LAST WEEK
NIFTY opened the week flat on Monday at 16,650. There were positive statements from both Russian and Ukrainian delegates and this led to the positivity. The index moved up by 200 points but fell the next day due to negativity from peace talks. The Russian representative said that it is premature to give a conclusion and the Ukrainian representative said that there is either going to be an agreement or a full-scale attack on Ukraine. NIFTY opened with a huge gap-up following the west but consolidated in a 90 points range on Wednesday before it broke out in the last hour. A Russian delegate had said that there had been some progress in the talks. The market opened with another huge gap-up on Thursday after an expected Fed outcome leading to a close above 17,000 after a long time. NIFTY closed the week at 17,287, up by 657 points or 3.95%. Friday was a ‘holi’day.
BANK NIFTY opened the week flat at 34,740. The index closed above 35,000 on Monday but fell back to the level on Tuesday. There was a huge gap-up on Wednesday and the index closed above 35,700. Another gap-up followed on Thursday and BANK NIFTY closed the week at 36,429, up 1882 points or 5.45%.
All the sectors moved well last week except for Metals. IT consolidated.
Foreign Institutional Investors net bought shares worth Rs 1,700 crores last week.
Domestic Institutional Investors net bought shares worth Rs 1,300 crores.
FIIs turned net buyers after a very long time. Though they have net sold for a heavy figure this month, they were net buyers last week. Vanguard group bought stakes in 19 Indian companies on Thursday. The figure stood at Rs 2,300 crores.
As expected, LIC IPO has been postponed.
Fed hiked interest rate by 25 basis points. This was in line with the expectations. However, US markets saw a fall followed by a fantastic up-move. Fed hinted that there will be 6 more rate hikes this year. Also, Jerome Powell warned about stagflation and said that inflation is likely to stay longer especially when the war is going on and it would take much more time before it can be brought back to the target level of 2%. However, he emphasised the strength of the economy and said that inflation rates may fall in the second half of the year.
Russia missing dollar bond interest payments is a concern. There is a grace period of 30 days but the foreign exchange reserves of Russia are frozen.
The US markets moved up by more than 5% last week. The European markets also exhibited a fantastic recovery.
SGX NIFTY is at 17,490.
INDIA VIX has dropped to 22.9.
WEEK AHEAD
NIFTY has supports at 17,250, 17,175 and 17,000. We can expect resistances at 17,350, 17,480 and 17,620.
BANK NIFTY has supports at 36,300, 36,000 and 35,700. Resistances are at 36,450, 36,600 and 36,900.
NIFTY has the highest call OI build-up at 18,000. The highest put OI build-up is at 17,000.
BANK NIFTY has the highest call OI build-up at 37,000 and the largest put OI build-up is at 36,000.
There are no key events this week. Let us watch how the war turns out. Mariupol is under attack now. The US will provide Ukraine with javelins and missiles. The US has also asked Turkey to provide Ukraine with Russian made missiles. Russian Ambassador to Bosnia Herzegovina said that they have plans against NATO’S threats.
Jerome Powell will give a speech on Wednesday. However, this is less likely to impact the markets.
Keep an eye on the crude oil prices which have now dropped to less than $110. Commodities prices also saw a drop.
It will be a range-bound market unless there is a positive trigger. A negative trigger can take the market down much faster. Let us watch 17,500 on the upside and 17,000 on the downside in NIFTY.
How was your week? Let us know in the comments section below.