Stock Market News: The major domestic stock indices concluded the week on a downward trend, with the Sensex dropping 424.90 points to finish at 75,311.06, while the Nifty 50 decreased by 117.25 points, closing at 22,795.90.
Ongoing worries about global economic conditions and foreign institutional investor (FII) sell-offs impacted investor confidence. Vinod Nair, Head of Research at Geojit Financial Services, pointed out that India is currently trailing behind its Asian counterparts, as FII outflows remain elevated, with the strategy of “sell India, buy China” continuing to be profitable for now.
The domestic market has continued to show widespread weakness, largely due to investor worries about the hawkish tone of the FOMC minutes, which indicated that elevated interest rates may persist and could limit liquidity in emerging markets. While the market has seen a healthy correction, the uncertainties around the gradual recovery of corporate profits and ongoing tariff-related challenges still create doubts about valuation levels, especially in the broader market.
Experts suggest that the coming week is poised to be eventful for both global and Indian markets, driven by significant macroeconomic data releases and corporate earnings reports. Market sentiment will be influenced by GDP data, housing statistics, inflation figures, infrastructure data, and core PCE figures.
a) Breadth Indicator: The market breadth has approached the bearish extreme as % of stocks (within Nifty 500 universe) above 50 and 200 days SMA has approached their bearish extreme of 13 and 5 respectively during last week. Historically, such bearish readings have paved the way for durable bottom in subsequent weeks
b) Momentum indicator: Past two decades data suggest that, the weekly RSI below 30 suggest oversold condition for the Nifty midcap and smallcap indices. Which have been tested only on six occasions, resulting into 20% up move in subsequent three months, wherein drawdowns have been limited to 5%. With recent reading of 33 we believe; the risk reward remain favourable as pullback from bearish extremes cannot be ruled out
c) The US Dollar index has been sustaining below 107 marks for the second consecutive week. Further weakness would be beneficial for emerging markets
d) Further development on ease off in geopolitical worries would bring some stability in equity markets
Stock To Buy This Week – Dharmesh Shah
Dharmesh Shah of ICICI Securities recommends buying Tata Power this week.
Buy Tata Power in the range of ₹346-357 for the target of ₹398 with a stop loss of ₹324.
Disclaimer: The Research Analyst or his relatives or I-Sec do not have actual/beneficial ownership of 1% or more securities of the subject company, at the end of 21/02/2025 or have no other financial interest and do not have any material conflict of interest.
The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.
