Stock Market

Share Market Highlights 26 March 2024: Sensex sheds 361 pts; Nifty settles at 22k; media top drag

The FOMC’s decision to hold interest rates steady at 5.25-5.5% reflects confidence in the US market’s upward economic trajectory. Despite maintaining a forecast of lowering rates to 4.6% by 2024, the latest “dot plot” indicates a shift in expectations, with fewer members anticipating multiple rate cuts this year. With signs of economic resilience and a willingness to tolerate temporary inflation fluctuations, the Federal Reserve is Fuelling Bullish Sentiment in US Markets

Similarly, as anticipated, the People’s Bank of China maintained unchanged lending rates in March, keeping the five-year rate steady at 3.95% after a 25 basis points reduction in February, aligning with efforts to boost economic growth amid property sector challenges and low consumer confidence.

India’s HSBC flash manufacturing Purchasing Managers’ Index (PMI) reached a 14-year high of 59.2 in March, indicating significant expansion in the manufacturing sector. Despite a slight decline in the flash services PMI, the overall composite PMI rose to an eight-month high of 61.3, signaling robust economic activity. Both manufacturing and composite PMIs have consistently remained above the 50-point threshold for expansion, showcasing sustained growth. The improvement in PMI figures reflects India’s resilient economic performance, with positive implications for future growth prospects.

“In a landscape marked by economic shifts, the steady hand of the Federal Reserve, along with the unwavering stance of the People’s Bank of China, India’s impressive PMI figures underscore resilience in the face of challenges. As value investors, we recognize that amidst volatility lies opportunity, and these indicators offer valuable insight for prudent long-term investments.”

The overall Indian market performed better for the week. Realty, Auto, Metal, Energy, PSU Banks, Media, and Oil & Gas sectors were up, and the sector that fell the most was the IT sector. FII were net sellers Rs 8,365 crores and DII were net buyers 19251 crores.

The key benchmark indices witnessed a roller-coaster move before closing the week in positive territory. Initially, prices declined to a five-week low amid escalating concerns about froth building in the midcap and smallcap segments. Nifty and Sensex prices settled the week at 22096.75 & 72831.94 up 0.33% and 0.26% respectively. However, the market saw a rebound as bargain hunters stepped in following the announcement from U.S. monetary authorities indicating a potential series of interest rate cuts throughout the year. Policymakers intend to reduce interest rates three times this year, aligning with the quarterly forecasts from December. Investor sentiment was further buoyed by optimistic forecasts of robust manufacturing and service sector activities in India for March. Additionally, the U.S. 10-year bond yield retreated from a nearly three-month high, reflecting increasing expectations of a reduction in the key benchmark rate.

In Nifty, the prices are expected to be in the range of 21,750-22,350 levels and if the index decisively closes below 21,800 then 21,650 may be the next support for the Nifty 50, while the immediate resistance is likely to be 22200 and then 22,300. Sustaining above 22000 could pull Nifty towards the crucial overhead resistance around 22,200-22,400 levels in the short term. Any decline from 21850 could drag the Nifty down to 21,700 level again in the near term.

In Banknifty, strong support is currently placed at the 46000 level. The Bank Nifty index persists in a “buy on decline” stance until the support below 45800 is convincingly surpassed on a closing basis. In upcoming levels, we can expect R1 to be placed at 47000 levels and S1 to be placed at 46200 levels. Over the short term, the index could move towards 47,500; a decisive move beyond 47,200 might propel it towards 48000.

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