Market witnessed relentless selling during the week as investors are concerned over rising Omicron virus cases across the world.
There was a bloodbath in the market throughout the week as we witnessed continued selling pressure on the account of global concerns and major events during the week. The benchmark index tumbled almost 3 percent on a weekly basis to close at 16,985.20 levels while Banknifty retreated more than 3.5 percent weekly to settle at 35,618.70
US Fed decision to raise interest rates
The US Fed decision to raise interest rate and building inflationary pressure kept sentiments downgraded. Global investors were also surprised by the interest rate hike by the BoE.
The US Fed stated that it would end bond purchase programme in Mar’ 2022 and to counter the rising inflation and projected to raise interest rate by three times in 2022. Crude oil dipped this week by posting a weekly loss as new COVID-19 variant ‘Omicron’ fears mount.
Investors to continue to monitor COVID-related news
Losses were partially offset to some extent by gains in major IT stocks like Wipro, Infosys and HCL Tech. Accenture’s strong results and optimistic outlook for FY22 cheered domestic IT stocks as investors hopes a similar guidance from Indian IT companies.
In coming weeks, investors will continue to monitor COVID-19 related news which could hamper global economy and global economic data.
On the technical front, the index has formed Open Bearish Marubozu Candle on a weekly chart which points out the weakness in the counter. Moreover, the index has given a breakdown of rising trend line as well as trading below 21&50-DMA which adds bearish momentum for the near term.
Overall, the benchmark index is likely to attract buying support near the recent low of around 16,782 levels while it may find the resistance at around 17,400 levels.
Top gainers
•Accenture’s strong results and optimistic outlook for FY22 cheered domestic IT stocks as investors hopes a similar guidance from Indian IT companies.
•IT stocks like Wipro, Infosys and Tech Mahindra were among the top gainers this week.
•Power Grid stock remained under investor’s radar as announcement of interim dividend was in focus this week.
Top losers
•Banking and financial stocks remained under pressure due to relentless selling by FPIs. Broad based selling across the counters also weighed on the banking stocks given their largest weight in major benchmarks indices.
•Bajaj twins, HDFC and Indusind Bank were among the top laggards this week.
•ITC underperformed this week (-7.6 percent) by wiping down last week’s stellar gains as ITC’s analyst meet fails to cheer investors.
(Ankit Pareek is Research Analyst, Choice Broking)
