The BSE Sensex opened higher by 13.78 points or 0.02% at 73,516.42 level while the Nifty 50 opened at 22,334.45 level, up 1.80 points or 0.01%.
Investors will be watching this week’s inflation data, both retail and wholesale, for fresh signals. Retail inflation data is due later today.
Also Read: Nifty 50, Sensex today: What to expect from Indian stock market in trade on March 12
The correction of the broader market, especially the small caps, is now the main near-term trend in the market, according to Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. The small cap index is down 7.8% from its top, and with valuations still high, this correction is likely to continue.
“Quality large caps will come back after a correction, but small caps are unlikely to bounce back in the near term. PSE stocks, which have risen too much too fast, are also likely to face selling pressure,” Vijayakumar said.
The Sensex and the Nifty 50, witnessed pressure in Monday’s session, as investors chose to hold off ahead of the release of important inflation data today in the US and at home The Nifty Midcap 50 Index fell 0.52%, while the Nifty Smallcap Index fell. 1.99% further, indicating that broader markets were also under pressure. To cut a long story short, profit-booking dominated Monday’s trading.
On Monday, the 30-share BSE Sensex ended lower by 616.75 points or 0.83% at 73,502.64 level while the Nifty 50 closed at 22,332.65 level, down 160.90 points or 0.72%.
Also Read: Bag today: Nifty 50, Sensex fall around 1% each; caps bleed; investors almost lose ₹3 lakh crores in a day
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Market Review and Outlook
Over the past week, our markets have surged to surpass the 22,500 mark for the first time. However, we witnessed some pullback moves earlier this week, and the Nifty 50 ended the day above the 22,300 mark, said Ruchit Jain, Senior Research Analyst at 5paisa.
In Monday’s session, our markets witnessed a profit reserve at the beginning of the week, where the small cap index corrected by a few percent. As of now, this dip appears to be a correction within an uptrend, as the technical indicators are still positive and the index is trading above its crucial supports. In the derivatives segment, foreign institutional investors (FIIs) started this series with short positions, but as the index moved higher, they covered some of their short positions and added long positions to reduce their net short positions, Jain explained.
In the options segment, open interest addition is seen in 22,500-22,600 call options for the weekly series, suggesting that this zone is resistance. On the downside, the immediate support for the Nifty 50 is now placed around the 22,200 mark, while positional support is around the 22,000-21,900 range, as highlighted by Ruchit.
The broader markets witnessed a mixed trend, with momentum seen on both sides of the trade. Despite a new high in the benchmark last week, the mid-cap and small-cap indices have not increased in recent days, indicating stock-specific gains. In fact, the small-cap index even broke its short-term support, and the RSI gave a negative crossing of the overbought zone in the weekly charts. Thus, these segments could go through some time-wise correction phase, and one should be very selective in trading for short term, explained Jain.
Also Read: Indian stock market: 7 key things that changed for the market overnight – Gift Nifty, crude oil to Bitcoin price rally
Stocks to Buy This Week – Ruchit Jain
On stocks to buy this week, Ruchit Jain recommended two stocks – Marico Ltd and Shriram Finance Ltd.
Marico Ltd
Ruchit stated that the stock has gone through a correction phase in recent months. However, prices are now trading around their support zone and have formed a bullish engulfing pattern on the daily chart. Therefore, we believe that the price-wise correction is done, and the stock could see a pullback soon. Short-term traders can look for buying opportunities in the stock in the range of ₹510–505 for possible purpose from around ₹540–550. The stop loss on long positions should be placed below ₹490.
Shriram Finance Ltd
According to Jain, the stock has formed a “Higher top, higher bottom” structure and is thus in an uptrend. The recent prices have been supported by good volumes, while the volumes on corrections are low, which is a positive sign. The stock is trading above its 40 DEMA support, and therefore, short-term traders can look to buy the stock in the range of ₹2,480–2,460 for potential targets of ₹2,630 and ₹2,720. The stop loss on long positions should be placed below ₹2,345.
Also Read: Week Ahead: Inflation data, FII activity, global cues among key market triggers as Nifty 50 eyes 22,800 this week
Disclaimer: The opinions and recommendations made above are those of individual analysts or trading companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 12 Mar 2024, 10:25 IST