Week in a nutshell (21st – 25th March)

Technical talks

NIFTY opened the week on 21st March at 17,329 and ended at 17,153 on 25^th March. Amid the geopolitical tensions and oil prices volatility, the Indian benchmark index closed in the red with a weekly loss of 1%. The next support and resistance levels for the index would be 17,024 and 17,442 respectively.

Among the sectoral indices, MEDIA (+7%), METAL (+5%), and OIL & GAS (+3%) were the gainers during the week. CONSUMER DURABLES (-5%), FMCG (-3.4%), and FINANCIAL SERVICES (-3%) led the losers.

Weekly highlights

• The S&P 500 and Dow Jones ended higher on Friday and Nasdaq closed marginally lower. Financial shares rose on Friday and boosted S&P 500 as the US treasury yield jumped to near its 3 years high. Investors will watch how the Federal Reserve will tighten its policy after Fed Chair Jerome Powell this week said the central bank needs to move quickly to combat high inflation.
• Oil prices recovered from early losses and ended higher on Friday after the two consecutive weekly losses as the missile attack hit Saudi Aramco’s storage facility and Saudi Arabia warned the crude supplies are at risk. Brent Crude and West Texas Intermediate finished the week at USD 119 and 113 a barrel up 10% and 8% for the week respectively.
• In India, petrol prices continue to increase. The oil companies hiked the price by 80 paise per liter on Saturday, this is the fourth hike in the last five days. Oil companies started the series of price hikes from 22 March and petrol price increased by Rs 3.20 per liter till date from 22 March. Since 4^th November 2021 prices had been frozen. These will lead to inflationary pressure on Indian consumers as well as organizations.
• India’s exports exceeded USD 400bn in 2021-22, added ~USD 110bn through the year with a 37% increase on an annual basis. Engineering goods, petroleum products, gems, and jewelry witnessed an increase in the share of exports. Even electronics goods and agricultural commodities saw an uptick in exports.
• United Nations downgraded India’s projected economic growth for 2022 from 6.7% to 4.6%. India in particular will face restraints on several fronts like energy access and prices, primary commodity restrictions, food inflation, tightening policies, and financial instability.
• The foreign institutional investors (FII) continued to be sellers and sold equities worth Rs 53,450mn while Domestic institutional investors (DIIs) continued to be buyers and bought equities worth Rs 40,250mn.

Things to watch out for next week

• Investors enter the last week of FY22. This typically sees tax-loss harvesting and NAV management by institutional investors. We expect to see increased volatility in mid and small-cap companies till the end of March. From 1^st April, quarterly and annual volume and the business update will likely be driving the market. Investors will be focused on Indian Auto companies’ volumes data for March-22.

• Indian equity markets remain volatile next week amidst rising geopolitical tensions between Russia and Ukraine, a series of petrol price hikes, pressure on crude oil prices due to a missile attack on Saudi Aramco’s storage facility.

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