After a tumultuous week of bloodshed on D-Street, investors are now turning their attention to global cues and central bank decisions for potential rate cut timelines in the upcoming week. With various factors such as foreign capital inflow, crude oil prices, and the outcome of the US Federal Reserve policy meeting in play, the market movement in the third week of March remains uncertain.
The domestic equity benchmarks experienced a sharp decline, marking the worst week since October 2023, with Nifty and Sensex dropping by 2.09% and 1.99% respectively. Small caps and midcaps also witnessed a significant downturn, recording their worst week in 15 months with a decline ranging from 4.7% to 5.5%. Concerns over stretched valuations and market bubbles have been raised by experts, leading to a cautious outlook on the market.
Despite the challenging week, there is hope for bargain opportunities in mid- and small-cap stocks that are supported by strong fundamentals. FMCG and contrarian plays like gold are also being considered as safe havens in the current market scenario. The upcoming week will see a flurry of activity in the primary market with new IPOs, especially in the SME segment, and several listings scheduled across both mainboard and SME segments.
Analysts anticipate volatility in the market this week, with the Nifty 50 potentially sliding further to 21,500. However, if the index manages to hold above 22,500, there could be a potential uptrend. Traders are advised to focus on index majors and exercise caution in broader markets to avoid losses.
Key triggers for the stock markets this week include the outcomes of the US Federal Reserve policy meeting, Bank of Japan and Bank of England decisions, as well as the launch of new IPOs and listings. Global cues from major economies, oil prices, and FII activity will also play a crucial role in guiding market direction in the coming days.
Overall, the market outlook remains uncertain, with analysts closely monitoring various factors that could influence investor sentiment and market trends. Investors are advised to stay informed and seek expert advice before making any investment decisions in the current volatile market environment.
