This week in a nutshell (March 15th to March 19th)

This week in a nutshell (March 15th to March 19th)

Technical talks

• NIFTY opened the week starting 15th  March at 15,048 and closed on 19th March at 14,744, declining 2% in the 5 trading sessions. 
• The index broke its support of 50 DMA on Thursday and rebounded back to almost the same level on Friday. Now 50 DMA at 14,748 will be the crucial resistance level to watch out for. On the downside, the index may find support at 100 DMA of 13,909. 

Weekly highlights

• This week, FII buying intensity increased as they pumped in Rs 58,929 mn in the Indian equity market. DIIs turned net sellers with Rs 30,366 mn net outflow from equities.
• The Consumer Price Index (CPI) inflation for the month of February came in at 5.03% against 4.06% in January 2021. An increase in inflation reduces the scope for a further repo rate cut by the Monetary Policy Committee. Repo rate cuts are a monetary measure of boosting economic growth.
• India’s trade data for the month of February was released this week. Exports saw a YoY growth of 0.7% to USD 27.9 bn, while imports saw a YoY jump of 7.0% to USD 40.5 bn. The trade deficit for February 2021 was USD 12.6 bn vs USD 10.2 bn for the same month last year.
• For the month of January 2021, the Index of Industrial Production (IIP) declined 1.6%. YoY decline in IIP suggests that the economy is still not entirely out of the shadow of covid-19 issues.
• GOI announced its much-anticipated vehicle scrappage policy this week. Under this policy, Commercial Vehicles (CVs) aged 20+ years and Passenger Vehicles (PVs) aged 15+ years will be de-registered in absence of a fitness certificate. The policy also includes incentives to vehicle owners for scrapping old vehicles including scrap value, road tax rebate, discount on new vehicles, and waiver of registration fees for new vehicles. This policy is expected to boost auto demand in an environment where auto sales have been suffering for the past several quarters.
• The US Fed reiterated its stance on keeping the interest rates near zero in the next few years. This announcement acted as a reassurance to the market that the US central bank will continue to remain pro-growth.

Things to watch out for next week

• The yearlong suspension of the Insolvency and Bankruptcy Board of India (IBC) is coming to an end on 25th March 2021. The suspension was implemented to protect the corporate debtors from defaulting due to the Covid-19 impact. If there is no further extension of the suspension, it will open up an important avenue for creditors to resolve bad assets.

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