Share Market Highlights 26 February 2024: Sensex sheds 353 pts, Nifty closes at 22,122 on profit taking, mixed global cues

Indian benchmark indices, Sensex and Nifty, opened weak on Monday amid mixed global cues. With global markets hitting new peaks with every passing day, analysts turned cautious on the valuation front. Individual stocks may face volatility due to the expiry of monthly derivatives contracts this Thursday, analysts said. 

In early trade, the 30-share BSE Sensex dropped 234.27 points to 72,908.52. The NSE Nifty fell 62.45 points to 22,150.25.

Ajit Mishra, SVP – Technical Research, Religare Broking Ltd, said: “We expect volatility to remain high due to the scheduled expiry of February month derivatives contracts.”

Besides, he said that participants should keep a close watch on the performance of the global indices, especially the US, for cues.

Sheersham Gupta, Director and Senior Technical Analyst at Rupeezy said: “Nifty has been in a consolidation zone for over one month, and we may soon see a breakout or breakdown with the former more likely. However, for any significant rally, the Nifty must give a decisive breakout above 22,250. The range of 22,100 – 22,130 is now the demand zone, and a slide below this range can push Nifty back towards 22,000 levels.

Santosh Meena, Head of Research, Swastika Investmart Ltd, said: “As we approach the February month Futures and Options (F&O) expiry alongside the MSCI rebalancing scheduled for Thursday, we anticipate heightened volatility. Several macroeconomic indicators from both domestic and global fronts will play crucial roles.”

GDP numbers and initial jobless claims will impact bond yields in the US. Moreover, our own Q3 GDP figures slated for release on February 29th and monthly auto sales data on March 1st will be closely watched.

Arvinder Singh Nanda, Senior Vice President of Master Capital Services Ltd, said: Certain Tailwinds for the upcoming quarter are improved global trade and investments, sustained manufacturing profitability, underlying service resilience, surge in capex in the budget, and increased household demand.

He added that possible headwinds for corporate are challenges related to the availability of raw materials and escalating prices, soft demand, shortage of skilled labour, increased power costs, market volatility, and geopolitical risk.

According to VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, an interesting feature of the recent FPI trend is the decline in FPI equity outflows despite the rising bond yields in the US. “Normally, when the US 10-year yield rises above 4.15%, the FPIs sell heavily. But this is not happening now. Since the DIIs, HNIs, and retail investors are the dominant players now, and their sustained buying is pushing the market to newer records, FPIs have taken a backseat, he added.

From February through 23rd, FPIs had net sold equity only for ₹423 crore, sharply down from the January level.

According to Shrikant Chouhan of Kotak Securities, “Today, the market may open with a cautious stance, considering the recent volatility and mixed global cues. The Nifty might open flat to slightly lower, around the 22125-22075 range. On the technical front, the Nifty has shown resilience and is expected to continue its bullish trend as long as it trades above 22000/72500. If it breaks above 22300, it could reach 22500 or 22600 levels. For Bank Nifty, support is seen around 46300 and 46000, with resistance at 47100 and 47400. Buying on dips could be a strategy, with a stop loss at 46000 on a closing basis for Bank Nifty. However, it’s essential to monitor the market closely for any changes in trend or sentiment.”