After The Bell: Nifty defends 15,000, what should investors do on Friday?

Market Outlook

Indian market consolidated on March 4, largely weighed down by weak global cues, but a bounce back from crucial support levels suggests that bulls don’t want to give up just yet.

The S&P BSE Sensex fell by nearly 600 points while the Nifty50 briefly breached the crucial support of 15,000 but bounced back to close above 15,000 levels.

Let’s look at the final tally on D-Street – the S&P BSE Sensex fell 598 points to 50,846 while the Nifty50 fell 164 points to close at 15,080.

Sectorally, the action was seen in power, utilities, consumer discretionary, and consumer durable stocks while profit-taking was seen in metals, finance, banks, energy, and telecom stocks.

On the broader markets front – the S&P BSE Mid-cap index was up 0.48 percent while the S&P BSE Small-cap index was up 0.8 percent.

“Domestic markets along with its global peers mirrored the wounded trend of the US market. The surge in US bond yields added selling pressure in technology stocks, forced Wall Street to close lower,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

“Blue-chips were much affected by the weak global cues, but Mid & Small caps with its increased investor confidence retained its positive momentum,” he said.

Here is what experts suggest investors should do on March 5

Rohit Singre, Senior Technical Analyst at LKP Securities.

The index saw a gap-down start on weak global cues though we saw some bounce but again in the second half we witnessed profit booking and index closed a day at 15,080 with loss of one percent and formed a bearish candle on the daily chart.

Going forward, the index has one good support at 15,000-mark if it manages to hold above, then some pullback otherwise more profit-booking can be seen, on the higher side 15,150-15,200 zone will be a stiff hurdle.

Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited

Nifty formed a bullish candle with a bigger shadows on daily scale which indicates tussle between bulls and bears in the market.

Now, it has to continue to hold 15,000 zones to witness an upmove towards 15,250 and 15,431 zones while on the downside, immediate support exists at 14,900 then 14,800 levels.

Binod Modi, Head Strategy at Reliance Securities.

A steep rise in bond yields in the USA once again hurt investors’ sentiments. However, we continue to believe that these concerns are short-lived and any immediate correction in the market due to the fear of rise in bond yields will only create the opportunity for investors to buy quality stocks at reasonable valuations.

In our view, a situation like a taper tantrum in 2013 is still far away. The spread between the USA treasury and India’s GSec Yields is still over 475bps, which looks to be comfortable and unlikely to reverse FPIs flows meaningfully.

In our views, infrastructure, industrials, engineering, building materials, banks, and select auto stocks are likely to outperform in the medium-to- long-term perspective as these are the key beneficiary of higher capital expenditures.

Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities:

We witnessed a sharp decline in our markets on Thursday, mainly due to the sudden jump in the long-term bond yields of the US. We think, soon it will be normal for the market and then the market can react normally.

The steady growth in the economy leads to a steady rise in the bond yields and therefore the market should start offering discounts in the medium-to- long-term.

Technically, the market recovered from lower levels but due to the pressure of the weekly expiration of Index contracts the Nifty/Sensex came back from the highs of 15,200/51,260.

On Friday, 15,050/50,750 and 14,950/50,400 levels will be decisive for the market. The Nifty / Sensex could fall to 14,850/50,100 or 14,750/49,800 on a decisive dismissal of 14,950/50,400. On the upside, the 15,250/51,300 level would be a big hurdle for the index.

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