Markets snap four-week winning streak; What investors should do on Monday

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Indian equity benchmark indices, Sensex and Nifty ended lower for the week gone by, snapping a four-week gaining streak. Last week, BSE Sensex fell 130 points (0.24%) to close at 52,344, while the Nifty50 shed 115 points (0.7%) to end at 15,683 levels. Investor sentiment weakened after the US Federal Reserve hinted at interest rate hikes by 2023 and taper the bond-buying programme.

BSE Midcap Index fell 3% dragged by Adani group stocks. BSE Smallcap index dropped 1.8% in the week ended June 18.

On BSE Sensex, HUL added the most in terms of market value, followed by Infosys, Tata Consultancy Services and Asian Paints last week. On the other hand, SBI and HDFC lost the most in term of market value.

Among sectors, Nifty Metal underperformed other indices with a loss of 6.6% followed by Nifty Realty (down 4%) and Nifty PSU Bank (down 3.8%).

Foreign institutional investors (FIIs) bought equities worth Rs 1,060 crore, while domestic institutional investors (DIIs) sold equities worth Rs 487 crore. So far in June,  FIIs have bought equities worth Rs 5,848 and DIIs have sold equities worth Rs 2,293 crore.

Going ahead, analysts expect markets to witness more profit booking leading to a range-bound correction as news flows from vaccinations and the new delta variant causing the third wave will chart the trajectory ahead.

Here’s how experts see markets trading the next week

Ajit Mishra, VP – Research, Religare Broking

Markets remained volatile for the third successive session but settled almost unchanged, taking a breather after the recent fall. With no major event, global cues will continue to dictate the market trend. On the domestic front, the progress of the monsoon and updates on the vaccination drive will be closely watched. Indications are in the favour of further consolidation in the index but the bias would remain on the positive side till Nifty holds above 15,400. Meanwhile, participants should maintain their focus on the selection of stocks and use dips to gradually accumulate the fundamentally sound counters.

Nirali Shah, Head of Equity Research, Samco Securities

After four weeks of consecutive green candle, the Nifty 50 index closed negative for the week. The benchmark index was rising on slow momentum and formed a rising wedge bearish pattern which has eventually broken down. As the market is still over-bought in the short term, Nifty index in expected to test 15,200 levels in the short term. There might not be a major decline immediately but profit booking cannot be ruled out. Immediate support and resistance are now placed at 15,350 and 15,900 levels.

Markets are expected to witness some profit booking to a broad range-bound correction as news toggle between vaccinations and the new delta variant causing the third wave. Any form of credit incentive to supplement health care infrastructure would be good news for equities.

Manish Shah, Founder, www.Niftytriggers.com

Nifty experienced a volatile week. The highlight of the week was a sharp reversal in the closing hours of the day as Nifty bounced off the low of the day and the week at 15,450. The zone at 15,450 was important as it was the 38.2 percent retracement of April 22 low of 14,151 to the recent high at 15,901. Secondly, the low at 15,450 was also near to the previous swing high. On the weekly time frame, the underlying trend remains intact. The trigger for entry on the upside would be on a break above 15,775-15,800 and once this happens Nifty could see a rally to 15,900 and above that to 16,200. As  long as Nifty holds above 15,400 a higher move remains a possibility.