What investors should look for this week amid volatile markets

The Sensex and Nifty 50 lost almost 4% last week (May 9-May 13).The tone has remained the same despite a reddish tinge almost to a flatter bar in the last two sessions bearish.

On Friday, the Sensex closed at 52,793.62, down 136.69 points or 0.26 percent. Heavyweights SBI, ICICI Bank, Axis Bank, Bharti Airtel, Maruti Suzuki, HDFC Bank, Bajaj twins and Tata Steel dragged down benchmarks and offset Sun Pharma, HUL, Reliance Industries, Titan, ITC, Dr. Reddy’s, M&M and Nestle .

The Nifty 50 closed at 15,782.15, down 25.85 points or 0.16%.

Small-cap stocks outperformed on both exchanges on the final day, while mid-cap stocks also posted some notable gains. In sector indices, autos, consumer durables and pharmaceuticals were the best performers, while banks and metals were dominated by bears.

“The market has been on edge this week on lingering concerns about a weaker rupee, higher global interest rates, rising inflation numbers and China’s lockdown,” said Vinod Nair, head of research at Geojit Financial Services.

Yesha Shah, head of equity research at Samco Securities, said: “The Nifty 50 closed the week sharply lower and is now trading near strong support at 15,700, which coincides with the bottom of a descending channel. BankNifty is also trading up near trendline support from 2020. March lows formed.”

“India and major global indices are now at oversold levels. So, an immediate rebound in Nifty and BankNifty is highly likely,” Shah added.

Investor wealth on the BSE has evaporated over the past five sessions rupee13,83,637.96 million.On Friday, the BSE market capitalization was rupee2,41,34,078.84. On May 6, the market value was at rupee2,55,17,716.8 million.

Last week, FPIs continued to be net sellers.Now, in the first few weeks of the May trading session, FPI outflows are rupeeAccording to NSDL, there is $252.16 billion in the stock market. In May so far, the underweight in Indian stocks has exceeded rupee171.44 million for the whole of April.Stock market outflows by 2022 are rupee1,52,378 million.

India’s retail inflation hit an eight-year high of 7.79% in April as food prices surged. Inflation remained above the RBI’s 6% ceiling target for the fourth consecutive month.

Four IPOs are almost worth it rupeeRs 26,500 crore entered the public subscription market last week.this rupee205.57 billion LIC IPO, the largest in the market to date, was 2.95 times oversubscribed, while rupee5.3861 crore Prudent Corporate Advisory Services IPO with a subscription rate of 1.22 times.this rupeeDelhi 52.35 billion IPO subscribed 1.6 times rupeeThe Venus Pipes & Tubes IPO was subscribed 16.31 times on the last day for a total of 1.6542 crore.

The Indian rupee fell 5 paise to an all-time low of 77.55 against the US dollar on Friday.

“The rupee was range-bound around 77.45 on the day as the dollar index was flat after a strong rebound,” said Jateen Trivedi, senior research analyst at LKP Securities. “Weekly, the rupee closed very weak, down about 1 percent year-on-year.” Weeks, as rapid rate hikes negatively impacted overall sentiment. “

Looking ahead to the week, the performance of WPI inflation data, LIC listing, rupee/USD movement, upcoming IPOs, Q4 earnings, and global cues will influence market sentiment.

This week, three IPOs worth rupee23.87 billion will be available for public subscription. These are – Paradeep Phosphates IPO, Ethos IPO and eMudhra IPO.

Shah said: “As the results season nears its climax, D-Street will be in sync with the global news flow. Next week India’s WPI data will be released and the much-anticipated IPO LIC will be listed on the exchange. Apart from these, nothing else is expected to happen. Major event. In the absence of any positive catalysts, expect the index to remain under pressure as there is a sell-off with every rally.”

“The release of higher-than-expected U.S. CPI data suggests that inflationary pressures will persist in the near term. However, as crude oil and other commodity prices continue to decline, inflationary pressures are expected to have peaked and will gradually ease, & the economy The Fed’s hawkish stance surprised the market and capped liquidity, which limited further setbacks ahead,” Nair added.

In addition, Nair said, “We can expect the market to remain stable as the sell-off in FII reduces inflation and factoring in Fed policy. On the other hand, DII has lost confidence after suffering consecutive losses.”

What should investors be watching this week?

According to Nair, given the current market volatility, investors prefer defensive sectors such as IT and pharmaceuticals, which are underpinned by the weak Indian rupee. Going forward, the main determinant of the market’s direction will be the rate at which inflation falls as a result of the Fed’s measures.

“Depending on how Nifty opens next week, highly aggressive traders could start long trades with tight stops below 15,700,” Shah said. “The current resistance is at 16,600.”

“Investors are therefore urged to stay on the sidelines, as in such a turbulent phase, it is better to wait for the storm to pass, rather than to bottom out,” Shah added.

On the rupee, Trivedi said: “The rupee will weaken on any gains ahead of the market price in the rate hike cycle”

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