Last week was no less than a rollercoaster ride for stock market investors. On one hand, the increasing tension between Iran and America has choked the global economy, while on the other hand, the fire of crude oil is finding a way to reach the pockets of the common man. The huge panic that was seen as soon as the market opened on April 2 made investors sweat. But, by the end of the day, Nifty surprised everyone by making a spectacular comeback of 500 points from the lower levels and closed in the green at the level of 22,713. Sensex also showed a gain of 185 points. This situation naturally raises questions in the mind of a common investor that in which direction the market is going and how safe is their hard-earned money.
decline for the sixth consecutive week
If we look at the performance of the entire week, the picture looks a bit worrying. This is the sixth consecutive week when the market has disappointed investors. Sensex and Nifty recorded a weekly decline of 0.5 percent and 0.4 percent respectively. The biggest reason behind this disappointment is international geopolitics. US President Donald Trump has warned that if no diplomatic agreement is reached, Iran’s energy targets could be hit hard. This aggressive statement took Brent crude oil to a dangerous level of $ 109 per barrel. This inflation of crude oil directly affects the Indian economy, transportation costs and profits of companies, due to which the market ultimately has to bear the brunt.
Which stocks made you cry, where is the silver?
In this huge market turmoil, the condition of all sectors was not the same. Out of total 16 major sectors, 12 closed in the red. The banking sector has dived for the sixth consecutive week and fell by 1.4 percent. This is the worst period for banking stocks after October 2023. The reason behind this was the concerns of possible tightening on foreign exchange business.
At the same time, there was a big fall of 3.4 percent in pharma shares, because the US administration is preparing to impose import duty on those pharmaceutical companies which are not ready to reduce the prices there. However, in this dense darkness, the defense sector showed a new ray of hope. Defense stocks jumped 2.4 per cent after the Indian government approved major defense procurement proposals worth $25 billion, with Bharat Electronics (BEL) shares rising 4.2 per cent.
These factors will decide the movement of the market
Now the real question is, what will be the mood of the market next week? Experts clearly believe that this period of ups and downs is not going to stop at the moment. Not only will investors be keeping an eye on the situation in Western Asia, the fourth quarter (Q4) results of the companies are also going to be announced. On April 9, the country’s leading IT company Tata Consultancy Services (TCS) is going to declare its results.
These results will decide the mood of not only the IT sector but the entire results season. According to experts, this time the quarterly results may be directly hit by expensive crude oil, weak rupee and sluggish global demand. Therefore, the performance of different sectors may vary significantly.
Expectation of recovery in Nifty
If we understand the nuances of the charts, after the huge fall the market has technically come into the ‘oversold’ zone. In such a situation, there is full scope for a technical pullback from lower levels. The ‘Bullish Candle’ formed after opening with a huge fall in the last session indicates this strength.
If Nifty succeeds in crossing last week’s high of 22,941 in the coming days, it can fly up to 23,450. At the same time, if the market remains under pressure, then a limited range of trading will be seen between 22,200 to 22,900. For long-term investors, the level of 22,100 to 21,800 will act as a very strong ‘support’. In the current environment, the better strategy is to be cautious and take thoughtful steps.
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