Dear
Trader…
One more negative session witnessed on the street
as Indian benchmark equity indices ended
lower with selling pressure seen across the sectors and the market is expected to continue on bearish momentum based on current
price action, once the same break below the current key support holding near
14909 levels. Alternatively, if the
market struggles to break the support, then it might retest the same and revise
the trend to bullish mode once again.
Asian stocks pulled back from all-time peaks on Friday as
higher longer-dated bond yields and disappointing U.S. jobs and economic
data dented investor confidence in a faster economic recovery from the
COVID-19 pandemic.
Euro zone shares rose on Friday as data showed factory
activity in February jumped to its highest in three years. Strong demand for
manufactured goods helped the factory PMI soar to 57.7 from 54.8, the highest
since February 2018 (vs 54.3 forecast). A PMI covering the euro zone’s
services industry fell to 44.7 from January’s 45.4 (vs 45.9 forecast). IHS
Market’s flash composite PMI registered 48.1 in February compared to January’s
47.8 and 48 forecasts.
The Indian stock market has risen more than an estimated 80%
since last April so caution will now be needed as the financial sector
stabilizes in the coming days and valuations in the Indian equity market are high;
the RBI also said that the rally was due to liquidity from foreign investors.
The UBS Securities report also said that US and British
investors are focusing on India’s medium-term growth potential and are
optimistic, while Asian investors are expressing concern over the high
valuation of the market.
FIIs made heavy purchases in the Indian equity market in the
December quarter and made the highest quarterly investment ever.
The market continues to grow due to the success of the
vaccination program, but has seen a correction in the bullish phase in the past
as well as FIIs continued to buy aggressively, but local institutional
investors have so far seen net sales in the December quarter, the reason is
redemption and to some extent many investors prefer to invest directly in
equities which are also affecting inflows.
The sentiment of foreign investors is positive that the
Corona situation in India has come under control and it has also boosted
confidence in the economy. UBS Securities has projected the fastest recovery of
the Indian economy in Asia in FY2021-22.
The record-breaking rally in the last two weeks has been
calming down with the massive buying figures of foreign portfolio investors in
the Indian stock market now disappearing, but caution will be needed in the
coming days as fund-giants continue to buy in the market.
In my opinion, it would be advisable to book profits in every
bullish stock as the market has reached an all-time high with an unprecedented
historic rally in just one year after the Corona epidemic and the Indian stock
market will also be keeping a close eye on the situation, with petrol and
diesel prices reaching record highs.
Traders should now become cautious while trading momentum & continue their bullish strategy until nifty holds above 15008-15088 levels could take the Nifty 15202 over the next few days. On falls, 14888-14808 levels could act as a good support in the near term.
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