Technical data

Week Ahead: From Inflation to Political Outcomes

Indian markets are heading for a bumpy ride during business week, with the dispute between the Kremlin and Ukraine once again dominating the mood. After four straight weeks of stabilizing in a bearish tone, the benchmarks Nifty 50 and Sensex finally made fruitful gains last week as a host of state elections boosted sentiment and lower prices Crude oil over the past two sessions has further triggered the rise.

On Friday, Sensex closed near 55,550 and Nifty 50 held just over 16,630. Nifty was slightly below the 17,000 mark throughout the day as markets remained limited, pharmaceutical stocks outperforming and oil stocks also recording notable gains. Meanwhile, paper stocks have also moved actively amid price increases to offset input cost pressures. Overall, markets witnessed broad-based buying across the basket with little correction in auto and computer stocks.

From March 07 to March 11, Nifty and Sensex were up more than 5%. With the exception of opening in the red on Monday, the markets were well supported by the bulls in the remaining days.

Discussing last week’s performance (March 7-11), Vinod Nair, Head of Research at Geojit Financial Services, said, “The domestic market opened weakly, witnessing strong selling as prices for oil rose above $130 a barrel for the first time since July 2008, following the risk of a US and EU ban on oil exports from Russia.”

Nair added: “However, the mood turned as the state election results turned positive for the market and oil prices started to decline. Indian markets saw heightened optimism in the advance. high-level talks between Russia and Ukraine on global markets.CPI inflation in the United States hit a 40-year high due to the high cost of gasoline, food and fuel. housing, adding doubts to the global trend.Inflation levels in India and abroad are set to rise even further in March, albeit temporarily given the impact of the Russia-Ukraine issue. “

In the coming weeks, the focus will be on inflation data, policy announcements from major central banks and weekly F&O expiry. While the development in Russia and the war in Ukraine will continue to play a major role in the evolution of market prospects.

“Next week, the market will focus on lower commodity prices and diplomatic development between Russia and Ukraine. If these global trends turn positive, Indian market performance will be good, otherwise it could become choppy. The market will also focus on inflation data coming out of India and the US, and the US Fed and BoE meeting is scheduled for next week,” Nair concluded.

Rupak De, Senior Technical Analyst at LKP Securities, “Nifty consolidated during the day, which can be seen as a pause before the next directional move. On the upper side, 16700 is likely to act as resistance on the upside of the index value A decisive move above 16700 may induce a rally towards 17000. On the lower end, support is visible at 16400-16380 below which Nifty may see a correction .”

India will release its February 2022 wholesale and consumer price inflation data tomorrow. Additionally, the US Federal Reserve is set to meet March 15-16 to decide on bond cuts as a hike rates is provided. Later, the Bank of England will also announce the outcome of the policy on March 17, followed by India’s weekly F&O expiration on Thursday as well.

However, the week will be shorter for trading as the Friday markets will be closed due to the Holi festival in India.

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