Dear Trader…
As expected, Indian stock market
fell on Wednesday, dragged down by heavyweight stocks, after data showed that
the country’s retail inflation jumped to a three-month high in February, while
a fresh surge in COVID-19 cases also weighed on.
The Nifty futures opened at 14968.00
points against the previous close of 14959.70, opening at a low of 14741.20
points. Nifty Future closed with an average movement of 239.95 points and a
strong rise of around 203.70 points and around 14756.00 points..!!!
On the NSE,
the midcap index 100 was down 2.48% and the small cap index 100 was down 2.21%.
Speaking of various sectorial indices, the NSE saw declines in media, pharma,
auto, PSU bank and metal stocks, while all other sectorial indices also
declined. The broader indices outperformed the benchmarks
with NSE Midcap and Small cap indices ending in the red.
The rise in bond yields
raises the cost of capital for companies, which, in turn, affects their stock
valuations. Hence, stock markets across the world are seeing some impact of
increasing bond yields. If central banks allow the yields to go up, it indicates that the
liquidity support that has been offered may also go down. Whenever the bond
yield increases, investors including FII, prefer to withdraw from equities and
look at bonds.
in
the coming session, as the market has already witnessed a sharp run-up and
valuations appear to be quite stretched at the current level, profit-booking at
these levels cannot be ruled out and therefore traders should be cautious at
these levels.
Markets seem to be digesting the recent gains and
waiting for the next triggers. Earnings were solid and commentary was
optimistic as well. Growth rebound in the economy, as well as earnings, augur
well from a medium-term perspective.
The decision to lockdown on the economic front could affect market
sentiment. So in the coming days, the economy and the Indian stock market may
see a major upheaval.
Technically, the important key resistances in Nifty future are placed at 14808 levels, which could offer for the market on the higher side. Sustainability above this zone would signal opens the door for a directional up move with immediate resistances seen at 14838 – 14888 levels. Immediate support is placed at 14676 – 14606 levels.
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