000 is an immediate demand area where we can expect a pullback while below the 16000 level 15700/15500 will be the next support levels. immediate supply while 16900-17000 will be the next resistance area,” he added.

However, Meena said, if we look at the derived data, the long exposure on the FII futures index has fallen to a multi-month low of 22%, which is extremely oversold, while the put ratio -call of 0.74 also indicates oversold. territory, so we can expect a market rebound near the 16200-16000 area.”

Bank Nifty, on the other hand, also slipped below the psychological level of 35000 where 34000 is an immediate and strong support level while 33500 will be the next support level, he said. “On the upside, 35350-35500 is an immediate resistance area while 36000 will be the next hurdle.”

Over the coming week, attendees will first react to Reliance’s numbers that were announced post-market on Friday, said

“In addition, developments on the Russian-Ukrainian front and the performance of global markets will be on the radar. On the macro front, IIP and CPI inflation data are due out on May 12 and the market will turn a blind eye to these numbers, to gauge the next possible move in the RBI at the June meeting. Markets are reeling from enormous pressure and indications are for further declines to come,” said Ajit Mishra, VP of Research at Religare Broking.

Vinod Nair, head of research at Geojit Financial Services, says that on the other hand, national figures such as GST collection, auto sales and PMI for the month of April give an idea of ​​the situation. improving economic prospects.

“In the coming week, the market will be watching inflation numbers across the globe. Although the numbers will remain high, the chances of a major market reaction are low given the impact has already been taken into account. account,” he said.

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