Stock market: Sensex, Nifty close lower ahead of retail inflation data. What to expect this week?

“With the Third Quarter Earnings Season coming to a close this week, Markets traded weak throughout the day ahead of the Inflation Print expected today. PSU Banks & IT stocks dragged Indices as traders booked profits on a rather dull day of trade wherein most of the sectoral indices ended in the red. Equity ownership of Retail Investors now stands at a record 24.5% at the end of third quarter even as they remind themselves of rising fixed income rates on dull days like today,” said S Ranganathan, Head of Research at LKP Securities.

Indian stocks succumbed to weakness in global markets as investors’ fret over the Federal Reserve’s stress on the tightening of the monetary policy to tame inflation, said analysts. Twelve of the 13 major sectoral indexes declined in domestic trading, with information technology (IT) stocks falling 1.88%. Volatility index, India VIX, rose by 8% to 13.7 levels. 

Week ahead

“We expect market to remain lacklustre as investors await key economic data on global as well as domestic front to provide some clear direction. Domestic CPI data to be announce today post market, while US would release its monthly CPI data on Tuesday along with Europe’s GDP numbers. Auto and Capital goods stocks likely to do well on back of good quarterly results,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.

Technical analysis

“On Monday, the benchmark indices witnessed profit booking at higher levels. Technically, near 20-day SMA the nifty consistently witnessed profit booking, a bearish candle on daily charts, and a close below 17800/60500 indicating further weakness from the current levels. for the traders now, 17850/60700 would act as a key resistance zone below the same, the nifty could slip till 17650-17600/60000-59900. On the flip side, a fresh uptrend rally is possible only after the dismissal of 17850/60700, above which, the market could move up to 17925-17950/60900-61000,” said Shirkant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd.